In February 2020, the Treasury Laws Amendment (Combatting Illegal Phoenixing) Act 2020 was passed by Parliament, and took effect from the 18th of February 2021. The legislation introduces new offences and grants ASIC and liquidators with additional powers to combat systemic fraud and illegal phoenixing.
The new amendments aim to prevent these illegal activities by holding company directors accountable, preventing them from incorrectly backdating their resignation or leaving their company with no directors.
The changes mean that as of 18 February 2021 companies can no longer cease the last remaining director on ASIC records. To enforce this, lodgements submitted including change to company details, or form 370 notification by officeholder of resignation or retirement, to cease the last appointed director without replacing that director will be rejected.
However, there are three exceptions to this rule, including if:
- The last director is deceased
- The company is being wound up or under external administration
- The officeholder never consented to their appointment
In order to cease a director under the three exceptions stated above, you will need to contact ASIC, either by phone or by doing an online inquiry.
If a director’s cessation date is notified to ASIC more than 28 days after the effective date, then the effective date will be overridden and replaced with the lodgement date.
Directors can apply to ASIC or the court to change a resignation date, however there will be an application fee.
For more information or assistance please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au
