Last year we saw the government begin a crackdown on phoenixing activity from several different angles with the introduction of a number of new draft laws. Click here for our previous report. The Office of the Treasury had withdrawn the draft bill from parliament for review to take into account public submissions. We confirm that the Assistant Treasurer has now released an amended exposure draft of the legislation.
The main aspects of the amendments to this legislation involve:
- expanding the director penalty regime to superannuation guarantee amounts;
- ensuring that directors cannot have their director penalties remitted by placing their company into administration or liquidation when unpaid Pay As You Go (PAYG) withholding or superannuation guarantee amounts remain unpaid three months after the due date; and
- restricting access to PAYG withholding credits for company directors and their associates where the company has failed to pay withheld amounts to the Commissioner of Taxation.
These provisions are a part of a general bolstering of laws relating to director’s obligations. However, there are currently further bills being considered to counter phoenix activity known colloquially as the Phoenixing Bill and the Similar Names Bill.
The Phoenixing Bill proposes to give ASIC the power to wind up abandoned companies, with the aim of protecting workers entitlements. The Similar Names Bill proposes to impose personal liability on directors for the debts of a company for 5 years if it has a similar name to a failed liquidated company.
And Treasury has closed submissions on the exposure draft of a further bill, the Personal Liability for Corporate Fault Reform Bill 2012. This is being described as the first tranche of proposed changes to commonwealth legislation relating to directors’ liability. The aim of these reforms is to harmonise the approach in the imposition of personal criminal liability or corporate fault across Australian jurisdictions.
So it’s safe to say there is a lot of activity in this area at the moment- keep watching this space if you are a director because this applies to you!
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