The government has released draft legislation to create a Director Identification Number (DIN) system.
A DIN will be a unique number identifying an individual director, similar to how Australian Company Numbers identify companies (despite any company name changes).
The intention of the reforms is to combat illegal phoenix activity – that is, when a company is liquidated by its owners and its business and assets are transferred to a new trading company in a deliberate scheme to avoid paying creditors.
The same key person(s) (usually one or more directors) will often be involved in both companies, hence the government intends to track directorships to combat this illegal activity.
Further details will be available when the legislation is presented before Parliament. In the meantime, directors are encouraged to stay informed about their duties and obligations as a director in addition to ensuring they have suitable lawful protections in place such as insurance.
