Director identification numbers and central business registry proposed
Company directors could soon be assigned unique identification numbers, with new legislation introduced to combat illegal phoenixing backed by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO).
If passed, director identification numbers (DINs) and modernised business registers would be some of the measures used against illegal phoenixing, a process where directors inappropriately take assets out of a business before liquidating, leaving staff, small businesses and suppliers in the lurch.
Ombudsman Kate Carnell says the activity costs the economy as much as $3 billion per year and hurts small business.
“The DIN will allow regulators to detect and track rogue company directors to ensure they cannot engage in multiple instances of phoenixing.
“The legislation is a definite step in the right direction, so that small businesses get a fair go.”
The possibility of DINs has been on the table since 2017
Carnell also supports the move to create a new central business registry regime, which will simplify the process for small and family businesses.
“At the end of the day, any measure that reduces red tape is good news for small and family businesses, because it allows them to get on with the job of growing their business,” she adds.