With effect from 18 February 2021, new ASIC regulations will apply to prevent single directors resigning from a company in order to avoid responsibilities to creditors and others.
Other than in special circumstances (such as death), the resignation of the last remaining director of a company will not be accepted nor processed by ASIC unless a replacement appointment is simultaneously made.
Furthermore, where a director resignation date is notified to ASIC more than 28 days after the nominated date of resignation, ASIC will record the resignation as being the date of lodgment of the form, not the effective date detailed in the lodged document. Late fees will still apply to the lodgement. This change will effectively prevent directors from backdating resignations.
Both measures strengthen the reach of ASIC and Insolvency Practitioners where directors seek to walk away from their financial or other obligations.
Whilst these changes will have little application or relevance for most, they are a timely reminder of the personal financial obligations potentially faced by directors where a company continues to trade whilst insolvent, where PAYG Withholding or compulsory superannuation contributions remain unpaid or in a range of other situations where director specific penalties may apply.
For more information on the changes, please contact your usual Mazars advisor, or alternatively one of our specialists via phone or the form below:
All rights reserved. This publication in whole or in part may not be reproduced, distributed or used in any manner whatsoever without the express prior and written consent of the Mazars, except for the use of brief quotations in the press, in social media or in another communication tool, as long as Mazars and the source of the publication are duly mentioned. In all cases, Mazars’ intellectual property rights are protected and the Mazars Group shall not be liable for any use of this publication by third parties, either with or without Mazars’ prior authorisation. Also please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice. Content is accurate as at the date published.