Thursday, April 18, 2024

New legislation will combat illegal phoenixing

The Australian Small Business and Family Enterprise Ombudsman Kate Carnell welcomes the new legislation to implement Director Identification Numbers (DIN) and modernise business registers.

If passed, the legislation will require Australian company directors to have a unique identification number.

Ms Carnell says the legislation will help combat illegal phoenixing, a process where directors inappropriately take assets out of a business before liquidating.

“Illegal phoenixing not only hurts small business, it costs the economy as much as three billion dollars per year,” Ms Carnell said.

“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.

“We also support 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.”

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