# Company Directors



## battiwallah (28 December 2008)

Did anyone read the excellent expose of company directors by Michael Sainsbury in The Australian 27-Dec-08?  I didn't know whether to laugh or cry.  There is a large group of directors, "the directors club", whose members keep being selected for directorships despite the appearance of incompetence.  In the industry apparently they are called the "unflushables".  Read all about it here, essential reading for all investors:

http://www.theaustralian.news.com.au/business/story/0,28124,24844968-643,00.html

Can something not be done to improve this miserable situation?


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## Craton (4 November 2021)

Long time coming I suppose.
Applied and received my ID today as per ASIC and my accountant's notification.

NOTE my bold right at the end.



> New ID requirement for directors​_1 November 2021_
> 
> Company directors need to verify their identity as part of a new director identification number (director ID) requirement
> A director ID is a unique identifier that a director will apply for once and keep forever - which will help prevent the use of false or fraudulent director identities.
> ...


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## greggles (4 November 2021)

Probably a good idea to be honest. Too much funny business going on with companies. Nominee directors, de facto directors, shadow directors. Company officeholders need to be held to account.


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## Dona Ferentes (4 November 2021)

Having a SMSF, I am a Sole Director, as well as trustee and member of the fund. If there is a failure in responsibilities, I am not going to sue myself.


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## Craton (5 November 2021)

@Dona Ferentes
Am a simple layman when it comes to law per se but lol, I wonder how that would play out if you did?
In fact, that makes me ask, can one be both a plaintiff and defendant in the same case?


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## Craton (5 November 2021)

Further info about the new ABRS from the About Us.

Reads in part:


> When fully established, ABRS will bring together the Australian Business Register (ABR) and more than 30 Australian Securities and Investments Commission (ASIC) registers in one place.




Role of ABRS:


> Role of the Registrar​
> The Registrar of Australian Business Registry Services (ABRS) is responsible for:
> 
> leading the Modernising Business Register (MBR) program
> ...


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## KevinBB (5 November 2021)

.. and then they will privatise the register maintenance role, and fees will go through the roof.
KH


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## frugal.rock (5 November 2021)

Dona Ferentes said:


> a Sole Director



Say that really quickly.... 👻

Reminds of the pharmacy 
R Soul Patterson. 😅


Craton said:


> In fact, that makes me ask, can one be both a plaintiff and defendant in the same case?



Clearly, there would be an out of court settlement at the last minute....😜


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## KevinBB (5 November 2021)

Dona Ferentes said:


> Having a SMSF, I am a Sole Director, as well as trustee and member of the fund. If there is a failure in responsibilities, I am not going to sue myself.



umm .. probably not, exactly.
My guess is that you are sole director of a company, and that company is trustee of the SMSF, and you are the sole member of the SMSF.
KH


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## Dona Ferentes (5 November 2021)

Corporate trustee
One to six members.
Each member of the fund must be a director of the corporate trustee, and each director of the corporate trustee must be a member of the fund.










						Choose individual trustees or a corporate trustee
					

How to choose the right SMSF structure for your situation and understand the requirements, cost and penalties.




					www.ato.gov.au


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## KevinBB (5 November 2021)

Many SMSFs are set up this way now, mainly for the ease of control if (when) the sole director of the company dies, i.e. beneficiaries under the wil, or the executor of the will, can easily take control of a company and make decisions for the SMSF.
Whereas if it were an individual as sole trustee of the SMSF, and that person dies, then there are all sorts of problems getting control of the SMSF's assets.
KH


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## Belli (6 November 2021)

KevinBB said:


> Many SMSFs are set up this way now, mainly for the ease of control if (when) the sole director of the company dies, i.e. beneficiaries under the wil, or the executor of the will, can easily take control of a company and make decisions for the SMSF.
> Whereas if it were an individual as sole trustee of the SMSF, and that person dies, then there are all sorts of problems getting control of the SMSF's assets.
> KH




Possible approach.

Obtaining legal advice strongly advised.

BDBN made to estate not directly to beneficiaries.  Include in Will a superannuation death benefits proceeds sub-trust.  Gift to executor shares in corporate trustee for SMSF effectively passing control to executor who will need to, or should, become director of corporate trustee of SMSF but of course will now need Director ID. 

And keep in mind it won't be your problem as you won't have any by then.


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## Dona Ferentes (7 November 2021)

KevinBB said:


> Many SMSFs are set up this way now, mainly for the ease of control if (when) the sole director of the company dies, i.e. beneficiaries under the wil, or the executor of the will, can easily take control of a company and make decisions for the SMSF.
> Whereas if it were an individual as sole trustee of the SMSF, and that person dies, then there are all sorts of problems getting control of the SMSF's assets.



the relevant
Differences between SMSF trustee structures​can be found at the ATO site.

Table 1: Comparison of member and trustee requirements for individual and corporate trustees (funds that have more than one member)
Table 2: Comparison of member and trustee requirements for individual and corporate trustees (single-member funds)
Table 3: Comparison of the costs associated with individual and corporate trustees
Table 4: Comparison of ownership of fund assets for individual and corporate trustees
Table 5: Comparison of the separation of assets for individual and corporate trustees
Table 6: Comparison of penalties for individual and corporate trustees
Table 7: Comparison of succession for individual and corporate trustees









						Choose individual trustees or a corporate trustee
					

How to choose the right SMSF structure for your situation and understand the requirements, cost and penalties.




					www.ato.gov.au


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## dyna (7 November 2021)

battiwallah said:


> Did anyone read the excellent expose of company directors by Michael Sainsbury in The Australian 27-Dec-08?  I didn't know whether to laugh or cry.  There is a large group of directors, "the directors club", whose members keep being selected for directorships despite the appearance of incompetence.  In the industry apparently they are called the "unflushables".  Read all about it here, essential reading for all investors:
> 
> http://www.theaustralian.news.com.au/business/story/0,28124,24844968-643,00.html
> 
> Can something not be done to improve this miserable situation?



" Unflushables". This Weekend's AFR article calls them psychopaths !  And they could be up to three times more numerous in the boardroom, than the 1 %  outside, in the general population.


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## Belli (8 November 2021)

KevinBB said:


> .. and then they will privatise the register maintenance role, and fees will go through the roof.
> KH




And possibly the penalities for not having a Director ID.  Maybe some are not aware of the possibility of incurring a $1.05m fine (personal not the company.)  Although this snippet relates to a discussion regarding charities it applies on a more broader scale.

"It is crucial that directors comply with the DIN requirements once they come into effect because there are hefty civil and criminal penalties if you don’t. For example:    

if a director of a CATSI organisation fails to apply for a DIN within the applicable time frame, they can face a civil penalty of up to $200,000; and
if a director of an organisations registered under the Corporations Act fails to apply for a DIN within the applicable time frame, they can face a civil penalty of 5,000 penalty units (which is currently $1,050,000) or three times the benefit derived, or detriment avoided because of the contravention (whichever number is higher).
There are also other large civil and criminal penalties associated with actions which undermine the DIN regime, such as providing false identification documents. Given these penalties, it is crucial organisations and directors (or prospective directors) stay up to date with the new DIN laws to ensure DINs are obtained when required."









						5 things to know about the Director Identification Number | G+T
					

This Gilbert + Tobin insight outlines the top 5 things Charities and Non For Profits should know about the new Director Identification Number (PIN) . See full list.




					www.gtlaw.com.au


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## KevinBB (8 November 2021)

This Director ID thing is going to be fun for those managing company registers as a service, i.e. public accountants. Many of the older company directors won't have a smart phone, therefore no myGovID, so everything will have to be done manually.

I can just imagine the complaints.

KH


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## peter2 (7 February 2022)

Bumping thread as a reminder to all directors out there. 

The ABRS site seems to be fixed now as I've finally got my DIR ID after being unable to do it over the last week.


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## qldfrog (7 February 2022)

peter2 said:


> Bumping thread as a reminder to all directors out there.
> 
> The ABRS site seems to be fixed now as I've finally got my DIR ID after being unable to do it over the last week.



yes got one too, better safe than sorry even with my company closing


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## Belli (10 February 2022)

peter2 said:


> Bumping thread as a reminder to all directors out there.
> 
> The ABRS site seems to be fixed now as I've finally got my DIR ID after being unable to do it over the last week.




It was a poor app.  Crashed, hung and just didn't work for me.  Gave up and applied via snail mail.  Got the ID within a fortnight back in November last year.


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## Belli (6 November 2022)

If you haven't registered for the Director ID yet, you have until the end of this month.  Apparently the registration rate is only 50% or thereabouts so people are either ignoring it or are unaware.  It may include those who have no intention of registering for various reasons.

Depending on hard they wish to go, those who don't register are up for a fine of $13,200 (criminal charge) or $1.1m (civil charge) which are based on penalty units currently $222 per unit but will increase to $275 per unit from 1 January following the October Budget.






						Director identification number  | ASIC
					






					asic.gov.au
				




The register is actually held by the Australian Business Registry Unit in the ATO.



			https://www.abrs.gov.au/contact-us
		


My best guess is it will liaise with ASIC because it's really weird as the present arrangements allows for setting up a company with ASIC without an ID, although you are supposed to get one before you do.  Go figure that one out!

Although the ID isn't currently linked to specific companies yet, I'm guessing that will happen eventually.


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## Dona Ferentes (6 November 2022)

Lined up to do my SMSF sole director on Monday.

_Will phoenixing be dealt a blow? _


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## Belli (7 November 2022)

A slight nudge more likely.

I provided the accounting firm I use with my Director ID as its accounting software now has provision for it.  While it may not be "active" in the sense it is currently transmitted to the ATO, I can see that will happen at some stage as well that MyGov will get around to requiring it.  And it will apply to any trusts such as family trusts or testamentary trusts under a corporate structure is my guess.

Good luck with the application process.  If doing it by phone you may have to endure the eternal "Your call is important to us" syndrome.


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## qldfrog (7 November 2022)

Belli said:


> A slight nudge more likely.
> 
> I provided the accounting firm I use with my Director ID as its accounting software now has provision for it.  While it may not be "active" in the sense it is currently transmitted to the ATO, I can see that will happen at some stage as well that MyGov will get around to requiring it.  And it will apply to any trusts such as family trusts or testamentary trusts under a corporate structure is my guess.
> 
> Good luck with the application process.  If doing it by phone you may have to endure the eternal "Your call is important to us" syndrome.



I did that a while ago, provided it to mu accountant but not sure it appears any where


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## Belli (7 November 2022)

qldfrog said:


> I did that a while ago, provided it to mu accountant but not sure it appears any where




I feel it is at early stages presently.  Tidy up the register first such as John Smith and John Brian Smith may seem to be different people but it's actually the same individual.


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## moXJO (7 November 2022)

Thanks for reminding me about the ID.


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## Dona Ferentes (7 November 2022)

Belli said:


> I feel it is at early stages presently.  Tidy up the register first such as John Smith and John Brian Smith may seem to be different people but it's actually the same individual.



Yes, and establishing if Michael Mouse is still with us.


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## Garpal Gumnut (7 November 2022)

I must admit I didn't find it all that difficult once I got a Tok Cayman App.

gg


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