More than 1 million people could become ineligible to run companies by the end of this month — and face fines of up to $13,000 — as the Australian Taxation Office introduces a new hurdle to crack down on "dummy directors" and the practice of "phoenixing".
Director IDs are being made mandatory for every director covered by the Corporations Act and must be in place by the end of November.
This covers people running major entities, many small businesses, and even charities and not-for-profit groups.
The ATO says director IDs will crack down on this issue, because they will authenticate who is controlling companies and make it easier for liquidators to connect dodgy dealings.
The scheme is being implemented by the Australian Business Registry Services (ABRS), which is a unit within the ATO.
ABRS deputy registrar Karen Foat told The Business:
"Until now, there hasn't been a verified way of confirming directors of companies on the company's register.”
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