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Demise of the Phoenix – new identification requirements for directors

In recent years, the Commonwealth Government has made efforts to deter and penalise phoenix activity in order to protect those who are negatively affected.  One of those efforts is the DIN requirement for directors, which is poised to disrupt phoenixing and deliver additional benefits.

This phoenix may not rise

Every director of an Australian company will soon be allocated a unique Director Identification Number (DIN) in an effort to stop unscrupulous directors from engaging in “phoenixing” activities. Phoenixing refers to the practice of stripping a company of all its assets, liquidating it, moving the assets to another corporate entity and carrying on business as usual under the guise of the new company. This practice leaves creditors out of pocket and is estimated to cost the Australian economy more than $3 billion per annum.

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