Company Directors & Recent Updates

As a company director you are:

• Responsible for overseeing affairs of the company
• Comply with legal obligations
• Be fully up-to-date on what is happening in your company
• Not use your position or information gained to benefit personally or for someone else
• Always make decisions with the company’s best interest in mind

Directors can be personally liable for not complying with the law and there may be penalties and consequences ranging from civil to criminal charges. Therefore, you want to make sure you are ALWAYS up to date with obligations and keeping the company’s best interest in mind!

Directors may still be liable after a company ceases trading, is deregistered, or even after they resign from being a director.

If a company is not able to pay for debts and becomes insolvent, they may be personally liable to pay for these debts. A company cannot trade if it is insolvent, and it is the responsibility of the director to make sure of this.

How do you know if your company may be insolvent?

• Not enough cash flow to meet debts when they fall due
• Making continuous losses
• Continuous overdue debt notices
• Assess the companies financial position as a whole

It is also crucial that as an employer the company meets its Pay As You Go (PAYG) Withholding and Superannuation Guarantee Charge (SGC) Obligations. See below to check the recent updates. Directors can also be held personally liable if the company doesn’t comply with requirements.

Have you recently paid superannuation late?

Did you know that superannuation paid late is NOT tax-deductible?

Our tip is to always pay superannuation several days before the quarter is due to make sure there is enough time for the money to hit the super fund, and you always receive a tax deduction for superannuation paid on time.

What to do if you paid superannuation late:

• Lodge a superannuation guarantee charge statement (see the below link)

The super guarantee charge | Australian Taxation Office (ato.gov.au)

• Pay the super guarantee charge

 

Updates:

1) As of 1 July 2021 super guarantee charge increased from 9.5% to 10%

Use the below super guarantee charge calculator to make sure you are paying the correct amount to employees:

Superannuation guarantee contributions calculator | Australian Taxation Office

2) Directors will now need a ‘Director ID’ number and will need to verify their identity as part of a new requirement. Meaning that every director will now have a unique identification number that they apply for once and keep forever.

When you need to apply by:

• Existing directors have until 30 November 2022 to apply
• If you have been appointed between 1 November 20251 and 4 April 2022 you must apply within 28 days of appointment
• From 5 April 2022, intending directors must apply before being appointed

To apply now or for more information see the link below:

Director identification number | Australian Business Registry Services (ABRS)