The Australian Securities and Investment Commission (ASIC) requires businesses to inform them when a change occurs to any previously lodged details. ASIC provides an opportunity for companies to review their lodged details each year on their ASIC Annual Company Review. This allows the business to ensure that all details are in fact correct. Generally, Companies are required to notify ASIC within 28 days of any change to their company details.
The case of the Deputy Commissioner of Taxation vs. Fitzgerald has emphasised the importance of keeping all company details up to date with ASIC and other government departments such as the Australian Taxation office (ATO) and Australian Business Registrar (ABR).
Schedule 1 of the Taxation Administration Act 1953 provides that the Commissioner is required to give a director 21 days notice prior to commencement of proceedings to recover a penalty. A director’s penalty notice (DPN) is an example of a penalty that the Commissioner may issue. This form of penalty is issued by the ATO and makes the director personally liable for two types of tax debts that the company may have incurred – Pay As You Go (PAYG) and Superannuation Guarantee Charge (SGC).
Under the legislation the notice is deemed to have been given as of the date that the commissioner posts it to the director. Additionally, the Commissioner of Taxation may serve the notice by posting it to the address of the director as it is listed in ASIC record.
Upon notice being served the director has 21 days for the company to either:
- pay the debt in full
- appoint an administrator; or
- appoint a liquidator to wind up the company.
If any of the above actions have occurred before the 21 day period expires the director’s penalty will be remitted
In the Case of Deputy Commissioner of Taxation vs Fitzgerald (2016) NSWSC 971 the director objected to the penalty notice citing that he did not receive it until after the 21 day period and therefore was unable to act. The Supreme Court held that as the notice was served to the director using the address listed with ASIC the notice was deemed to have been served and hence the director was liable for penalties. This is just one scenario that emphasises the importance of ensuring that ASIC is notified of changes to your company.
If you require assistance with updating your company’s details or you have received a DPN and are unsure of what action to take, please contact us at The Quinn Group on (02) 9223 9166 or submit an online enquiry form today.
Our team of lawyers and accountants will be able to assist you with all your tax and ASIC requirements.