The Australian Taxation Office (""ATO"") has the authority to hold a company's director accountable for delinquent PAYG obligations. In exchange for losing its priority status as a creditor, the ATO was granted this authority as part of the 1993 Australian insolvency law reforms. This authority is exercised in accordance with Division 9 of Part VI of the Income Tax Assessment Act 1936 by issuing a Director Penalty Notice (""DPN"") to a director.
A DPN is not required to be """"served"""" in the same manner as legal proceedings. Rather, it must be sent to the director's last known address using ASIC and/or ATO databases. Consequently, it is essential that directors maintain their contact information current with both organizations.
The notice will specify the precise amount due and provide the director with 21 days to take one of three actions to avoid personal liability:
• Completely discharge the company's debt.
• Appoint a Voluntary Administrator to manage the business.
• A Liquidator has been appointed to the company.
If a director fails to comply with the notice, he or she becomes personally culpable for the debt, and the ATO has the authority to file a petition for bankruptcy against the director if the individual is unable to pay the debt. In addition, resigning as a director after the DPN has been issued will not release them from liability.
• Circumstances (e.g., illness) prevented the director from managing the company at the time the relevant debts were incurred; or • The director took all reasonable steps to make the directors comply with the notice (e.g., they are a minority director who was unable to convince the board to act).
In both of the aforementioned instances, the party asserting the defenses bears the burden of proof.
Consequently, it is of the utmost importance that if someone receives this notice, they act immediately. This article's content was accurate at the time of publication, but should only be used as a guide. Before taking any further action, we urge you to always obtain professional guidance.""
" - https://www.affordablecebu.com/
