We alerted you to recently passed legislation requiring all directors to have a director identification number (DIN). The DIN is a unique number that relates to the director (not the entity). Here’s how to apply for a Director ID.

Company directors are being urged by the Australian Tax Office (ATO) to apply for Director ID before November 30, 2022.

Why do you need one?

The Director ID program is designed to improve transparency, with the Australian Business Registry Services stating that “shareholders, employees, creditors, consumers, external administrators and regulators are entitled to know the names and certain details of the directors of a company”.

What is a Director ID?

The Director ID is a 15-digit director identification number that is unique to each individual director who has verified their identity with the Australian Business Registry Services (ABRS).

If the director changes companies or stops being a director, the unique identifier will remain with them forever.

Who needs to apply?

If you are the director of a company, charity or not-for-profit organisation, a registered Australian body or registered foreign company under the Corporations Act 2001 or even an alternate director acting in a director’s capacity, you must apply for a new ID.

This also applies to directors of any Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006.

All directors are required to apply for their own ID, however if you operate your business as a sole trader or partnership, you do not have to apply.

Unless directed otherwise by the registrar, if you are a director of more than one company, you only need to apply for one Director ID.

When do you need to apply?

The date you need to apply for a new Director ID depends on when you were appointed as a director. From November 1, 2022, directors must have their new ID before their appointment.

Those appointed as a director on or before October 31, 2021, must apply by November 30, 2022.

For any appointments made after April 5, 2022, directors must apply for the new Director ID before they are officially appointed.

Current directors of Aboriginal and Torres Strait Islander corporations have an additional 12 months to apply for the new ID. Those appointed on or before October 31, 2022, must apply by November 30, 2023.

Criminal and Civil Penalties if you fail to apply

Company directors also face significant criminal and civil penalties if they fail to obtain a director ID, or fail to apply for one when directed to do so by the registrar. The maximum criminal penalty in these cases is $13,200 and the maximum civil penalty is $1.1 million.

Directors also face criminal penalties of up to $26,640 or one year imprisonment, and civil penalties of up to $1.1 million, if they apply for multiple Director IDs or misrepresent their Director ID.

How to apply

The fastest way to apply for a Director ID by using the myGovID app to log in to ABRS online and verify your identity with information the ABRS has on record. You can check if your business is registered as a company with the Australian Securities and Investments Commission at ASIC Connect. Details of how to apply can be found here on the ABRS website.

If you can’t apply by the date you need to, you can complete an Application for an extension of time to apply for a director ID (NAT 75390, PDF 271KB).

Once you have received your DIN please forward this to our team to insert into our Corporate Secretarial software.

If you have any questions, please contact the team at MGI on
asic@mgisq.com.au

Queensland-based small to medium businesses can now apply for Round 9 of the Advance Queensland Ignite Ideas Government Grant Funding. Two tiers of funding are available:

Tier 1

Up to $100,000 (excluding GST) for projects of up to 12 months duration.

Tier 2

Greater than $100,000 and up to $200,000 (excluding GST) for projects of up to 24 months duration.

Successful Ignite recipients will have the opportunity to access additional business development support to accelerate their business.   

Application process and timeframes:

• Stage 1 – Expression of Interest applications are now open and close 10am Thursday 7 July 2022.  
• Stage 2 – Shortlisted applicants will be invited to submit a Full Application. 

Late applications will not be accepted. 

For more information on the program and eligibility criteria, please see the website: https://advance.qld.gov.au/entrepreneurs-and-startups-industry-small-business/ignite-ideas-fund

When preparing an application, please ensure you satisfy the full eligibility criteria.

Please contact the team at MGI if you have any questions about Government grant funding.

Time is running out. Australian small businesses have until September 20, 2022 to register a domain name of .au, allowing the .com, .net or .org to be dropped from the internet address.

The Australian Small Business and Family Enterprise Ombudsman Bruce Billson has implored small businesses to take urgent action by 20 September deadline to safeguard their brand and identity on the internet or risk seeing impersonators, web-name ‘campers’ or cyber criminals take up domain names just like theirs.

The Ombudsman said the changes could see businesses lose their customer base or be at the mercy of cyber criminals impersonating them if they did not proactively sign up to the new system.

These shorter Australian domain names are currently reserved for businesses that already use the relevant com.au, net.au or org.au addresses until 20 September 2022. This change was announced by .au Domain Administration (auDA) which is the organisation responsible for internet domains in Australia. 

Previously, it was only possible to licence lower level .au domain names, such as com.au, net.au, org.au.

If a business already had a domain name ending in .au, and registered it before 24 March 2022, the matching .au direct domain has been placed on a six-month priority hold – meaning that they have the first choice to register it. Any domain names not registered by 20 September 2022 will be available for the general population. 

To be eligible for a .au direct name, you must have a verifiable Australian presence, which includes being a citizen or permanent resident, or being an organisation registered in Australia.

A domain name ending in the .au namespace (com.au, .net.au, .org.au, .edu.au etc.) indicates the business, organisation or individual using it has a connection to Australia. 

There are also specific rules around whether businesses can register domains in the .au namespace.

You will be able to register new names via any participating .au accredited registrar in accordance with the .au Licensing Rules, as long as you are eligible to register the domain name.

Exact matches will be put on Priority Hold for the Priority Application Period to prevent them from being registered by others and to enable existing registrants the first opportunity to register (Priority Status) the exact match of their existing domain names. 

In some cases, there also may be more than one applicant for the same .au direct domain name as there are different registrants that hold the same domain name licence in different namespaces. In these cases, the .au direct exact match will be allocated according to the Priority Allocation Process. 

To find out more information, please visit the auDA website or contact the team at MGI.

While minimum wage increases are a boost for workers—increasing their gross income, buying power, standard of living, and disposable earnings – small business owners can struggle with the effects of raising minimum wage. Payroll is one of the most expensive things any business has to deal with, and a mandatory increase—in some cases, can put a major clamp on profit margins.

A minimum wage increase can improve the productivity of a business workforce, because higher wages reduce staff turnover. There is strong evidence that higher minimum wages lead to more stable and experienced workforces. In addition, firms can reap the benefits of employees who can focus more on work and are less distracted by the cognitive demands of poverty (for example thinking about how to get enough money to fix their car because it broke down)

If you’re a business owner, what can you do to survive?

1. Reduce costs for a better ROI

Every successful business is proactive to reduce or remove inefficient costs. Consider making an investment up front that will, over time, drive down costs to a point at or below what you would lose in payroll increases.

Closely examine how you spend money. Do you have business expenses that you can reduce? Do you have flexibility in your business budget to rearrange money to payroll and away from something less critical to your business? Could your savings or investments be making more money for you in different ways.

2. Increase prices

Increasing prices is the most obvious option, and also the one many small business owners say will ultimately render any wage raises moot. If employers’ costs go up, they have to pass them on to the customers by raising prices, which means that, despite the increase in wages, life will be like it was before wages went up. This is called market equilibrium, and in this case, it would be achieved through inflation, or more dollars will buy the same amount of goods. So, even though pay-checks are bigger, buying power is the same in relation to new prices.

3. Streamline your business offerings

When business is good, you might consider looking to expand your business offerings to find new revenue stream or to improve cash flow. However, when times aren’t so good, cutting back offerings that don’t have as wide of a profit margin can be a prudent way of saving money. Reducing the number of products you offer can help you better manage inventory more efficiently. Sell only what’s making you the best return to increase your margins.

4. Managing working hours and limit penalty rates to keep costs manageable

Most businesses are already running efficiently, so laying off workers often is not the solution. Businesses can reduce costs by carefully rostering and scheduling their workers to avoid overtime payments for excessive working that attract extra loadings. By carefully managing labour costs in this manner, businesses should be able to offset the increase in labour cost over inflation. 

5. Create a Culture of Innovation

It’s a mistake to treat Australia’s current economic situation as one of austerity, where businesses need to tighten their belts to wait it out. In both good and bad times, a successful business owner always innovates. Innovation can range from reviewing a company’s operational processes to rolling out a new product or service. Those businesses who best seize the opportunities created by harsh conditions will come out the strongest in the end.

6. Say Goodbye to Manual Processes

Because productivity is so important, it’s worth taking a deeper dive into the way work gets done within your business.  Too many businesses still use manual processes that needlessly complicate their day-to-day operations. The hidden costs of paper-based and manual recordkeeping can really add up. Now’s the time to conduct an internal review. Ask yourself, what activities do your employees do, day after day, that could be automated? If those activities were automated, you might be pleasantly surprised at how much extra time they have to pursue more productive projects, adding better efficiencies and improved productivity to your business.

Talk to the business advisory team at MGI about our business coaching services and let us help you manage your business profitability and business growth.  We can help you benchmark your business against others in the market, strategic planning planning, wealth management and also offer outsourced CFO services. A Virtual CFO can help you assess what levers you can pull to minimise risk and create efficiencies.

The Australian Taxation Office has recently simplified the way charities can submit an application for a refund of franking credits.

You can check your eligibility on the ATO website here.

As most charities are exempt from taxation they do not need to lodge an income tax return. Many charities invest excess funds to build a capital base to sustain their charitable operations into the future.  If charities received fully franked dividends, then they are able to apply for a franking credits refund.

In previous years, you had to call the ATO to organise a franking credit refund application form.

The ATO has now released the application form online with instructions on how to fill out the form.

The Application Form can be accessed here.

If you would like more information about the application for franking credits refunds or require assistance with the refund application form, contact the team at MGI.