A director penalty notice (DPN) is a notice the ATO can issue to directors of company to make them personally liable for two types of company tax debts, being:
There are two types of DPN:
Have you been required to give guarantees in relation to the conduct of the company? They can typically be required where leases and trade accounts are involved.
It is important to recognise that should a company encounter financial difficulty, then ultimately these guarantees could be called upon which can expose you personally to pay the debts incurred by the company. We regularly assist Directors in understanding the likely ramifications should this occur. We also take a proactive role in working with Directors to achieve practical solutions when considering and giving guarantees. In addition, we also work closely with other professionals to develop sound strategies regarding structuring a company and Director’s affairs from inception.
There are obviously other areas of consideration for Directors. Whilst we believe that careful consideration should be given to being appointed a Director, we also recognise that certain events can occur during a company’s life cycle which sometimes are outside of the Director’s control. We seek to provide Directors with the practical advice and solutions required in an ever changing and dynamic regulatory environment.