Can I get a DPN for a deregistered company?

Why deregistration does not remove the penalty

A director penalty is a personal liability that runs in parallel with the company's debt. It attaches to you, not to the company. Deregistering the company removes the company from the ASIC register, but it does not remove the debt the company owed or your parallel liability for it.

The penalty arises on the day the company's PAYG withholding, GST or SGC obligation falls due and is not paid. If you were a director on that day, or became one and stayed for more than 30 days, the penalty already exists. Closing the company later does not undo it. The same logic applies to resigned directors: resigning or closing changes nothing about amounts that fell due on your watch.

The ATO can also apply to ASIC to reinstate a deregistered company. It usually does this so it can appoint a liquidator, lodge estimates or recover assets. Reinstatement is more common where the debt is large or the company still had assets when it closed.

What a DPN on a closed company usually looks like

Three things tend to be true of DPNs issued after a company has closed:

• They are often lockdown notices. Companies that are wound down informally usually stop lodging BAS and SGC statements. If BAS was lodged more than 3 months late or not at all, or an SGC statement was lodged after its due date, the penalty is a lockdown penalty that can only be remitted by paying the amount.
• The figures may be estimates. Where nothing was lodged, the ATO can make a reasonable estimate of the unpaid amount and issue a DPN on the estimate. Lodging the outstanding returns can replace the estimate with the real figure, which is sometimes lower.
• The usual remission options may not be available. A deregistered company cannot appoint an administrator, restructuring practitioner or liquidator unless it is first reinstated. For a non-lockdown notice that matters, because those are the actions that remit the penalty inside the 21 days.

The notice is posted to your address on the ASIC register, not to the company. If you moved after the company closed and did not update ASIC, the 21 days can run without you seeing the letter.

What you can do now

Start by checking the notice against what the company actually lodged and paid. Old debts from a closed business are often a mix of real amounts, estimates and interest, and the debt after closing a business is not always what the ATO first states.

Then look at the options that exist for the personal liability. A payment plan on the director penalty does not remit it, but it does stop enforcement while you keep to it. The statutory DPN defences are narrow, but they apply to closed companies too: illness, having taken all reasonable steps, or a reasonably arguable position on SGC or GST. If the amount is beyond you, personal insolvency options exist and are worth understanding before the ATO takes the next step.

What to do next

1. Check the date the notice was posted and count 21 days from that date, not from the day you opened it.
2. Compare the amounts in the notice with what the company lodged. If any figures are ATO estimates, ask whether lodging the actual returns would change them.
3. Update your address on the ASIC register so any further notices reach you.
4. Get advice on whether a defence applies and whether a payment plan or personal insolvency option fits your situation.

More questions: 16 Director penalty notice questions questions answered · Full guide: Director penalty notices