DIRECTOR IDS NOW A REALITY AND TARDINESS TO APPLY HOLDS MASSIVE PENALTIES.
From 1 November 2021, company directors must verify their identity and obtain a director identification number (Director ID).
This change has been in the pipeline for quite some time. Legislation changes were first announced in 2018 and eventually passed in June 2020 to integrate the changes into the government's Modernising Business Registers (MBR) program.
The Director ID aims to help prevent the use of fictitious director identities, help regulators trace directors' relationships with companies over time, and better identify director involvement in unlawful activity such as illegal phoenix activity.
Who needs a Director ID?
The requirement to have a Director ID applies to any person appointed as a director, or an alternate director acting in that capacity.
It applies to directors of companies, registered Australian bodies or registered foreign companies under the Corporations Act 2001, and any Aboriginal and Torres Strait Islander corporations registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
When do directors need to apply?
Current company directors have until November 2022 to apply for their Director ID.
From 1 November 2021, any director appointed to a company must apply within 28 days for a Director ID; and from 5 April 2022, directors cannot register as a director without one.
Current directors of Aboriginal and Torres Strait Islander corporations have an additional 12 months to apply for the new Director ID. Those appointed on or before 31 October 2022, must apply by November 30, 2023. From November 1, 2022, directors of these corporations must have their new Director ID before their appointment.
Directors who fail to apply for a Director ID within the relevant timeframes above can face criminal or civil penalties of 5,000 penalty units—currently standing at $1.11 million. Directors of Aboriginal and Torres Strait Islander corporations can face penalties of up to $200,000.
Applying for a Director ID
The new Australian Business Registry Services (ABRS) is responsible for administering the Director ID initiative.
It is free to apply and obtain a Director ID. The quickest way to lodge an application is online using the myGovID app. A director will need to provide their tax file number, residential address as held by the Australian Taxation Office (ATO), and two documents (from a set list) to verify their identity. Directors can also apply by phone or using a paper form, if they are unable to get a myGovID app.
It is not possible to apply for a Director ID on behalf of someone else.
Further information on applying for a Director ID can be found at: https://www.abrs.gov.au/director-identification-number
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