Australian Company Directors Now Required to Apply for a Director Identification Number (Director ID)
Under new changes to the Corporations Act 2001 (Cth) and the Treasury Law Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth), Australian company directors are now required to verify their identity through a new director identification number (director ID) requirement.
These changes came into effect on 1 November 2021.
What is a director ID?
A director ID is a unique 15-digit identifier for a company director which verifies their identity. The director ID will remain valid even if the director changes companies, ceases to act as a director, changes their name or moves overseas.
All directors of an Australian company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation will require a director ID.
What is the purpose of director IDs?
The introduction of director IDs is intended to prevent the use of false or fraudulent director identities. This will serve to limit phoenix activity whereby directors pursue insolvency to avoid paying debts, only to then start up a new company to continue operations.
The director ID requirement does not replace existing requirements to keep company records updated. Directors must still notify their company as well as ASIC of any changes, such as a change of address.
How can company directors apply for a director ID?
Directors can apply for a director ID via the Australian Business Registry Services (ABRS) website. Directors must apply themselves, the process cannot be undertaken by a third party on their behalf.
The verification process will leverage the director’s myGovID to verify their identity. If you don’t have a myGovID, you will be required to apply for one.
For those who would prefer to apply offline or who can’t get a myGovID, applications can be lodged via a downloadable form or over the phone at 13 62 50.
There is no cost to apply.
What information and documentation will company directors need to apply?
In order to verify your identity, you will need to supply information that the ATO can verify.
This will include:
– Tax file number (TFN)
– Residential address as held by the ATO
– Two documents from the following list:
- Bank account details
- Notice of assessment
- Superannuation account details
- Dividend statement
- Centrelink payment summary
- PAYG payment summary.
What about foreign resident directors?
Foreign resident directors will also have to obtain director IDs. For foreign resident directors without Australian documentation such as an Australian passport or drivers licence, they will need to provide copies of foreign identity documentation which is translated into English and certified by either a notary public or staff at an Australian embassy, high commission or consulate.
When do company directors need to apply for a director ID?
Existing company directors will have until 30 November 2022 to apply for a director ID.
Directors appointed between 1 November 2021 and 4 April 2022 must apply for a director ID within 28 days of their appointment.
From 5 April 2022, people intending on becoming a company director must apply for a director ID before being appointed.
What happens in instances of non-compliance?
There are four new director ID offences under the Corporations Act 2001:
- Failure to have a director ID when required to do so
- Failure to apply for a director ID when directed by the Registrar
- Applying for multiple director IDs
- Misrepresenting director ID.
Directors who fail to comply with the above may be issued an infringement notice and could face criminal charges and/or civil penalties of up to $1.11 million.
So, don’t delay. Make sure you’re compliant and have applied for a director ID within the required timeframe.
Please don’t hesitate to contact us should you have any questions on the process or require any documentation.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.