If you are a director of an Australian company, registered Australian body or not-for-profit organisation, or a corporate trustee for your self-managed super fund (SMSF), then you will need to apply for a director ID by 30 November 2022.
The application process is simple, so don’t delay. Otherwise you could be hit with a fine of up to $13,000.
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.
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 you apply for a director ID?
The easiest way to apply is online 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 your myGovID to verify your identity. If you don’t have a myGovID, you will be required to apply for one.
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.
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.
When do you need to apply for a director ID?
Existing company directors will have until 30 November 2022 to apply for a director ID.
Going forward, people intending on becoming a company director must apply for a director ID before being appointed.
What happens if you don’t get a director ID?
If you fail to apply for a director ID by the deadline you could be fined up to $13,000.
For those who fail to apply for a director ID and continue to operate businesses, there are four new offenses under the Corporations Act 2001 designed to prevent non-compliance:
- 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.
Need advice on whether you require a Director ID or how to approach the process? Contact us today.
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.
Ryan Miller is the founder of Keeping Company, May 2011 – Present. A tie-loathing, people person with an entrepreneurial spirit. Ryan’s drive to modernize the accounting industry coupled with his desire to help people succeed saw the birth of Keeping Company. Focusing on the SME space, KeepingCo. empowers business owners by providing high-quality end-to-end accounting and business advisory services.
Ryan took his first Accounting role working at KPMG. He went onto further refine his skills as a Chartered Accountant taking the role of Director of a Chartered Accounting firm in Erskineville.
Ryan is a fully qualified Chartered Accountant and a member of the Institute for Chartered Accountants Australia and New Zealand. He is also a Registered Tax Agent and holds a Bachelor of Commerce from the University of South Australia.