Company directors who have yet to apply for their Director Identification Number (Director ID) have been urged to do so now by the Australian Taxation Office (ATO), before time runs out on November 30, 2022.
More than 2.7 million company directors are expected to apply for a new ID, after changes to company Director IDs came into effect in early November last year.
The mandatory IDs were locked in place to prevent the use of false or fraudulent director identities, increase director accountability, mitigate adverse cross directorships and eliminate director involvement in unlawful activity, such as illegal phoenix activity.
The updates are the result of legislation changes, which were first announced in 2018, and passed in June 2020, with the 2020 federal budget including funding to integrate the changes into the government’s Modernising Business Registers (MBR) program.
The Director ID is a 15-digit director identification number that is unique to each individual director who has verified their identity with the Australian Business Registry Services (ABRS).
If the director changes companies or stops being a director, the unique identifier will remain with them forever.
If you are the director of a company, charity or not-for-profit organisation, a registered Australian body or registered foreign company under the Corporations Act 2001 or even an alternate director acting in a director’s capacity, you must apply for a new ID.
This also applies to directors of any Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
All directors are required to apply for their own ID, however if you operate your business as a sole trader or partnership, you do not have to apply.
Unless directed otherwise by the registrar, if you are a director of more than one company, you only need to apply for one Director ID.
The date you need to apply for a new Director ID depends on when you were appointed as a director. From November 1, 2022, directors must have their new ID before their appointment.
Those appointed as a director on or before October 31, 2021, must apply by November 30, 2022.
For any appointments made after April 5, 2022, directors must apply for the new Director ID before they are officially appointed.
Current directors of Aboriginal and Torres Strait Islander corporations have an additional 12 months to apply for the new ID. Those appointed on or before October 31, 2022, must apply by November 30, 2023.
The Director ID program is designed to improve transparency, with the Australian Business Registry Services stating that “shareholders, employees, creditors, consumers, external administrators and regulators are entitled to know the names and certain details of the directors of a company”.
Company directors also face significant criminal and civil penalties if they fail to obtain a director ID, or fail to apply for one when directed to do so by the registrar. The maximum criminal penalty in these cases is $13,200 and the maximum civil penalty is $1.1 million.
Directors also face criminal penalties of up to $26,640 or one year imprisonment, and civil penalties of up to $1.1 million, if they apply for multiple Director IDs or misrepresent their Director ID.
The fastest way to apply for a Director ID by using the myGovID app to log in to ABRS online and verify your identity with information the ABRS has on record.
You can check if your business is registered as a company with the Australian Securities and Investments Commission at ASIC Connect.
