Everything You Need To Know About Getting Your Director ID
Directors are now required to verify their identity and apply for a Director Identification Number (director ID) in an effort to deal with illegal phoenix activities and improve the traceability of company directors over time. This new measure is also intended to cut down on the use of false or fraudulent director identities by assigning a unique ID to directors that lasts forever.
Existing Directors have been able to apply for the Director ID since November last year. We have put together the following as a guide to assist you with the process.
What is a director ID?
A director ID is a 15-digit identifier given to a director who has verified their identity with the Australian Business Registry Services. This will be used to trace relationships with companies over time. All directors will need to apply for their own ID which will be their own unique identifier.
Who is required to hold a director ID?
A director ID is required if an individual is an eligible officer of:
A company, a registered Australian body or a registered foreign company under the Corporations Act 2001 (Corporations Act)
An Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
An eligible officer is a person who is appointed as:
An alternate director who is acting in that capacity.
A person who expects to become an eligible officer within 12 months may apply for an ID (if they do not already hold one). Once registered, that person has 12 months to be appointed as an eligible officer or their ID will be made inactive.
How do directors apply for an ID?
Application is via the Australian Business Registry Services website. Applicants will need a myGovID to apply for the director ID online:
Applicants will need to provide details such as:
Individual Tax File Number (optional)
Residential address (as recorded with the ATO)
Answers to 2 questions, where details are known by the ATO, such as:
Bank account details
An ATO notice of assessment
Super account details
A dividend statement
A Centrelink payment summary
PAYG payment summary.
If you can’t get a myGovID, you can apply via the following two methods:
By phone if you have an Australian Tax File Number
By completing a paper form and providing certified (translated) copies of your documents to verify your identification.
When do directors need to apply?
As mentioned above, Applications for a director ID opened in November 2021. Both existing and new directors will need to apply in accordance with the following dates:
When do directors need to use the ID?
The director ID needs to be provided to the corporation’s record-holder, which can be the company secretary, another director or an authorised agent of the company.
If appointed as a director of any other companies in the future, directors will also need to give their ID number to the people responsible for maintaining the records of those companies.
Directors must also inform the Registrar of any changes to the information attached to their ID.
What happens if directors fail to comply?
Failing to hold a director ID may result in an infringement notice or possible civil and/or criminal prosecution. The maximum penalties are $13,320 currently and 1 year imprisonment. Certain offenses may also be applied against those involved in a contravention, which could include the eligible officer’s advisers.
Additional breaches include if a director:
Fails to comply with a direction from the Registrar
Applies for multiple director ID’s
Provides a false ID
Misrepresents their ID
Provides false or misleading information.
The Fox Group Chartered Accountants are specialist Business Advisers that provide best practice Accounting and Taxation services for Businesses and Self-managed Super Funds. If you are not getting what you need from your Accountant, contact us for a chat.