If you’re the director of an Australian company, then this is something that you need to get around. The government has begun rolling out a new system centred around Director Identification Numbers, and applications for these Director IDs opened on November 1st, 2021.
As your authorised tax, BAS or ASIC agent, we can help you understand the new requirement. But, it is important to note that you will need to apply for your director ID yourself to verify your identity. No one can apply for you.
To help you wrap your head around what you need to do, I’ve put together a quick cheat sheet to help you with the most important details.
What exactly is the Director ID, and why bother?
Designed to eliminate director fraud, your Director ID is a 15 digit identifier that will stay with you forever – even if you change directorships, change names or move overseas. You only need to apply for it once.
This streamlined system aims to help directors make these kinds of changes without dealing with a messy paper trail of different application processes. In doing so, it’ll also make it harder to hide unlawful activity. Overall, compliance is about to get a lot simpler for directors.
To apply, directors will first need a myGovID. Once you’ve got one, you can apply for your Director ID via the Australian Business Registry Services website. The ABRS has been newly formed to oversee this system, and operates as a branch of The ATO.
Eligible directors who fail to apply for their Director ID could face infringement notices and civil or criminal penalties.
Who needs to apply?
Directors will need to apply for a Director ID if they are a director of any of the following:
- A company, with an Australian company number (ACN).
- An Aboriginal and Torres Strait Islander corporation.
- A corporate trustee (including self-managed super funds).
- A charity or not-for-profit organisation that is a company or corporation.
- A registered Australian body, with an Australian Registered Body Number (ARBN).
- An incorporated association that’s registered with ASIC and trades outside the state or territory in which it is incorporated.
- A foreign company registered with ASIC and carrying on business in Australia (regardless of where you live).
A Director ID is not required for those who are:
- A company secretary but not a director.
- Acting as an external administrator of a company
- Running their business as a sole trader or partnership.
When do I need to apply for a Director ID?
There are actually quite a few different deadlines for existing and new directors, depending on when you became a director and whether you were appointed under the Corporations Act or the CATSI Act. These are as follows:
For Existing Directors
- Existing directors under the Corporations Act who are appointed as a director on or before 31 October 2021 will have until 30 November 2022 to apply.
- Existing directors under the CATSI Act who are appointed on or before 31 October 2022 will have until 30 November 2023 to apply.
Too busy? Our Rees Group corporate team will be in contact over the next 3 months to support you through the process.,
For New Directors
- Individuals appointed as a director under the Corporations Act between 1 November 2021 and 4 April 2022 will need to apply for a Director ID within 28 days of their appointment as a director.
- Individuals appointed as a director under the Corporations Act after 5 April 2022 will need to apply for a Director ID prior to their appointment.
- Individuals appointed as a director under the CATSI Act from 1 November 2022 will need to have applied for a Director ID prior to their appointment.
Should I be worried about my privacy?
Good question, but the short answer is no.
As with any newly established and far-reaching database, concerns around privacy tend to be at the front of people’s minds.
Thankfully, the ABRS (Australian Business Registry Service) has advised that Director IDs will not be shared with the public. They’ve also made it clear that there will be strict rules around how the Director IDs can be used.
If you’ve got other questions, or you’d like to get into the finer details, you can find more information on the ABRS website.
If you’re an existing client, then our new corporate manager Johanna Ah Yu will be in contact to facilitate this process in early 2022. Otherwise, you can reach her at firstname.lastname@example.org
If you’ve got other concerns you’d like to discuss, then get in touch with one of our talented business advisors today.
The information in this article is of a general nature. It does not take your specific needs or circumstances into consideration. You should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.