Effective November 2021, the Federal Government has introduced a requirement for Directors to apply for a unique identification number (Director ID). The Director ID will be attached to a director permanently, even if they cease to be a director, change their name, or move interstate or overseas.
All Directors will be issued with a unique and permanent Director ID which will provide traceability of a director’s profile and association with companies. This identification process will be a further tool for regulators to identify repeated breaches of the Corporations Act by individual Directors.
Historically the Australian Securities and Investments Commission (ASIC) has not been required to verify the identity of Directors when registering Companies and consenting to act as a Director.
As a result, tracing a Director’s relationships across companies and investigating a Director’s involvement in possible repeated unlawful activity has proved difficult.
The introduction of the Director ID is part of the implementation of the Modernising Business Registers (MBR) program. The MBR program will establish the new Australian Business Registry Services (ABRS) which is being implemented by the Australian Taxation Office and will streamline how business information is registered, viewed and maintained.
From 1 November 2021, all new Directors will be required to apply for their Director ID, whilst existing Directors will have until 30 November 2022 to apply. You will require a Director ID if you’re an eligible officer of:
- A company, registered Australian body or a registered foreign company under the Corporations Act 2001
- 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 a director, or an alternate director who is acting in that capacity.
In order to apply for a Director ID, a director will require a MyGov ID and other proof of identity documents. Directors must personally complete the online application process as applications on behalf of another person will not be accepted.
Should a director or company fail to meet the new Director ID requirements, civil and criminal penalties may apply. Penalties may apply to the following:
- Failing to apply for a Director ID within the prescribed timeframes or if directed by the regulator to do so;
- Intentionally applying for more than one Director ID;
- Providing a false Director ID; or
- Being actively involved in the contravention of any of the above offences.
Directors who fail to apply for a Director ID within the stipulated time frame can face criminal or civil penalties of 5,000 penalty units, which currently stands at $1.11 million.
For further information and to apply for a Director ID, please visit https://www.abrs.gov.au/director-identification-number.