DIRECTOR IDENTIFICATON NUMBERS ARE HERE TO STAY

Christian Chenu

In June 2020, the Australian Government passed the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth).

This is part of the government’s Digital Business Plan, which includes the Modernising Business Registers Program.

As part of this plan, the new Australian Business Registry Services (ABRS) has been established. Once fully operational, the ABRS will maintain the Australian Business Register as well as more than 30 other registers that are currently operated by ASIC and which will be transitioned over to the ABRS between now and 2024.

Director Identification Numbers

The Director Identification Number is the first service being offered by the Australian Business Registry Services. They are mandated by new Part 9.1A of the Corporations Act 2001 (Cth). The purpose of this regime is to prevent fraudulent director identities, prevent phoenixing activity, trace directors’ relationships with companies over time and facilitate insolvency proceedings. The ID numbers have also been proposed as one means of protecting director personal information (dates of birth, residential addresses), which are currently searchable on ASIC registers. This will guard against cyber security and identify theft risks. It is not yet clear how this will be implemented.

A Director ID is a 15-digit identifier unique to an individual. People will need a Director ID if they are a director or intend to become one, including alternate directors. They will keep that ID number forever, even if they change companies, change names, cease acting as a director, move interstate or relocate overseas.

How to Apply

The director – and only the director – can apply for his or her Director ID online by completing a three-step application process. The director will also need a myGovID to apply. Note, a myGovID is not the same thing as a myGov account. A myGovID can be obtained by visiting myGovID.gov.au.

The applicant will need to verify their identity by providing their Tax File Number, residential address as held by the ATO, and two identity documents (typically an Australian passport and a driver’s licence). Foreign resident directors will have a slightly harder time as they will need to provide certified copies of foreign ID documents.

The above steps imply that the days of taking instructions from a client and establishing a company within 24 hours may be a thing of the past (particularly for clients without existing Director IDs).

There is no charge for applying for a Director ID.

When to Apply

It is important to note that this regime is now live and applies to all new director appointments. It also applies to existing directors, albeit with a grace period as follows:

Date of Appointment When to Apply
On or before 31 October 2021 By 30 November 2022
Between 1 November 2021 and 4 April 2022 Within 28 days of appointment
From 5 April 2022 Prior to appointment

Handling Data

It is recommended that Director IDs be provided to a company’s tax agent or the person responsible for managing your company records. Company secretaries or tax agents must ensure that these details are up to date. If a director needs to change their personal information, they must notify their company within seven days. The company must then notify ASIC within 28 days. Late fees will apply after this date.

Penalties

These obligations are not to be taken lightly. Contravention may lead to civil penalties (up to 5,000 penalty units. As of 1 July 2020, penalty units are worth $222 each) or criminal charges (up to 12 months’ imprisonment).

Although we are unable to apply on your behalf (applications must be made by the directors themselves), Loch Legal is happy to discuss this with you. Please contact Sophie Cohen (sophie@lochlegal.com.au) on 0411 866 505 or Christian Chenu (christian@lochlegal.com.au) on 0417 015 997 to discuss how we can help.

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