As of 1 November 2021, directors of Australian companies are now required to verify their identity as part of the Director Identification Number (Director ID) initiative. This article summarises director obligations under the initiative and how they can apply for a Director ID.
The Director Identification Numbers regime
The Director ID initiative is a requirement under the Australian Government’s Modernising Business Registers program, which was announced as part of the Digital Business Plan in the 2020 Federal Budget. The initiative aims to verify the identity of directors to combat illegal phoenix activity, eliminate director identity fraud and increase the accountability of directors. Accordingly, a Director ID will be a unique identifier that will be assigned to a director for life.
Timeframes to apply
When directors need to comply with the new requirements will depend on when they were appointed as a director. There will be a transition period in place until 5 April 2022.
- Appointed on or before 31 October 2021: Prior to 30 November 2022
- Appointed between 1 November 2021 and 4 April 2022: Within 28 days of appointment
- Appointed from 5 April 2022: Prior to appointment
A failure to apply for a Director ID within the required timeframe will leave directors open to both criminal and civil penalties. However, please note that directors will be able to apply for an extension if they are unable to apply by the date required. The Australian Tax Office is expected to release details about the process for requesting an extension in November 2021.
How to apply
The fastest way to apply will be via the new Australian Business Registry Services (ABRS) website, which was launched this month.
Directors will need to:
- Download the myGovID app and apply for a myGovID (if they haven’t already done so);
- Gather information and documents to verify their identity (visit the ABRS website for a list of documents required); and
- Login to ABRS online and complete an application for a Director ID.
Recommendations
We recommend that to prepare, directors should:
- familiarise themselves with the ABRS website;
- update director appointment processes within their company to include the Director ID requirements; and
- set up a myGovID if they don’t already have one.
More information
If you have any queries or would like further information about this article, please contact:
Justin Hill
Principal
M: 0418 578 701
E: jhill@pageseager.com.au
Ella Wade
Lawyer
T: (03) 6235 5161
E: ewade@pageseager.com.au
Published: 17 November 2021
