From November 2021, company directors will need to verify their identity as part of a new director identification number (Director ID) regime. The Director ID will be a unique identifier that a director will apply for once and will keep forever.
So what exactly is a Director ID?
A Director ID is a 15-digit identifier given to a director (or someone who intends to become a director) who has verified their identity.
A Director ID:
• starts with 036, which is the 3-digit country code for Australia under International Standard ISO 3166
• ends with an 11-digit number and one ‘check’ digit for error detection.
Directors will only ever have one Director ID. They’ll keep it forever even if they change companies, stop being a director, change their name or move interstate or overseas.
Who needs a Director ID?
You need a Director ID if you are 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 (CATSI Act).
An eligible officer is a person who is appointed as a director or as an alternate director who is acting in that capacity. Importantly, it is not only the directors of trading companies that need a Director ID. If you’re a director
of a passive investment entity or indeed a corporate trustee (such as of a discretionary trust of a self-managed super fund), you too will need to apply for a Director ID
How is a Director ID obtained?
Applications for a Director ID are free and will open on 1 November 2021.
The fastest way to apply is online via the ABRS platform at www.abrs.gov.au/director-identification-number
To log in to ABRS online, the director will also need a myGovID which is different from myGov. We recommend chatting to your Bookkeeper or Accountant to assist in establishing a myGovID.
It’s also important to note that Directors must apply for their Director ID themselves because they will need to verify their identity by producing their myGovID alongside two identity documents from a list including: their bank account details, super account details, ATO notice of assessment, dividend statement, Centrelink payment summary, or PAYG payment summary.
Further details on the specifics of identity verification for each of the application methods is detailed on the ABRS website.
How is a Director ID managed?
Once a Director ID is obtained, it should be passed on to any relevant persons, which might include:
the company secretary.
another director.
the accountant.
the ASIC Registered Agent (if different).
Penalties
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 over $1.1 million.
Penalties will also apply for conduct that undermines the new requirements, including providing false identity information to the registrar or intentionally applying for multiple Director IDs.
This information is provided by Australian Bookkeepers Network Pty Ltd