Director ID - Know your status and don’t get caught out

With the introduction of the director ID regime on 1 November 2021 comes a series of questions as to ‘why’ this is being implemented and ‘who’ it may apply to.

For too long, tracking illegal activities by directors has been a difficult task. Directors have been able to shut down companies and start new ones without any checks in place, or go under false names to join boards without transparency to shareholders and relevant stakeholders.

By introducing this identifier, the new Australian Business Registry Services (ABRS) will provide all directors with an ID number that will stay with them forever, similar to a tax file number (TFN). This will provide clear tracking of companies which directors have had control over, and will hopefully restrict phoenix activity in the future.

You might be reading this and thinking “I don’t run a business in a company, this doesn’t apply to me”, however, director IDs also apply to those who might have a trust or SMSF. This is because in many cases, these entities have been established with a company as the trustee.

When do you have to register for a director ID?

For existing directors, you have until 30 November 2022 to register.

Registering for an ID is something that you will need to do yourself. You will need to ensure that you have a myGov ID www.mygovid.gov.au/set-up, and that you have the relevant information including your TFN; bank account details; and an ATO notice of assessment. The registration process is completed online, takes only 5-10 minutes, and can be completed via the ABRS website: www.abrs.gov.au/director-identification-number/apply-director-identification-number

What if I’m not a director yet?

If you’re not currently a director, you may become one in the future. If you become a director between 1 November 2021 and 4 April 2022, you must apply for your director ID within 28 days of your appointment. If applying from 5 April 2022, you will need to apply before being appointed as director.

There is certainly plenty of time to register, but please be aware that if you miss these dates, the penalties start at $13,200 per director. Why not register now before you forget?

For further information regarding this, please visit abrs.gov.au or check out the latest director ID news. If you’re unsure whether this applies to you, please contact our office on 1300 365 125 so that we may assist you.