Director Identification Number – Required for ALL Company Directors
What is a Director Identification Number?
A director ID is a unique 15 digit identification number that, once issued, will remain with that director forever, regardless of whether they stop being a director, change companies, change their name, or move overseas.
Why Was it Introduced?
The Director ID forms part of the Government's Modernisation of Business Registers (MBR) Programme intended to create greater transparency, the MBR will unify the Australian Business Register and 31 ASIC business registers, including the register of companies and will be managed by the Australian Taxation Office (ATO). The introduction of Director IDs is intended to create a fairer business environment and preventing the potential for fraud and phoenix company activity.
For those concerned about their privacy, the director ID will not be searchable by the public and will not be disclosed without the consent of the Director..
Who Does it Apply to?
All directors of a company (including a registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation) will need to apply for a Director ID, including directors of corporate trustees of self-managed super funds (SMSFs) and family trusts. Sole traders, partnerships or individual trustees of trusts are not required to apply. An individual with 'Director' in their title, but not appointed as a Director under the Corporations Act or Corporations (Aboriginal and Torres Strait Islander) Act (CATSI) need not apply also.
How and When do I Apply?
For Corporation Act directors:
For CATSI directors:
|Date You Became a Director
||Date You Must Apply By||Date You Became a Director||Date You Must Apply By|
|On or before 31 October 2021
||By 30 November 2022
||On or before 31 October 2021||By 30 November 2023|
|Between 1 November 2021 and 4 April 2022
||Within 28 days of appointment
||From 1st November 2022||Before appointment|
|From 5 April 2022
Australian resident directors can apply for a Director ID from 1 November 2021. The first step is to verify your identity using the myGovID app.
Note – myGovID is different from myGov
- myGovID is an app. You download the myGovID app to your smart device. It lets you prove who you are and log in to a range of government online services, including myGov.
- myGov is an account. Your myGov account lets you link to and access online services provided by the Australian Taxation Office (ATO), Centrelink, Medicare and more.
In addition to your myGovID, you will need to have on hand documentation that matches the information held by the ATO. If you have a myGov account linked to the ATO, you can find the details on your profile. You will need:
- Your tax file number
- The residential address held on file by the ATO; and
- Two documents that verify your identify such as:
- Your bank account details held by the ATO (on your myGov ATO account, see ‘my profile/financial institution details’).
- Dividend statement investment reference number
- Notice of assessment (NOA) – date of issue and the reference number (on your myGov ATO account, see Tax/lodgements/income tax/history).
- The gross amount from your PAYG payment summary
- Superannuation details including your super fund’s ABN and your member account number
The final stage requests your personal contact details (not the company’s).
Upon completion, your director ID will be issued immediately on screen. This information should be provided to your company secretary or office holder.
If anything changes, such as your residential address or phone number, you will need to update your details through the ABR. You will also need to notify your company within seven days (14 days for CATSI Act directors) and the company will then need to notify the Australian Securities and Investments Commission (ASIC) within 28 days.
Individuals will need to apply for their director ID themselves to verify their identity. In other words, no one can apply for it on the director's behalf (including your tax agent).
Applying by Phone or Paper
You can choose to verify your identify and apply for your director ID by phone (13 62 50) or on paper. Ensure you have your identification documents available before embarking on the process and note that your identifying documentation will have to be certified by an authorised certifier (Barrister of Justice of the Peace etc. Please note, copies certified by a registered tax or ASIC agent are not allowed as your ongoing commercial relationship could create a real or perceived conflict of interest.
Foreign Directors and the Director ID system
Foreign directors of Australian companies have the same requirements and deadlines as Australian resident directors, however, the
verification process is only accessible in paper
One primary and two secondary forms of certified identification are required to accompany the application
The form and the accompanying documents will need to be sent by mail to Australian Business Registry Services using the details provided.
Being a Company Director is a Responsibility
Being a company director is not just a title; it is a responsibility. A company director is responsible for ensuring that the company does not trade while insolvent. Consequentially, the directors may be held personally liable for any debt incurred as a result. The director penalty regime has also tightened up in recent years to ensure that directors are personally liable for PAYG withholding, net GST, and superannuation guarantee charge liabilities if the company fails to meet its obligations by the due date. For many small businesses, this can mean the directors are also often personally responsible for company loans secured against property such as the family home.
Failing to perform your duties as a director is a criminal offence with fines of up to $200,000 and five years in prison.
As always, if you need to discuss any aspect of the the Director ID regime, don't hesitate to contact us.
This article forms part of our Business Accelerator Magazine. Download the latest edition HERE or browse other articles from this edition below:
- See also Government Locks in Director ID Deadline
- The Key Ingredients for Business Success (Part 2)
- Why Do New Businesses Fail?
- Preparing to Sell Your Business
- Return to Top
Disclaimer: This newsletter contains general information only. No responsibility can be accepted for errors, omissions or possible misleading statements. No responsibility can be accepted for any action taken as a result of any information contained in these articles. It is not designed to be a substitute for professional advice and does not take into account your personal circumstances.