Existing Directors of Australian Companies were required to apply for a Director Identification Number (Director ID) by November 30, 2022. The business registrar has extended the director ID application deadline by two weeks, from November 30 to December 14.
New Directors will now be required to apply for their Director ID before their appointment.
Application for a Director ID is free, and you must apply for your own Director ID. The fastest way to apply is online using the Australian Business Registry Services (ABRS) which is a single platform administered by the Commissioner of Taxation that brings together ASIC’s 31 business registers and the Australian Business Register.
All company Directors must apply for it themselves, as they are required to verify their identity themselves. There’s a common myth that if you’ve got a registered tax agent, they can just apply for a Director ID on your behalf, but that’s not the case.
Use your myGovID app with at least a standard identity strength to log in to the ABRS online to start your Director ID application. You will be required to produce your myGovID alongside two identity documents from a list including your bank account details, super account details, ATO notice of assessment, dividend statement, Centrelink payment summary and PAYG payment summary.
If you don’t have the myGovID app, download it from the App Store or Google Play, enter your personal details and prove who you are by verifying your identity documents.
Under the law, 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 $1.11 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.
The government expects the Director ID regime to help prevent illegal phoenixing by ensuring Directors can be traced across companies, while also preventing the use of false or fictitious identities.
Under the law, 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 $1.11 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.
The government expects the Director ID regime to help prevent illegal phoenixing by ensuring Directors can be traced across companies, while also preventing the use of false or fictitious identities.
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The new regime is expected to cover over 2.5 million Directors, or roughly 10 per cent of Australia’s 25.7 million population. The Director ID will be attached to a Director permanently, even if they cease to be a Director, change their name, or move interstate or overseas.
The ATO report that despite a record 78,000 directors applying on 29 November alone, around 700,000 had still to apply from a total of more than 2.5 million – equivalent to 28 per cent of Directors. ABRS deputy registrar Karen Foat said, “Some people might not actually realise they are a Director of a Company. You don’t have to wear a suit or work in an office to be considered a Director,” she said. “If you run a small business, self-managed super fund, a not-for-profit or even a large sporting club, you may be a Director, which means you’ll need a Director ID.
ABRS registrar Chris Jordan said it would apply a “pragmatic compliance approach” to directors if they applied by 14 December. “The ABRS will not apply compliance resources to determine whether individuals met their director ID obligations by 30 November 2022 if they apply for a director ID by 14 December 2022,” Mr Jordan said.
But Ms Foat reminded that missing the extended 14th December deadline could involve a maximum criminal penalty of $13,200, or up to $1,100,000 under civil law. “Whilst penalties can apply, the community can expect we will take a reasonable approach to support people to apply, particularly where Directors have been impacted by circumstances like natural disasters,” she said.
The government has said that Directors who have reasonable grounds for missing the application deadline owing to their personal circumstances can seek an extension of time to apply.
