You have until 30 November 2022 to apply for your director ID
From 1 November 2021, the Corporations Act 2001 requires all company directors to verify their identity, apply for, and obtain a Director Identity (director ID) through the Australian Business Registry Services (ABRS).
If you are a director of an Australian or registered foreign company, or registered Australian body, you have until 30 November 2022 to apply for your director ID. Failure to do so is a criminal offence with the Australian Securities and Investments Commission (ASIC) who is empowered to enforce Director ID offences pursuant to the Corporations Act 2001.
What is a director ID?
A director ID is a unique identifier that a director of a company will apply for once and then continually use. The director ID was brought about to help prevent the use of false or fraudulent director identities.
How do I get a director ID?
The ABRS is responsible for administering the director ID initiative. You can apply for your director ID online through the ABRS website. To apply online, you will need to have a myGovID account set up.
If you don’t have or are unable to set up a myGovID and live in Australia, you can call the ABRS. You will be required to verify your identity – for more information on the documents required to do so, visit Apply for your Director ID.
If you are a new director and were appointed for the first time between 1 November 2021 and 4 April 2022, you must apply for an ID within 28 days of your appointment. If you currently live outside of Australia, you can apply for your ID by using a paper application form – Application for a director identification number (NAT 75329, PDF 306KB).
In addition to completing the form, you will also need to provide certified copies of your documents that verify your identity.
If you are having issues applying for your director ID, we recommend you seek legal advice, so you do not end up with a fine.
From 5 April 2022, all intending new directors must apply for an ID before being appointed to their role.
Directors appointed before 1 November 2021 have until 30 November 2022 to apply for their ID.
Why do directors need an ID?
Director IDs will help prevent the use of fake director identities and make it easier for regulators to associate directors with companies. Before obtaining a director ID, all directors must verify their identity with the ABRS.
A director ID will help to:
- Prevent the use of fraudulent director identities.
- Make it easier for external bodies and regulators to trace directors’ relationships with different companies over time.
- Identify and address director involvement in unlawful activities, for example, where Illegal phoenix activity has occurred.
Illegal phoenix activity occurs when a company is liquidated, wound up or abandoned in order to avoid paying its outstanding debts. A new company is then created to continue the same business activities but without the outstanding debt. When illegal phoenix activity takes place, employees miss out on wages, superannuation, and other work entitlements. Suppliers or sub-contractors are also left unpaid and other businesses are placed at a competitive disadvantage. The community as a whole misses out on revenue that could have gone toward community services.
What happens if I fail to get an ID?
There are civil and criminal penalties that will apply where individual directors fail to apply for their director ID within the prescribed timeframes.
The ABRS is currently identifying newly appointed directors who have not applied for their director ID within 28 days of appointment and contacting those directors to make them aware of their obligation and to encourage them to apply for their ID.
At first instance, the ABRS’ focus will be on education, awareness and helping directors comply with obtaining their IDs.
If directors fail to act after requests from the Registrar, the ABRS will refer them to ASIC who will commence enforcement action.
If a director fails to acquire an ID when required to do so, they can be fined up to $13,200 under the Corporations Act, or up to $1,100,000 under civil law.
If a director fails to apply for an ID when directed by the Registrar, the director may be fined up to $13,200 under the Corporations Act, or up to $1,100,000 under civil law.
If you have been fined, we strongly recommend you seek legal advice on any options you have available.
Director IDs were introduced to help prevent the use of fraudulent director identities, make it easier for external bodies and regulators to trace directors’ relationships with different companies over time, and identify and address director involvement in unlawful activities.
Directors who fail to obtain their IDs within the required timeframe may be subject to hefty fines. This is why it is important to seek legal advice if you have any doubts about your requirement to obtain a director ID.