Time’s running out to get a director ID

By Zilla Efrat

Company directors will need to apply for a director identification number (director ID) by 30 November 2022.

It is a criminal offence if directors do not apply on time and penalties may apply.

A director ID is a 15-digit unique identifier. It will start with 036, which is the 3-digit country code for Australia under International Standard ISO 3166, and it will end with an 11-digit number and one “check” digit for error detection. A director will only apply for it once and keep it forever

One of the main reasons for bringing in the director ID is to help prevent the use of false or fraudulent director identities.

The ID will make it easier for external administrators and regulators to trace directors’ relationships with companies over time and identify and eliminate director involvement in unlawful activities, such as illegal phoenix activity.

Illegal phoenix activity is when a company is liquidated, wound up or abandoned to avoid paying its debts. A new company is then started to continue the same business activities but without the debt.

When this happens, employees miss out on wages, superannuation and entitlements, suppliers or sub-contractors are left unpaid and other businesses are put at a competitive disadvantage.

The new ID will be needed by directors of companies registered with the Australian Securities and Investments Commission (ASIC) or with the Office of the Registrar of Indigenous Corporations as well as by those planning to become a director in the next 12 months.

The Australian Business Registry Services (ABRS) is responsible for delivering the director ID initiative. Visit the ABRS website for more information and to apply. There are no charges for applying.

The director ID is the first service to be delivered by ABRS, a newly established function of the Australian Taxation Office.

When fully established, the ABRS will also bring together the Australian Business Register (ABR) and more than 30 ASIC registers in one place.

It plans to transition the companies register, business name registers, Australian business numbers and professional and historical registers to ABRS between now and 2024.

A director ID, however, isn’t governed by the same rules or laws that apply to a tax file number. An authorised agent or company secretary must ensure that information about a company and its officeholders is handled according to their legal obligations and securely stored.

Remember too that you must be actively involved in overseeing the company’s affairs and have given your written consent to be appointed as a director.

The law doesn’t authorise the ABRS to disclose director IDs to the public without the directors’ consent. For now, your director ID will not be searchable by the public. Plus, the registrar will consult the community about what details can be disclosed and searched in the future.

When you receive your director ID, you need to pass it on to the record-holder in your company or Aboriginal and Torres Strait Islander corporation. This might be your company secretary, another director, a contact person or an authorised agent of the company.

If you’re appointed as a director of any other companies or Aboriginal and Torres Strait Islander corporations in the future, you need to give your director ID to the relevant record-holders as well.

A director ID is not required if you are a company secretary but not a director or acting as an external administrator of a company. You also don’t need one if you run your business as a sole trader or partnership.

The fastest way to get a director ID is to apply online using the myGovID app on your smart device. It helps you prove who you are and to securely log in to a range of government online services, including myGov.

Feel free to contact us for anything that relates to your business finances so we can help with your success.

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