Director Identification Numbers: Important Changes to the Law
Are you a director of a company or are you planning to become one? If so, there have been some changes to the Corporations Act 2001 (Corporations Act) that are important to be aware of. From November 2021 you are required to register for a Director Identification Number.
We’ve summarised all of the key information below, but please get in touch if you have any further questions.
What is a Director Identification Number (Director ID)?
A Director ID is a unique identifier which will start with 036 (the Australian country code) and be followed by a unique 11- digit number. This number will be unique to you.
You only need to apply for a Director ID once and will keep it forever even if you start working at another company, decide you want to stop being a director, change your name or even move interstate or overseas.
Why is the Government introducing Director IDs?
Director ID’s make it easier for third parties like shareholders and external administrators to find a director’s name and other relevant identifying information when engaging with a company.
Director ID’s also aim to prevent illegal activity such as identification fraud and illegal phoenix activity. Illegal phoenix activity is where directors transfer assets in one company that is liquidated or otherwise abandoned to a new one to avoid paying debts. Director ID’s ensure that directors will be able to be tracked and regulated, so they can’t engage in illegal phoenix activity.
Who needs to apply for a Director ID?
Anybody who is a director (or an alternate director acting in that capacity) of a registered Australian body or a registered foreign company under the Corporations Act needs to apply for a Director ID.
You currently don’t need to apply for a Director ID if you are a company secretary or running your business as a sole trader or partnership.
How do I apply for a Director ID?
You are the only person who can apply for a Director ID. Nobody (including your lawyer, accountant or other professional) can apply on your behalf. You can apply via the Australian Business Registry Services (ABRS) website.
To apply you need your myGovID, tax file number (TFN), residential address and identity documents.
Once your application is completed and you are registered, you can manage your details anytime via the ABRS website.
When do I apply for a Director ID?
You are able to apply for a Director ID now. If you are going to become a director in the future, you can apply before you’re appointed. The following timelines apply:
If you became a director on or before 31 October 2021, you must apply for a Director ID by 30 November 2022.
If you became a director between 1 November 2021 and 4 April 2022, then you must apply for a Director ID within 28 days of your appointment.
If you become a director from 5 April 2022, you must apply before your appointment date.
You could be issued with infringement notices and be subject to civil and criminal penalties if you do not register for a Director ID. We recommend you complete your application as soon as possible for peace of mind.
If you found this article helpful, you might like to read more in our resource Legal Advice For Small Business.
Please let us know if you have any further questions, we’re always happy to help.