The clock is ticking: apply now for your Director ID

If you are a director appointed under the Corporations Act 2001 (Cth) on or before 31 October 2021, you must apply for a Director ID by 30 November 2022 to avoid committing a criminal offence and incurring penalties.

What is a Director ID?

A Director ID is a unique 15-digit identifier assigned to directors to help prevent the use of false or fraudulent director identities, enable regulators to trace relationships across companies and identify and eliminate director involvement in illegal phoenix activity.

The Australian Business Registry Services (ABRS), which is a relatively new registry service, is responsible for delivering, and the Australian Securities and Investment Commission (ASIC) is responsible for the enforcement of, the Director ID initiative.

Who needs to apply for a Director ID?

All directors of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation will need a Director ID.

When do you need to apply?

The date on which you must apply for a Director ID will depend on the date on which you are first appointed as a director:

Directors of companies regulated by the Office of the Registrar of Indigenous Corporations and registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 have a different time frame in which to apply.

If you are unable to apply for your Director ID by the relevant due date, you may complete and submit an application form with the ABRS to request an extension. 

How to apply for a Director ID

You must apply for your own Director ID; it is a one-off application and the resulting Director ID is one that you will keep forever – even if you change companies, cease being a director, change your name or move interstate or overseas.

The fastest way to apply for your Director ID is online via the following steps:

1. Set up a standard or strong identity strength myGovID
   Different to a myGov account, a myGovID is a digital identity managed from your smart device that makes it easier for you to prove who you are online.
   If you already have a myGovID, move onto Step 2. If not, you can visit mygovid.gov.au/set-up to learn how to set up a myGovID.
2. Gather documents to verify your identity
   In addition to your myGovID, you will need your tax file number and residential address (as held by the ATO) and to be able to answer questions based on information from 2 other documents to verify your identity.

3. Visit the ABRS website, follow the prompts and complete your application
   The application process should take less than 5 minutes.

Phone and paper application options are also available, and each process has its own requirements for verifying your identity. Applicants from outside Australia must submit a paper application.

What are the consequences for non-compliance?

ASIC is responsible for enforcing the following new Director ID offences that have been introduced under the Corporations Act 2001 (Cth), two of which relate to a failure to apply for a Director ID when required:

Key takeaways

Failing to comply with the new Director ID initiative may result in serious consequences. To avoid the imposition of any of those consequences, we recommend that existing directors apply for a Director ID, and become familiar with their responsibilities in relation to their Director ID, as soon as possible, and before the relevant due date, which will be 30 November 2022 for many directors.

This article was first published as part of ClearLaw on www.cleardocs.com. You can read more ClearLaw articles here.