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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. In this article, we provide information and guidance regarding the Director ID initiative, key timelines and processes, and consequences for non-compliance.

Alisha Wright, Maddocks Lawyers

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?

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:

First appointed as a director

Date you must apply

On or before 31 October 2021

By 30 November 2022

Between 1 November 2021 and 4 April 2022

Within 28 days of appointment

From 5 April 2022

Before appointment

 

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?

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), 2 of which relate to a failure to apply for a Director ID when required:

Offence

Legislative section

Maximum penalties for individuals

Failure to have a director ID when required to do so

s 1272C

$13,200 (criminal); $1,100,000 (civil)

Failure to apply for a director ID when directed by the Registrar

s 1272D

$13,200 (criminal); $1,100,000 (civil)

Applying for multiple director IDs

s 1272G

$26,640, 1 year imprisonment or both (criminal); $1,100,000 (civil)

Misrepresenting director ID

s 1272H

$26,640, 1 year imprisonment or both (criminal); $1,100,000 (civil)

 

Key takeaways

As can be seen from the above, 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.

More information from Maddocks

For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of the Commercial team.

More Cleardocs information on related topics

You can read earlier ClearLaw articles on a range of topics, such as:

Do you need a Director ID?

Using online legal documents: aren't they all the same?

Order related document packages

Company registration

Change to sole director company

 

Lawyer in Profile

Alisha Wright
Alisha Wright
Associate
PH: 03 9258 3555

Alisha Wright is an Associate in Maddocks’ Commercial Team.

Alisha advises extensively in a range of matters including:

  • general commercial advice;
  • drafting and negotiating bespoke commercial agreements and arrangements; and
  • joint ventures and property developments.

Alisha has recently assisted with providing advice to SMSFs in relation to their compliance obligations and the drafting of bespoke shareholders agreements.