Are you a Company Director?
Director I.D. is here for your action.
Earlier this year ASIC introduced the requirement for all company directors to hold a director identification number (director ID). This means directors are now obliged to verify their identity as part of the new requirements.
Under the legislation, each person who holds the position of director for an Australian or registered foreign corporation, will be required to confirm their identity by obtaining a personal director ID, which they will use for all director appointments. These requirements therefore extend to any director of a trustee company as well as directors of corporate entities.
When to apply for a director ID
The director ID application is now available, with transitional arrangements for existing and new directors. When you need to apply for a director ID will depend on when you became a director, as set out below.
|
Date person becomes a director |
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 |
How to apply for a director ID
To apply for your director ID you will need to set up a myGovID account which you will use to verify your identity at https://www.mygovid.gov.au/set-up
Once you have verified your identity, you need to apply for a director ID via the Australian Business Registry Services website from November 2021.
This process must be done by the director.
Once you have obtained a director ID, you will be required to register this against any existing director appointments. It will be retained permanently by you, similar to the way a tax file number is applied to each individual.
The benefits of the director ID
The Act is designed to increase director accountability and traceability, substantially limiting the potential for fraudulent activity and ‘phoenixing’ (where directors of a company wind up a company to avoid paying its liabilities and incorporate a new company to carry on substantially the same business). It will also prevent the use of fictitious identities.
A further benefit will be that sensitive personal director information held on publicly accessible corporate registers will no longer be available. By removing this information, directors’ private information will be better protected from identity theft and privacy breaches.
While the transitional provisions will be in place for the first twelve months of operation, criminal and civil penalties will apply for directors who do not apply for a director ID within the allowed time. Until the appointment of the Registrar to the Commonwealth Business Registry, ASIC will remain the corporate regulator.
A member of the Stable Financial team will soon be in touch with all companies registered with Stable Financial to discuss the director ID registration process. If you have any questions regarding your directorship or the director ID, please contact your Stable Financial team member.