Director identification number
- Company directors need to verify their identity as part of a new director identification number (director ID) requirement
- A director ID is a unique identifier that a director will apply for once and keep forever - which will help prevent the use of false or fraudulent director identities.
- When you must apply depends on when you were appointed as a director. Existing directors have until 30 November 2022 to apply.
- Directors appointed between 1 November 2021 and 4 April 2022 must apply within 28 days of their appointment.
- From 5 April 2022, intending directors must apply before being appointed.
- The new Australian Business Registry Services(ABRS) is responsible for administering the director ID initiative.
- ASIC is responsible for enforcing director ID offences set out in the Corporations Act 2001. It is a criminal offence if you do not apply on time.
Who needs a director ID
You need a director ID if you're a director of a:
- Aboriginal and Torres Strait Islander corporation
- corporate trustee, for example, of a self-managed super fund
- charity or not-for-profit organisation that is a company or Aboriginal and Torres Strait Islander corporation
- registered Australian body, for example, an incorporated association that is registered with the Australian Securities and Investments Commission (ASIC) and trades outside the state or territory in which it is incorporated
- foreign company registered with ASIC and carrying on business in Australia (regardless of where you live).
You must apply for your own director ID to verify your identity. No one can apply on your behalf.
Why you need a director ID
Shareholders, employees, creditors, consumers, external administrators and regulators are entitled to know the names and certain details of the directors of a company.
All directors are required by law to verify their identity with us before receiving a director ID. This is important because it will help to:
- prevent the use of false or fraudulent director identities
- make it easier for external administrators and regulators to trace directors’ relationships with companies over time
- identify and eliminate director involvement in unlawful activity, 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 without the debt. When this happens:
- employees miss out on wages, superannuation and entitlements
- suppliers or sub-contractors are left unpaid
- other businesses are put at a competitive disadvantage
- the community misses out on revenue that could have contributed to community services.
If you have questions or concerns please call our office and speak with your Accountant.