fbpx

What is a director ID and who needs to apply

What is a director ID and who needs to apply

The director identification number (director ID) initiative is introduced as a part of the Government’s Modernising Business Registers (MBR) Program.

Directors will be required to register for a unique identification number that they will keep for life.

What is a director ID?

A director ID is a unique identifier number to be issued to each person who is a director or acting alternate director of a company or the equivalent role (such as a management committee member) of some incorporated associations.

The Australian Government has released draft exposure materials that provide greater information on the proposed Director Identification Number (DIN) regime, including how to apply for a DIN. It proposes that Corporations Act directors be required to apply for DINs by 30 November 2022, with CATSI Act directors by 30 November 2023.

Directors only need to apply for director ID once and keep it forever even if they cease being a director, change their name, change companies, move interstate or overseas, or act as a director for multiple organisations.

The overall objective is to promote good corporate conduct, help prevent the use of false or fraudulent director identities, and tackle ‘phoenixing’. 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. Director IDs are expected to reduce phoenixing by ensuring directors can be properly traced between organisations and preventing the use of fake identities.

Who needs to apply

You need a director ID if you’re an eligible officer of:

  • A company, a registered Australian body or a registered foreign company under the Corporations Act 2001 (Corporations Act)
  • An Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act).

 

An eligible officer is a person who is appointed as:

  • A director
  • An alternate director who is acting in that capacity.

 

Directors must apply for their director ID themselves because they need to verify their identity. No one can apply on their behalf.

You don’t need a director ID if you’re:

  • A company secretary but not a director
  • Acting as an external administrator of a company
  • Running a business as a sole trader or partnership
  • Referred to as a ‘director’ in your job title but have not been appointed as a director under the Corporations Act or the CATSI Act
  • A director of a registered charity with an organisation type that is not registered with ASIC to operate throughout Australia
  • An officer of an unincorporated association, cooperative or incorporated association established under state or territory legislation, unless the organisation is also a registered Australian body.

 

When you need to apply

You can apply for a director ID from November 2021.

If you are planning on becoming a director, you can apply before you’re appointed.

Corporations Act directors

When you must apply for your director ID depends on the date you become a director.

Date you become 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

 

CATSI Act directors

When you must apply for your director ID depends on the date you become a director.

Date you become a director Date you must apply
On or before 31 October 2022 By 30 November 2023
From 1 November 2022 Before appointment

How to apply

You must apply for your director ID yourself. No one can apply on your behalf.

Your authorised agent can’t apply for a director ID for you either. They can help you understand the new requirement and if you need to apply and when.

The director ID application will be available from November 2021 at abrs.gov.au.

To log in to ABRS online, you’ll need to use the myGovID app, set it to a Standard or Strong identity strength. If you haven’t already, you can set up your myGovID now.

Here’s the step by step guidance on how to apply for your director ID.

Meeting director ID obligations

If a director required to apply for a DIN does not do so, they may face a civil penalty of 5,000 penalty units.

There is also the possibility that the Director may face criminal penalties, including imprisonment. 

In addition, a director must not:

  1. Knowingly apply for additional/multiple DINs; or 
  2. Misrepresent a DIN to a Government or registered body (or provide false or misleading information to the Registrar to obtain a DIN).

It is mandatory for individual directors to ensure that they apply for and are issued a DIN within the timeframes stipulated above to avoid incurring civil and possible criminal penalties. 

 

How to protect yourself from increasingly sophisticated scams

Many people believe they wouldn’t fall for a phishing fraud – but scammers have become increasingly sophisticated in their methods, making it’s harder to tell the fakes from the real deal. Here’re some tips to help you… Learn more

Share this: