Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) introduces new requirements for all directors of a company in Australia to have a director identification number (Director ID) from the key dates referred to in the table at the conclusion of this article.
Background to the Director ID
The Director ID is one part of the Federal Government’s Modernising Business Registers (‘MBR’) program that will combine more than 30 business registers into one place that will be referred to as the Australian Business Registry Services (‘ABRS’).
What is a Director ID?
A Director ID is a 15-digit identifier given to a director (or someone who intends to become one) who has verified their identity with ABRS.
It starts with 036 (which is the 3-digit country code for Australian under International Standard ISO 3166) and ends with an 11-digit number and one ‘check’ digit for error detection.
The purpose of a Director ID
• Prevent use of false or fraudulent director identities
• Assist external administrators and regulators to trace directors’ relationships with companies
• Better identify and eliminate directors involved in unlawful activity
How does the Director ID work?
Each director will have their own unique Director ID that they keep for the remainder of their life. This Director ID doesn’t go away if a director:
• Changes companies
• Stops being a director
• Changes their name
• Moves interstate or overseas
Who needs a Director ID?
You need a Director ID if you are a director or alternate director who is acting in that capacity of:
- a company
- an Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act)
- Corporate trustee, e.g., a self-managed superfund
- registered Australian body
- a charity or not-for-profit organisation that is a company or Aboriginal and Torres Strait Islander corporation
- a registered foreign company under the Corporations Act 2001
To be a director under the Corporations Act 2001, you must be:
- An individual who is at least 18 years old
- Not be disqualified from managing corporations, unless the appointment is made with the permission of ASIC or the Court.
It should be noted that a person who expects to become a director within 12 months may apply for a Director ID (if they do not already hold one). Once registered, that person has 12 months to be appointed as an eligible officer or their Director ID will be made inactive.
Who doesn't need a Director ID?
A Director ID is not required if you are:
- A director of an incorporated association (with no ABRN) registered with the Australian Charities and Not-for-profits Commission (ACNC)
- A company secretary but not a director
- Acting as the external administrator of a company
- Running your business as a sole trader or partnership
Who is responsible for administering and enforcing Director ID initiative?
The 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.
What are some Director ID offences?
New Director ID offences under the Corporations Act 2001:
- Failure to have a Director ID when required to do so
- Failure to apply for a Director ID when directed by the Registrar
- Applying for multiple Director ID
- Misrepresenting Director ID
If you were appointed a director on or before 31/10/2021, you need to apply for a Director ID before 30/11/2022.
If you were appointed a director between 01/11/2021 and 04/04/2022, you need to apply for a Director ID within 28 days of being appointed a director.
If you were appointed a director from 05/04/2022, you need to apply for a Director ID prior to being appointed a director.
How do I apply?
Directors need to apply for Director ID themselves and their advisers cannot apply on their behalf. It is also free to apply. To apply, follow the directions in the link here.