Company Directors Now Must Have IDs – Do You Have Yours?
The Government is introducing a new requirement for directors to apply for a unique identification number (Director ID) from November 2021.
Existing company directors will be required to apply for a director identification number (Director ID) by 30 November 2022.
Directors that are appointed between November 1, 2021 and April 4, 2022 will need to apply within 28 days of appointment.
From April 5, 2022, application is required before appointment.
Director IDs will help prevent the use of fake director identities and make it easier for regulators to associate directors with companies.
Directors must apply for their director ID themselves and will be required to produce their myGovID alongside two identity documents from a list including their bank account details, super account details, ATO notice of assessment, dividend statement, Centrelink payment summary, and PAYG payment summary.
Under the law, directors who fail to apply for a director ID within the stipulated time frame can face criminal or civil penalties of 5,000 penalty units, which currently stands at $1.11 million. Directors of a The Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act) organisation can face penalties of up to $200,000.
Penalties will also apply for conduct that undermines the new requirements, including providing false identity information to the registrar or intentionally applying for multiple director IDs.
The director ID will be attached to a director permanently, even if they cease to be a director, change their name, or move interstate or overseas.
Directors will be able to start applying for their Director ID from 1 November 2021 from the Australian Business Registry Services website.
In order to make an application a director will need to have a myGovID. It is important to note that myGovID is different to MyGov, which is commonly used to access existing services from the ATO or Medicare.
In preparation for making an application open, the Australian Business Registry Services advises eligible directors to set up their myGovID if they have not already done so. The ABRS website has more information about setting up a myGovID.
Written by Michael Rodriguez, Director at Cambridge & Kent Chartered Accountants, 12 November 2021