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Published on 12 Sep, 2023

Important Deadline for Director ID

Written by:
Thomas S Phabmixay
General Manager

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A Director Identification Number (DIN), also known as a Director ID, serves as a unique identifier for individuals serving in director roles within various types of organizations. This identification number is a legal requirement established under the Corporations Act. The Director ID obligation is applicable to existing directors and those intending to become directors, as well as to eligible officers.

The eligible officer term refers to anyone appointed as a director or an alternate director who is actively fulfilling the responsibilities of that director role. In specific situations, you’ll need a Director ID even if you serve as the director of your corporate trustee for a Self-Managed Super Fund (SMSF) or family trust.

The various entities for which a Director ID is required are as follows:

  • A Company
  • A Registered Australian Body
  • A Registered Foreign Company
  • An Aboriginal and Torres Strait Islander Corporation

The Director ID initiative is a key part of a larger government program backed by the Australian Business Registry Services (ABRS). The primary aim of this initiative is to trace directors’ relationships within the corporate world. The system allows for easier detection of fraudulent director identities and other forms of unlawful activity. This includes, but is not limited to, activities like illegal phoenix operations.

To apply for a Director ID, individuals must personally navigate the application process. Regrettably, neither your Accountant nor your Professional Services Provider can serve as an authorised agent for this specific task. The director details typically required for the application usually include your residential address and various identity documents for validation.

By implementing the Director ID, the Australian Business Registry hopes to fortify its capabilities in recognising and rectifying improper director conduct, thereby enhancing the overall corporate governance landscape in Australia.

Understanding When You’re Required to Obtain a Director ID?

The need to obtain a Director Identification Number (Director ID) is determined by the Corporations Act and is relevant to certain positions. If you are in a position as a director or an eligible officer within a company, a registered Australian entity, a registered foreign company, or an Aboriginal and Torres Strait Islander corporation, obtaining a Director ID is obligatory. The process to apply for a Director ID can be done online through the Australian Business Registry Services (ABRS).

It’s crucial to note that a Director ID functions as a unique identifier that you will retain indefinitely; a single Director ID will suffice for your lifetime. This holds true even if you change companies, assume new roles in various corporations, or are appointed as an existing director in additional organisations. Consequently, there’s no need to apply for multiple Director IDs.

Non-compliance with these identification number Director ID regulations can lead to penalties. These enforcement mechanisms aim to counteract fraudulent director identities and other illegal activities, enhancing the ability to trace directors’ relationships with companies.

If you are neither an active company director nor an eligible officer, the Director ID obligation does not pertain to you. However, you still have the option to apply for a Director ID should you choose to. For those unsure about their directorial status, a consultation with the ASIC Companies Register can provide clarity.

For applicants unfamiliar with the procedures, a variety of identity documents will be needed to verify your residential address and other director details. If necessary, an authorised agent or contact person can offer support during the application process.

Understanding Director ID Violations and Consequences

Penalties may arise if one fails to secure a Director Identification Number (Director ID) when mandated, attempts to apply for multiple director identification numbers, or provides false or fraudulent director IDs. ASIC provides a detailed table outlining the maximum penalties associated with these violations. For a comprehensive breakdown, refer to the provided image below.
A chart displaying the penalties for Director ID violations, including both civil and criminal offenses for non-compliance with legislative sections.

Application Deadlines for Obtaining a Director ID

Your obligation to apply for a Director ID depends on the date you first assume a director role. For directors subject to ASIC regulations and registered under the Corporations Act 2001, the following stipulations apply:
  • Intending new directors must complete their Director ID application before their official appointment.
  • If you assumed the role of a director on or prior to 31 October 2021, you have until 30 November 2022, to meet your Director ID requirement.
  • For directors newly appointed between 1 November 2021, and 4 April 2022, there is a 28-day window from the date of appointment to submit an application for a Director ID.

Are extensions available?

If you discover that you’re unable to fulfill your Director ID obligation by the required deadline, the Australian Business Registry Services (ABRS) provides an option for an extension of time to apply for a Director ID. The application for the extension can be downloaded as a PDF from the ABRS website, accessible via the link provided here.

Steps to Secure Your Director ID

The Australian Business Registry Services (ABRS), a newly minted division of the Australian Taxation Office (ATO), oversees the administration of the Director ID system. For expedited processing, it is advisable to apply for a Director ID online through the ABRS portal.

As previously emphasized, directors themselves must navigate the application process to validate their identities, meaning an authorised agent can’t complete the process on your behalf. The key director details required for an online application include:

  • A MyGov ID with either standard or strong identity strength. If you don’t already possess one, eligible directors can establish their MyGov ID at http://www.mygovid.gov.au/set-up.
  • Your Tax File Number (TFN)
  • Your residential address, as recorded by the ATO
  • Information extracted from two distinct identity documents to corroborate your identity
The variety of identity documents accepted for verification encompasses:
  • Bank account particulars
  • An ATO Notice of Assessment
  • Details from your Superannuation account
  • A Dividend Statement
  • A Centrelink Payment Summary
  • A PAYG Payment Summary
In addition to the online option, directors also have the flexibility to apply for a Director ID either telephonically or via postal mail, both within and outside Australia.

By adhering to this procedure, you will successfully fulfill your Director ID obligation, thereby mitigating the risk of penalties related to fraudulent director identities or other types of unlawful activity. Compliance with this identification number Director ID regime aids in enhancing the traceability of directors’ relationships with companies.

What if I am a director of an Australian company but don’t reside in Australia?

If you are not living in Australia and you don’t possess a MyGov ID, it’s necessary to create one before proceeding with your application for a Director ID number. You can establish your MyGov ID by visiting the following website: http://www.mygovid.gov.au/set-up.

Director ID Obligations

A Director must:
  • apply for a Director ID within the relevant time frame, or when directed by the ABRS Registrar to do so;
  • not apply for more than one Director ID (unless directed by the Registrar to do so);
  • Avoid providing false information about the Director ID to a Commonwealth entity, company, registered Australian entity, or Aboriginal and Torres Strait Islander corporation; and
  • not be involved in a breach of the above obligations.
Directors who fail to fulfill their responsibilities could encounter significant civil or criminal fines, amounting to 5,000 penalty units, which currently equals $1.11 million dollars.

Am I required to provide my Director ID to ASIC?

You are not required to provide your Director ID to ASIC currently.

Privacy

Currently, the Registrar of ABRS has informed that a Director ID will not be accessible to the general public. Once you acquire your Director ID, it should be shared with your company secretary or any other individual responsible for record-keeping.

The ABRS will only disclose your Director ID to you or to:

  • someone the director gives permission to disclose
  • certain Commonwealth, State and Territory government bodies, and
  • Court and Tribunals.

What to do once you have received your director ID

Once you have applied for and received your director identification number no further action is required on your part.

Next Step is to Contact TMS Financials

TMS Financials provides you with a team of experienced professionals that help you achieve your financial goals through smart tax structures and strategic financial structuring. We’re a one-stop shop for all financial needs and pride ourselves on building strong partnerships with our clients.

Book a free financial health review to see the difference we can make in your financial future.

Book a free accountant consultation with TMS CPA Accountants your specialists in Sydney Australia.

Disclaimer

This outline is for general information only and not as legal, tax or accounting advice. It may not be accurate, complete or current. It is not official and not from a government institution. Always consult a qualified professional for specific advice tailored to your unique circumstances.

Ready to Secure Your Director ID?

Schedule a FREE consultation with TMS Financials today and avoid penalties.

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