ASIC has launched a new requirement for company directors to verify their identity in the form of a director identification number.
The unique identifier number will be 15 digits, beginning with 036 (the 3-digit country code for Australia under International Standard ISO 3166). Directors will need to apply for their own director ID, but they will apply once and keep the same ID forever. Even if you were to change companies or your name, stop being a director or move overseas or interstate, you will retain the same director ID.
All directors of a company, registered Australian body, registered foreign company or an Aboriginal and Torres Strait Islander corporation will need a director identification number.
The Australian Business Registry Services (ARBS) is administering the new initiative.
What is the purpose?
There are a number of reasons ASIC has introduced the scheme.
Firstly, director identification numbers will help to prevent the use of false or fraudulent director identities.
They will also help external administrators and regulators to trace the relationship directors have had with different companies over time.
The regime strives to eliminate the involvement of directors in certain unlawful activities. In particular, they hope to minimise illegal phoenix activity. Illegal phoenix activity refers to the liquidation, winding up or abandonment of a company in order to avoid paying its debts, before then starting a new company that continues to carry on the same business activities.
When do I need to get my director ID?
This will depend 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 will need to apply within 28 days of their appointment.
From 5 April 2022, intending directors will need to apply before they are appointed.
How can I apply?
You can apply here. The process is quick and easy – it will only take about 5 minutes.
You will need a few things:
- Tax File Number (TFN)
- Residential address as held by the ATO
- Information from 2 documents to verify your identity (e.g. bank account details, PAYG payment summary, super account details, ATO notice of assessment etc.)
myGovID is not the same as a myGov account – it is an app for your smart devices that lets you prove your identity when logging into a range of online government services. You will need to ensure your myGovID has either Standard or Strong identity strength.
If you do not have a myGovID, or cannot get one, then you can also apply by phone or via the lodgment of a paper form. You will still need your TFN and information to verify your identity. The paper form process is much slower as it will require certified copies of any documents used to verify your identity. Have a look at the ARBS website if you intend to choose either of those options.
Due to the identity verification component, you will need to apply yourself rather than asking a tax agent or BAS agent to do so on your behalf.
Are there any consequences?
There are four new offences under the Corporations Act 2001 (Cth), contained in sections 1272C, 1272D, 1272G and 1272H. They will be enforced by ASIC.
Individuals who fail to obtain a director ID on time or when directed by the Registrar may be exposed to a maximum criminal penalty of 60 units (currently equal to $13,200.00).
Individuals who apply for multiple director IDs or who misrepresent their director ID may be exposed to a maximum criminal penalty of 120 units (currently equal to $26,640.00) and/or 1 year imprisonment.
In addition, all offences may incur potential civil penalties of up to 5,000 penalty units (currently equal to $1.1 million).
If you have further queries about director identification numbers, please do not hesitate to contact ABKJ.