We’ve been talking about the introduction of Director IDs for some time. They are now required – and there are hefty penalties if you have not complied, including civil and criminal prosecution.
By Jim Vass
Under law, ALL directors and alternate directors are required to have a Director ID number, whether they are Australian directors, or foreign directors of Australian companies.
A director ID is a unique number, an identifier that a director will apply for once and keep forever. Directors will need to apply for their ID themselves because they will need to verify their identity.
The new scheme follows amendments to Treasury Laws (Registries Modernisation and Other Measures) Bill 2019. Essentially, the new legislation initiated a new Commonwealth Modernising of Business Registers (MBR) regime, to manage Director IDs and perform other functions. These director IDs will be kept permanently and will record a director’s profile and board responsibilities over the full course of their career.
Also under the new legislation, all registry functions (the establishment, maintenance and use of registers) will be appointed to one single Commonwealth Business Registrar, to be administered by the ATO — with 34 ASIC registers (including the Companies Register) and the Australian Business Register to be consolidated in one place.
ASIC will still play a critical role in regulatory functions such as monitoring and enforcing laws.
The new system is designed to strengthen the process for the registration of directors and help to stop directors being appointed to companies without their consent. The aim too, is to stop illegal phoenixing.
So, there are benefits to the scheme. But right now, your focus, if you are a director, needs to be on ensuring that you have applied for your unique ID.
The Federal Government is not mucking around – there are significant penalties for company directors who fail to comply.
The deadline for application depends on the date you become a director:
If you became a director:
Applications should be completed ASAP, otherwise Directors can face criminal charges or civil prosecution with penalties ranging from $13,200 (criminal) to $110,000,000. Criminal prosecution can also result in 1 year imprisonment. Offences and penalties are further outlined in the Corporations Act 2011.
You can apply for your Director Identification Number here.
When you have your ID, please let us know for the files
As reiterated, Directors do need to do this themselves because of the identity requirements involved, but if you do have questions or concerns, we’re here to talk if you need us.
Please also let us know when you have received your Director ID, so we can update our records.