Coming to a Company Near You – Director ID
If you are a director of a company, irrespective of size, there is a new requirement under Australian law that you must have a Director ID.
The Federal Government has introduced a system of unique identifiers for directors of Australian companies as part of modernising the country’s business registries.
The Director ID is a unique identifier which will be kept indefinitely by the person to whom it is issued.
The system is intended to enable regulators to verify and track the history of individuals who are appointed to directorships in Australian companies and help stamp out illegal phoenixing and other fraudulent activity.
If you want to become a director, or are one already, you’ll need a Director ID. When you need to apply depends on the date you were appointed as a director.
New directors appointed between 1 November 2021 and 4 April 2022 will need to apply for their Director ID within 28 days of their appointment.
Existing directors appointed on or before 31 October 2021 will have until 30 November 2022 to apply and have been able to apply from November 2021.
Who needs a Director ID?
You need a Director ID if you’re an eligible officer of:
a company, a registered Australian body or a registered foreign company under the Corporations Act 2001 (Corporations Act)
an Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act).
An eligible officer is a person who is appointed as:
a director
an alternate director who is acting in that capacity.
You will only ever need one Director ID. You don’t have to apply for another one if you become a director of other companies or corporations.
You must apply for your own Director ID to verify your identity. No one can apply on your behalf.
You don't need a Director ID if you're:
a company secretary but not a director
acting as an external administrator of a company
running a business as a sole trader or partnership
referred to as a ‘director’ in your job title but have not been appointed as a director under the Corporations Act or the CATSI Act
a director of a registered charity with an organisation type that is not registered with ASIC or ORIC to operate throughout Australia
an officer of an unincorporated association, cooperative or incorporated association established under state or territory legislation, unless the organisation is also a registered Australian body.
When you need to apply
You can apply for a Director ID now.
If you plan to become a director, you can apply before you’re appointed.
Corporations Act directors
When you must apply for your Director ID depends on the date you become a director.
| undefined | Date you must apply |
|---|---|
| On or before 31 October 2021 | Within 28 days of appointment |
| Between 1 November 2021 and 4 April 2022 | Within 28 days of appointment |
| From 5 April 2022 | Before appointment |
To be a director under the Corporations Act, 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.
What does it all mean?
If you’re a director of a company, irrespective of size, you will need to act.
To obtain a Director ID you will need to complete the identification requirements through myGovID.
The identification process requires you to verify your identity using a combination of identification documents and existing ATO information. Once you have completed your Director ID process, and you have been issued with a Director ID, you will need to notify your accountant and use the identifier in future governance activities.
Author: Steve Lamande, Partner nem Australasia
This article is based on research and opinion available in the public domain.