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Director ID – What All Businesses Need to Know
As you may have heard, there are a number of changes being brought in by the Australian Government’s “Digital Business Plan” to combat fraud and security issues in businesses, measures which have brought about some obligations that require attention. Known as the “Modernising Business Registers” program, the Australian Business Registry Services (ABRS) is being established, and the government will be streamlining how you register, view, and maintain business information with them. Within this program is the rollout of Director Identification Numbers (Director ID) – a unique identifier that company directors apply for and keep forever. As there are some steps that need to be taken soon, here are the details.
Director ID – Purpose
The purpose of director IDs is to help eliminate illegal phoenixing, among other fraudulent activity, and allow the Government to track individual directors’ corporate history more accurately. As a director, your ID will remain with you permanently and is created upon verification of your identity through MyGovID from 1 November 2021. As director IDs are associated with the director of a company, rather than the company itself, it can be used by the government to hold company directors accountable for any fraudulent company activity.
Director ID – Who Needs One?
You will need a director ID if you are an eligible officer of one of the following: a company, a registered Australian body, a registered foreign company under the Corporations Act 2001 (Corporations Act), or an Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act). Per the ABRS, an “eligible officer” is a director, or an alternate director who is acting in that capacity.
There are slightly different obligations in the short-term depending on your circumstances as a director. Here is a quick summary:
- Directors appointed prior to 1 November 2021 have until 30 November 2022 to apply for their director ID
- Any new Directors appointed between 1 November 2021 and 4 April 2022 are required to apply for their director ID within 28 Days of appointment
- Any new Directors appointed after 5 April 2022 are required to have their director ID before being appointed
Note that your registered Tax Agent (e.g. McKinley Plowman) cannot apply on your behalf. As you are required to verify your identity through MyGovID when applying for your unique director ID, this is a process you must undertake yourself. If you haven’t yet set up your MyGovID app, now is the time to do so – and make sure you set your identity strength to Standard or Strong. Click here for instructions on how to set this up. You can subsequently log into ABRS online and follow the prompts to create your Director ID.
While we are not able to do this on your behalf, should you have any questions about your obligations as a director, or how Director IDs may impact your business, please do not hesitate to reach out to the team at McKinley Plowman on 08 9301 2200 (Joondalup), 08 9361 3300 (Victoria Park), or via our website.
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