The total director population in Australia is estimated to be more than 2.5 million.
Around one million company directors are yet to apply for their director ID ahead of the 30 November deadline.
Hopefully, you (and your clients) are one of the 1.5 million directors who have completed the registration. If not – Unfortunately, this is one task that absolutely can’t be outsourced – you must apply for this yourself and prove your identity.
If you don’t- According to ASIC, it is to be considered a criminal offence if directors do not apply on time and penalties may apply.
What is it? A unique 15-digit identifier administered by ABRS, managed by the Australian Taxation Office (ATO) that is a requirement for all company directors as of 30 NOVEMBER 2022 (Next Week). Company directors only need to apply for a director ID once – when it is issued, they will keep the number forever. It is free.
How do I get it? All company directors must apply for it themselves, as they are required to verify their identity themselves. The fastest way to apply is online at abrs.gov.au, which will issue a director ID instantly once the application is complete.
Who needs it?
Make sure you apply for a Director ID ASAP – especially if you’re a director of a:
- company
- charity or not-for-profit organisation that is a company or Aboriginal and Torres Strait Islander corporation
- registered Australian body, for example, an incorporated association that is registered with the Australian Securities and Investments Commission (ASIC) and trades outside the state or territory in which it is incorporated
- foreign company registered with ASIC and carrying on business in Australia (regardless of where you live)
- corporate trustee, for example, of a self-managed super fund.
You can check if your business is registered as a company with the Australian Securities and Investments Commission at ASIC Connect.
What is it used for?
The rationale behind rolling out the Director ID is to clamp down on illegal activity, for example, a practice called phoenix activity – where business owners illegally shut down their company and transfer assets into a new company to avoid paying what they owe to employees and suppliers.
What do I do once I’ve got it?
Once issued, the director ID will need to be passed onto the record-holder of the company – this may be the company secretary, another director, or authorised agent. They can store it and ensure it’s assigned to your records as needed.
And what if I don’t?
Company directors who ignore this compulsory requirement face possible criminal and civil penalties if they fail to obtain a director ID, or fail to apply for one when directed to do so by the registrar (hint – you have). The maximum criminal penalty in these cases is $13,200 and the maximum civil penalty is $1.1 million.
One last note – one is plenty…
Directors also face criminal penalties of up to $26,640 or one-year imprisonment, and civil penalties of up to $1.1 million, if they apply for multiple Director IDs or misrepresent their Director IDs.
You can apply now at ABRS>Directors ID
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