Overview
The new director ID initiative has been launched by the Australian government in an effort to improve corporate governance and accountability. As a company director, under new legislation, you’re now required to obtain a director identification number (director ID). This will help to ensure that you can be properly identified and held accountable for your actions as a director.
Who needs to apply?
All company directors will need a director identification number (director ID). This includes:
- People who are appointed as directors
- Alternate directors
- De facto directors
If you first become a director on or before 31 Oct 2021, you must apply for your director ID by 30 Nov 2022.
If you’re appointed as a director after the 5 Apr 2022, you’ll need to apply for your director ID before you can act as a director.
How to apply
The quickest way to get your director ID is to apply online through the Australian Business Register. You’ll need to provide your:
- your tax file number (TFN)
- your residential address as held by the ATO
- information from 2 documents to verify your identity.
You’ll also need to have a myGovID with at least a Standard identity strength. If you don’t have a myGovID, you can create one when you start your application.
Learn more about how you can apply here.
What are the benefits of having a director ID?
The main benefit of having a director ID is that it will help to improve corporate governance and accountability. This is because you can be properly identified and held accountable for your actions as a director.
Another benefit of having a director ID is that it can help to prevent fraud. This is because it will be more difficult for people to impersonate directors if they need to have a valid director ID.
What happens if you don’t apply for a director ID?
If you fail to have a director ID when required to do so, or if you fail to apply for a director id when directed to by the register, you may:
- Face a civil penalty of up to $1,100,000
- Face a criminal penalty of up to $13,200
If you apply for multiple director IDs, or misrepresenting director ID, you may:
- Face a civil penalty of up to $1,100,000
- Face a criminal penalty of up to $26,640, 1 year imprisonment or both
The bottom line
As a company director, it is mandatory to apply for and obtain a director identification number (director ID). The benefits of having a director ID include improved corporate governance and accountability, as well as prevention of fraud. Failure to have or apply for a valid director ID when required may result in civil and/or criminal penalties. For more information on how to apply for your director ID, please contact us or visit the Australian Business Register website.
