You are currently viewing Director Identification Number (Director ID) – What Is It and Why Do You Need One?

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.