Consumer Law

DIRECTOR IDENTIFICATION NUMBERS

There is a new requirement for directors, and alternate directors, to apply for a director identification number (director ID), under the Corporations Act 2001 (Cth) (Corporation Act)

The Government is aiming to prevent false or fraudulent use of director identities and unlawful activities. What is the requirement?

A director, including an alternate director (acting in that capacity), is required to have a director ID if they are a director of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation (registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth)). A director ID only needs to be applied for once, regardless of whether a person is a director of multiple companies (unless directed otherwise by the registrar of director IDs). When must a person apply for a director ID?

The timing for applying for a director ID varies depending on when a person becomes a director: • a person who was an existing director on or before 31 October 2021 has until 30 November 2022 to apply; • a person who becomes a director between 1

November 2021 and 4 April 2022 must apply within 28 days of their appointment; and • from 5 April 2022 a person intending to become a director must apply before being appointed as director. If a person applies for a director ID before being a director, but does not become a director within 12 months, the director ID is cancelled. Directors of an Aboriginal or Torres Strait Islander corporation have longer to apply (please visit the Australian Business Registry Services for further information). Linking the director ID to companies

It is anticipated by the Australian Securities and Investments Commission (ASIC) that your director ID will be linked to companies that persons are directors of in September 2023. Until this is implemented a person is not required to disclose the director ID to ASIC or to the company a person is a director of. How does a person apply for a director ID?

The Australian Business Registry Services (ABRS) website provides a detailed guide on how to apply for a director ID. A person can apply for a director ID through the myGovID online app. Once the myGovID is setup, a person can log onto and provide information and documents to verify their identity. A guide is provided on the ABRS website. If you are unable to apply online using the myGovID app, the ABRS can be contacted and a director ID applied for by way of telephone or by using a paper form. What if a director does not have a director ID?

Penalties apply for the failure to comply with the director ID requirements, such as having a director ID or applying for multiple director IDs. For example, failing to have a director ID has a maximum pecuniary penalty of up to $1,100,000 (civil, based on matters considered by the court) or $13,200 (criminal). Applying for multiple director IDs can result in one year imprisonment. Infringement notices may also be issued. Takeaways

The key takeaways are: • a director must apply for a director ID; • application timeframes vary, for directors registered under the Corporation Act: directors appointed on or before 31 October 2021, by 30 November 2022; for directors appointed between 1 November 2021 and 4 April 2022, within 28 days of their appointment; and for directors intending to be appointed from 5

April 2022, before they are appointed as a director; • only one director ID may be applied for. This document is intended for general information purposes only and should not be regarded as legal advice. Please contact Industry Legal Group if you require legal advice. Individual liability limited by a scheme approved under professional standards legislation.

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Industry Legal Group provides advice to members on commercial law matters. If you have any questions relating to the above information, please contact Industry Legal Group on 1300 369 703 or aaaa@industrylegalgroup.com.au