Have you applied for your Director Identification Number? Colleen Stromei, LVML CFO

Have you applied for your Director Identification Number?

COLLEEN STROMEI, LVML CFO, ADDFLOW DIRECTOR

New Federal Government regulation requires all directors of Australian companies, whether trading companies, trustee companies, private companies, or public companies, to have their identity verified and to apply for a Director Identification Number (Director ID).

The Director ID is a life-long identification (just like a Tax File Number) which a director will keep even if they change companies, change their personal details or stop being a director.

What is a Director ID needed for?

According to the government:

All directors are required by law to verify their identity with us before receiving a Director ID. This is important because it will help to:

• Prevent the use of false or fraudulent director identities • make it easier for external administrators and regulators to trace directors' relationships with companies over time • identify and eliminate director involvement in unlawful activity, such as illegal phoenix activity. Illegal phoenix activity is when a company is liquidated, wound up or abandoned to avoid paying its debts. A new company is then started to continue the same business activities without the debt. When this happens:

• employees miss out on wages, superannuation and entitlements • suppliers or sub-contractors are left unpaid • other businesses are put at a competitive disadvantage • the community misses out on revenue that could have contributed to community services.

Who needs a Director ID?

You need to identify yourself and obtain a Director ID if you are a director, or an acting alternative director, of

• a company registered under the Corporations Act 2001

• an Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Straigt Islander) Act 2006

• a corporate trustee, such as a self-managed super fund

• an Australian body registered with ASIC •

a foreign company registered with ASIC and carrying on a business in Australia

Under the current legislation, you do not need a Director ID if you're

• a company secretary but not a director

• acting as an external administrator of a company

• running a business as a sole trader or partnership

• not appointed as a director under the Corporations Act or the CATSI Act, but you have the job title of 'director'

• a director of a registered charity that is not registered with ASIC or ORIC

• an officer of an unincorporated association, cooperative or incorporated association established under state or territory legislation, unless the organisation is required to be registered with ASIC

When do you need to apply?

You can apply for a Director ID now, and if you are planning on becoming a director you should apply before you are appointed.

If you were appointed as director before 31 October 2021, you have until 30 November 2022 to register for a Director ID. However, if your appointment was after 31 October 2021, you are required to hold a Directors ID already, and from 5 April 2022, you must register before being appointed as a director.

How to register for a Directors ID

The fastest way to register for a Directors ID is to use the online myGovID app. If you have not set up your myGovID app already, you will need to provide identification details to complete this step. Alternatively, the Australian Business Registry Service (ABRS) can complete your identification by phone by calling 13 62 50. Note that the ABRS will require you to provide your Tax File Number, ATO registered address answer two questions based on details they know about you to complete your identification.

What next?

The ABRS will notify ASIC of your new Directors ID. However, you must provide your Directors ID to the company secretary or other authorised record keeper of any company you currently hold a director's position for and any future company appointments you accept.

If your name, role, or address details change, you must notify the company secretary or other authorised record keeper within seven days of the change. The company officeholder must then advise ASIC within 28 days to avoid late fees. Changes to a director's personal details can be advised using ASIC's online services.

In summary:

If you are a Director of your landscape company you are required by law to have a Director ID.

For director appointments prior to 31 October 2021, you will need to register for a Director ID via myGovID by 30 November 2022.

For director appointments between 31 October 2021 and 5 April 2022, you should already be registered.

For new director appointments, you must register before being appointed.

If you are in any doubt about whether you need a Directors ID, please contact your Tax Agent for advice.