6 minute read
Do you need to get a director ID?
f DIRECTORS of Australian companies need to apply for a unique identifier, the director ID.
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BY SMALL BUSINESS DEVELOPMENT CORPORATION
From 1 November 2021, if you are the director of an Australian company or plan to become one, you will need a Director Identification Number (director ID).
Director IDs are part of the Modernising Business Registers program introduced by the Australian Government, which aims to make it easier for businesses to meet their registration obligations and increase trust in business information.
Small Business Development Corporation
What is a director ID?
A director ID is a 15=digit identification number that is unique to you. As a director, you will only ever have one director ID that remains the same (even if you change companies, cease your role as a director, change your name or move interstate or overseas).
The new identifier has been introduced to create greater confidence in directors’ identities and combat fraudulent activities, such as phoenixing.
Phoenixing is a practice that involves company directors transferring the assets of an existing company to a new company, leaving the old company with debt and putting different directors in place before liquidating it. This illegal practice is used to avoid paying creditors, including the ATO, subcontractors and employees. The new director IDs will mean that there is a record of individual director’s history, allowing regulators to identify and track illegal activity.
Who needs one?
Director IDs are now required if you are a director (or an acting director) of: • a company, a registered Australian body or a registered foreign company under the Corporations Act 2001 (Corporations Act) • an Aboriginal and Torres Strait
Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act). You don’t need one if you are running a business as a sole trader or partnership, or are referred to as a ‘director’ in your job title but have not been appointed as one under the Corporations Act or the CATSI Act. You must be at least 18 years old and have not been disqualified from managing corporations to apply for a director ID.
How to get your director ID
To apply for a director ID, you will need a myGovID account with a Standard or Strong identity strength to log onto the Australian Business Registry Services website. You will also need to have some information ready including your tax file number, residential address as held by the ATO, and two documents to verify your identity. The application process should take less than 5 minutes.
Alternative application methods are available for people who are unable to apply online.
When do you need to apply?
If you became a director on or before 31 October 2021, you have until 30 November 2022 to get your director ID. Directors appointed between 1 November 2021 and 4 April 2022 must apply within 28 days of their appointment; and directors appointed after 5 April 2022 must apply for their ID before their appointment as a director.
What happens if you don’t apply?
If you don’t apply for a director ID within the applicable timeframe, or when instructed to do so, apply for more than one director ID, misrepresent your ID or breach any obligations, you may be issued with an infringement notice or be subject to other penalties.
What to do with your director ID?
When you receive your director ID, you need to notify the record-holder in your company such as your company secretary, another director, a contact person or an authorised agent of the company. You will also need to give your director ID to the relevant recordholders at any future companies you are appointed as director of.
Once you have your director ID, you can view, update and manage your details online at any time. Your director ID confirms your identity and will in future show which companies you’re linked to.
MORE INFORMATION
You can visit the Australian Business Registry Services Director IDs are part of the Modernising Business Registers program. website (www.abrs.gov.au) to find out more about director IDs. You can also turn to the Small Business Development Corporation and its Business Local providers in regional WA for free business advice, practical skills development, a range of online resources, dispute management and more. Visit smallbusiness.wa.gov.au or call 133 140 for more information.
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