Australian company directors have one year to apply for their unique director identification number before fines of over $1.1 million are issued for non-compliance.
Existing company directors will now be required to apply for a director identification number (director ID) by 30 November 2022, while directors of Indigenous corporations that are governed by the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act) will be required to apply for the unique identifier by 30 November 2023.
The deadline, first floated by the Treasury earlier this year, has now been confirmed in a legislative instrument made last week by the Minister for Superannuation, Financial Services and the Digital Economy, senator Jane Hume.
Applications for a director ID are free and will open next month on the newly established Australian Business Registry Services (ABRS), a single platform administered by the Commissioner of Taxation that brings together ASIC’s 31 business registers and the Australian Business Register.
Directors must apply for their director ID themselves and will be required to produce their myGovID alongside two identity documents from a list, including their bank account details, super account details, ATO notice of assessment, dividend statement, Centrelink payment summary, and PAYG payment summary.
While existing directors will have a year to apply for their director ID, new directors appointed between 1 November 2021 and 4 April 2022 will have just 28 days after appointment to apply for their director ID.
New directors who are appointed from 5 April 2022 will be required to apply for their director ID before appointment.
Under the law, directors who fail to apply for a director ID within the stipulated time frame can face criminal or civil penalties of 5,000 penalty units, which currently stands at $1.11 million. Directors of a CATSI organisation can face penalties of up to $200,000.
Penalties will also apply for conduct that undermines the new requirements, including providing false identity information to the registrar or intentionally applying for multiple director IDs.
The new regime, passed in the Parliament in June last year, is expected to cover over 2.5 million directors, or roughly 10% of Australia’s 25.7 million population.
The director ID will be attached to a director permanently, even if they cease to be a director, change their name, or move interstate or overseas.
The government expects the director ID regime to help prevent illegal phoenixing by ensuring directors can be traced across companies, while also preventing the use of false or fictitious identities, such as Elvis Presley or Bob Marley.
Find out more about the director ID regime on the Australian Business Registry ABR website.
Finance Circle Group
Courtesy of mybusiness.