Status update: Rollout of Director IDs

Schedule 2 of the Treasury Laws Amendment (Modernisation and Other Measures) Act 2020 introduces a new requirement for directors or alternate directors of companies or bodies corporate registered under either the Corporations Act 2001 (Cth) (Corporations Act) or the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (CATSI Act) to hold a 'director identification number' or Director ID.

The change is part of the government's Modernising Business Registers Program.

What is a Director ID?

A Director ID is a unique 15 digit numerical identifier that will be assigned to each eligible director (upon a one-off application by the director) as proof of their identity.

Directors will then keep their Director ID regardless of whether they change companies, change their name, cease to be a director or move interstate/overseas. This will make it easier to trace directors' relationships with companies over time.

The primary aim of the new requirement is to make it easier to track unlawful activity, including phoenix activity, though it's also expected that it will have other benefits. For example: it is expected to reduce time/cost for administrators and liquidators by making it simpler to track directors and their corporate history.

Once directors receive their Director ID they will need to supply it to the record holder of their company (eg company secretary) and, if appointed as a director to other companies in future, will need to supply it to the record holder of that company.

Who needs a DIN?

Directors (or alternate directors acting that capacity) will need to apply for a DIN if they are a director of either:

• a company, a registered Australian body or a registered foreign company under the Corporations Act; or
• an Aboriginal and Torres Strait Islander corporation registered under the CATSI Act

Director ID application deadlines

An instrument - Corporations (Director Identification Numbers—Transitional Application Period) Instrument 2021 – specifying the deadlines by which existing and future directors will need to have applied for a Director ID was registered on 5 October 2021.

The deadline for submitting a Director ID application differs according to the date at which directors were appointed. The explanatory statement accompanying the instrument specifies that these deadlines have been set to allow time for the new system to be properly tested and to allow sufficient time for eligible directors to submit their applications.

The ABRS website provides further detail on these deadlines. In summary:

Existing directors

• Eligible persons under the Corporations Act who are existing directors or who are appointed as a director on/before 31 October 2021 will have until 30 November 2022 to apply.
• Eligible persons under the CATSI Act who are existing directors or who are appointed on or before 31 October 2022 will have until 30 November 2023 to apply.

New directors

Eligible persons under the Corporations Act who are:

• appointed as a director between 1 November 2021 and 4 April 2022 will need to apply for a Director ID within 28 days of their appointment as a director
• appointed as a director from 5 April 2022 will need to apply for a Director ID prior to their appointment.
  Eligible persons under the CATSI Act who are appointed as directors from 1 November 2022 will need to have applied for a DIN prior to their appointment.

Extensions

Directors who are unable to apply by the relevant deadline can apply for an extension using this form.

Penalties for non-compliance

Eligible directors who fail to meet their Director ID obligations could be issued with an infringement notice or face civil or criminal penalties.

Applications are now open

• The Director ID application process opened on 1 November 2021. Directors, and those wishing to apply before their appointment, are required to make the application themselves.
• There are three methods of submitting a Director ID application: 1) online, 2) over the phone or 3) in paper form.
• Generally, Australian directors located within Australia can elect to use any of these methods, according to preference. The ABRS website makes clear that applying online is the quickest method.
• Foreign directors will generally need to submit an application in paper form, or (depending on whether they are able to supply the necessary identity documents to support their application), over the phone. A high level overview of the requirements is below.

Applying online

Directors eligible for a myGovID are able to apply online via the ABRS website.

In order to apply online Directors will need to have a standard or strong identity strength myGovID. In addition, the application process also requires the following other information as proof of identity:

• residential address (as recorded by the Australian Taxation Office (ATO))
• specific information as proof of identify from two of the following list: bank account details, an ATO notice of assessment, super account details, a dividend statement, a Centrelink payment summary, and/or PAYG payment summary.

Directors also have the option, but are not required, to supply their individual Australian Tax file number (TFN). According to the ABRS website, supplying a TFN will speed up the application process.

You can find more detail around the specific identity information required to support an online application on the ABRS website here.

Applying over the phone

In order to apply over the phone, Directors will need to provide the same information as is required to apply online (with the exception of a myGovID), as well as certain other additional other information as proof of identity including (among other things): specific details from either a Medicare card or an Australian driver's licence/learner's permit.

The information provided must match in the information held by the ATO. You can find further details about the requirements for phone applications on the ABRS website.

Paper applications

If Directors are unable to supply the identity documents required to apply using other methods, they will need to submit an application in paper form attaching certified copies of certain additional proofs of identity. In practice, this means that foreign directors located outside Australia will need to apply in paper form.

Details of which documents are required to support paper applications from Directors applying from within Australia and Directors applying from overseas can be found on the ABRS website.

The ABRS website directs that Directors applying from outside Australia who are experiencing difficulty in having their documents certified as required should contact the ABRS.