Directors of businesses in Australia now need to apply for a director identification number (DirectorID).
It can be confusing knowing if you need to apply and what you need to complete your application, so we’ve created this explainer to help you.
Why you need to do it
Directors IDs will increase transparency about who is a director of a business in Australia for stakeholders such as employees, contractors, creditors and consumers. There will be a public record of all the businesses a person has been a Director of, decreasing the risk of fraud and unlawful activity.
The Australian Business Registry Service website says:
“Shareholders, employees, creditors, consumers, external administrators and regulators are entitled to know the names and certain details of the directors of a company.
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 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 to apply
People who are appointed as a Director under the Corporations Act.
Typically, that means you are listed as a Director on your incorporation documents and your annual business returns.
You don’t need to apply if:
- You’re a sole trader or in a partnership structure
- Your job title is Director, but you are not appointed as a Director under the Corporations Act.
You’ve got multiple entities in your business structure, or you have more than one business – so how many Director IDs do you need?
Just one. You’ll have one ID, associated with all the companies you may be a director of – past, present and future.
When do you need to apply?
Most people will need to apply before the end of November:
If you became a Director of any business before 31 October 2021, you must apply for your Director ID by 30 November 2022.
You should have registered already if you first became a Director since 31 October 2021. If you have not, then you need to do so urgently.
Not sure if you’re a director?
The ABRS website has a helpful guide that notes:
- company, which will have an Australian company number (ACN)
- registered Australian body, which will have an Australian Registered Body Number (ARBN)
- registered foreign company, which will have an ARBN.
If you’re unsure, it is worth talking to your accountant or agent who assisted you in setting up your business to confirm how it is registered.
What will I need to apply?
There are a few steps involved in registering for your Director ID.
Step 1 – set up a MyGovID
You might already have a MyGovID to access the ATO, Medicare or Centrelink. It’s a central ID the Australian Government use to confirm your identity and provide secure access to Government services.
If you don’t have one yet, you need to set one up.
You will need to prove your identity by providing at least 2 of these documents:
- driver’s licence or learner’s permit
- passport (not more than 3 years expired)
- birth certificate
- citizenship certificate
- Medicare card
- visa (using your foreign passport)
- ImmiCard.
Step 2 – gather the documents for your Director ID
You must provide additional documents and information when applying for your Director ID. You will need:
- your tax file number (TFN)
- your residential address as held by the ATO
- information from 2 documents to verify your identity, such as:
- bank account details
- an ATO notice of assessment
- APRA fund account details
- a dividend statement
- a Centrelink payment summary
- a PAYG payment summary (this is different to your income statement or your PAYG instalment activity statement).
Step 3 – complete your application online
You must log in to the Australian Business Registry Service (ABRS) using your MyGovID, and complete the online application.
https://abrs.gov.au/persons/ui/secure/start/applyForDirectorID?action=applyfordirectorid
I can’t prove my identity to get a MyGovID. What do I do?
The ABRS website has detailed a process to apply for a Director ID over the phone.
You will still need to provide:
- your tax file number (TFN) (optional)
- your residential address as held by the ATO
- answers to 2 questions based on details we know about you
- a primary and secondary Australian identity document.
If you live outside of Australia, there is a form to complete.
I’m still a bit lost – who can help me?
If you need help knowing if you need to apply, understanding the process or gathering the necessary information, we highly recommend contacting your accountant or the agent who helped you set up your business.
You can also reach out to us as well. We’re happy to have a chat about what you need and see if we can help you and your business through this process. Give us a call on 03 5831 1466 or email admin@jhco.com.au.
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