1 Nov 2021 – New ID Requirement for Directors

THE SHORT STORY

If you want to become a Director or are already one, you’ll soon need a Director ID.

A Director Identification Number (Director ID) is a unique identifier you need to apply for once and will keep forever. It will help prevent the use of false or fraudulent Director identities.

If your business is a company, registered foreign company, registered Australian body or Aboriginal and Torres Strait Islander corporation, the Directors of the business can apply for a Director Identification Number (director ID) on the new Australian Business Registry Services from November 2021.

The fastest way to get a Director ID is to apply online via MyGovID and you only need to apply once.

• If you DON’T have a MyGovID, you can find information on how to download the app HERE.
• If you have a MyGovID, you don’t need to do anything until November

While Hannans360 can assist in helping you decide if you need to apply we can’t apply for a Director ID on your behalf.

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Why you need a Director ID

According to ABRS (a new government agency) 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 ABRS 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.

How Director ID works

A Director ID is a 15-digit identifier given to a Director (or someone who intends to become a Director) who has verified their identity with ABRS. 

A Director ID:

• starts with 036, which is the 3-digit country code for Australia under International Standard ISO 3166
• ends with an 11-digit number and one ‘check’ digit for error detection.

Directors need to apply for their own Director ID. It’s free to apply.

Directors will only ever have one Director ID. They’ll keep it forever even if they:

• change companies
• stop being a director
• change their name
• move interstate or overseas.

When you must apply for your Director ID depends on the date you become a director.

Find out more about the new requirement and what you can do to prepare HERE.