New Director ID Requirements with the ABRS & How They Might Affect You

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New director id requirements with the ABRS and how they might affect you

Directors need to take action and register for a Director Identification Number (DIN) in order to meet their obligations under the Corporations Act 2001 (Cth) and the Treasury Law Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth).

From November 2021, anyone holding a Director position or those planning on becoming a Director must apply for a DIN. The DIN will be a unique identifier that a Director will apply for once and keep forever, attaching to a director permanently, even if they:

  • cease to be a director;
  • become a director of a new or different company;
  • change their name; or
  • or move interstate or overseas.

Applications for a DIN are free and will open on the newly established Australian Business Registry Services (ABRS). The ABRS is responsible for the implementation and administration of the DIN and the Australian Securities and Investments Commission will be responsible for the enforcement of associated offences.

The government expects the DIN regime to help prevent illegal phoenix activity by ensuring directors can be traced across companies, whilst also preventing the use of false or fictitious identities.

This new regime presents as a key consideration if you have recently, or are planning to set up a new company.

Directors must apply for a DIN themselves as verification of identity is required. No one can apply on another person’s behalf, however, if you need assistance with this process, or in relation to the incorporation of a new company, please contact the Arrow White team for further information.


WHAT IS THE ABRS?

The ABRS is a single platform administered by the Commissioner of Taxation that brings together ASIC’s 31 business registers and the Australian Business Register.

WHAT IS THE DIRECTOR ID PROGRAM?

A director identification number (director ID) is a unique identifier for each individual director.

The director ID will be attached to a director permanently, even if they:

  • cease to be a director;
  • become a director of a new or different company;
  • change their name; or
  • 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.

The new regime, passed in Parliament in June last year, is expected to cover over 2.5 million directors, or roughly 10% of Australia’s 25.7 million population.

WHO NEEDS TO APPLY?

You need a director ID if you’re an eligible officer of (or are intending to become one in the future):

  • 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).

An eligible officer is a person who is appointed as:

  • a director
  • an alternate director who is acting in that capacity.

Directors must apply for their director ID themselves because they need to verify their identity. No one can apply on their behalf, but Arrow White will be able to provide legal assistance for this process.

WHEN DO YOU NEED TO APPLY?

Under the new scheme, directors are classified into four categories dependant on the date of directorship appointment, and the type of corporation they are the appointed directors of:

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 appointed from 5 April 2022 will be required to apply for their director ID before appointment.

Existing company directors will now be required to apply for a director identification number (director ID) by 30 November 2022.

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.

Where can you apply?

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.

What are the penalties for non-compliance?

Under the law, directors who fail to apply for a director ID within the stipulated time frames (provided by the ABRS) 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.

If you are in the process of satisfying these requirements with an accountant or financial advisor but require additional legal advice, we can work in conjunction with our client’s accountants to provide the best possible outcome for our clients.

For further information on the director ID regime, head to the new ABRS website, or for legal advice contact our firm on on 07 3051 0800 or email us at: epost@troyoverend.com.

Disclaimer: This publication is intended for general and informative use only and is not to be relied upon as professional financial or legal advice.

Contact our team today for a free quote by clicking the link here or calling us on 1300 277 699.

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