Director ID Requirement – Everything You Need to Know

As of 1 November 2021, directors are required by law to get themselves a Director Identification Number (Director ID).

If you're currently a director or are planning to become one, here's everything you need to know - including how to apply.

What is a Director ID?

A Director ID is a 15-digit identifier number given to a director - or someone who intends to become one. To get one, your identification must be verified

Why Did They Introduce Director IDs?

Director IDs were introduced via the government's Australian Business Register Service (ABRS) for the following reasons:

• To prevent the use of false or fraudulent director identities
• To make it easier for external administrators and regulators to trace director relationships with companies over time
• To identify and eliminate director involvement in unlawful activity, including illegal phoenix activity.

Illegal phoenix activity can result in:

• Employees missing out on wages, super and entitlements
• Suppliers/subcontractors being left unpaid
• Other businesses being put at a competitive disadvantage
• The community missing out on revenue.

Find out more about how you can avoid illegal phoenix activity.

Who Needs a Director ID?

You need a Director ID if you’re a director, including an alternate director, of one of the following:

• An Australian or foreign company registered with ASIC, including corporate trustees of trusts and SMSF’s
• An Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act)
• Charities or NFP’s registered as a company
• Some incorporated associations that are registered with ASIC.

When do You Need to Apply For a Director ID?

Now the requirement for a Director ID is in place, you can apply for one straight away. You can also apply for a Director ID before you’re appointed.

When you need to apply depends on the date you become a director as follows:

Registered under the Corporations Act

Registered under the CATSI Act

How do You Apply For a Director ID?

1. Go to the ABRS website to access the ABRS Director ID services and learn about the Director ID requirements
2. Verify your identity using your myGovID credentials or create a myGovID using your smartphone and Australian identity documents. For more information, visit How to set up myGovID
3. Conduct a proof of record ownership by answering two questions about your ATO record
4. Complete a Director ID application on the ABRS platform to receive your Director ID instantly.

Information to have handy when you apply:

• Individual Tax File Number (TFN)
• Residential address
• Bank account and super account details
• A dividend statement
• PAYG payment summary
• ATO notice of assessment
• Centrelink payment summary

What do I do With my Director ID?

Hand it to your company’s record holder (usually your company secretary), another director or your authorised agent, if you have one. It’s essential you keep the information up to date.

What Happens if You Don't Apply?

If you fail to apply for a Director ID by the given deadline, you could face criminal and civil penalties. The maximum civil penalties directors can face is 5,000 penalty units – currently standing at $1.11 million. Directors of Aboriginal and Torres Strait Islander corporations can face penalties of up to $200,000.

Director IDs are quick and easy to apply for and can benefit everyone. If you’re a director and you haven’t already applied, there’s no time to waste.

If you’re a director and your company is experiencing financial distress, take action today by getting in touch with our team of turnaround specialists on 1800 861 247 or via our contact form. They can assess your situation and explore all of the options available to take your business back to profitability. Alternatively, see how we can help with our Instant Online Assessment.