Important Changes to Director IDs

Acis, current as of: 30 March 2022.

From 5 April, further changes are being made to the requirements for when a person is to apply for their director ID. This marks the end of the current transitional period during which many directors have 28 days from the date of their appointment as a director to obtain their director ID. When you have to apply for a director ID will depend on the date you become a director.

Who is Responsible?

While the onus is on the director to apply for their own director ID, the message from Australian Business Registry Services (ABRS) is that advisers are expected to educate clients about the requirement to have their director ID. In keeping clients’ interests at heart, advisers should ensure that each person being appointed as a director has their director ID within the statutory timeframes, whether it be to a new or existing company.

Penalties

Failure to obtain a director ID prior to being appointed as a director, or within the required timeframe for existing directors, is a strict liability offence. Fines as high as $13,200 may be imposed for the criminal offence, and up to $1,100,000 if the court deems it appropriate to apply a civil penalty.

What is ASIC Doing? 

ASIC does not currently collect director IDs or require them to be provided when directors are being appointed. This may change when the ASIC companies register is transferred to ABRS – currently expected in September 2023.

What is Acis Doing?

Acis is not collecting director IDs as they are a private identifier which we won’t handle unnecessarily. What we will do to assist our clients, and your clients, is include reminders and check boxes in our company registration ordering process.

From 5 April, when submitting an order to incorporate a company, you will see a reminder for the director ID requirement where the details of the director/s are entered.

Likewise, when undertaking corporate secretarial work to appoint a director to an existing company, these requirements will apply and a reminder will be included with the document instructions.

What Next?

Director IDs are new to the corporate landscape, but they are here to stay. The ABRS is expecting advisers to communicate with and educate their clients on the changes to the requirements. While it is ultimately each director’s responsibility to obtain their director ID, we foresee the possibility that advisers may be blamed by their client when contacted by the ABRS and/or penalties are applied. To assist, we have included a table below that outlines the relevant dates for new and existing directors.

Additional Information

Director IDs can be applied for online through the myGovID app. For those who do not have access to the internet, or are overseas, they can apply for their director ID by phone or by paper form.  More information about setting up your myGovID and the process to obtain a director ID can be found here.

As of March 2022, the ABRS estimates that 330,000 directors have applied for their director ID and, while this is progress, it is imperative that your clients who intend to be, or already are a director, adhere to the requirement to have their director ID before the respective deadlines. The table below outlines the statutory required timeframes:

DATE YOU BECAME A DIRECTOR*	DATE YOU MUST APPLY
On or before 31 October 2021	By 30 November 2022
Between 1 November 2021 and 4 April 2022	Within 28 days of appointment
From 5 April 2022	Before appointment

*For more information and scenarios relating to the director ID, please visit the ABRS resource here.

Acis does not provide advice in relation to commercial law, taxation, duty, company law or any other matter. We do not purport to provide advice nor should you construe anything in any correspondence with us, or material provided by us, as advice of any kind.