Director IDs are being introduced across Australia in November 2021, in an effort to detect and deter unlawful activity.

If you’re a company director, here’s what you need to know.

What is a director ID?

The introduction of mandatory director IDs means that all Australian company directors are now required to register and be issued with a 15-digit unique identifier that will stay with them and follow them across companies.

Why are director IDs being introduced?

A director ID will allow regulators to track the activity of directors, rather than just companies, in an effort to stamp out illegal activity such as phoenixing.

Phoenixing is when a director transfers assets to a new company in order to continue operating a business, while the previous company, with bad debts remaining, is placed into liquidation.

Who needs a director ID?

You are required to register and obtain a director ID if you are a director of an Australian business, a registered foreign company, or a registered Australian body, or Aboriginal and Torres Strait Islander corporation.

You do not need to register for a director ID if you are director of an incorporated association (with no ABN) registered with the Australian Charities and Not-for-profits Commission, a company secretary but not a director, acting as an external administrator of a business, or run your business as a sole trader or partnership.

When do the new rules for director IDs apply?

Applications opened from November 1, 2021, and although you have some time to apply, we encourage directors to start getting prepared immediately. Here are the cut off dates:

• Existing directors appointed on or before October 31, 2021 have until November 30, 2022 to apply
• New directors appointed between November 1, 2021 and April 4, 2022 must apply within 28 days of their appointment
• New directors appointed from April 5, 2022 onwards must have a Director ID before their appointment.

How do I apply for a director ID?

Directors must apply for their director ID themselves because part of the process is confirming their identity. That doesn’t mean you’re on your own – the LDB team is available to guide you through this process.

You can apply for your director ID online, by phone or in writing.

Apply online

The first thing you need to do is set up a myGovID account. This shouldn’t be confused with your myGov account.

myGovID is an app that you can download to your phone or device, that can be used to prove your identity across a number of online government services, including myGov.

Once you’ve downloaded the myGovID app and set up your account, you can log in and apply for your director ID. The application process is straightforward and should take less than five minutes.

Apply by phone

To apply by phone, simply call the Australian Business Registry Service on 13 62 50.

You’ll need some identity documents, so make sure they’re handy before you pick up the phone, including:

• an individual Australian tax file number (TFN)
• your residential address as held by the Australian Taxation Office
• answers to two questions based on details the government already knows about you
• two Australian identity documents – one primary and one secondary.

Apply by post

Directors of Australian companies can submit application forms via post but they will need to be accompanied by certified copies of one primary and two secondary identity documents.

Primary documents include:

• Australian full birth certificate (extracts and commemorative certificates are not acceptable)
• Australian passport (including passports that have expired in the past two years)
• Australian citizenship certificate or extract from a Register of Citizenship by Descent
• Foreign passport.

Secondary documents include:

• Medicare card
• Australian driver’s license or Australian learner’s permit.

Need help with director IDs? Speak to the team at LDB Group

There’s a lot of good reasons for not delaying your application for a director ID, including civil and criminal penalties and the resulting reputational damage if you miss the deadline, but there’s also very good reasons for doing it properly.

Issues such as applying for more than one director ID or providing incorrect information can also lead to penalties.

LDB can assist with the gathering of required documentation before you proceed, as well as advise you on what to look out for.

To get the ball rolling, give our helpful team a call on (03) 9875 2900 or send us a note via the contact form below.