Update on Director IDs

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The Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019 was passed in June 2020 and requires all new and current directors of Australian companies to hold a unique Director Identification Number (Director ID).


Why are Director IDs being introduced?

Director IDs are intended to provide traceability of a director’s relationships across companies, to directly tackle phoenix activity and enable the prosecution of culpable directors in Australia.

Currently, directors can have multiple records within ASIC systems with minor variations of name (with a middle name, without a middle name), address and/or other personal details. The new legislation will mean that a director will keep a Director ID identifier for life and across appointments at each company they are a director of.  Even if he or she ceases to be a director, the same identifier will not be re-issued to any other person.

The regime is also expected to increase the accessibility of information that may assist administrators and liquidators. Our current understanding is that the public will also be able to search the registry and view a director’s profile, including any historic relationships with different companies.

The legislation includes criminal and civil penalties for applying for multiple Director IDs or misrepresenting a Director ID.


Impact on directors and companies

Every director will need to register to receive a permanent, unique Director ID. They will be required to submit prescribed personal information and undergo a 100-point identity verification.

Companies will need to put processes in place to ensure that all existing directors apply for an ID within the prescribed timeframe once the regime is implemented. Also, companies will need to ensure that director appointment processes include the necessary steps for new directors to apply for a Director ID.


What do directors need to do right now?

1.  New Directors

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

2.  Existing Directors

Existing company directors will now be required to apply for a Director ID by 30 November 2022. Applications will open on 1 November 2021 and there is no cost to apply.

Key dates for Director ID applications:

Date you become 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


Is anyone exempt from the Director ID regime?

Yes, you won’t need a Director ID if you are:

  • a company secretary but not a director
  • acting as an external administrator of a company
  • running a business as a sole trader or partnership
  • referred to as a ‘director’ in your job title but have not been appointed as a director under the Corporations Act or the CATSI Act
  • a director of a registered charity with an organisation type that is not registered with ASIC to operate throughout Australia
  • an officer of an unincorporated association, cooperative or incorporated association established under state or territory legislation, unless the organisation is also a registered Australian body.


How to apply for Director IDs

Directors must apply for their Director ID themselves because they will need to verify their identity. No one can apply on their behalf.

The fastest way to receive your Director ID is to apply online. For detailed instructions on how to apply, please refer to our article – How to set up a Director ID.


Penalties for non-compliance

Under the law, directors who fail to apply for a Director ID within the stipulated time frame can face criminal or civil penalties of 5,000 penalty units which currently stands at $1.11 million.


Further help:

If you have any questions regarding the impact of this legislation on your business operations, please feel free to contact us for a chat.


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