If you haven’t heard of a Director ID, you’re probably wondering what is it and why do you need it? New legislation requires all directors of any company to be registered with a unique 15 digit Director ID by 30th November 2022!
Who needs to register and why?
Shareholders, employees, creditors, consumers, external administrators and regulators are entitled to know the names and certain details of the directors of a company. All directors are required by law to verify their identity with the ABRS before receiving a director ID. This is important because it will help to:
- prevent the use of false or fraudulent director identities
- make it easier for external administrators and regulators to trace directors’ relationships with companies over time
- identify and eliminate director involvement in unlawful activity, such as illegal phoenix activity.
Illegal phoenix activity is when a company is liquidated, wound up or abandoned to avoid paying its debts. A new company is then started to continue the same business activities without the debt. When this happens:
- employees miss out on wages, superannuation and entitlements
- suppliers or sub-contractors are left unpaid
- other businesses are put at a competitive disadvantage
- the community misses out on revenue that could have contributed to community services.
How to register for a Director ID?
You can register for a director ID online at the ABRS website. You will require:
- To be setup with myGovID (this is different from myGov)
- Gathered documents such as TFN information, residential address and 2 documents verifying your identity (list of types of documents accepted is listed on the ABRS website)
- Complete your application online and voila you’re done!
The deadline is fast approaching so if you haven’t registered for a Director ID please do so as soon as possible to avoid any penalties.