News

Recent enquiries have sparked discussions regarding the requirement for Director Identification Numbers (director ID), including whether a legal obligation exists in an external administration scenario.

The director ID is a new federal regime where a unique 15-digit identifier is given to a director, or someone who intends to become a director. The director ID has been introduced with the aim of tracing the relationship of directors and companies over time, and preventing the appointment of fictitious directors.

In accordance with the Treasury Law Amendment (Registries Modernisation and Other Measures) Act 2020, any person who was a director at any point subsequent to the commencement of the regime on 1 November 2021 is legally required to have a director ID. This requirement is irrespective of a company entering external administration or being deregistered. The requirement also applies to people who have resigned as director prior to an insolvency appointment.

The introduction of the director ID will also assist administrators and liquidators in accessing important current and historical information. This will ultimately reduce time and costs, and provide a more efficient insolvency process.

The requirements of the director ID apply to each person holding the position of director for an Australian or registered foreign corporation, and extend to directors of trustee companies as well as corporate entities.

Directors of registered Australian entities appointed on or before 31 October 2021 must apply for a director ID before 30 November 2022.

A transitional period is currently in operation and directors should take note of the following timeframes: 

• if they become a director on or before 31 October 2021, they must apply by 30 November 2022
• if they become a director between 1 November 2021 and 4 April 2022, they must apply within 28 days of appointment
• if they become a director from 5 April 2022, they must apply prior to appointment

Directors can apply for their director ID using the ABRS website. Prior to their application, directors are encouraged to set up a myGovID account to enable a smooth digital application process.

As Australia's financial regulator, ASIC is responsible for the enforcement of offences associated with the director ID, and directors should be reminded of their legal obligations to avoid infringement notices or civil penalties.

Directors and advisors are encouraged to contact HPL for further information on how the director ID will impact businesses.