ASIC
have recently released an important message from the Australian Business
Registry Services (ABRS) regarding director identification numbers. The ABRS have confirmed that they are
continuing to engage with directors who have so far failed to apply for a
Director Identification Number (Director ID).
ASIC have advised that action may be taken if a director fails to apply for a Director ID including the director being:
The ABRS also reminds directors that failing to apply for a Director ID on time is a criminal offence, and as such, may attract significant criminal and/or civil penalties.
Directors should consider the recent announcement as an opportunity to potentially mitigate any disciplinary action or legal penalties and adhere to the ABRS Director ID requirements.
We have outlined below some further information about Director IDs and the potential penalties for failure to apply for a Director ID.
A Director ID is a unique identifier assigned to a company director that aims to provide traceability of a director’s profile and association with companies over their career. The Director ID is the same number for all director positions held by an individual across all their appointments. Usually, they will be retained indefinitely, but may be cancelled if a person applies for a Director ID and does not take up a directorship within a set period.
Directors
must apply for a Director ID if they are a director of:
1.
A company;
2.
An Aboriginal and Torres Strait Islander
corporation;
3.
A corporate trustee, for example, of a
self-managed super fund;
4.
A charity or not-for-profit organisation
that is a company or Aboriginal and Torres Strait Islander corporation;
5.
A registered Australian body, for example,
an incorporated association that is registered with ASIC and trades outside the
state or territory in which it is incorporated; or
6.
A foreign company registered with ASIC and
carrying on business in Australia (regardless of where you live).
When Do You Need to Apply?
From 5 April 2022, any individual appointed as a director under the Corporations Act must apply for a Director ID prior to their appointment.
From 1 November 2022, any individual appointed as a director under the CATSI Act must apply for a Director ID prior to their appointment.
A person who is intending to become a company director who does not yet have a Director ID should bear in mind that the application process may slow down their appointment, and should promptly apply to avoid any such delay.
Foreign Directors
Where a director lives outside Australia, they should be mindful that a Director ID application will involve additional documentation which may be time-consuming to compile and which may delay the submission of the application.
For example, a foreign director needs primary and secondary documents which need certifying by a notary public by way of an apostille or at an Australian Embassy, High Commission, or Consulate.
If the documents are not in English, they must be translated by someone approved by DFAT and the translation and certified originals then provided with the application.
Once submitted to the ABRS, the current processing time for an application is up to 56 days. Companies will need to factor in these timeframes in advance, to ensure the directors can meet their Director ID obligations.
Disclosure of Director ID
A director under the Corporations Act does not need to provide their Director ID to ASIC or the company. However, a director under the CATSI Act must provide their Director ID to the person responsible for keeping company records (e.g. the company secretary, or another director).
Fines & Penalties
The following penalties apply for non-compliance with Director ID requirements:
|
Offence
|
Corporations Act 2001
|
Maximum Penalty
|
|
Failure to have a Director ID when required to do so.
|
s 1272C
|
- $16,500 (criminal)
- $1,375,000 (civil)
|
|
Failure to apply for a Director ID when directed by the Registrar.
|
s 1272D
|
- $16,500 (criminal)
- $1,375,000 (civil)
|
|
Applying for multiple Director ID.
|
s 1272G
|
- $33,000, 1 year imprisonment or both (criminal)
- $1,375,000 (civil)
|
|
Misrepresenting Director ID.
|
s 1272H
|
- $33,000, 1 year imprisonment or both (criminal)
- $1,375,000 (civil)
|
How to Apply
Directors can apply for a Director ID either:
- Online via myGovID;
- By telephone with the ABRS; or
- Through lodging a paper form.
For directors with access to myGovID and sufficient Australian identity documents, we recommend applying via the online system.There are no costs for applying.
We Are Here to Help
If you require assistance in applying for a Director ID or would to discuss any of the above in further detail, please contact our Corporate & Commercial Advisory team.
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