A guide to understanding and applying for a directors ID

In November 2021, the Federal Government introduced a new regulation that requires all business directors to have a directors ID.

Under the new regulation, directors must verify their identity and apply for a unique 15-digit ID number will stay with you for life.

This ID will remain the same regardless of whether you cease working as a director, switch companies, change your name, or relocate overseas.

Who needs a directors ID?

Anyone who is currently a director of a company, registered Australian body, foreign company or Aboriginal and Torres Strait Islander corporation, is required to obtain a director’s ID.

Applications for existing directors are open until 30 November 2022.

If you are planning to become a company director prior to 4 April 2022, you must submit your application within 28 days of your appointment date.

For those starting their directorship after 5 April 2022, you must ensure the application date is prior to your appointment.

Why were these IDs introduced?

Essentially, director IDs serve the purpose of improving the traceability and movement of directors across companies within Australia and overseas. They help to prevent false identities and illegal business practices.

Therefore, the identification rollout is part of the Australian Governments’ plan to crack down on the rise of fraudulent and illegal phoenix business activity in the country. A report conducted by the Australian Taxation Office (ATO), revealed that The Economic Impact of Illegal Phoenix Activity equated to between $31 and $298 million in unpaid employee entitlements, and $1.6 billion in unpaid taxes and compliance.

Illegal phoenix activity involves a new company taking over the business of another company that has previously gone into liquidation, in order to avoid the payment of debts and employee entitlements.

As a current director, you must apply for your Director’s ID prior to 30 November 2022. This is required to avoid the risk of losing your position and other civil/criminal penalties. Preparing this identification number is crucial to your future career, so we’re here to walk you through the process.

How to apply for a director ID

The DIN regime is run through the Australian Taxation Office (ATO) but created through the Australian Business Registry Services (ABRS).

The application process is simple and has no associated costs. It must be conducted, however, by you as the director, rather than an accountant or financial planner on your behalf.

For detailed information on completing your director’s ID application, you should visit the Australian Business Registry Services website.

1. You will be required to create a myGovID to verify your identity, which is separate from your regular myGov account.
2. Prepare necessary identification documents such as your Tax File Number (TFN) and residential address, as they are held by the ATO. You will also require information from two personal verification documents (such as your passport, driver’s license or PAYG payment summary).
3. Complete the online application process to obtain your director’s ID.

For further assistance in understanding the governments requirements for directors ID, Macmillans Accountants can offer everything you need to know. Even though we are not permitted to apply for your director ID, we can assist with any questions you have along the way.