The Government has introduced a new director ID regime with the aim of preventing the use of false and fraudulent director identities and to reduce unlawful activity, such as phoenix activity. All directors who are subject to the rules will apply for a director ID once and will keep this ID forever, regardless of whether they change companies, stop being a director or move overseas.
The ATO and Australian Business Registry Services (ABRS) have released new information on the new director ID requirements, indicating that individuals will be able to apply for a director ID from November 2021.
While tax and BAS agents can potentially assist clients in determining whether they need to apply for a director ID, they cannot apply for a director ID on behalf of a client.
Who needs to apply?
Individuals will need to obtain a director ID if they are a director or eligible officer of any of the following entities:
- A company;
- An Aboriginal and Torres Strait Islander corporation;
- A corporate trustee, for example, of a self-managed super fund;
- A charity or not-for-profit organisation that is a company or Aboriginal and Torres Strait Islander corporation;
- A registered Australian body, for example, an incorporated association that is registered with the Australian Securities and Investments Commission (ASIC) and trades outside the state or territory in which it is incorporated;
- A foreign company registered with ASIC and carrying on business in Australia (regardless of where the individual lives).
Individuals will not need a director ID if they are running a business as a sole trader or partnership.
How to apply?
There are two stages to the application process:
- Verifying the director’s identify
- Linking the director to the business’s ABN
In most cases directors will apply online through the ABSR using myGovID. myGovID is an identification verification app.
For clients who cannot obtain a myGovID then the best way to apply depends on their situation.
- Individual has a TFN – If the individual has an Australian TFN then they can apply by phone.
- Individual does not have a TFN – The individual will need to apply with a paper form (available to download from November 2021) and will need to provide certified copies of documents to verify their identity.
Foreign directors will need to apply using the paper form and have their primary and secondary identification documents verified by either a notary publics, or by an Australian embassy, high commission or consulate, including consulates headed by Austrade honorary consuls.
The individual’s myGovID will need to be linked to the business’s ABN through the Relationship Authorisation Manager (RAM). RAM will require one person acting on behalf of the business to act as the principal authority that will enable other directors to link to the ABN. RAM allows the director to act on behalf of a business online when the business is linked to their myGovID.
When an individual must apply for a director ID depends on when the individual becomes a director:
|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
There are different timing requirements for directors of Aboriginal and Torres Strait Islander corporations.
- Preparing for your director ID
- Who needs to apply and when
- Verifying your identify – document requirements
If you need any further details or assistance on the above, feel free to contact our office.