30 November has been set as the deadline for all directors of companies to apply for a director ID. This process is free of charge and available to all directors both within Australia and overseas. Directors may apply for their director ID through their myGovID online account and will be immediately issued a unique 15-digit identifier.
You can also register through the ABRS website. After registration, the director should pass on their number to the record holder of the organisation. This could be another director, the company secretary or an authorised agent.
According to the Australian Business Registry Services (ABRS), which is managed by the Australian Tax Office (ATO), this registration process is mandatory. According to ABRS Deputy Registrar, Karen Foat, those that fail to meet the deadline will be at risk of being penalised with a fine of up to $13,200.
She is urging everyone to check that they are not directors anywhere. Even those that run small businesses, self-managed super funds or non-profits may find they fall in this category and will be required to have a director ID.
Foat is also warning against rumours that the registration can be done through a registered tax agent. She affirms that each director must register themselves as the process involves the verification of identities. This measure is intended to help prevent the use of false and fraudulent director identities.
The ATO and ABRS have said their most recent information campaign has helped boost the number of registrations since October. However, the ABRS has also been mailing paper forms over the last couple of weeks to encourage more action, despite over 90% of registrations having been done online. This is alongside annual electronic reminders and by going through accountants who work with the directors.
Thus far about 1.5 million of the 2.5 million eligible directors have carried out the registration process and acquired their director IDs. As recently as 21 November there were 28,426 applications. However, even at that peak rate, it is estimated that another 230,000 will have registered by the end of the month, leaving about 770,000 or 31% of directors having not completed the process.
The process is intended to help in cracking down on dummy directors and company phoenixing. These incidents have resulted in organisations that have collapsed without paying creditors later being revived, or rising from the ashes like a phoenix, as another entity. The problem was driven by weak laws that allowed people to sign up as directors without sufficient proof of their identities.
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