Director IDs and resignations

In the final week of November, the ATO announced that more than one million directors still need to apply for their director identification number (director ID). Importantly, while penalties can apply if the deadline (generally 30 November) is not met, the community can expect that the ATO and Australian Business Registry Services (ABRS) will take a reasonable approach to support people to apply with an emphasis on compliance rather than sanctions.

Director IDs are a unique 15-digit identifier that is a requirement for all company directors. Company directors will apply for a director ID once and keep the number forever. It is administered by ABRS, and managed by the ATO.

On 21 November, a record 28,426 directors applied for their director ID. Most of these directors applied on the ABRS website using their myGovID, meaning their new number was issued straight away.

As 30 November deadline for most directors to apply has arrived, ABRS Deputy Registrar Karen Foat said the ABRS was glad to see such strong application numbers.

With that 30 November deadline here, we’re really pleased that so many directors are getting their director ID, and we encourage all other directors to follow suit.

All directors of companies, registered Australian bodies and registered foreign companies must apply for a director ID – it is not optional. It’s free and available to directors within Australia and overseas.

It has recently been clarified that anyone who was a director prior to 31 October 2021 but who resigned on or before the 30 November deadline not required to obtain a director ID.

Ms Foat reminded directors to sign up now: 

Some people might not actually realise they are a director of a company. You don’t have to wear a suit or work in an office to be considered a director. If you run a small business, self-managed super fund, a not-for-profit or even a large sporting club, you may be a director, which means you’ll need a director ID.

The fastest way to apply is online at www.abrs.gov.au  which will issue a director ID instantly once the application is complete. Nearly 90% of directors who have applied so far have used the online service. Once issued, the director ID will need to be passed onto the record-holder of the company – this may be the company secretary, another director, or authorised agent.

Ms Foat explained: 

There’s a common myth floating around that if you’ve got a registered tax agent, they can just apply for a director ID on your behalf, but that’s not true. All company directors must apply for it themselves, as they are required to verify their identity themselves. This robust identification process will help prevent the use of false and fraudulent director identities.

Ms Foat said that by applying for their director ID, directors are helping regulators create a fairer playing field for honest businesses.

Director ID helps the government to take action against illegal activity, for example a practice called phoenix activity. This is really dodgy behaviour and it’s where business owners illegally shut down their company and transfer assets into a new company to avoid paying what they owe to employees and suppliers.

By applying for a director ID, you’re helping to protect the community from those doing the wrong thing.

If you are unsure if you are required to apply, or do not know how to do so, reach out to us for guidance.