Posted on October 27, 2021
Hanna Psomoulis
The ATO has recently introduced new director ID requirements. What are these requirements? Do they apply to you – and if so, how?
Who does this apply to?
These director ID requirements will apply to all eligible officers of companies, registered Australian bodies and registered foreign companies registered under the Corporations Act 2001 (Corporations Act) , and corporations registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act).
An eligible officer is someone who has been appointed as a director or an alternate who is acting in that capacity.
Importantly, these director ID requirements must be completed by the director and no-one else on their behalf.
What is it, and what do you need to do?
Director IDs are 15-digit unique identifiers which will be assigned to directors following their successful application and will remain with the same director for their life. Directors will have the same ID regardless of whether they move between companies, move between states or countries, change names or even cease being a director altogether.
So, the burning question, what do you need to do to get a director ID? It is a three-step process:
- You need to set up myGovID;
There are a number of things to note about this step. First, unlike step 3, it can be done now.
Secondly, and importantly, the myGovID app is not to be confused with the myGov app or account. Whilst the myGov app allows you to link-up and access a number of government online services, the myGovID app aims to prove your identity and allows you to access a range of government online services including, but is not limited to, those available through myGov.
Thirdly, when setting up your myGovID you need to ensure you choose either a standard or strong identity strength. Basic identity strength will not suffice.
- You need to gather the required documents to prove you ID
This will include your TFN, residential address held by ATO and certain information from two appropriate documents. More information as to the nature of the documents required is provided on the Australian Business Registry Services website.
- You need to complete your director ID application
This step can only be completed from November 2021 onwards.
When do you need to apply by?
The time period within which you will be required to complete the director ID process will depend upon two things – your date of appointment and whether your organisation is registered under the Corporations Act or the CATSI Act.
If under the Corporations Act and you were appointed:
- on or before 31 October 2021 – you have to apply by 30 November 2022; or
- between 1 November 2021 and 4 April 2022 – you have to apply within 28 days of your appointment; or
- on or after 5 April 2022 – you have to apply before your appointment.
If under the CATSI Act and you were appointed:
- on or before 31 October 2022 – you have to apply by 30 November 2023; or
- on or after 1 November 2022 – you have to apply before your appointment.
There will be some extensions allowed, but more information on this will be provided by the Australian Business Registry Services in November.
Where do you need to apply?
myGovIDs can be set up through the myGovID app, whereas you will need to apply for director IDs through the Australian Business Registry Services website once the link becomes available in November.
Why do we need director IDs?
The rationale behind the director IDs is simple – identifying directors of companies in this way will help to prevent directors from using false identities, to trace a director’s relationship with different companies over time, and to thereby identify and reduce director involvement in unlawful activities.
Concluding words
If these changes affect you and you are seeking further guidance in relation to your new obligations or to your commercial practice more generally, please feel free to contact our office on (03) 9853 0311 to speak with Sharelle Staff or another of the experienced members of our team at Scanlan Carroll.
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