The Federal Government and other industry bodies have been working hard in recent years to improve the integrity of Australian business registers and create a central Commonwealth Business Registry.
As part of the 2020 Budget Digital Business Plan, the government announced the full implementation of the Modernising Business Registers (MBR) program aimed to:
- establish the new Australian Business Registry Services (ABRS)
- streamline how you register, view and maintain your business information with government.
One of the first steps of the MBR and ABRS is the introduction of mandatory director identification numbers for all directors of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation, and a lot of Directors will need to apply by 30 November 2022.
What is the ABRS?
Australian Business Registry Services (ABRS) is a new registry that will progressively help businesses, communities and governments register, view and maintain their information. The service will bring together the Australian Business Register (ABR) and over 30 Australian Securities and Investments Commission (ASIC) registers.
The new ABRS is now live, but will continue to progressively roll out until 2024 with it’s key milestones being:
- establish the foundations for the new registry service
- introduce director identification numbers** (Launching November! More info below)
- transition the companies register, business names register, Australian business numbers (ABN), and the professional and historical registers to the new registry service
The program is being implemented by the Australian Taxation Office (ATO) in partnership with the Treasury, ASIC, the Department of Industry, Science, Energy and Resources (DISER), and the Digital Transformation Agency.
What is a Director Identification Number (DIN)?
A director identification number (director ID) is a unique identifier you need to apply for once and will keep forever. All directors of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation will need a director identification number (director ID).
Directors need to apply for their own director ID, iIt’s free to apply, and will only ever have one director ID. Yup, you’ll keep it forever even if you change companies, stop being a director, change your name or move interstate or overseas.
Your ID will start with 036 (the 3-digit country code for Australia under International Standard ISO 3166) followed by an 11-digit number and one ‘check’ digit for error detection.
Basically - If you want to become a director or are already one, you'll need a director ID (you can apply before you’re appointed).
Why do I need a director ID?
Shareholders, employees, creditors, consumers, external administrators and regulators are entitled to know the names and certain details of the directors of a company. All directors are required by law to verify their identity with the ABRS before receiving a director ID. This will help to:
- prevent the use of false or fraudulent director identities
- make it easier for external administrators and regulators to trace directors’ relationships with companies over time
- identify and eliminate director involvement in unlawful activity, such as illegal phoenix activity.
Illegal phoenix activity is when a company is liquidated, wound up or abandoned to avoid paying its debts. A new company is then started to continue the same business activities without the debt. When this happens:
- employees miss out on wages, superannuation and entitlements
- suppliers or sub-contractors are left unpaid
- other businesses are put at a competitive disadvantage
- the community misses out on revenue that could have contributed to community services.
When do I need to apply?
You can apply for a director ID from November 2021. If you are planning on becoming a director, you can apply before you’re appointed.
Corporations Act Directors
- For Directors appointed under the Corporations Act, you need to apply by 30 November 2022 if you are already a director (appointed before 31st October 2021).
- If you became/plan to become a director between 1 November 2021 and 4 April 2022, you must apply within 28 days of appointment.
- From 5 April 2022, the rule is that you must apply BEFORE your appointment
To be a director under the Corporations Act, you must:
- be an individual who is at least 18 years old
- not be disqualified from managing corporations, unless the appointment is made with the permission of ASIC or the Court.
For more information on the Corporations Act, visit the ASIC website.
CATSI Act Directors
- If you were/will be appointed on or before 31st October 2022, you must apply by 30 November 2023.
- From November 2022, the rule is that you must apply BEFORE your appointment.
To be a director under the CATSI Act, you must:
- be an individual who is at least 18 years old
- be a member of the Aboriginal and Torres Strait Islander corporation and an Aboriginal and Torres Strait Islander person (unless the corporation’s constitution or rule book says otherwise)
- not be disqualified from managing an Aboriginal and Torres Strait Islander corporation, unless the appointment is made with the permission of the Registrar of Aboriginal and Torres Strait Islander Corporations or the Court.
For more information on the CATSI Act, visit the Office of the Registrar of Indigenous Corporations (ORIC) website.
How to apply for your director ID
If you have all of the right information handy the Director ID application will be nice and easy, so we recommend checking out the below before just jumping onto ABRS and clicking APPLY!
To apply for your Director ID online, head to the abrs.gov.au website. It is possible to apply via phone and paper form, but this is not as straightforward and you will need to provide certified copies of documentation to pass proof of identity requirements.
If applying online, the first thing you need is to ensure you have is a myGovID (NOT the same as your myGov account!). This involves downloading the app onto your smartphone and completing identification procedures - So have your ID handy; drivers licence, medicare card, passport, etc.
Once this is in place, you can click the "Apply for your director ID" on the abrs.gov.au website. You will be asked to further verify your identity during this process. Have your Tax File Number handy as well as additional items to verify.
These additional items could be:
- Bank account details;
- ATO Notice of Assessment;
- Superannuation account details;
- A recent dividend statement;
- Centrelink payment summary; and
- PAYG payment summary.
If you have a myGov account (again, NOT the same as myGovID) that is linked to the ATO online services, you can load this up on a separate tab or screen. This is because the DIN application process is synced with the ATO and the details entered during the DIN application need to match current ATO details. If you do not have a MyGov account with access to ATO online services, please call your tax agent to confirm your current ATO details.
Once your identity has been verified, your unique DIN will be provided to you. We suggest also providing this to your tax agent (that's us if you are our client!), so we can update our systems and ensure that when DINs go live, your DIN will be linked to your respective company.
If you don’t know if you need to apply, or by when, reach out to us (or your authorised tax, BAS or ASIC agent) to help you decide. There’s lots more information available on the ABRS website and, if you find yourself too stuck, we are always here to help.