ACCOUNTING

Calling all Directors

by Juston Jirwander, Director, Bishop Collins Accountants

Part of a major modernisation of Australia’s business registries, the introduction of Director IDs – a unique identifier that a director will keep indefinitely – is designed to help stamp out illegal phoenixing and other fraudulent activity, enabling government to verify and track the corporate history of individual directors.

While preventing fraud is the main reason for Director IDs, it’s not the only reason. The original legislation made clear the scheme is also meant to protect the privacy of directors by allowing them to be identified on public registers without disclosing, dates of birth, full names and residential addresses, etc.

At a time when cyber security attacks, identity theft and other threats are on the rise, it’s important this is followed through.

In a major step, the Australian Tax Office has launched its Australian Business Registry Services website, enabling directors to now apply for their ID.

If you are a director of one of the following entities: l A company. l Registered Australian body, such as an incorporated association. l A registered foreign company or

Aboriginal & Torres Strait Islander corporation.

You will need to obtain a Director Identification Number DIN (Director ID) by the dates below.

What is a Director ID Number?

A Director Identification Number (DIN) is a 15-digit number given to a director or someone who intends to be a director and has identified themselves with the Australian Business Registry Services (ABRS).

“If you are a Director you will need to obtain a Director Identification Number

It’s the director’s responsibility to apply for their Director ID. It is free to apply. There will only ever be one Director ID given to you as a director. This remains with the director regardless of whether they change companies, stop being a director, change their name, or move interstate or overseas.

Why do you need a Director ID?

In simple terms, you need this so creditors, shareholders, employees, consumers, administrators and regulators know the names and specific details of directors of a company.

Having a Director ID will 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; and dentify and eliminate director involvement in unlawful activity, such as illegal phoenix activity.

Important dates to apply by

Applying for your ID number depends on your date of becoming a director.

Date you become a Director:

l On or before 31 October 2021

Apply: By 30 November 2022 l Between 1 November 2021 and 4 April 2022

Apply: Within 28 days of appointment l From 5 April 2022

Apply: Before appointment

To be a director, under the Corporations Act, you must:

l Be an individual who is at least 18 years old. l Not be disqualified from managing corporations unless the appointment is made with the permission of ASIC or the Court. Your Director Identification Number (DIN) obligations include: l Applying for a DIN within the relevant timeframe for your situation. l Applying for a DIN when directed by the Registrar to do so. l Ensuring you only apply for no more than one DIN (unless directed by the Registrar to do so). l Not misrepresenting your DIN to a

Commonwealth body, company, registered Australian body or

Aboriginal and Torres Strait

Islander corporation. l Making sure you are not involved in breaching any of the above DIN obligations.

You must meet the above obligations. Serious consequences may apply if you are unable to meet the duties required. These include: l Possible civil or criminal penalties, or l You may be issued with an infringement notice.

How do you apply for your Director ID?

You can apply in three easy steps: l Set up myGovID l Gather your documents l Complete your application on the abrs.gov.au website.

Remember, it is a legal requirement to obtain a Director ID. You can contact Bishop Collins if there is a problem completing these steps by the due date or if you have any questions. l

For further information, head to: www.abrs.gov.au

If you have any questions please call Bishop Collins on 02 4353 2333.