In its 2020 Budget Digital Business Plan, the Australian government announced the full implementation of the Modernising Business Registers (MBR) program. The program is designed to both establish the new Australian Business Registry Services (ABRS), and enhance how businesses register and manage their information with the government.
Although the ABRS rolls out progressively between 2021 and 2024, one of the immediate changes is that business directors must obtain a Director ID number.
Here is what you need to know.
1. What is a Director ID?
The Director ID is a unique number you as a director apply for once and keep forever. It’s designed to prevent the false or fraudulent use of your identity.
The number is 15 digits long and is allocated to any director—or someone who plans to become a director—who has verified their identity with the ABRS. All Australian Director ID numbers start with the digits 036 (Australia’s country code under International Standard ISO 3166), and end with an 11-digit number plus one digit designed for error detection.
Directors need to apply for their own director ID, no one else can do this for you.
This ID number is yours forever – even if you change companies, stop being a director, change your name or move overseas.
2. Why do I need a Director ID?
Verifying your identity with the ABRS helps prevent fraudulent or false IDs being used, which makes it easier for regulators to trace directors’ relationships with companies over time and identify and eliminate unlawful director activity. It safeguards your identity and reduces the chance of identity fraud.
Additionally, various groups including employees, creditors and shareholders are entitled to know the names of a company’s directors.
3. Who must obtain a Director ID
Any eligible officer of a company, including people who are appointed as a director or an alternate director of a company must obtain a director ID.
This includes people who are a director of a:
- registered Australian body
- registered foreign company
- Aboriginal and Torres Strait Islander corporation
- corporate trustee.
Under the Corporations Act, a director must be:
- at least 18 years old
- cannot be disqualified from managing corporations, unless ASIC or the Court has given permission.
Under the CATSI Act, a director must be:
- at least 18 years old
- a member of the Aboriginal and Torres Strait Islander corporation and an Aboriginal and Torres Strait Islander person
- not disqualified from managing a corporation, unless given permission from the Registrar.
Finally, there are some people who do not need an ID, such as are those who are a company secretary but not a director; a company’s external administrator; running a business as a sole trader or partnership; or have “director” in the job title, but were not appointed officially as a director under the Corporations Act or the CATSI Act.
Individuals will not need a director ID if they are running a business as a sole trader or partnership.
4. Applying for a director ID
- Set up your myGovID and verify your identity
- Gather your documents so you are ready to apply
- Login to ABRS and apply (this links you to the business’s ABN)
The individual’s myGovID will need to be linked to the business’s ABN through the Relationship Authorisation Manager (RAM). RAM will require one person acting on behalf of the business to act as the principal authority that will enable other directors to link to the ABN. RAM allows the director to act on behalf of a business online when the business is linked to their myGovID.
The Directors details will need to match the information held by ASIC.
It is free to apply for your director identification number, but you must apply for your own number and verify your identity. No one else can apply for the ID on your behalf.
When an individual must apply for a director ID depends on when the individual becomes a director:
For Corporation Act directors:
|Date you become a director||Date you must apply|
|On or before 31 October 2021||By 30 November 2022|
|1 November 2021–4 April 2022||Within 28 days of appointment|
|From 5 April 2022||Before appointment|
For CATSI (Aboriginal and Torres Strait Islander Act) directors:
|Date you become a director||Date you must apply|
|On or before 31 October 2022||By 30 November 2023|
|From 1 November 2022||Before appointment|
If the company intends to appoint new directors, it will be important to ensure that they are aware of the requirements and timeframes to establish their director ID if they do not already have one.
How do I set up myGovID?
myGovID is an identification verification app for your mobile.
You will need to download the app onto your phone or device and create an account.
The myGovID does not create your director ID – the app’s only purpose is to validate your identity, and once validated, issue a code that can be used to identify you on government online services without going through the same verification process.
myGovID uses your phone/device’s camera to scan your forms of ID such as your passport, driver’s license and/ or VISA (check the documentation requirements here), to validate who you say you are. Be careful when you are scanning your documentation as the system does not always read the scan correctly.
What documents will I need to apply for my Director ID?
In addition to your myGovID, you will need to have on hand documentation that matches the information held by the ATO. If you have a myGov account linked to the ATO, you can find the details on your profile. You will need:
- Your tax file number
- The residential address held on file by the ATO; and
- Two documents that verify your identify such as:
- Your bank account details held by the ATO (on your myGov ATO account, see ‘my profile/financial institution details’).
- Dividend statement investment reference number
- Notice of assessment (NOA) – date of issue and the reference number (on your myGov ATO account, see Tax/lodgements/income tax/history).
- The gross amount from your PAYG payment summary
- Superannuation details including your super fund’s ABN and your member account number
The final stage requests your personal contact details (not the company’s).
How do I apply to ABRS?
Once you have set up your myGovID, you need to apply to the Australian Business Registry Services (ABRS) for your director ID. Use the email you used to create your myGovID to start the process.
Once complete, your director ID will be issued immediately on screen. This information should be provided to your company secretary or office holder.
If any of your details change, for example a change of residential address or phone number, you will need to update your details through the ABR. You will also need to notify your company within seven days (14 days for CATSI Act directors) and the company will then need to notify the Australian Securities and Investments Commission (ASIC) within 28 days.
What if I can’t download myGovID?
If you cannot download myGovID then the best way to apply depends on your situation.
- Individual has a TFN – If the individual has an Australian TFN then they can apply by phone.
- Individual does not have a TFN. The individual will need to apply with a paper form (available to download from November 2021) and will need to provide certified copies of documents to verify their identity.
What if I’m a foreign director?
Foreign directors of Australian companies have the same requirements and deadlines as Australian resident directors, however, the verification process is only accessible in paper form.
One primary and two secondary forms of identification are required to accompany the application that have been certified by a notary publics or by staff at the nearest Australian embassy, high commission or consulate, including consulates headed by Austrade honorary consuls. Primary forms of identification include a birth certificate or passport, and secondary include driver’s licence, foreign government identifier, or national photo identification card.
In the presence of the applicant, the authorised certifier must certify that each copy is a true and correct copy of the original document by sighting the original document, stamping, signing and annotating the copy of the identity document to state, ‘I have sighted the original document and certify this to be a true and correct copy of the original document sighted’. initialling each page listing their name, date of certification, phone number and position.
The form and the accompanying documents will need to be sent by mail to Australian Business Registry Services using the details provided.
What if I’m named a Director but I don’t really have any responsibilities?
It’s important that anyone agreeing to be a director understands the implications. Being a director is not just a title; it is a responsibility. At a financial level, directors are responsible for ensuring that the company does not trade while insolvent. The by-product of this is that the directors may be held personally liable for the debt incurred. The director penalty regime has also tightened up in recent years to ensure that directors are personally liable for PAYG withholding, net GST, and superannuation guarantee charge liabilities if the company fails to meet its obligations by the due date. For many small businesses, the directors are also often personally responsible for company loans secured against property such as the family home.
Failing to perform your duties as a director is a criminal offence with fines of up to $200,000 and five years in prison.
Ignorance is not a legal defence. Don’t sign anything unless you understand the consequences.
What do I do with my Director ID once I have successfully obtained it?
Once you have successfully applied for and obtained your Director ID, you will need to pass it onto the record-holder of any companies for which you are a director (e.g., the company secretary, another director, a contact person or an authorised agent of the company i.e us if you are a managed client of ours).
We would suggest you also retain the number for your own records as this will be your lifetime Director ID and required for any additional director appointments you have accepted, or will accept.
At this stage, no additional steps need to be taken to record your Director ID (e.g., with ASIC or the ATO).
Want to receive information like this in your inbox?
Our email communications have ramped up a bit due to Covid, as we want to ensure our inner circle are informed.
If you’d like to have emails about not just tax tips, business news and ATO due dates – but government grants, local grants, and on trend information to keep you informed.
(And sometimes some witty jokes and team photos) sign up below to our email newsletter.