If you haven’t yet applied for a Director ID Number (DIN) now is the time to do it or risk a civil penalty of up to $1.1 million.
The Australian Taxation Office (ATO) has started the process of chasing some 500,000 company directors who have not yet registered. Despite the official deadline of 30 November 2022, the ATO has said that penalties won’t apply to anyone who registered for their Director ID before 14 December 2022.
It is estimated that there are 2.5 million directors in Australia and only 2 million have so far registered, according to a statement made by the ATO to InnovationAus.
The system was launched by the ATO and Australian Business Registry Services (ABRS) in 2021 and is designed to help prevent illegal ‘phoenixing’. Phoenixing is the process by which a new company is established to continue the operations of a business that has been liquidated to avoid paying debts, employees and creditors.
What is a Director ID?
The Director ID is a 15-digit director identification number that is unique to each individual director who has verified their identity with the Australian Business Registry Services (ABRS).
If the director changes companies, stops being a director, changes their name or moves interstate or overseas, the unique identifier will remain with them forever.
Every director is required to apply for a DIN under the Corporations Act 2001 and you will need to have a myGovID to apply for the director ID,
MGI first alerted our clients of the need to apply for the Director ID back in October 2021 and provided a further reminder of how to apply for a Director ID in September 2022.
If you have yet to apply for a DIN, we urge you to start the process now as the ATO has indicated that it will take a light touch with directors who are merely lagging behind.
“The ATO has now commenced contacting directors who have not met their obligations to apply for a director ID. In the first instance, directors will be provided with guidance on how to apply.”
The ABRS has now also published a video guiding company directors through the process.
How to apply
The fastest way to apply for a DIN is by using the myGovID app to log in to ABRS online and verify your identity with information the ABRS has on record. You can check if your business is registered as a company with the Australian Securities and Investments Commission at ASIC Connect. Details of how to apply can be found here on the ABRS website.
Once you have received your DIN please forward this to our team to insert into our Corporate Secretarial software.
If you have any questions, please contact the team at MGI on
asic@mgisq.com.au
