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In an effort to prevent false or fraudulent director identities, the Australian Government has announced a new requirement for directors.
The Director Identification Number is a unique number given to all company directors. As an individual identifier, your allocated number remains the same regardless of how many companies in which you act as a director now or into the future.
While we cannot apply for a Director Identification Number on your behalf, we are actively advising relevant clients that they will need to apply for one.
We’re also finding that it’s a timely reminder for existing company directors to re-visit the structure of their business to ensure it aligns with current business activities and future goals.
WHEN DO I NEED TO APPLY FOR A DIRECTOR IDENTIFICATION NUMBER?
All new company directors need to apply for a Director Identification Number within 28 days of establishing their company (or being appointed a director). From April 5 next year, new directors will need to apply before they are appointed.
Existing company directors have until 30 November 2022 to apply.
Slightly different dates apply to directors who fall under the Corporations (Aboriginal and Torres Strait Islander) Act.
Keep in mind that the Director Identification Number only applies to directors. Sole traders, partnerships, and company secretaries don’t need to apply.
HOW DO I APPLY FOR A DIRECTOR IDENTIFICATION NUMBER?
You can use the myGovID app (which is available on Google Play or the Apple Store) to apply for your Director Identification Number.
It’s relatively simple – all you need is your birth certificate or a passport with an expiry not more than 3 years old.
To apply, you can:
- Download the myGovID app on your smartphone or tablet
- Enter your name, address and date of birth
- Put in your birth certificate or passport identification number
- Add one other identification number (such as your Medicare number)
If you have trouble using the app, you can call Australian Business Registry Services on 13 62 50.
Once your Director Identification Number is set up, we can include it when we register a company on your behalf (in which you are acting as a director).
Unfortunately, we cannot update any details about your personal Director Identification Number for you – but you can do this quickly yourself via the myGovID app.
WHY IS THE DIRECTOR IDENTIFICATION NUMBER HAPPENING NOW?
While the introduction of the Director Identification Number seems to be coming at a time when many directors are already under a lot of pressure, its primary aim is to eliminate the establishment and winding up of phoenix businesses.
Ultimately, this will help to protect legitimate director reputations and prevent customers from being impacted by fraudulent business activities.
Regulatory changes such as the Director Identification Number are happening all the time, and when you’re busy running a business it’s near impossible to keep up with them all. This is where your accountant or business adviser should play a key role in advising you on any relevant compliance changes so you can plan and act accordingly.
IS IT TIME FOR A BUSINESS RESTRUCTURE?
Establishing a business is exciting, but it’s also essential to get it right. We see many cases where people have used an online service in an effort to save a little money, but have not thought about the long-term tax and compliance consequences of their company structure.
Trying to change your structure later on is much more difficult than getting it right the first time – and could make all the difference in being able to claim certain tax incentives, attract investors, and so on.
To have a business advisory expert assess your company structure against current and future goals, simply contact your local RSM office.
For further information
If you require further information about the COVID-19 lockdown and grants available, please contact your local RSM adviser to find out more in relation to these measures.