The Australian government has amended the Corporations Act (Cth) 2001 requiring all Directors to register with a digital ID.
How do you know if your are a Director
Section 9 of the Corporations Act (Cth) 2001 defines a director as a person appointed to that position. The definition also regards 'a de facto director' or a 'shadow director' as a director for purposes of the Corporations Act even if that person has not been validly appointed as a director.
If you are unsure whether you are a Company Director or who the Directors of an entity may be, you can search:
ASIC Connect for a company, registered Australian body, or registered foreign company under the Corporations Act; or the
Office of the Registrar of Indigenous Corporations for a company registered under the CATSI Act.
The Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act) sets out the duties required of Directors.
Directors of Aboriginal and Torres Strait Islander corporations also have duties that are consistent with directors’ duties under common law and the Corporations Act (Cth) 2001.
[For more information, go to the Office of the Registrar of Indigenous Corporations website here.]
The Responsibilities and Liabilities of Directors
A Director must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise under the Corporations Act (Cth) 2001.
Directors are in charge of the management of a company’s business.
Directors make the strategic and operational decisions of the company and are responsible for ensuring that the company meets its statutory requirements and legal obligations.
Directors are responsible under taxation law for ensuring their company’s tax and super obligations are reported and paid on time.
If your company does not pay certain liabilities by the due date, director penalties may apply.
Company Directors are responsible for ensuring that the company's tax and super obligations are reported and paid on time.
As a company director you become personally liable for your company's unpaid amounts of:
- pay as you go withholding (PAYGW);
- goods and services tax (GST);
- super guarantee charge (SGC).
The Governments' Director ID Requirements
A Director Identification Number (Director ID) is a unique identifier that is valid for a lifetime.
The Australian Government has established the Director ID system to prevent the use of false or fraudulent director identities.
The Director ID is interconnected to MyGovID (different to My Gov), the ATO, it collects your personal information, and business information and streamlines business regulation in Australia.
The Director ID is relevant for all Australian citizens, including those living overseas.
All company officeholders need to understand their legal obligations under the Corporations Act (Cth) 2001.
This includes keeping accurate financial records, passing solvency resolutions, and keeping company details up to date.
Being a company officeholder is different to being the holder of a business name.
Company officeholders (directors and secretaries) have a number of responsibilities, including those set out in the Corporations Act (Cth) 2001.
[See the legal obligations of Company Officeholders, as listed by the Australian Securities & Investments Commisison here]
Who Needs to Register for a Director ID
The following is a list of those who require to register for a Director ID before the 30th of November 2022:
Company;
Aboriginal and Torres Strait Islander corporation;
Corporate trustee, for example, of a self-managed super fund;
Charity or not-for-profit organisation that is a company or Aboriginal and Torres Strait Islander corporation;
Registered Australian body, for example, an incorporated association that is registered with the Australian Securities and Investments Commission (ASIC) and trades outside the state or territory in which it is incorporated; and/or
Foreign company registered with ASIC and carrying on business in Australia (regardless of where you live).
Penalties apply for Directors who do not register before 30th November 2022
The penalty for not registering your name/company for a Director ID by 30th of November 2022:
- Criminal Penalty = $13,400.00
- Civil Penalty = $1m maximum penalty.
The legal provision for this power is found under the Corporations Act (Cth) 2001 - Section 1272C - Requirement to have a director identification number.
Your Director ID and Your Privacy
You may be wondering how your corporate information is protected, given these new laws, backed up by new regulations.
Well, the truth is, it is all up in the air at the moment.
We know that, from the 5th of April 2023, you will be required to set up a Director ID PRIOR to registering a Company, or before becoming a Director.
We also know that, for now, registering for your Director ID is possible over the phone, without setting up a MyGovID for corporate use.
We also know the, for now, your Director Id is not searchable by the public, and not just anyone can access it without your consent, but, that the Registrar will be undertaking consultation in relation to this matter in time.
A Director ID is not governed by the same rules or laws that apply to a tax file number (TFN).
An authorised agent or company secretary must ensure that information about a company and its officeholders is:
Is handled according to their legal obligations; and
Is securely stored.
The law does not authorise the Australian Business Registry Services to disclose your Director ID to the public without the director’s consent.
Your director ID will not be searchable by the public.
The Registrar will consult the community about what details can be disclosed and searched in the future.
Let's Lobby the ABRS Registrar to ensure our Corporate Privacy!
So, here's what you can do for now:
1. stay informed;
2. join us for our legal lecture with hints and tips;
3. register the suggested way; and
4. petition the ABRS Registrar to ensure corporate privacy is protected!
Chris Jordan AO, Commissioner of Taxation and Registrar of the Australian Business Register, was appointed as Registrar of ABRS on 4 April 2021 under the: Business Names Registration Act 2011. Commonwealth Registers Act 2020. Corporations Act 2001.
HERE's HOW .....
By calling the Australian Business Registry Services on: (02) 6216 3440, submit your request/complaint to ensure that your Director ID will never be searchable by the public, and that you will retain autonomy and privacy over this, and other commercially sensitive materials!
YOUR LETTER/STATEMENT STRUCTURE
LOBBY LETTER TO THE REGISTRAR OF THE ABRS
Date _________
Dear Mr Chris Jordan AO,
Commissioner of Taxation, Registrar of the Australian Business Registry Services
Dear Registrar,
I understand that recent amendments to the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) and the Corporations Act 2001 (Cth) require all company directors, or anyone intending to become a director, to obtain a Director Identification Number (DIN).
As I am a listed Director, according to section 9 of the Corporations Act, I wish to clarify a few matters in relation to these new government requirements.
[Prepare a brief statement, informing the ABRS Registrar that, as you understand it, they will be consulting on the matter soon, and you wanted to get in early, and put your opinion on record.]
[Provide you personal name, your company name, or the nature of your business, how long you have been in operation, and then state your reservations clearly.]
Given that the requirements are for me to upload all of my personal and corporate data on the new MyGovID and ABRS platforms, can you and your parliamentary colleagues guarantee that my privacy will be protected under the Privacy Act 1988 (Cth) or any other legal provision?
Does the Government give guarantees that my information will be safely and securely stored, without the threat of hacking?
[Express your concerns in relation to the Director Digital ID, and the issue of privacy.]
[Put one point in one paragraph! Use FACTS.]
[Use the information in the legal lecture you attended here]
[Be clear and succinct. Get to the point.]
[State that you have already registered, that you are a law abiding citizen, wishing to attract no penalties, but you are concerned about privacy and intellectual commercially sensitive property in relation to this matter.]
I understand that, as the Registrar of the ABRS, you have expressed that the accessibility of my Director Digital ID is, for now, accessible by only the Courts, Tribunals and Government Departments, but that this matter will be going to consultation in the near future.
Therefore, is it correct in saying that the Government’s current position is not to disclose the Director Digital IDs, but that my Director ID may be accessible by the public into the future?
[Sign off, and date the document.]
[Send it via email and/or (registered) post.]
[Let me know if you receive a response!]
USEFUL LINKS
6. MY GOVID
USEFUL HANDOUTS
BOOK IN YOUR SPOT AT OUR ONLINE LEGAL LECTURE ON
DIGITAL ID'S FOR DIRECTORS HERE
BOOK IN ANDREA CONSULTS FOR A BUSINESS STRATEGY MEETING HERE