From 1 November 2021, Directors of various entities registered under the Australian Corporations Act 2001 (Cth) will need to obtain a unique Director ID number. The Director ID’s purpose is to verify the identity of each director.
The new requirements have important implications for Australian subsidiaries of multinational companies, foreign corporations registered in Australia and for special purpose vehicles that may be established in Australia, such as joint venture companies and acquisition and financing vehicles.
Directors of the following types of entities are covered by the new requirements:
Aboriginal or Torres Strait Islander corporations (registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) are also covered.
The provisions also cover alternate directors when acting as such.
The provisions only cover directors who are actually appointed, and do not cover de facto directors or shadow directors, but the provisions could potentially be expanded to cover them.
Directors of Australian charities registered under the ACNC regime that are not within the above categories are not required to obtain a Director ID.
For directors appointed before the regime commenced on 1 November 2021 there is a transitional period up to 30 November 2022 to apply for a Director ID.
For directors appointed between 1 November 2021 and 4 April 2022, the Director ID must be applied for within 28 days of appointment.
For directors appointed on or after 5 April 2022, a Director ID must be applied for before appointment.
We do note that there is a power for the Registrar of the ABRS to extend the 28 day application period, including by way of a class instrument.
Importantly for foreign corporations registered under the Corporations Act, if a new foreign director is appointed after 1 November 2021, a Director ID need to be applied for within 28 days of appointment.
For directors with an Australian “MyGovID” (which requires Australian identity documents) or with an Australian tax file number, there are online or telephone application processes.
For foreign directors, however, the application process is paper-based and hard copies of identity documents (such as passports, birth certificates, photo ID cards or driver’s licences) will need to be certified by staff at an Australian Embassy, High Commission or Consulate or by a Notary Public.
Further details pertaining to the paper-based process for foreign applicants are set out in the Annexure, extracted from the ABRS website.
Criminal and civil penalties can be imposed for breach of the provisions, including failure to apply for a Director ID within the time required. Substantial civil penalties of up to A$1,050,000 (5000 penalty units) can be imposed.
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