ASIC take action against Directors failing to obtain a Director ID

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As of April 2024, the Australian Securities and Investments Commission (ASIC) have started to identify and take action against directors who do not have a Director Identification Number, in line with the current regulations.

Recently, ASIC prosecuted their first director for failing to comply with the director ID obligations. This director was charged at the Downing Centre Local Court. Shortly after, two directors in Perth, Australia were also identified and penalised $5,000 each (plus extra costs).

So, what are the regulations that directors are failing to adhere to?

Under the Director Identification Number regime introduced in 2021, all directors need to have their identity confirmed when they consent to being a director. This will come in the form of an identification number.

Directors will keep this number permanently, even when their duties cease. The number will not be issued to another person. The result is an ID system that traces a director’s relationships across companies, enabling better tracking of directors of failed companies and prevents the use of false identities.

In effect, the system will create one source of truth across Government agencies for individuals and entities, target illegal phoenixing and will be managed by the Australian Taxation Office (ATO).

From April 2022, all company directors will need to hold a director ID prior to being appointed. This can be applied for through the Australian Business Register system and your myGov account.

When you register, you will need to declare that the information you have provided is true and correct, you are or will be an eligible officer within 12 months, and you do not have an existing director ID (or applied for one). 

This serves as a timely reminder that all company directors must obtain a director ID before their appointment from 5 April 2022. As the recent case suggests, ASIC are now taking action against those who fail to adhere to the new regime and penalties will apply to all directors involved if they’re non-compliant.

To learn more about director IDs, read our blog here.

If you’d like assistance obtaining your director ID, contact your Aintree Group advisor or get in touch with us.