ASIC Enforcement of Director ID Obligation – What Directors Need to Know

Several years ago, new laws were introduced requiring directors to verify their identity with the Australian Business Registry Services and obtain a director identification number.

Transition periods commencing 1 November 2021 were afforded to existing directors and new directors until 4 April 2022 and 30 November 2022 respectively. Following the expiry of those periods, all directors must obtain a director ID prior to appointment.

This year, ASIC has become firmer in enforcing the director ID obligation with several directors being prosecuted and fined up to $10,000 each. This is a strict liability offence so mere non-compliance can trigger substantial penalties.

ASIC has framed these fines as a deterrent to the broader director community.

If you are preparing to become a director, you must obtain a director ID prior to your appointment.

For companies limited by guarantee that are charities, we often see directors who are unaware of the obligation to hold a director ID. This usually stems from the fact charities generally report director changes to the ACNC rather than ASIC. However, directors of a company limited by guarantee are still company directors required to obtain a director ID.

Currently, you do not need to inform ASIC of your director ID when applying to register a company or making changes to director details. However, from 1 July 2027, new laws being introduced mean companies will be required to collect director IDs.

If you would like advice on director ID obligations, particularly in the charity and not-for-profit space please reach out to our commercial team.

Paul Gray
Principal
T: 03 5225 5231 | M: 0414 195 886
E: pgray@ha.legal

Hugo Le Clerc
Senior Associate
T: 03 5225 5213 | M: 0438 089 334
E: hleclerc@ha.legal

This article was prepared with the assistance of Angelina Hogan-Fox, Law Graduate.