Have you applied for your Director ID?

ASIC has brought its first prosecution action against a director for failing to have a Director Identification Number (Director ID).  

On 19 March 2024, a director appeared in the Downing Centre Local Court and was formally charged with one count of contravening section 1272C(1) of the Corporations Act 2001 for failure to have a director ID. An interim non-publication order (NPO) was granted by the Court prohibiting the identification of the defendant. The charges were listed for a further mention before the Downing Centre Local Court on 16 April 2024. On 22 March 2024, the interim NPO was extended to 16 April 2024.

Background:

A director identification number (director ID) is a unique identifier you will keep forever. It will help to prevent the use of false or fraudulent director identities.

• Directors appointed before 1 November 2021 had until 30 November 2022 to apply.

• New directors appointed between 1 November 2021 and 4 April 2022 had 28 days from their appointment to apply.

• From 5 April 2022 onwards, intending new directors must apply before their appointment.

Implications:

Non-compliance with this requirement is a criminal offence and carries significant penalties

• Failure to have a director ID when required to do so $16,500 (criminal); $1,375,000 (civil)

• Failure to apply for a director ID when directed by the Registrar $16,500 (criminal); $1,375,000 (civil).

 Key Takeaways:

• Urgent Compliance: The ASIC's prosecution action underscores the urgency for directors to ensure compliance with Director ID requirements. Failing to obtain a Director ID can result in severe legal repercussions, as demonstrated by the ongoing case.

• Timely Action: Directors who have not yet obtained their Director ID must take immediate action to fulfill this obligation. Compliance with regulatory mandates is essential for maintaining the integrity of corporate governance and avoiding potential penalties.

• Risk Mitigation: By proactively acquiring a Director ID, directors safeguard themselves and their companies from the financial and reputational risks associated with non-compliance. It is a proactive step towards upholding transparency and accountability in corporate practices.

If you have not obtained a Director ID yet, please apply as a matter of urgency.

We are here to help, if you require assistance with the applications, or have any further questions please contact us.