What is a Director ID and why was it introduced?
To combat illegal phoenix activity, the Australian Taxation Office (ATO) has introduced 15-digit Director Identification Numbers to help prevent false or fraudulent use of director identities.
Illegal phoenix activity is when a company or individual attempts to escape financial obligations by liquidating and re-establishing the company under another name. When this happens, several related parties are impacted including:
• Employees who miss out on wages, superannuation, and entitlements
• Suppliers or sub-contractors who are owed money
• The community who misses out on revenue that may have been contributed to community services
As a director, you will apply for you Director ID once only. This 15-digit identifier will stay with you forever regardless of if you change your name, change companies, stop being a director, or move interstate or overseas.
You must apply for your Director ID by 30 November 2022 if you were appointed a director before 31 October 2021. If you were appointed between 1 November 2021 and 4 April 2022, you had 28 days after your appointment to apply. If you are a new director, you will need to apply prior to being appointed.
Failure to apply for a Director ID by the required date, applying for multiple Director IDs, or misusing a Director ID is an enforceable offense. The maximum penalty for failing to apply for a Director ID by 30 November 2022 is $13,200 (criminal); $1,100,000 (civil).