Directors of Indigenous corporations which are governed by the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act) will be required to get a director identification number (director ID) by 30 November 2023.
The new dates come as the government looks to introduce the director ID regime to prevent illegal phoenixing by ensuring directors can be traced across companies, while also preventing the use of fictitious identities.
The new regime will require all directors to provide a number of documents to establish their identity with the Commonwealth Registrar in order to receive a unique director ID, which they will keep permanently, even if they cease to be a director.
The Commonwealth Registrar, operating as a separate statutory function of the ATO, will now conduct testing of the director ID system by inviting a controlled number of existing directors “to ensure the new platform delivers a robust, reliable and consistent user experience”.
The testing period is anticipated to end by 31 October.
Once the testing period concludes, existing directors will be required to obtain a director ID by 30 November 2022.
This time frame will apply for both existing directors who were appointed prior to the commencement of the director ID regime and directors appointed during the testing phase.
Individuals who are seeking appointment after 30 November 2022 will be required to obtain a director ID prior to being appointed as a director.
The Treasury expects the director ID regime to cover 10 per cent of Australia’s 25.7 million population.
There will be civil and criminal penalties for directors who fail to apply for a director ID within the applicable time frame, and for conduct that undermines the new requirements, including providing false identity information to the Registrar or intentionally applying for multiple director IDs.
Directors of an organisation registered under the Corporations Act can face a civil penalty of 5,000 penalty units (currently $1.11 million), while directors of a CATSI organisation can face a civil penalty of up to $200,000.
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Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.