Director IDs now available online for SMSFs

This unique 15-digit identifier only takes minutes to apply online but will stay with a director for life, offering greater identity security. 

Superannuation and Financial Services Minister Jane Hume said the director ID would help to level the playing field for honest businesses, saving time and delivering on the Morrison government’s commitment to cut red tape for businesses.

“Directors will keep the same director ID as they move between different roles, businesses and even countries,” Ms Hume said. 

“Acting as a unique identifier for every director, director ID not only paves the way for streamlined experiences in the future but offers directors greater confidence that they are protected from fraud and illegal activity today.”

To apply, directors can simply log into ABRS online using the myGovID app. The online application form takes minutes to complete, and their director ID is issued instantly. It is free to apply and available to directors within Australia and overseas. Applications are available by phone and by paper for those who need it.

Any individual who is a director or acting as an alternate director must register. This includes directors of an SMSF or a limited recourse borrowing (LRBA) corporate trustee.

Due to the huge number of applications that will need processing, there are transitional arrangements in place for directors to assist with the onboarding process.

From 1 November 2021 to the end of 4 April 2022, there is a transitional period where all new directors have 28 days to apply for a DIN after being appointed as a director.

From 5 April 2022, when the transitional period ceases, all directors will be required to apply for a DIN prior to being appointed as a director.

For all existing directors appointed prior to 31 October 2021, they will have a deadline of 30 November 2022 to apply for a DIN.

From 1 November 2021, the DIN application process will be available at ABRS, and the director applying will require a myGov ID to access the ABRS. Furthermore, they will need to provide proof of identity documentation to verify their identity. A director can choose to provide their tax file number when applying for a DIN, which should expedite the application.

Ms Hume said the application process had been rigorously tested during a private beta phase to ensure it is functional and fit for purpose. 

“Now in public beta, testing and trials are continuing in the live environment, and the website will continually be improved over time to create the best possible experience,” she added.

With the new changes, SMSF Alliance principal David Busoli said that it would not affect the usual process for the establishment of a corporate trustee for an SMSF, or for a limited recourse borrowing arrangement, but warned that it would leave the directors subject to ASIC action, including penalties, if they don’t comply with the 28-day deadline.

“Unfortunately, as the director must personally register for their DIN, we will not be able to assist with this,” he said. 

“At some stage, where a director refuses to comply, it would be expected that ASIC would not allow their directorship to continue. Where the company is acting as a trustee for an SMSF, this may cause a breach of the director/member nexus, which would need to be rectified within six months. Such rectification may require the member to leave the fund.

“As this is a new process, it would be expected that the regulators will be a little patient, though this should not be relied upon. Notwithstanding the staggered implementation program, we would recommend early registration.”