Around 1.6 million directors — almost two-thirds of the total — had yet to apply for an ID number with just two months to go to the 30 November deadline, figures from the ATO revealed.
The director ID scheme, which is one of the early steps in digitising and integrating all of Australia’s business registries, was vital to prevent fraud and reborn, or phoenix, companies arising from the ruins of failed operations, it said.
“Director ID is being introduced to help combat illegal phoenix activity and will enable traceability of a director’s relationships across companies and over time,” the ATO said. “Director ID will also help prevent the use of false or fraudulent director identities.
Failure to have a director ID when required to do so or failure to apply when directed by the registrar can carry a maximum criminal penalty of $13,200 or up to $1,100,000 under civil law.
One possible reason for the slow take-up rate is the need for directors to apply in person — accountants or other finance professionals are unable to do so on their behalf “unless the registrar is satisfied that the individual cannot apply themselves”, the ATO said.
To apply online, directors need to already have a unique myGovID, with at least a standard level of identity check, prior to starting the process.
The ATO said almost nine out of 10 directors were applying online, and the ID number was granted instantly. Non-digital options were available to those unable to apply online, it said, and the ID is free.
Different deadlines also applied to directors of companies registered with the Office of the Registrar of Indigenous Corporations.
2/3rds and NOT done yet. As far as I can see the regulators involved have dumped it on accountants to tell their clients about it. ASIC has the names and addresses, they should send letters out to all the directors they know about.
Two reasons:
1. It is easier to remind registered agents than to contact EVERY director.
2. Bearing in mind that ASIC’s archaic data base relies on “street addresses”. They would get around 40% returned mail I’d suggest. They are so out-of-touch with modern practices is not funny. But I’ve been told by them it is “legislation” which mandates the use of street addresses. Every other Government departments is “digitising”, and they only use street addresses? Mind you, digitising has exponential risk – as seen by RBA’s OSKO debacle this week, and Optus Breach last month.
90% of people I speak with have absolutely no idea about the Director ID regime. Another complete bureaucratic balls-up in the making.
I act as ASIC agent for quite a few companies where the directors are a client and a few unrelated associates. I don’t act for these people and have no way to contact them. Maybe they have an accountant; maybe they don’t. Maybe they have an ID; maybe they don’t. I’d suggest they have no idea.
Why is it my responsibility to chase these people? The government (ASIC) is overseeing this mess; they need to clean it up, not me.
So if there’s as much as 40% being returned – why aren’t those directors actually updated details with their Annual Review?
We’ve had a number of clients change the structure of their business – ie close the company down rather than apply for a DIN. We’ve also found through the convoluted information the paper forms and sent them to some clients who aren’t as computer savvy.
Even if the director has since resigned, they still need to get a director number.
This should come as no surprise. The arrogance of the Regulators in enforcing these highly technical computer driven solutions, to the exclusion of all other methods is just astounding.
How do public servants who make these implementation decisions for a Government mandate like this let themselves get so bullied by their own IT people into coming up with such a highly complex, unfriendly and often unusable process.
There are many elderly directors of SMSF trustee companies who do not use computers or smartphones to the extent that they could follow this highly complex task, without incurring some type of error.
The myGov ID generator is beyond most, let alone the Director ID application process.
It is so frustrating as a professional, not being able to assist your client. The utter stupidity of cutting service providers like ASIC agents and tax agents out of being able to assist with or complete the process has taken the “privacy” argument to ridiculous levels. If Govt won’t even trust the professional agents it licences, what chance has anyone got of complying?
For pity’s sake, ASIC has a complete data base of directors, dates of birth, place of birth. Why could they not just create and issue a Directors ID to all existing directors. That would have been a lot better than the mess we have now.
2/3rds are done you say? I’m surprised it’s gotten this far!