The Australian Securities and Investments Commission (ASIC) has initiated its first prosecution action against a director for non-compliance with the obligation to possess a Director Identification Number (Director ID).

Background:

The Director ID regime, introduced in November 2021, mandates that all company directors obtain a unique 15-digit Director ID. The timelines for compliance vary based on appointment dates:

– Directors appointed before 1st November 2021 were required to apply by 30th November 2022.

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

– Effective from 5th April 2022, intending new directors must obtain their Director ID before their appointment.

Acquiring a Director ID entails navigating through a straightforward yet crucial application process. Directors must first establish a myGovID by downloading the official app and completing the requisite identification procedures.  Upon securing a myGovID, directors can proceed to apply online for their Director ID.

ASIC Prosecution:

Since November 2022, ASIC have taken a softer approach with those directors who have not yet obtained their Director ID.  However, it seems that ASIC may now be starting to take a tougher stance on non-compliance.

On the 19th of March 2024, a director appeared in the Downing Centre Local Court, facing one count of contravening section 1272C(1) of the Corporations Act 2001 for failing to obtain a Director ID. The court granted an interim non-publication order (NPO), preserving the defendant’s anonymity. Further, the charges were scheduled for a subsequent mention before the Downing Centre Local Court on the 16th of April 2024.

Non-compliance with section 1272C(1) of the Corporations Act 2001 carries a maximum penalty of 60 penalty units, equating to a potential fine of $13,320. The severity of the penalty highlights the importance of applying for a Directors ID.

Moving Forward:

If you are planning to become a company director for the first time, please ensure that you apply for a Director ID before taking on that position.  Additionally, if you are already a company director and have not yet applied for a Director ID, please do so as a priority.

If you need help to apply, please get in touch.

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Sky Accountants Ballarat

Phone: 03 5332 8855

Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia

Postal Address: PO Box 2234, Bakery Hill, Victoria 3354

Sky Accountants Gisborne & Macedon Ranges

Phone: 03 5428 1400

Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia

Postal Address: PO Box 270 Gisborne Victoria 3437