The Government registered 2 legislative instruments on 29 April 2021 relating to the director identification regime, extending the time directors need to register so that it is now form 4 April 2021 to 30 November 2022 – beware, this is all current and future directors.

See below for further details.

[Tax Month – April 2021]

 


 

The Government registered 2 legislative instruments on 29 April 2021 relating to the director identification regime, which forms part of the Modernising Business Registers (MBR) Program. As a matter of interest, the person who made these instruments was Melinda Smith, acting Commissioner of Taxation and Chief Service Delivery Officer, in her capacity as the Registrar of the MBR Program (it seems that the ATO runs everything, don’t you think?).

By way of background, the MBR Program was introduced through legislation in 2020 to improve business registry services.

  • The director identification number (“director ID”) is designed to prevent the appointment of “fictitious” directors, combat illegal phoenixing and, over time, facilitate traceability of individual’s profile and relationships with companies.
  • The director ID will require all directors to establish their identity with the Commonwealth Registrar.
  • It will be a unique identifier for each individual who consents to being appointed a director.

There will be a testing period that is due to end on 31 October 2021, to test the efficacy of the new arrangements. The extended timeframes 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.

The instruments are as follows.

  1. The Corporations (Transitional) Director Identification Number Extended Application Period 2021 [Explanatory Statement] provides that, for those directors appointed under the Corporations Act 2001, the transitional period to obtain a director ID is between 4 April 2021 and 30 November 2022. This timeframe will apply for both:
    1. existing directors who were appointed prior to the commencement of the Director ID regime [the 30 Nov 2022 date provided under s1653(3), I think]; and
    2. directors appointed during the testing phase [under this instrument, made under s1272C(2)(a)(iii)].
  2. The Corporations (Aboriginal and Torres Strait Islander) (Transitional) Director Identification Number Extended Application Period 2021 [Explanatory Statement] sets the transitional period for directors of indigenous corporations under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act) as between 4 April 2021 and 30 November 2023.

DATE OF EFFECT: the instruments effectively take immediate effect. They were issued in draft form and are largely unchanged.

Explanatory Statement (Instrument for local directors)

[After the describing the ‘testing period’, which goes until 31 October 2021, the statement goes on to say … ]

14. However, the commencement of the director ID provisions in the Act, starts the timeframe for when existing directors or newly appointed directors must have a director ID. These timeframes are:

    • Transitional period for existing directors: for individuals who are a director prior to commencement of the director ID provisions (existing directors) – within the period the Minister specifies by legislative instrument (transitional application period) under subsection 1653(3) of the Act; and
    • Transitional period for new directors for individuals who are not a director prior to commencement of the director ID provisions but are appointed as a director after commencement (new directors) – within 28 days of being appointed a director for the first 12 months after the legislation commences.
    • After the transitional period: all individuals must have a director ID prior to their appointment as a director or such later period as may be allowed under the regulations or the Registrar.
  1. In order to ensure that new directors are not disadvantaged or exposed to the offence provision (for not having a director ID within the required timeframe) during the testing period the Registrar will extend the time in which these individuals are required to have a director ID.
  2. Specifically, this instrument provides that new directors appointed in testing period have until 30 November 2022 to obtain a director ID.
  3. Subsection 1272E(2) of the Act allows the Registrar to specify a longer time period to apply for a director ID number for a class of person by legislative instrument.

[30.4.21 – LTN 81, 30/4/21]

 

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