Recent action by the Australian Securities and Investments Commission against two company directors who failed to hold a director identification number (director ID) has reinforced the importance of SMSF members ensuring they apply for and hold one before becoming a corporate trustee.
SuperCentral superannuation special counsel Michael Hallinan noted ASIC took action against two West Australian directors who were convicted for breaching section 1272C(1) of the Corporations Act and fined $5000 each for failing to hold a director ID while acting as a director of a company.
“Individuals who are appointed or to be appointed as a director or alternate director must apply for a director ID before they are appointed as a director or alternate director of a company,” Hallinan said.
“The requirement to have a director ID extends to directors, or alternate directors, of companies acting as trustees of self-managed superannuation funds – even if this is the only appointment of the director.”
He added there was no allowance for not having a director ID and the legal obligation was strictly applied.
“As the offence of not having a director ID while acting as a director is an offence of strict liability, there is no ‘intention’ element, but beware if you are a director, or alternate director, and do not have a director ID even for one day, the offence has been committed,” Hallinan said.
“The lesson is that even if an individual’s only appointment is as a director of a company which acts as trustee of their own SMSF, they must have a director ID and they must have that director ID before the appointment is made.
“Only the individual can apply for their own director ID and the application must be made via the MyGov account of the individual.
“Once you have a director ID, it will stay with you for the rest of your life – whether or not you cease to be a director.”
The requirement to hold a director ID was introduced in June 2020 and applies to all directors and alternate directors of a company. Existing directors at the time the changes were introduced had until 30 November 2022 to apply, while all new directors from 5 April 2022 must apply for a director ID before being appointed.
