Director ID Number Disclosure Framework
LegalCorporateCompliance23/04/2021 12:00:00 AM

Company Law - Director ID Number Disclosure Framework

On 15 April 2021, the government released its disclosure framework for Director Identification Numbers (ID), the Corporations (Director Identification Number) Disclosure Framework (PGPA Bodies, Courts and Tribunals) 2021 Instrument (Instrument). This follows on from the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020, which fully commenced on 4 April 2021, and which invokes a new Pt 9.1A of the Corporations Act 2001 (Cth) (Act). Pt 9.1A provides for director IDs and strict liability offences for failure to obtain a director ID.

The Instrument authorises the disclosure of protected information (director IDs) to government entities, Public Governance, Performance and Accountability (PGPA) bodies, courts and tribunals, to enable those entities to exercise their functions or powers. PGPA bodies may include, corporate Commonwealth entities, non-corporate Commonwealth entities, Commonwealth companies and multi-agency taskforces.

Background

Broad consultation for this Instrument was undertaken by Treasury for a period of 3 weeks commencing on 12 March 2021. The draft instrument and draft explanatory statement were published on the Treasury website during that consultation.

The introduction of a director ID requirement is one of the government initiatives to promote good corporate conduct, facilitate confidence, and deter and penalise illegal phoenixing, fraudulent corporate activity and business misconduct. The director ID will require all company directors to confirm their identity. It will be a unique identifier for each individual who consents to being appointed as a company director. You can read more about director IDs here.

The new director ID regime will also offer benefits beyond combatting illegal phoenixing. For example, simpler, more effective tracking of directors and their corporate history will reduce time and cost for administrators and liquidators, thereby improving the efficiency of the insolvency process. In addition, the regime will improve data integrity and security and facilitate the efficient and effective use of registry data. For example, it will allow directors to be identified by a number rather than by other more personally identifiable information.

What are the disclosure requirements for director IDs?

The disclosure framework can be tailored to the particular functions and powers of the Registrar. As such, the Registrar may make a disclosure framework which provides for the disclosure of protected information under the Act, in this case director ID information.

A person who is, or has been, in official employment, is prohibited from disclosing protected information if the protected information was obtained by the person in the course of their official employment, unless an exception, under the Act, applies.

The disclosure of director ID information to PGPA bodies, courts or tribunals will not require payment of a fee and will generally be provided electronically.

The disclosure of director ID information, as authorised by the Instrument, provides for the disclosure of such information within the meaning of the Privacy Act 1988 (Cth). The Instrument does not unnecessarily or unreasonably restrict an individual’s right to privacy. Information is only disclosed to the extent required to achieve the legitimate objective of administering the director ID regime, with any limitation being reasonable, necessary and proportionate.

However, there is nothing in the framework to compel persons to disclose director ID information. That is, persons who are authorised to disclose director ID information under the Instrument have discretion as to whether (a) to make the disclosure and (b) the extent of director ID information to disclose.

The disclosure framework may provide for how applications, requesting certain protected information not be disclosed, can be made or decided. However, the Instrument provides that persons making such an application must demonstrate how the disadvantages, to the individual concerned, of disclosing the information, outweighs the relative advantages of the disclosure to PGPA bodies, courts or tribunals. This evidence is required as it is generally not appropriate for persons to suppress director ID information.

Risks and benefits of disclosure

The disclosure framework must only provide for the disclosure of protected information if the Registrar is satisfied that the benefits of the disclosure outweigh the relevant risks of disclosure, in particular the risks relating to the individual in question.

The disclosure framework Instrument provides circumstances in which recordings or disclosures of protected information, such as director IDs, are authorised. The Instrument sets out additional circumstances in which the director ID information may be disclosed. It provides a framework which creates an appropriate level of disclosure where the benefits of disclosure outweigh the risks and balances the protection of director ID information with the efficient administration of the legislation.

Sources: Corporations (Director Identification Number) Disclosure Framework (PGPA Bodies, Courts and Tribunals), 15 April 2021, accessed 22 April 2021.

Corporations (Director Identification Number) Disclosure Framework (PGPA Bodies, Courts and Tribunals), Explanatory Statement, 15 April 2021, accessed 22 April 2021.

CCH Pinpoint ®, Corporations Act s 1272A Applying for a director identification number, effective 4 April 2021, accessed 22 April 2021.

CCH Pinpoint ®, Corporations Act s 1272C Requirement to have a director identification number, effective 4 April 2021, accessed 22 April 2021.

CCH Pinpoint ®, Director Identification Numbers are finally here, 22 June 2020, accessed 22 April 2021.

CCH Pinpoint ®, Treasury consults on new Director ID regime, 16 March 2021, accessed 22 April 2021.

CCH Pinpoint ®, Legislation for director identification numbers commences, 6 April 2021, accessed 21 April 2021.
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