Ensure SMSF Compliance and Avoid Delays with the Right Director ID Process

As part of the Australian Government’s push to modernise business registers, all directors of companies, including corporate trustees of SMSFs, must now hold a Director Identification Number (DIN).

This 15-digit ID is issued once and stays with the individual for life. It helps regulators trace directorships, prevent fraud, and link records across agencies.

For SMSF advisers and accountants, it’s vital to ensure clients meet this obligation early. Delays can stall fund registration, trustee changes, or even rollovers.

For a deeper look at how timing issues can impact rollovers during SMSF setup or restructuring, see our guide on understanding rollover timing and compliance risks.

Who Must Apply for a Director ID?

A Director ID is required for:

• All current directors of SMSF corporate trustees.
• New directors being appointed within the next 12 months.
• Alternate directors formally acting in a director’s place.
• Legal personal representatives (LPRs) appointed as directors (e.g., for a deceased estate).

It is important to note, that no one can apply on someone else’s behalf. Each director must apply personally for their own DIN. A tax agent or adviser can guide the director through the process but cannot submit the application for them.

Why Director ID Matters for SMSF Compliance

The Director ID is not just a formality. It’s a key compliance safeguard that advisers must address when working with SMSF clients who have, or intend to have, a corporate trustee structure:

• Trustee eligibility: Under s201A of the Corporations Act 2001, any individual appointed as a director of a corporate trustee must have a Director ID prior to their appointment. Without it, the appointment is invalid and the SMSF may breach trustee structure rules under the SIS Act. See ATO guidance on Director ID requirements for SMSFs.
• Permanent identifier: The Director ID follows the individual for life, allowing regulators to track directorships across entities, including SMSFs, and flag disqualified persons. Step-by-step guide to applying for a Director ID (ASIC PDF).
• Fraud prevention: Introduced to curb phoenix activity and unlawful behaviour, the Director ID helps uphold the integrity of SMSF governance and prevents misuse of corporate trustee structures.

For a deeper look at current enforcement priorities, see the ATO’s update on Director ID compliance within the SMSF sector.

Director ID Non-Compliance: SMSF Risks and Adviser Responsibilities

Failure to obtain a Director ID isn’t just a formality. It can directly disrupt SMSF establishment and ongoing trustee management.

Advisers should be alert to the following risks:

• SMSF registration refused: The ATO will not register a new SMSF if any proposed director of the corporate trustee does not have a Director ID in place.
• Trustee changes delayed: Adding or replacing directors without valid IDs can stall time-sensitive actions such as rollovers, contributions, and investment decisions.
• Legal exposure: Under the Corporations Act 2001, acting as a director without a Director ID is an offence. Clients may face civil penalties exceeding $1.3 million, or criminal fines over $13,000.

Just as verifying Director IDs is essential for trustee appointments, advisers should also ensure the SMSF trust deed is regularly reviewed to align with the fund’s structure and evolving compliance requirements.

To avoid delays or regulator scrutiny, advisers should verify that all directors have applied for their Director ID. This includes new appointments or any restructure involving an SMSF corporate trustee.

When Adviser Checks Are Critical for Director ID Compliance

Advisers should pay close attention to Director ID requirements in the following high-risk scenarios:

• New SMSF registrations with a corporate trustee: The ATO will not process the registration if any proposed director lacks a valid Director ID.
• Trustee restructures due to life events: Changes triggered by death, divorce, or incapacity require a Director ID check for any new or replacement directors.
• Conversions from individual to corporate trustee: All members become directors under the new structure must hold a Director ID before the change is executed.

Late identification of missing Director IDs can lead to registration delays, trustee appointment issues, or compliance breaches. Verifying these details upfront is a simple way to protect your clients from unnecessary setbacks.

myGovID vs myGov: Helping Clients Avoid Common Mistakes

One of the most frequent causes of Director ID delays is confusion between myGovID and myGov. Advisers should explain this difference early to prevent failed applications or client frustration.

Use the comparison below to clarify the distinction:

To set up a myGovID, clients will need:

• A smart device
• A personal email address
• Identity documents (e.g. driver’s licence, Medicare card)

By proactively addressing this step, advisers can help clients avoid delays and ensure Director ID applications are completed correctly.

How to Support Clients Applying for a Director ID

All Director ID applications must be completed personally by the individual director via the Australian Business Registry Services (ABRS).

Advisers cannot apply on behalf of clients due to identity verification requirements.

Refer clients to the official ABRS platform, which contains up-to-date application steps and alternative methods (such as phone or paper forms for those without digital access):

Apply for a Director ID – Australian Business Registry Services (ABRS)

We recommend advisers avoid recreating the application process internally. Instead, direct clients to the ABRS link above and assist them only where needed.

Particularly with clarifying the difference between myGovID and myGov.

Client Email Template We Recommend

Use the message below to prompt clients who need to apply:

Subject: Action Required – Director ID Needed for Your SMSF

Hi (Client Name),

As a director of your SMSF’s corporate trustee, you’re legally required to apply for a Director Identification Number (Director ID). This is a once-off process to support transparency and protect against fraud.

To apply, you’ll need to:

1. Set up a myGovID (note: this is different from your regular myGov login).
2. Complete your application online via the ABRS: Apply for a Director ID

It only takes a few minutes once your identity is verified.

Please let us know once your Director ID has been issued, or if you need help navigating the process.

Kind regards,
(Your Name)
(Your Firm)

Prepare Your Internal Team

Ensure your staff understand Director ID obligations and client support expectations. We suggest:

• Having team members complete their own Director ID application to experience the process firsthand.
• Embedding DIN checks into your workflows. Especially during new SMSF setups, trustee replacements, or conversions to corporate trustee structures.

Make It Routine

Don’t wait until clients are mid-transaction or facing ATO delays. Review your trustee records now and prompt clients without a DIN to apply.

If you’re managing multiple SMSFs, consider batching these checks as part of regular compliance reviews. It’s a once-off task that prevents more serious issues later.

We’re Here to Support You

While we can’t apply for a client’s Director ID on your behalf, SMSF Engine is here to support you behind the scenes. From white-label checklists to process templates, we help you prompt clients, manage compliance, and keep everything running smoothly, all under your brand.

If you’d like help embedding this into your workflows, contact us here.

We’re here to make it easy for your practice and your clients.