Since 1 July 2026, ASIC has had the power to disqualify a director from managing corporations for up to three years if they fail to apply for a Director ID when directed by the Registrar. This power, inserted as section 206FA of the Corporations Act 2001 (Cth) by the Treasury Laws Amendment (Business Registries Stabilisation and Uplift) Act 2026, is not theoretical. Queensland directors who have not obtained their Director ID, or who have ignored a Registrar direction, are now exposed to a real disqualification risk.
- New power from 1 July 2026: Section 206FA of the Corporations Act 2001 (Cth) gives ASIC authority to disqualify a director for up to three years for failing to apply for a Director ID when directed by the Registrar.
- Process includes a hearing right: ASIC must give notice and an opportunity to be heard before making a disqualification order. The disqualification must be justified on the facts.
- New reporting obligations: From 1 July 2026, a Director Identification Number (DIN) must be provided to ASIC as part of company registration. Section 205B notices (director appointment) must now include the DIN within 28 days of appointment.
- Director IDs have applied since November 2021: Most directors should already hold one. Failure to obtain it was previously penalised by fines; now disqualification is on the table.
- Disqualification has serious consequences: An existing disqualification under section 206A prohibits managing any corporation, exposes you to criminal liability, and can trigger consequences in insolvency matters and external administration proceedings.
What Is a Director ID and Who Needs One?
A Director Identification Number (Director ID) is a unique, lifelong identifier assigned to every director of an Australian company or registered foreign company. It was introduced to address a persistent problem in Australian corporate regulation: the practice of fictitious directorships, where individuals created or assumed director identities they did not actually hold, making regulatory enforcement and insolvency recovery significantly harder.
The Director ID framework is administered by the Australian Business Registry Services (ABRS), an arm of the Australian Taxation Office. Obligations to obtain a Director ID commenced in November 2021 for directors of companies registered under the Corporations Act 2001 (Cth), with transition deadlines that have long since passed.
If you are or have ever been a director of an Australian company, you need a Director ID. The obligation applies to executive directors, non-executive directors, and directors of small proprietary companies alike. It applies to directors of registered foreign companies and certain Aboriginal and Torres Strait Islander corporations. There are no exemptions based on company size, revenue, or the informality of your directorship.
Obtaining a Director ID requires verifying your identity through myGovID and completing a straightforward application through the ABRS portal. The process typically takes around fifteen minutes. There is no cost. The Director ID is yours for life and does not change if you resign from one company and join another.
The problem, as ASIC has consistently noted, is that a material cohort of directors simply did not comply, whether through inaction, confusion about obligations, or deliberate avoidance. That persistent non-compliance triggered the legislative response that commenced on 1 July 2026.
What Changed on 1 July 2026: The New Section 206FA Power
The Treasury Laws Amendment (Business Registries Stabilisation and Uplift) Act 2026 (Act No. 57 of 2026) received royal assent on 30 June 2026 and commenced on 1 July 2026. Among its significant changes to the Corporations Act 2001 (Cth) was the insertion of section 206FA: a new disqualification power aimed directly at Director ID non-compliance.
Under section 206FA, ASIC may disqualify a person from managing corporations for up to three years if that person fails to apply for a Director ID when directed to do so by the Registrar. This is a significant escalation from the prior enforcement framework, which relied primarily on civil penalty provisions.
The Act also introduced new company-level reporting obligations from 1 July 2026. Companies are now required to provide the Director ID (referred to in the Act as the DIN) as part of:
- Company registration applications
- Section 205B notices of changes in director details, including new appointments, changes to existing director information, and cessation of directorships. These notices must be lodged with ASIC within 28 days.
This means that from 1 July 2026, if a company appoints a new director who does not already hold a Director ID, the section 205B obligation to notify ASIC cannot be properly discharged without one. Non-lodgement is itself a compliance breach.
How Does the ASIC Disqualification Process Work Under Section 206FA?
Section 206FA is not a summary power. ASIC cannot simply issue a disqualification notice. There is a procedural framework that mirrors the approach used for other ASIC disqualification powers, including those in section 206C (repeated contraventions) and section 206F (failure to pay judgment debts).
The process under section 206FA operates as follows:
- Registrar direction: The ABRS Registrar must first have directed the person to apply for a Director ID. This direction will typically occur after ASIC or the Registrar has identified non-compliance.
- Failure to comply: The person must have failed to apply for a Director ID after receiving that direction.
- ASIC notice: ASIC must give the person written notice of the proposed disqualification and the grounds on which ASIC considers it justified.
- Opportunity to be heard: The person is entitled to respond and make submissions before ASIC makes its determination. This is not simply a rubber-stamp process.
- ASIC determination: ASIC must be satisfied, having regard to all the circumstances including the person’s conduct in dealing with the Registrar, that disqualification is justified.
- Disqualification order: If ASIC makes the order, the person is disqualified from managing corporations for the period specified, up to three years.
The right to be heard is meaningful. If you receive an ASIC notice under section 206FA, engaging a lawyer immediately to respond to that notice is the single most important action you can take. A well-constructed response addressing the circumstances, demonstrating good faith, and explaining any delay may make the difference between disqualification and a lesser outcome.
What Directors Need to Do Right Now
If you are a Queensland director and you are not certain whether you hold a Director ID, the action is straightforward. Search the ABRS portal at abrs.gov.au and verify your status. If you do not hold one, apply immediately through myGovID. The application is free and typically processed the same day.
If your company has recently appointed a new director, check that the section 205B notice to ASIC includes the new director’s DIN and that it has been lodged within 28 days of the appointment. The 28-day period in section 205B(1) has not changed, but the required content has. A notice lodged without a DIN may be deficient and require correction.
If you are managing the affairs of multiple companies as a director or through a related structure, ensure every directorship is linked to your Director ID. The DIN is a single identifier that follows you across all directorships, but each company’s ASIC register entry needs to accurately reflect it.
If you have already received a direction from the Registrar to obtain a Director ID and you have not yet complied, treat this as urgent. The risk of a section 206FA disqualification referral to ASIC exists from this point forward. Get legal advice and apply for the Director ID simultaneously.
The Consequences of Director Disqualification
A disqualification order, whether made under the new section 206FA or the existing provisions of section 206C, section 206E, or section 206F, produces the same immediate consequence: the person is prohibited from managing a corporation.
Under section 206A of the Corporations Act, a disqualified person must not:
- Make or participate in making decisions that affect the whole or a substantial part of the business of the company
- Exercise the capacity to affect significantly the company’s financial standing
- Communicate instructions or wishes to the directors of the company, knowing that the directors are accustomed to act in accordance with those instructions
Acting as a director while disqualified is a criminal offence under section 206A(2), carrying a maximum penalty of five years imprisonment and significant fines. Even informal management, of the kind captured by the section 206A(1)(c) deeming provision, constitutes a breach.
The practical consequences for Queensland directors extend further. Disqualification:
- Appears on the ASIC public register of disqualified persons, searchable by any creditor, counterparty, or prospective business partner
- Can affect your ability to obtain commercial credit or enter joint ventures
- Is a factor that liquidators and administrators will scrutinise in director disputes and insolvent trading recovery actions
- May be relevant to professional indemnity insurance and licensing requirements in regulated industries
For directors of companies that subsequently enter voluntary administration or liquidation, a pre-existing disqualification will be a significant complicating factor in any examination of director conduct.
What Queensland Directors Need to Know Specifically
There is no Queensland-specific carve-out to the Director ID regime or the new section 206FA power. The Corporations Act applies across Australia as federal law. Queensland directors of Queensland companies, registered companies operating in Queensland, and Queensland-based directors of companies registered elsewhere are all within scope.
The construction and insolvency sectors in Queensland deserve particular attention in this context. ASIC’s enforcement priorities in Queensland have increasingly focused on phoenix activity, director misconduct in company failures, and director identity verification. The Director ID regime was introduced specifically to make phoenix conduct harder. Section 206FA is a further step in that direction.
Queensland directors operating in the building and construction sector should also be aware that ASIC enforcement actions in this space have increased significantly following the wave of construction company insolvencies in 2023 and 2024. Where ASIC identifies patterns of non-compliance, including failure to hold a Director ID, it will use all available powers including the new section 206FA.
Directors who receive ASIC correspondence referencing a Registrar direction or Director ID non-compliance should not respond informally or without legal advice. The ASIC disqualification process, once initiated, is formal. The evidence you provide in your initial response forms part of the record.
For context on how ASIC has been using its disqualification powers more broadly, our article on ASIC director disqualifications in 2025-26 sets out the scale of the enforcement program, including the record 36 disqualifications made in that financial year alone.
Frequently Asked Questions
Do I need a Director ID if I am only a director of a small proprietary company?
Yes. The Director ID obligation applies to all directors of Australian companies registered under the Corporations Act 2001 (Cth), regardless of the company’s size, revenue, or trading status. There is no small business exemption.
What happens if I receive a Registrar direction to obtain a Director ID?
Apply for your Director ID immediately through the ABRS portal at abrs.gov.au. You should also seek legal advice if you believe you have grounds to contest the direction or if you are concerned about how non-compliance may have been characterised. Ignoring a Registrar direction is the act that creates the risk of a section 206FA disqualification referral to ASIC.
Can ASIC disqualify me immediately under section 206FA without giving me a chance to respond?
No. Section 206FA requires ASIC to give notice and an opportunity to be heard before making a disqualification order. The process is not summary. However, the time to engage a lawyer is when you receive the notice, not after the order is made.
If I am disqualified as a director, can I still be involved in a family business or family trust?
This depends on the structure and your specific role. If the family business operates through a company and you are or would be managing the affairs of that company within the meaning of section 206A, disqualification prevents that involvement. Trust structures require separate analysis depending on the trustee structure. Legal advice is essential if this is your situation.
How is the new section 206FA different from the existing penalty provisions for not obtaining a Director ID?
Before 1 July 2026, non-compliance with the Director ID requirement was primarily penalised through civil penalty provisions and infringement notices, typically resulting in financial penalties. Section 206FA adds a new and more serious consequence: disqualification from managing corporations. This is a qualitatively different form of enforcement that affects your legal capacity to act as a director, not just your financial position.
If you have received an ASIC notice or are concerned about your Director ID status, contact Mark Harley at Boss Lawyers on 1300 267 711 or via bosslawyers.com.au/contact/.
If you have received an ASIC disqualification notice or are concerned about your Director ID compliance status, Boss Lawyers’ director disputes practice and insolvency team act for Queensland directors in ASIC proceedings.
This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.
Related services: director disputes.
