Last updated on June 9, 2026

Why do I need a Director ID for an SMSF?

The government introduced a director identification number(ID) as a means to prevent false and fraudulent use of a director’s identity and to support regulators and external administrators to track directors across various companies to identify and prevent illegal activities.

From the 5^th April 2022 all directors of a company need a director identification number (ID). Individual trustees are not required to have an ID.

Every SMSF corporate trustee director must have a director ID. You only need to apply for it once, and it remains valid for life, even if you stop being a director, change your name, or relocate to another state or country.

If you already have a director ID from serving as a director of another company, you do not need to apply again when creating a new company to act as an SMSF trustee. This requirement also applies to sole director SMSF corporate trustees.

How do I obtain a director ID?

When becoming a director for the first time you must apply to the Australian Business Registry Service (ABRS). We can assist you with the paperwork, but it is the individual who must identify yourself and apply for the ID. There is also a link on the same page to managing your ID so your personal details can be updated on the register.

An overview to apply for your director ID  is as follows:

1. Set-up your digital ID – using myID app
2. Gather your documents – personal tax file number and address
3. Complete your application – log on to ABRS using your myID

For those individuals living in Australia who can’t, or would prefer not to, use myID you can phone the ARBS or use a paper form. Individuals living outside of Australia with the required Australian identity documents can apply on-line or use a paper application form.

When must you apply for a director ID?

An individual must apply before they are appointed which can be up to 12 months beforehand.

What happens if I don’t have a director ID?

The ATO may choose not to register a new SMSF Setup if a director of the corporate trustee does not have a director ID. A maximum penalty can be imposed of $19,800 from 7 November 2024 (next indexed on 1^st July 2026) if a director fails to obtain a director ID or fails to apply for a director ID within the required timeframes or provides false or misleading statements. A jail term up to one year can also be imposed. The court can make a pecuniary penalty order with a maximum penalty of $1.65 million.

Who needs a director ID?

A director of a company who can be appointed under the Corporations Act 2001 is the most obvious person who needs a director ID. Every director of an SMSF corporate trustee, including any alternate director acting temporarily, must have a director ID.

Additionally, anyone appointed as an attorney, under an enduring power of attorney, for an SMSF member, such as someone representing a member traveling overseas for an extended time or acting for a member with dementia, who becomes a director of the corporate trustee also requires a director ID.

A legal personal representative who can be appointed as a director on the death of an SMSF member must have a director ID.

Why have a corporate trustee?

We find the benefits significantly outweigh the drawbacks, with minimal extra costs relative to SMSF operations. The change in trustees must be lodged with the ATO, and if the trustee is a company, the change in directors must be notified to ASIC with a minor fee. Every time there is a change in any trustee, the title to all of the fund’s assets must be updated to reflect the new trustee (s). Currently, none of our SMSF clients serves as individual trustees.

Our approach is that all SMSFs should have a sole purpose corporate trustee for the following reasons:

• Changes to the trustees – there are a number of circumstances when an SMSF is faced with changing the trustee, and changes can include:
  • adding your children or a new wife to your SMSF
  • as the members age, there is a higher probability of one of them being diagnosed with dementia, having a stroke, or becoming incapacitated due to an accident
  • a member dies
  • a relationship breakdown or a divorce
  • a member exits the fund.

Consider a fund with six individual trustees that holds multiple bank accounts, shares, managed funds, and two properties. Changing the title on each asset is time-consuming and costly. Bank accounts may need to be closed and reopened, complicating matters if existing links for dividends or trust distributions must be updated.

• A fund with three or more members may not be able to legally register the title of assets in all of the individual trustees’ names.
• Trustees are subject to state legislation, and some states do not allow more than four individual trustees.
• Administrative monetary penalties can be imposed for contraventions of some super rules and regulations on all individual trustees in contrast to a corporate trustee, as only the company, not all directors, are penalised for breaches.
• Separating fund assets from the personal assets of trustees or directors is much easier when the SMSF appoints a sole purpose corporate trustee. The company is the legal owner of the assets and acts exclusively on behalf of the SMSF, thereby making it clear that the assets belong to the SMSF rather than to any individual member.
• Asset protection is generally considered better under a corporate trustee structure – a tenant suing an SMSF for an injury suffered can only access the fund assets and not the directors’ assets – individual trustees can be pursued personally.
• A single member fund with a sole director corporate trustee can set up and operate an SMSF. However, a single member fund with individual trustees must have two individual trustees.

Of course, there are always some disadvantages which include:

• initial set up costs – SMSF Australia include the cost of a new sole purpose corporate trustee in the establishment costs. We charge $2,000 plus GST to set up a new SMSF, which includes:
  • a new sole purpose corporate trustee
  • we provide a registered office as part of our services free of charge
  • trust deed
  • Class super platform fee, which includes electronic service address (ESA) to receive rollovers and employer contributions
  • compliance documents such as minutes, member applications, ATO declaration, and apply for your ATO registrations
  • accounting time to organise transfers/rollovers of existing super accounts
• annual ASIC fee, which for a special sole purpose trustee company is $70 from 1^st July 2026, which is annually updated
• ongoing annual compliance reporting to ASIC – SMSF Australia handle this for their ongoing administration clients
• compliance with the company’s constitution