Background
The Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) introducing a Director Identification Number (DIN) requirement for all existing and new directors (including alternate directors) and strict liability offences for those who fail to obtain a DIN by the requisite time.
The DIN is a 15 digit unique identifier for each person who consents to be a company director. Each director will only be issued with one DIN that is unique to them. The director will keep the DIN permanently, even if they cease to be a director.
Purpose of the DIN
The overall objective is to promote good corporate conduct.
The benefits of introducing the DIN system are as follows:
- Enables tracking of directors and their relationship across companies.
- Corporate history of directors will be easily accessible.
- Verification of directors will lead to reduced fraud and/or fictitious directors.
- Limits the opportunity of directors to engage in illegal phoenixing activities.
Applying for a DIN
An ‘eligible officer’, being a director or alternate director of:
- a registered Australian body or a registered foreign company under the Corporations Act 2001 (Cth); or
- an Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth),
must apply for a DIN.
The fastest way to obtain a DIN is to apply online on the Australian Business Registry Services website (https://www.abrs.gov.au/director-identification-number/apply-director-identification-number). This will require a myGovID and is free.
An applicant for a DIN will be required to complete a declaration confirming their identity and their eligibility to obtain a DIN.
Timing
- Any person that became a Director prior to 31 October 2021, is required to obtain a DIN before by 30 November 2022.
- Any person that becomes a Director in between the period of 1 November 2021 and 4 April 2022, must obtain a DIN within 28 days of appointment.
- Any person that becomes a Director from 5 April 2022 onwards must obtain a DIN prior to their appointment as a Director.
Please note that foreign resident directors will also have to obtain DINs within the same timeframes however Directors of Indigenous Corporations have different deadlines.
Penalties
If a director that is required to apply for a DIN does not do so, they may face significant fines and possibly criminal sanctions.
Key Takeaway
It is mandatory for individual directors to ensure that they apply for and are issued a DIN within the timeframes stipulated above to avoid incurring penalties.
The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.
