The Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) commenced on 4 April 2021, introducing a Director Identification Number (DIN) requirement for all existing and new directors and strict liability offences for those who fail to obtain a DIN.
The DIN will be a 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.
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.
An ‘eligible officer’ (a director, alternate director or any other officer of a registered body of a kind prescribed by regulations) must apply to ASIC for a DIN.
The Australian Business Registry Services is currently conducting testing of the DIN system by inviting a controlled number of existing directors to test the DIN platform before 31 October 2021.
Once testing is complete, the transitional period will begin. The transitional period is scheduled to end on 30 November 2022.
Existing directors are required to obtain a DIN before the end of the transitional period (by 30 November 2022). Directors of Indigenous corporations will have until 30 November 2023.
Directors appointed during the transitional period will be required to obtain a DIN within 28 days of being appointed a director.
After the transitional period, any person intending to become a director must obtain a DIN prior to being appointed as a director (or as directed by the Registrar).
Individuals requiring a DIN can apply through the electronic platform provided by the Registrar or in the form approved by the Registrar.
An application must not be made by another person on behalf of the individual, unless the Registrar is satisfied that the individual is unable to make the application on their own behalf.
An applicant for a DIN will be required to complete a declaration confirming their identity and their eligibility to obtain a DIN.
If a director that is required to apply for a DIN does not do so, they may face a civil penalty of 5,000 penalty units.
There is also the possibility that the Director may face criminal penalties, including imprisonment.
In addition, a director must not:
- knowingly apply for additional/multiple DINs; or
- misrepresent a DIN to a Government or registered body (or provide false or misleading information to the Registrar to obtain a DIN).
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 civil and possible criminal penalties.
If you would like advice or assistance in relation to the above or any other Commercial matters, please contact our accredited business law specialists and Partners Justin Thornton on email@example.com and Rahul Lachman on firstname.lastname@example.org or otherwise by calling them on (02) 4626 5077.
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.