A rundown on Director Identification Numbers
In June 2020, the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (the Act) introduced new provisions to the Corporations Act 2001 requiring all company directors, or anyone who intends to become a director, to obtain a Director Identification Number (DIN).
This 15-digit number confirms an officer’s identity by way of a unique identifier and provides a clear record of the officer’s relationships and conduct across multiple companies. This new requirement, to be kept by the individual permanently, seeks to combat illegal phoenix activity, prevent the use of false or fraudulent director identities and to assist regulators in the investigation of illegal conduct which is contrary to the spirit of business and commerce as part of the Australian Government’s Digital Business Plan via the implementation of the Modernising Business Registers Program.
In addition to these purposes, the Act is also meant to allow for better protection of the privacy of directors by allowing them to be identified on public registers without disclosing information that is currently available such as dates of birth and residential addresses. It is not yet clear whether ASIC will adopt these potential changes.
This article will provide a rundown on:
1. who must have a DIN;
2. how to apply for a DIN;
3. the important deadlines associated with the new legislation.
Who must have a DIN?
All eligible officers must have a DIN unless the Registrar determines otherwise. Eligible officers include directors and alternate directors of Australian registered or foreign registered companies. Currently the Act does not extend to de facto or shadow directors, however, the definition of eligible officer may be extended by regulation to any other officers of a registered body.
How to apply for a DIN
The fastest way to apply for a DIN is through a myGovID account. The application requires the provision of your TFN, residential address as held by the ATO and information from two documents to verify your identity. Please note that your myGovID account tis different from your myGov account (myGovID is an app you can download to a smart device that allows you toprovide who you are for a range of government online services).
Key deadlines
The deadline for DIN applications depends on the date the director is appointed. If a director fails to submit an application by the required date, then they will be considered to have contravened the provisions.
The general position is that DIN applications must be completed prior to a director’s appointment, however transitional provisions are in place for certain directors. These provisions provide that:
· for directors appointed on or before 31 October 2021, DIN applications must be submitted by 30 November 2022; a
· where the directors appointment falls between 1 November 2021 and 4 April 2022, the application must be completed within 28 days of appointment; and
· where the appointment is on and form 5 April 2022, the application must be made before the appointment.
It is important to note that contraventions of the new provisions are strict liability offences, meaning that a director’s intentions are irrelevant and the consequences for non-compliance can include:
· infringement notices under Part 5 of the Regulatory Powers Act 2014 which can lead to a range of civil penalties (up to 5,000 penalty units, currently $1.1 million);
· general penalties under the Corporations Act 2001; and
· criminal charges which carry a maximum imprisonment term of 12 months.
Whilst the team at Terracon cannot submit a DIN application on your behalf, we are available and willing to assist with any queries you may have regarding how these new requirements will affect your business dealings. Our team is available from 9am to 5pm Monday to Friday on 6128 0755 or at admin@terraconlegal.com.au.
