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Director Identification Numbers

Director Identification Numbers

If you are a director of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation or you are about to become one, you will need to apply for a unique 15-digit director identification number (“DIN”).

Background

The Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) amends the Corporations Act 2001 (Cth) (“Corporations Act”) and the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (“CATSI Act”) introduces a new system requiring directors to obtain a DIN.

Once issued, a director will keep their DIN throughout the course of their life, even if they cease to be a director. A director will only ever have one DIN.

This means a director’s relationships will be traceable across companies, enabling better tracking of directors of failed companies and reduce the likelihood of directors being able to hide behind pseudonyms or use multiple variations of their names (such as nicknames, middle names or minor variations of their names) to appear as a different person in respect of different company directorships.

In the past, this has enabled directors to deliberately avoid paying liabilities by shutting down an indebted company and transferring its assets to another company.

The DIN system is part of the Government’s wider strategy to tackle repeated unlawful activity including illegal phoenix activity, the total cost of which is estimated to be between $2.9 billion and $5.1 billion to the Australian economy annually.

The DIN also appears to be able to protect the privacy of directors by allowing them to be identified on public registers without disclosing information currently available such as dates of birth and residential addresses.

Who must apply for a DIN

The changes will apply to persons who are appointed either as a director or an alternate director who is acting in that capacity (“eligible person”).

Timeframes to apply for a DIN

The dates in which Directors will need to apply for a DIN if you were, or are to be appointed as an eligible person under the Corporations Act 2001(Cth) is as follows:

Date of Appointment as Director Application of Director Individual Number Date
On or before 31 October 2021 By 30 November 2022
Between 1 November 2021 – 4 April 2022 Within 28 days of appointment as a Director
From 5 April 2022 Before the appointment as Director

 

If a person becomes a director or alternative director of a company which is governed by the CATSI Act or before 31 October 2022, the date for application is 30 November 2023. Then, from 1 November 2022 these persons must apply for a DIN before appointment.

How do you apply for a DIN

The easiest way to apply for a DIN is through the MyGovID application which can be downloaded through a smart phone.

Applying for a DIN can also be done via the ABRS Website or by phone application by using your tax file number.

However, Directors who do not have a tax fille number will need to request for a DIN via paper application.

Each application will need to be supported by at least two forms of identification documents.

Consequences of non-compliance

If a director fails to comply with the requirements to apply for and obtain a DIN, ASIC may require a director to make such application and give a time period for compliance.

ASIC will also have powers to issue infringement notices and civil and criminal penalties may apply.

Penalties also apply for providing false information and applying for, or holding multiple DINs.

ASIC can also request through a court that an individual is disqualified from acting as a director permanently in the future.

How we can help you

JHK Legal regularly advises company directors with respect to their legal obligations.

JHK Legal can assist in providing advice about whether you are an eligible person for the purposes of the new DIN system and any general enquiries you might have.

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Written by JHK Legal Solicitors Morgan Beames, Lawyer and Kristianne Glastras, Associate.

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