• Stella Jansen

Required action for Directors – Director Identification Number regime goes live on 1 November 2021


Introduction

The Australian Government introduced the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 in June 2020. (Cth). Part of the legislation included a new regime in Part 9.1A of the Corporations Act 2001 (Cth), which requires all company directors, or anyone who wishes to become a director, to obtain a Director Identification Number (DIN).


A DIN is a unique 15-digit identifier given to a director or someone who wishes to become a director, and it is kept by the individual indefinitely once issued.


With approximately 2.7 million companies on the Australian Company Register, it is likely that more than two million directors will be transitioned to the new system.


The Australian Business Registry Services (ABRS) is in charge of implementing and administering DINs.


ASIC is in charge of enforcing associated offenses.


What is the purpose

These modifications are part of the Australian Government's Digital Business Plan, which is being implemented through the Modernising Business Registers Program. This program will connect the Australian Business Register with over 30 ASIC registers via the ABRS.


The DIN is ABRS's first service, and it aims to create a single source of trusted and accessible business data in order to:


Prevent the use of false or fraudulent director identities.

Make it easier for external administrators and regulators to trace directors' relationships with companies over time.


Identify and eliminate director involvement in illegal activities such as phoenixing.


However, preventing fraud isn't the only reason DINs are used. According to the original legislation, the scheme is also intended to protect directors' privacy by allowing them to be identified on public registers without disclosing information that is currently available, such as dates of birth and residential addresses. This is especially important given the ever-increasing risks of cyber security and identity theft, though it is unclear whether ASIC will immediately adopt this.


When applications must be made

If a person became a director or an alternate director of a company or other registered Australian body governed by the Corporations Act 2001 (Cth) (such as an incorporated association registered with ASIC and trading outside of the state of registration or a foreign company registered with ASIC):


Date of appointment Date for DIN application

On or before 31 October 2021 By 30 November 2022

Between 1 November 2021 and 4 April 2022 Within 28 days of appointment

From 5 April 2022 Before appointment


If a person was appointed as a director or alternate director of a company governed by the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth):


Date of appointment Date for DIN application

On or before 31 October 2021 By 30 November 2023

From 1 November 2022 From 1 November 2022


How to apply

DINs must be requested in person. Applying is free of charge.


Australian resident directors

From 1 November 2021, the quickest way for Australian resident directors to obtain a DIN is to apply online at the ABRS website.


This will necessitate the creation of a myGovID account (which is different from a standard myGov account). myGovID is a smart device app that allows you to prove your identity and log in to a variety of government online services, including myGov.


If a person does not want to download the myGovID app, they can apply by phone or on paper, but they must provide identification details when doing so.


To apply for a DIN, you must provide the following documentation to verify your identity:

  • Tax file number (TFN).

  • Residential address as held by the Australian Taxation Office.

  • Information from two documents used to verify their identity (eg Australian passport, drivers licence, birth certificate).


Foreign resident directors

Foreign resident directors will be required to obtain DINs within the same timeframes as domestic directors. Foreign resident directors with Australian documentation may still be able to apply using the options listed above.


To complete the online application, the foreign director must submit a paper application and provide the following information:

  • Certified copy of one primary document, such as a foreign birth certificate or a foreign passport

  • Certified copy of one secondary document, such as a national photo ID or a driver's license

Outside of Australia, the following individuals are authorized to certify identity documents:

  • Notary publics.

  • Staff at an Australian embassy, high commission, or consulate, including consulates headed by Austrade honorary consuls.

In the presence of the foreign director, the certifier must certify that each copy is a true and correct copy of the original document. This entails:

  • Sighting the original document.

  • Stamping, signing, and annotating the copy of the identity document to state, 'I have sighted the original document and certify this to be a true and correct copy of the original document sighted.

  • Initialling each page

  • Listing their name, certification date, phone number, and position.

This will almost certainly be a time-consuming process. We advise foreign resident directors to begin this process as soon as possible.


Managing your DIN


Notification

After obtaining a DIN, it must be forwarded to the relevant company, ASIC registered entity, or Aboriginal and Torres Strait Islander corporation for which the director acts. Furthermore, beginning on April 5, 2022, a director will be required to provide their DIN prior to appointment (or 1 November 2022 for Aboriginal and Torres Strait Islander corporations).


At this time, it is unclear whether, when, or how businesses must provide DINs to ASIC.


Updating information

If a director's personal information changes, he or she can update their DIN online at the ABRS website. Directors must also notify their companies of such a change within seven days (or within 14 days if a director of an Aboriginal and Torres Strait Island corporation). To avoid late fees, a company must notify ASIC of the change within 28 days of the change.


Privacy

A DIN verifies a director's identity and, in the future, will show which companies that director is associated with. It is not subject to the same rules or laws as a TFN.


An authorised agent or company secretary is responsible for ensuring that information about a company and its officers is:

  • Handled in accordance with their legal responsibilities; and

  • Safely stored

For the time being, a DIN will not be searchable by the general public. Without the director's permission, the ABRS is not permitted to disclose DINs to the public. The ABRS and ASIC will consult with the community in the future about what details can be disclosed and searched.


Compliance

Failure to meet obligations or committing an offense in relation to a DIN may result in an infringement notice, which may result in civil penalties (up to 5,000 penalty units, currently $1.11 million) and/or criminal charges (up to 12 months imprisonment). Applying for multiple DINs and providing false information in an application are both offenses.


Please contact us at Accountants360 if you require any additional information. We will gladly assist you. While we cannot make the application on behalf of a director, if you have any further questions.


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