The Australian Government has passed amendments to the Corporations Act 2001 that will require company officers to hold a Director Identification Number (DIN).
What is a DIN?
A DIN is a unique identifier which will be assigned to each individual. Each individual may only hold one DIN, and the DIN will attach to the individual for life.
One of the purposes of the DIN registration system is to assist in identification and verification of individual directors. A mandatory identification system is said to assist in preventing unlawful behaviour, such as fraudulent registration of directors under false identities, registration as a director while disqualified and illegal company phoenixing activity.
Who will be required to obtain a DIN?
The DIN requirement will apply to all "eligible officers" of a corporation, including:
- an Australian company;
- an Australian-registered body corporate;
- a foreign corporation registered in Australia; and
- Aborigninal and Torres Strait Islander corporations.
It does not appear that the regime will apply to other entity types, such as trusts, sole traders or partnerships (unless one of the participants in those structures is also a corporation).
Under the legislation, "eligible officers" will include:
- alternate directors; and
- other types of officers to be determined under Regulations.
It should be noted that deeming provisions may deem a role to be that of a "director", regardless of the title actually assigned to the role by the corporation.
When does the regime commence?
The legislation, titled the Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019, was passed by Parliament on 12 June 2020 and received royal assent on 22 June 2020.
Commencement of the regime is set to take place in June 2022, however, the formal commencement date is to be nominated by the appropriate Minister.
While transitional arrangements will apply to existing officers, the regime will require the officers to hold or have applied for a DIN before they may be appointed to office. The Registrar will have the power to direct individuals to apply for, refuse applications to issue, and issued infringements in relation to, a DIN.
Who will administer the regime?
It is proposed that DINs will be administered by the Australian Business Register (ABR) under the Australian Tax Office, however the Minister will have power to formally appoint a Registrar. The ABR already has responsibility for regulating Australian Business Numbers (ABNs).
The DIN regime is part of an overall modernisation of the business registration system, which is ultimately intended to replace ageing ASIC registries with modern, streamlined equivalents.
Failure to obtain a DIN when required is an offence carrying a potential fine.
Intentionally applying for a second DIN or misrepresenting the DIN to the Commonwealth will be jailable offences. The offence and potential penalty also extends to persons who are "involved" in the contravention.
- Australian Parliament House: Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019.
- ABR Media Statement: Modernising Business Registers and Director Identification Numbers (February 2020)
This post is intended for general information only and is not intended to constitute legal advice. You should obtain appropriate professional advice for your circumstances or contact us for further assistance.