Individuals who are appointed as a Director of an Australian company will need to apply for a Director ID Number (DIN) from 1 November 2021.
The new requirement is a move to implement a more robust method of identifying and tracking company directors, and to combat illegal company phoenixing and fraud. (A criticism of the existing regime is that it relies heavily on honesty, and is thus open to abuse by the supply of false identity information.)
The DIN requirement is part of the Australian government's "Modernising Business Registers" reform. By 2024, it is proposed to replace the Australian Business Register (ABR) and several ASIC registers with a centralised registry.
The Australian Business Register System (ABRS) will be maintained by the Australian Tax Office (ATO).
The Director ID Number System
The DIN system consists of a single identity number assigned to an individual.
Each individual can have only one DIN, and this DIN will be attached to them for life. The director will need to supply their DIN to the company upon their appointment as a director.
The DIN will be used to by government to identify and track each director within the ABRS and ensure that individuals are not appointed as a company director when they are disqualified.
Who needs to apply for a DIN?
Individuals must apply for a DIN if they are appointed as a director or alternate director of:
- a company, registered body or registered foreign entity that is registered under the Corporations Act 2001 (Cth);
- an Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).
The DIN requirement does not apply to:
- sole traders;
- partners in a partnership (unless the individual is a director of a corporate partner);
- trustees of a trust (unless the individual is a director of a corporate trustee);
- officers of charitable organisations not registered with ASIC;
- officers of unincorporated associations, cooperatives and incorporated associations, unless the organisation is a registered body;
- individuals who have 'director' in their title but are not formally appointed as a company director;
- company secretaries who are not also directors.
What do you need to apply for a DIN?
To complete the application, the director must:
- set up a personal MyGovID Account;
- complete the basic verification of identity steps requried by MyGovID;
- have a personal Tax File Number (TFN);
- apply for a Director ID Number on the ABRS website;
- complete additional identity verfications by answering questions cross-matched with ATO data.
It will also be possible to apply for a DIN by phone or a manual paper application process for applicants without a MyGovID Account.
Can someone apply for a DIN on my behalf?
No. The DIN application process must be completed by the individual director. Due to verification of identity requirements, the application cannot be completed on behalf of someone else.
What is the deadline to apply for a DIN?
The deadline to apply for a DIN varies depending on the date the director is appointed.
It is possible to apply for a DIN at any time prior to appointment as a director.
Different requirements and deadlines apply for directors appointed to indigenous corporations.
Are there penalties?
Failure to obtain a Director ID Number when required will be an offence under the relevant legislation.
It will also be an offence to knowingly apply for more than one Director ID Number, or to supply false or misleading information when applying for a DIN.
Fines and criminal penalties may apply to the individual and to the relevant company.
What steps can Company Directors take?
An existing or prospective company director may need to consider the following steps to prepare for the commencement of the DIN requirements:
- Set up a MyGovID Account and complete the initial basic verfication of identity;
- Identify the companies of which they are a director;
- Ensure their personal details (such as name, current residential address and date of birth) provided to each company, and the corresponding ASIC records, are accurate and up-to-date - this is an ongoing obligation under the Corporations Act;
- Apply for a Director ID Number with ABRS (available from 1 November 2021)
- Provide their DIN to each company once issued.
For further information, please refer to the Official ARBS Website.
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