From November 2021, company directors will be required to apply for and authenticate their identity through a Director Identification Number (DIN). A DIN is a 15-digit identification number used to identify a director (and alternative director) when applications open in November 2021.
By the Federal Government passing the Treasury Law Amendment (Registries Modernisation and Other Measures) Bill 2019, which saw the introduction of the requirement coupled with a new Commonwealth Modernising of Business Registers (MBR) regime, the MBR program has established the Australian Business Registry Services (ABRS) which will attempt to streamline how businesses register and maintain their information with the Government.
The intended purpose of the DIN regime is to deter and tackle illegal ‘phoenixing’ activities in circumstances where directors deliberately avoid paying liabilities by winding down an insolvent company and transferring its assets to a newly incorporated entity. By increasing director accountability and traceability, the introduction of DINs will allow for stronger regulation upon directors and enable the Australian Securities Investments Commission (ASIC) to prevent and hopefully stop illegal phoenixing.
Directors will only be required to make one application, for a DIN, which will stay with them for life, irrespective of whether they become a director of another company, cease bring a director and/or the changing of their personal name in preventing illegal phoenix activity.
Who is required to hold a DIN?
A DIN is required by an individual if they are a director of:
A company registered under the Corporations Act 2001 (Cth) (Corporations Act);
An Aboriginal and Torres Strait Islander corporation under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act); and
A Charity or Not-for-Profit registered under the Australian Charities and Not-for-Profit Commission (ACNC).
How do directors apply for a DIN?
Directors can apply for a DIN via the ABRS website, however, before doing so, directors will need a myGovID number. Should directors fail to apply for a DIN by the designated timeframe, they face possible infringement notices and/or civil and criminal actions from ASIC.
When do directors need to apply?
Applications for DINs for existing and new directors can commence from November 2021 as follows:
Salerno Law has a talented commercial law and litigation team which can assist with the DIN requirements and their rollout upon company directors. Should you have any queries regarding the DIN requirements, Alexander Phillips and Matthew Krog would welcome the opportunity to discuss them.
By Alexander Phillips
DISCLAIMER: This article is only meant to give you general information and should not be relied on as legal advice. Speak to one of our lawyers for more information.
Salerno Law is managed by Emma Salerno, Managing Partner and CEO, who has a wealth of experience from operating her own businesses across Australia as well as a range of in-house and commercial experience both in Australia and overseas.