With the implementation of the Director Identification Numbers (DIN’s) commencing in November 2021, it will be important to understand the new obligations for those operating in the capacity of a Director.
Overview
As part of the 2020 Budget Digital Business Plan, the government announced the full implementation of the Modernising Business Registers (MBR) program. A key element of this program was contained in Schedule 2 of the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) (the Act) which introduced the requirement for a Director Identification Number (DIN) – a perpetual unique identifier for every company director.
About Director identification number (DIN)
The new DIN requirements apply to appointed Directors and acting Directors of Australian corporations and registered foreign companies under the Corporations Act 2001 (Cth), including companies responsible for managed investment schemes and registered charities.
Overview
- From November 2021, directors will need to verify their identity as part of a new director ID requirement
- The individual will keep that unique identifier permanently, even if they cease to be a director. Please note an individual’s Director ID will not be re-issued to someone else and generally only one Director ID will be issued to an individual
- Directors must apply for their director ID themselves because they will need to verify their identity. No one can apply on their behalf
Benefits from Director ID
The Director ID regime is intended to tackle illegal ‘phoenixing’ activities and increase Director accountability and traceability, enabling better tracking of directors and preventing the use of fictitious identities. DIN’s will be recorded in a new database to be administered and operated by the Australian Tax Office and be made available to the public.
Along with combating ‘phoenixing’, where companies are liquidated or abandoned to deliberately dodge debts and/or liabilities. This Director ID will allow shareholders, employees, creditors and consumers to be confident they know who the directors of a company are.
Key benefits
- Improving the efficiency of the insolvency process by providing a simpler, more effective tracking of directors and their corporate history, which will reduce time and cost for administrators and liquidators
- Improving data integrity and security
The ABRS is responsible for the implementation and administration of director ID. ASIC will be responsible for the enforcement of associated offences.
Visit the ABRS website for more information.
How to apply for your director ID
You can apply for your director ID from November 2021 – click here.
Get ready to apply by setting up your myGovID if you don’t already have one.
Please note: the information that may be requested and collected in an application for, or to update the details for an existing Director ID, includes an individual’s:
- names and former names
- addresses and former addresses
- contact details,
- date and place of birth
- tax file number
If you have any questions or would like to discuss your Director Identification Number requirements, please contact us.
Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for professional advice.
