The Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) introduces new requirements for all directors of a company in Australia to have a director identification number (DIN) from the key dates in the table at the conclusion of this article.
Background to the DIN:
The DIN is one part of the Federal Government’s Modernising Business Registers (‘MBR’) program that will combine more than 30 business registers into one place that will be referred to as the Australian Business Registry Services (‘ABRS’).
What is a DIN?
A DIN is a 15-digit identifier given to a director (or someone who intends to become one) who has verified their identity with ABRS.
It starts with 036 (which is the 3-digit country code for Australian under International Standard ISO 3166) and ends with an 11-digit number and one ‘check’ digit for error detection.
The purpose of a DIN is to:
- Prevent use of false or fraudulent director identities.
- Assist external administrators and regulators to trace directors’ relationships with companies.
- Better identify and eliminate directors involved in unlawful activity.
How does the DIN work?
Each director will have their own unique DIN that they keep for the remainder of their life. This DIN doesn’t go away if a director:
- Changes companies,
- Stops being a director,
- Changes their name,
- Moves interstate or overseas.
Who needs a DIN?
You need a DIN if you are a director or alternate director who is acting in that capacity of:
- A company.
- An Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006(CATSI Act).
- Corporate trustee, e.g., a self-managed superfund.
- Registered Australian body.
- A charity or not-for-profit organisation that is a company or Aboriginal and Torres Strait Islander corporation.
- A registered foreign company under the Corporations Act 2001.
To be a director under the Corporations Act 2001, you must be:
- An individual who is at least 18 years old AND
- Not be disqualified from managing corporations, unless the appointment is made with the permission of ASIC or the Court.
It should be noted that a person who expects to become a director within 12 months may apply for a DIN (if they do not already hold one). Once registered, that person has 12 months to be appointed as an eligible officer or their DIN will be made inactive.
Who doesn’t need a DIN?
A DIN is not required if you are:
- A director of an incorporated association (with no ABRN) registered with the Australian Charities and Not-for-profits Commission (ACNC).
- A company secretary but not a director.
- Acting as the external administrator of a company.
- Running your business as a sole trader or partnership.
Who is responsible for administering and enforcing DIN initiative?
The Australian Business Registry Services (ABRS) is responsible for administering the DIN initiative.
ASIC is responsible for enforcing director ID offences set out in the Corporations Act 2001. It is a criminal offence if you do not apply on time.
What are some DIN offences?
New DIN offences under the Corporations Act 2001:
- Failure to have a DIN when required to do so.
- Failure to apply for a DIN when directed by the Registrar.
- Applying for multiple DIN.
- Misrepresenting DIN.
How do I apply?
Directors need to apply for DIN themselves and their advisers cannot apply on their behalf. It is also free to apply. To apply, follow the directions in the link here.