The new Director Identification Number scheme – Basics and Deadlines
Posted on December 16, 2021
Company directors in Australia will soon need to have been issued with a unique digital identifier, a Director Identification Number (DIN).
On 12 June 2020, the Federal Government passed legislation requiring directors to register and be issued with a DIN.
A 15-digit DIN will be permanently assigned to an individual after their identity has been verified. The system is designed to prevent illegal ‘phoenix’ activity, and to aid the prosecution of offences by directors; but it will also streamline processes and help avoid discrepancies and errors in Government registers, as well as improve efficiency in insolvencies and similar procedures.
Who must apply for a DIN?
- Company directors.
- Directors of a body corporate that is a registered Australian body or registered foreign company.
Charities and not-for-profits –
- for directors of a company limited by guarantee, DIN registration is obligatory;
- for directors (or board members, or committee members) of a state based incorporated association (under the South Australian Incorporated Associations Act), it depends; DIN registration will be required If the association is registered with the Australian Securities and Investments Commission (ASIC) - but not otherwise. (ASIC registration is necessary where an association operates outside the state or across state lines.) Registration with the Australian Charities and Not-for-profits Commission (ACNC) is not relevant for these purposes.
Right now, ‘shadow’ and de facto directors are not caught. But the legislation leaves scope for their inclusion in the future, so watch this space.
When must you apply?
- Existing directors - have until 30 November 2022 to apply.
- New directors (appointed between 1 November 2021 and 4 April 2022) - must apply within 28 days of their appointment.
- From 5 April 2022, intending directors must apply before being appointed.
Extensions of time are possible, upon application.
The new Australian Business Registry Services (ABRS) will administer the DIN initiative. A DIN will need to be linked to the companies of which a person is a director. The long-term aim is to complete this by the time the ASIC companies register is transferred to the ABRS, expected to be around September 2023. A company director does not yet have to provide a DIN to the company, or to the ASIC.
Related Obligations
The DIN regime is currently being implemented, and directors should know their obligations and the applicable deadlines to avoid incurring criminal penalties resulting from a breach.
You must apply within the relevant timeframe (see above), and when directed by the Registrar to do so; and must not apply for more than one DIN, or misrepresent your DIN.
Breach of DIN obligations will be a criminal offence. ASIC will be the enforcement body.
The system seems to be fairly straightforward, but there are always questions ‘at the edges’. Please contact us if you need help or advice on DINs or any other corporate or commercial law issues.