Who should read this article?
Directors of a company and people who intend to become directors of a company should read this article.
The Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) amended the Corporations Act 2001 (Cth) to require all company directors, or anyone intending to become a director, to obtain a Director Identification Number (DIN), which is a unique 15-digit identifier that will be kept by a director permanently.
This mandatory requirement commenced on 1 November 2021.
Purpose of New Requirements
A DIN is given to a director (or someone intending to become a director) who has applied for the same after having verified their identity with the Australian Business Registry Services. Directors are required to apply for their own DIN at no cost.
The purpose of the DIN requirement includes:
- Preventing the use of false or fraudulent director identities;
- Assisting external administrators and regulators to trace directors’ relationships with companies over time; and
- Assisting the Australian Government in identifying and eliminating director involvement in unlawful activity, such as illegal phoenix activity.
Section 1272 of the Corporations Act
Section 1272C of the Corporations Act 2001 (Cth) (‘Corporations Act’) requires that an ‘eligible officer’ of a company must have a DIN unless such officer already has a DIN. Section 1272B of the Corporations Act defines an ‘eligible officer’ as:
- a director of a company, or of a body corporate that is a registered Australian body or registered foreign company, who:
- is appointed to the position of a director; or
- is appointed to the position of an alternate director and is acting in that capacity;
regardless of the name that is given to that position; or
- any other officer of a company, or of a body corporate that is a registered Australian body or registered foreign company, who is an officer of a kind prescribed by the regulations.
As DINs are provided to an eligible officer on a permanent basis, a person who already has a DIN must not apply for a new DIN. Failure to comply with this requirement is an offence under the general penalty provisions of the Corporations Act (sections 1311(1) and 1317E).
What are your obligations as a director?
We have enclosed a link to the Australian Business Registry Services’ step-by-step guide to apply for a DIN here. A person willing to apply for a DIN must download a ‘MyGovID’ app and set up an account, which is different to ‘MyGov’ App/Account.
The information required to apply for a DIN must match information that is held by the Australian Taxation Office (ATO), including:
- that person’s tax file number (TFN);
- that person’s residential address as held by the ATO; and
- information from two documents to verify that person’s identity (such as that person’s bank account details, ATO notice of assessment, dividend statements, PAYG payment summary, or superannuation statement).
|DATE OF APPOINTMENT AS DIRECTOR||DATE FOR DIN APPLICATION|
|On or before 31 October 2021||By 30 November 2022|
|Between 1 November 2021 and 4 April 2022||Within 28 days of appointment|
|From 5 April 2022||Before appointment|
Failure to comply with DIN requirements (including timelines)
The consequences for failing to comply with the above requirements, which include applying for multiple DINs and using false information when applying for a DIN, include:
- criminal charges up to 12 months imprisonment;
- a general penalty provision of the Corporations Act (ss1311(1) and 1317E) (under s1272D)
- infringement notices under Part 5 of the Regulatory Powers Act(under s1272F for breaches of ss1272C(1) and 1272D(1)) leading to potential civil penalties up to 5,000 penalty units, currently $1.11 million (1 civil penalty unit is currently $222).
Although we cannot submit the application for a DIN on behalf of a director, we encourage you to reach out to the writer or a member of our Corporate and Commercial Team if you have any queries in relation to the above requirements and deadlines.