Director Identification Number
New legislation has recently passed the Federal parliament, introducing a Director Identification Number (DIN) regime that will ensure Australian company directors will soon be identified by distinct and permanent DINs.
On 22 June 2020, the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) was given Royal Assent, amending the Corporations Act to introduce the DIN requirement.
- A new Commonwealth business registry scheme will be implemented.
- The DIN regime will be administered by a registrar, which will be an existing Commonwealth body that is yet to be appointed.
- A person must apply for a DIN before he or she is appointed a director. Once an application is received, the registrar must provide the director with a DIN once the registrar has successfully identified the director’s identity.
- Each director will receive a permanent, unique director identification number.
- The requirements will commence on 12 June 2022 unless an earlier date is set.
When do directors need to apply?
Once the regime becomes operative, existing directors will be provided with a specific period of time to apply for a DIN. A person appointed a director within the first 12 months of the regime’s operation will have 28 days to apply for a DIN. After that, a person will be required to apply for a DIN before he or she is appointed as a director.
Practical effects of the changes
The DIN will provide traceability of a director’s relationships across companies. This will enable tracking of directors of failed companies, and should prevent the use of fictitious identities. Further, the DIN will assist companies appointing directors by providing complete visibility of the director’s corporate history.
The DIN will also assist regulators and external administrators to investigate a director’s involvement in any unlawful activity.
Consequences of non-compliance
The registrar will have the ability to issue infringement notices, and criminal and civil penalties may apply. The maximum penalty for a director who applies for multiple DINs, or misrepresents a DIN, is likely to be approximately $21,000 and/or 12 months imprisonment.