Directors must now apply for new identity numbers
Anyone who is a director – or an alternate director acting as a director – must apply personally for a new director identity number (DIN) under the Federal Government’s Modernising Business Registers (MBR) program which became operative on 1 November.
You need a DIN if you’re a director or acting director of a company, a registered Australian body or a registered foreign company under the Corporations Act 2001 (Corporations Act), or of an Aboriginal and Torres Strait Islander corporation registered under the Corporations Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act).
The need for designated Responsible People in not-for-profit organisations to have DINs only applies to charities that have directors – such as companies, ORIC registered companies, or ARBNs.
When people need to apply for their DIN depends on when they were appointed as a director. If you are expecting to become a director, you can apply before appointment.
New directors must apply for their unique 15-digit DIN within 28 days of appointment, but directors appointed before 31 October have until 30 November next year to secure their new identification number. However, from April next year directors must have a DIN before appointment.
You can be a director of any number of companies, move from one company to another or one country to another, but will require only one DIN for a lifetime unless informed otherwise by the registrar of DINs.
Applying for a DIN
You can apply for a DIN online. But first you need to download the myGov ID app and set up a myGovID account, and it can be done via the Australian Business Registry Services (ABRS) websiteApply for your director ID | Australian Business Registry Services (ABRS) .
For further information about DINs and the background to their introduction go to Macks Advisory - Corporate Advisory, Restructure & Turnaround, Corporate & Personal Insolvency - Adelaide, South Australia type DINS in the search field and see six articles.
When applying for your DIN you’ll have to supply your tax file number, residential address as held by the Australian Taxation Office (ATO) and two documents to verify your identity.
We’re informed by the Department of Financial Services that once you’ve set up a myGovID account – and note this is separate from a myGov account – it costs nothing to apply for and obtain a DIN immediately in a process that “takes less than five minutes”. DINs are available to directors in Australia or overseas.
Directors can apply by phone or using a printed form, and further information is available on the ABRS website link above.
You can view your DIN at any time via myGovID but the number and your associated information, which is securely stored, will be shown only to you or to someone you give permission to access it, or to certain Commonwealth, State and Territory government bodies, courts, and tribunals.
Macks Advisory is informed your DIN will not at this stage be searchable by the public, but we understand the Registrar of DINs will be consulting the community at large about details that may be searched and disclosed in the future.
Penalties related to DINs
Director identification obligations include applying within specific time frames explained above or when officially instructed to do so. You can’t apply for more than one DIN, must not misrepresent your DIN to any company or organisation and must not breach any of these obligations.
People who fail to make timely application for a DIN or appear to be breaching obligations to the regime may be issued with an infringement notice. There may also be related civil or criminal penalties.
While these haven’t yet been specified it’s interesting to note draft legislation suggests they could up to 5000 so-called “penalty units” or $1.1m, and we understand Aboriginal and Torres Strait Islander penalties will be capped at $200,000.
If you believe you’ll be unable to apply by a deadline you can apply for an extension of time with this form Application for an extension of time to apply for a director ID (abrs.gov.au) .
Reasons for the new DIN regime
Phoenixing – where a new company is set up to continue the business of a failed one to avoid settling outstanding debts and obligations – has for years been costing employees, creditors, and governments up to $5.1bn annually according to Australian Securities and Investments Commission (ASIC) estimates. The new regime will help to create a fairer business environment by improving data integrity, creating greater confidence in directors’ identities, and allowing earlier identification of director involvement in unlawful practices such as phoenixing.
DINs will help prevent creation of false and fraudulent director identities and thus ensure business owners who are doing the right thing can operate on a level playing field.
The new system will enable everyone to do business more easily, safer, and faster.
Directors keep the same DIN when they change roles in a company or move from one company to another, and because they keep their unique number their whole lives, it streamlines their business experiences and helps protect their reputation while also making it less likely they will be a victim of someone else’s illegal activity.
Modernising business registers
The Modernising Business Registers (MBR) program will bring together and coordinate more than 30 government registry services by 2024. The program is led by the Australian Taxation Office (ATO) in partnership with ASIC and other agencies.
The Australian Institute of Company Directors (AICD) backs the introduction of DINs which it hopes will also address privacy concerns by obviating the need to make directors’ personal information – such as date of birth and residential address – publicly available on registers.
In its submission to Treasury earlier this year, AICD argued that the 28-day grace period for new directors to obtain a DIN, be made a permanent feature of the new regime.