Director Identification Number regime is nearly here
The Director Identification Number (DIN) regime has been passed by parliament and is now law. Under the new law, all directors of companies registered under the Corporations Act 2001 will need to have one unique identifier.
The DIN is a measure that limits the opportunities for a company and its directors to engage in phoenixing activities. This new measure requires all directors to confirm their identity before receiving a DIN, and there are civil and criminal penalties for system misuse. This includes intentionally applying for more than one DIN.
From 1 November 2021, this register will be open for applications at Australian Business Registry Services (www.abrs.gov.au).
Identification of directors
A key component of the DIN register is to be able to separately identify different directors by giving them a unique identifier.
In order to do this, the registrar will be required to collect information to identify individual directors. The instrument has listed the following pieces of information:
the individual’s names and former names
the individual’s addresses and former addresses
the individual’s contact details, and
the individual’s date and place of birth.
Therefore, the ATO (as the new registrar) will be utilising myGovID for directors to verify their identity. Directors who do not have a myGovID account will need to create one (mygovid.gov.au).
Additions to ITAA 1936 s 202 will allow the ATO to request the tax file number (TFN) of an individual in order to verify their identity. It should be noted that, like other applications, it is not mandatory for an individual to quote their TFN, if they have one. However, not quoting the TFN may delay the application process.
Transitional period
From 1 November 2021, a transitional period will apply for current directors of Australian companies. Generally, this period is 12 months for current directors under the Corporations Act and 24 months for directors under the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
However, other registration rules will apply during the transitional period based on when an appointment of a director is made.
Date of appointment of directorship Due date for application of DIN
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
Other requirements
At this stage, only directors are required to register for a DIN and no other officeholders will be required to register. However, this may change with the abilities of the registrar to keep additional registers in the future.
Apart from the main obligations to register during the transitional period, which are mentioned above, 3 other registration requirements exist for individuals within the DIN system. These include:
requiring an individual to apply for a DIN within 28 days of being directed by the registrar to apply for a DIN
prohibiting a person from knowingly applying for multiple DINs, and
prohibiting a person from misrepresenting a DIN to a government body or registered body.
As noted, from 5 April 2022 a person is required to apply for a DIN prior to appointment. Generally, a person is able to apply if they intend to become a director within the ensuing 12 months. It is not compulsory for a person to do this, but nevertheless they are allowed to. However, the DIN allocated to a prospective director will be cancelled if the person does not become a director within 12 months of issue.
