From November 2021 it is a requirement for all directors of a company in Australia to apply for a director identification number (DIN) in order to meet their obligations under the Corporations Act 2001 (Cth) and the Treasury Law Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth).
The purpose of introducing DINs is to prevent the use of fictitious director identities, assist regulators trace directors’ relationships with companies and better identify directors involved in unlawful activity, such as illegal ‘phoenix’ activity. Each director will have their own unique DIN that they will keep for the remainder of their life. A director can only have one DIN that they must use for all companies.
Naturally, the requirement to obtain a DIN will also apply to SMSF members who are directors or are to be appointed as directors of a corporate trustee. Alternate directors are also required to apply for a DIN.
The DIN is one part of the Federal Government’s Modernising Business Registers (MBR) program that will combine more than 30 business registers into one place that will be referred to as the Australian Business Registry Services (ABRS).
Key dates to be aware of:
– From 1 November 2021 to the end of 4 April 2022 there is a transitional period where all new directors have 28 days to apply for a DIN after being appointed as a director.
– From 5 April 2022, when the transitional period ceases, all directors will be required to apply for a DIN prior to being appointed as a director.
– For all existing directors appointed prior to 31 October 2021, they will have a deadline of 30 November 2022 to apply for a DIN.
– From 1 November 2021, the DIN application process will be available at ABRS and the director applying will require a myGov ID to access the ABRS.
Furthermore, directors will need to provide proof of identity documentation to verify their identity. A director can choose to provide their tax file number when applying for a DIN which should expedite the application.
Directors will need to apply for a DIN themselves and their advisers will not be able to apply on their behalf. LT Accountants and advisers can however assist by advising clients of the steps and timelines involved.
All directors should apply for their DIN before the relevant deadline. Prior to applying for a DIN, directors should ensure they have an up to date myGov account which is needed to apply for a DIN. Failure to comply with the new DIN requirements may result in both civil and criminal penalties. This includes failure to obtain a DIN and providing false or misleading information.