The time is here: Director Identification Numbers

19 Oct 2021

Executive Summary

The Australian Government has introduced Director Identification Numbers (DIN) to improve the integrity of Australian Business Registers and counter illegal phoenix activities to avoid paying debtors. Australian Directors will need to apply for a DIN from November 2021 and require a MyGovID to complete the application process.

Key points

Using the MyGov platform, Directors must have their identity verified and apply for a DIN (this includes alternate Directors). Other officers, including the company secretary, are not subject to the same identification requirements.
Directors are only permitted to have one DIN and the Director will use their unique identifier across multiple board engagements.
The scheme applies to Australian corporations and registered foreign companies under the Corporations Act 2001 (Cth) (the Act) and Aboriginal and Torres Strait Islander corporations under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act).

Background

As part of the 2020 Federal Budget, the Modernising Business Registers (MBR) Program was announced as part of the broader Digital Business Plan. As a key element of this, the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (the New Act) was passed in June 2020. The MBR intended to create a central Commonwealth Business Registry operated by the Australian Taxation Office (ATO) to improve the integrity of Australian business registers.

Schedule 2 of the New Act introduced DINs as a legal requirement for all Directors to hold. A DIN is a unique 15-digit numerical identifier assigned to eligible Directors once their identity has been verified.

The Australian Business Registry Services (ABRS) website has just been launched for this huge scale scheme. There is an average of 224,000 companies added each year, and there are more than two million Directors to be transitioned onto this system.

Why have a DIN?

DINs have been introduced to counter phoenix activities, a tactic of winding up companies to elude debtors and creating a new company to continue business trading, enabling a Director profile to be traced over time as well as corporations, and avoiding the appointment of fictitious or non-consenting Directors.

Each Director will apply once and receive a DIN (the unique identifier) for the Director to use indefinitely even if they are a Director to multiple boards, cease to be a Director or move interstate/overseas.

To protect the privacy of Directors, they will be identified on public registers without the release of personal information such as an address, date or place of birth.

Who needs to apply?

DINs apply to all appointed Directors and acting Directors of Australian corporations and registered foreign companies under the Act. DINs are also applicable to Aboriginal and Torres Strait Islander corporation Directors registered under the CATSI Act.

The people who do not need a DIN:

Company Secretaries;
Unincorporated bodies;
Shadow Directors;
Acting external administer of a company;
Sole trader or partnership business;
Those referred to as a Director but not appointed as a Director;
A Director of a registered charity with an organisation type that is not registered on ASIC; and
Officer of an unincorporated association.

How does a Director apply?

From November 2021, a Director can apply online through https://www.abrs.gov.au/Director-identification-number/apply-Director-identification-number.

To complete the online application, the Director will need a MyGovID, as such, Directors are encouraged to set this up now (if they have not done so). The ABRS also provides a paper form option for registration of those persons who are ineligible for a MyGovID.

When does a Director need to apply?

A Director needs to apply for a DIN depending on when they were appointed as follows:

Date of appointment as a Director	Due date for application
On or before 31 October 2021	Before 30 November 2022
Between 1 November 2021 and 4 April 2022	Within 28 days of the appointment
From 5 April 2022	Before appointment

Eligible Directors under the CATSI Act:

Date of appointment as a Director	Due date for application
On or before 31 October 2022	Before 30 November 2023
From 1 November 2022	Before appointment

Extension

The ATO has recognised that there could be challenges for the 28-day deadline, especially for foreign Directors, charities, and not-for-profits with limited resources. Information will be available on the ABRS website in November 2021 about how to apply for an extension.

Non-Compliance

The ABRS is responsible for implementing and administering DINs and ASIC will be responsible for enforcing associated offences.

In combination or as stand-alone punishments, the New Act provides for the issue of infringement notices and other civil and criminal penalties for the following: