Last year legislation was passed which introduced the requirement for all new and current directors of a company in Australia to have a director identification number.
The introduction of a director identity number (“DIN”) is intended to prevent the use of fictitious director identities, assist regulators trace directors’ relationships with companies, improve data integrity and security and better identify directors involved in unlawful activity, such as illegal “phoenix” activity.
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, which will be referred to as the Australian Business Registry Services (“ABRS”).
The ABRS will be progressively established between 2021 and 2024 (the Director ID is the first service to be launched by ABRS).
More services are expected to the rolled-out between 2021 and 2024 as all business registry services are migrated to the new registry. However, until then, all services will continue through the Australian Securities & Investments Commission (“ASIC”) and Australian Business Register.
Who needs a DIN?
All existing and new directors of registered Australian companies will be required to apply for a DIN.
This includes existing and new directors of the following entities;
o Australian companies – Proprietary and public.
o A registered foreign company (entities with an ARBN).
o Registered body corporate.
o Aboriginal and Torres Strait Islander corporations.
Naturally, the requirement to obtain a DIN also applies to SMSF members who are directors of a corporate trustee.
Alternate directors are also required to apply for a DIN, and a successor director can apply for a DIN if they intend to become a director within 12 months. However, unless that person is appointed as a director within 12 months of being issued a DIN, the DIN will be automatically cancelled.
In the event that a successor director does not have a DIN, they should be prepared to apply for a DIN at short notice in the event that a succession event occurs, and timely action is required upon the loss of mental capacity or death of the nominating director.
Who is exempt from the Director ID regime?
The following are not required to apply for a DIN;
o a company secretary but not a director
o acting as an external administrator of a company
o running a business as a sole trader or partnership
o a director of a registered charity with an organisation type that is not registered with ASIC to operate throughout Australia
o an officer of an unincorporated association, cooperative or incorporated association established under state or territory legislation, unless the organisation is also a registered Australian body.
Action required by directors
From 1 November 2021, the DIN application process opened via the ABRS.
Due to the nature of the information to be supplied, directors will need to apply for a DIN themselves. Unfortunately our firm is unable able to apply on behalf of a director
However, we can obviously assist with the steps and timelines involved.
Each director will be issued with 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.
How to apply
There are 3 ways a director can apply for a DIN; via myGovID, the telephone or a paper-based application can be lodged. Please see below regarding each option;
o Digital application;
Directors will need to download the myGovID app on a smart device, and set-up an account (we note myGovID is different from a myGov account).
To complete your online application, you will need:
o a myGovID,
o an individual Australian tax file number (TFN),
o your residential address, as recorded by the Australian Taxation Office (ATO),
o information from two documents specific to your individual ATO record. Please follow the below link for examples of documents which can be used.
o ‘Phone application - this is only available to directors who have an Australian TFN.
Contact the ABRS on 13 62 50 (Monday to Friday between 8am and 6pm).
The items listed above (under the online application) will need to be provided, along with Australian identity documents – one primary and one secondary.
o Paper-based application - If you’re unable to apply online or over the ‘phone, you can complete a paper application. This can be downloaded via the ABRS website.
In addition to the information requested on the application form, you will need to provide certified copies of one primary and two secondary identity documents. These identity documents must be in English (and so if applicable, translation may be necessary).
Details of the documents required to be submitted for the paper application are also detailed on the ABRS website (we note different identity documents are required depending on whether the applicant is within or outside Australia).
Further, there are also specific certification and translation guidelines. Accordingly, we also respectfully refer you to the above link for those details (we note, these also differ significantly for applicants within and outside Australia).
Time frames for registration
For Corporations Act directors
Date you were appointed as a director | Date you must apply for a DIN |
On or before 31 October 2021 | 30 November 2022 |
During the transitional period (1 November 2021 and 4 April 2022) | Within 28 days of being appointed a director |
From 5 April 2022 | Prior to being appointed as a director |
For Corporations (Aboriginal and Torres Strait Islander) Act directors:
Date you were appointed as a director | Date you must apply for a DIN |
On or before 31 October 2022 | 30 November 2023 |
From 1 November 2023 | Prior to being appointed as a director |
Penalties for non-compliance
Civil or criminal penalties may apply for directors who do not apply for a DIN within the stipulated time frame. These penalties currently range between $13,320 and $1,110,000.
Final note
While existing directors have until 30 November 2022 to apply for a DIN, proof of identity documents and details supplied will be cross referenced between Government records, and so details must correspond and be current. As a result, in the event there are any issues with satisfying proof of identity, we recommend the DIN application is attended to as soon as practicable, so as to provide sufficient time to address any issues.
Further, directors residing overseas may need to have documents translated and certified at Government embassies, and so again, we recommend the application process is commenced as soon as practicable.
As detailed above, we are unable to apply for a DIN on behalf of any individual. However, if you require any additional information regarding the application process, or if you have any issues, please do not hesitate to contact us.