From 1 November 2021, directors of Australian companies are required to apply for and verify their identity under the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth), which introduces reforms to Part 9.1A of the Corporations Act 2001 (Cth).

Applications are now open for a Director Identification Number (DIN). Below we outline what directors need to know about DINs and the application process.

Why have Director Identification Numbers?

The DIN regime is a first of its kind in Australia and has been established in an effort to suppress both illegal phoenix activities and fraud through the tracing of company directors over time. The Australian Business Registry Services (ABRS) is responsible for the implementation and processing of DINs, whilst ASIC will enforce related breaches. Through this single source of business data, ABRS will be able to:

• prevent use of fraudulent identities;

• monitor directors’ association with companies over time; and

• ascertain directors’ involvement in phoenixing or unlawful activities.

What is a Director Identification Number?

A DIN is a permanent and individual 15-digit identifier provided to a director or someone who intends to become a director of a registered Australian company and who has verified their identity with the ABRS. Directors are required to apply for their own DIN, which directors will keep indefinitely.

Who is required to hold a Director Identification Number?

If a person is a director or alternate director of a:

• company

• registered Australian body that is a body corporate; or

• registered foreign company that is a body corporate,

under the Corporations Act, they are required to apply for a DIN. The requirement does not apply for shadow or de facto directors and the regime is relevant to both foreign and domestic directors of registered Australian companies.

When do directors need to apply?

Both existing and new directors are required to apply for a DIN in accordance with the dates outlined below.

• Date of directorship on or before 31 October 2021 - apply by 20 November 2022
• Date of directorship between 1 November 2021 and 4 April 2022 - apply within 28 days of appointment
• Date of directorship from 5 April 2022 - apply before appointment

It is somewhat incongruous to note that:

1. Persons who were directors on or prior to 31 October 2021, have 12 months to register;

2. However, directors appointed between 1 November 2021 and 4 April 2022 (i.e. newly appointed directors) will have only 28 days from the date of their appointment to register; and

3. Newly appointed directors from 5 April 2022 will be required to register before the date of their appointment.

How do directors apply?

Australian resident directors

The simplest way to apply for a DIN is online via the ABRS website www.abrs.gov.au/director-identification-number/apply-director-identification-number The online process requires that directors have a myGovID account (not to be confused with myGov).

The myGovID app enables directors to prove their identity and the myGovID can be set up here www.mygovid.gov.au/

To apply for a DIN, the following documents are required for verification of identity:

• Tax File Number;

• Residential address held by the Australian Taxation Office; and

• Information from two documents to verify their identity, for example an Australian passport, birth certificate, or driver’s licence.

Foreign resident directors

The application process and timeframes for foreign resident directors remains the same as Australian resident directors. However, to complete an online application, the foreign director is required to lodge a paper application to verify their identity and provide a:

• Certified copy of one primary document, for example a birth certificate or foreign passport; and

• Certified copy of one secondary documents, for example a driver’s licence.

These documents can be certified by a notary public or staff at an Australian embassy, high commission, or consulate in the presence of the foreign director.

Once the identity has been verified in myGovID, the application process can be completed online through ABRS www.abrs.gov.au/director-identification-number/apply-director-identification-number

The use of the DIN

Once a DIN has been received, directors need to provide their DIN to the person responsible for holding company records for each ASIC registered entity in which the director is appointed. Directors must also inform any other companies to whom they are appointed in the future. Presently, there is no requirement to provide DINs directly to ASIC, however, this will likely change, possibly by September 2023.

Compliance

Causing an offence or failing to meet obligations under the DIN regime, may give rise to an infringement notice which may lead to civil penalties and/or criminal charges (1 year imprisonment). These offences include intentionally applying for multiple DINs and intentionally using false information in an application for a DIN.

All Australian companies are required to ensure that directors (and alternate directors) are aware of their requirements and obligations under the regime.

Although the deadline for current directors is 20 November 2022, we recommend that directors begin collating the required personal information and commence the application process now, while this announcement is fresh in their minds.

Useful Links

ABRS Website: www.abrs.gov.au/director-identification-number/apply-director-identification-number

MyGovID website: www.mygovid.gov.au

Article written with the assistance of Molly Richardson, GDLP Student