As part of the Modernising Business Registers (MBR) Program, directors of Australian companies will be required to apply for a Director Identification Number (DIN) under a new regime introduced by the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020.
A DIN is a unique number issued to each director of a corporation that will be kept by the individual permanently, even after they cease to be a director and it will be required for directors to interact with any government agency.
The government regulators consider such verification method will help prevent the use of fictitious director identities and eliminate director involvement in illegal phoenix activity.
Who will it apply to?
The regime will apply to all directors of:
- Australian companies, registered foreign companies, and registered Australian bodies registered under the Corporations Act 2001.
- Aboriginal and Torres Strait Islander Corporations registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
The regime does not extend to directors of unincorporated bodies, or de facto or shadow directors.
To apply for a DIN, the directors must provide:
- Names and former names;
- Addresses and former addresses;
- Contact details; and
- Date and place of birth;
The Registrar may make further requests for information if they deem the above information to not have sufficiently proven the individual’s identity.
While the current Disclosure Framework only contemplates the provision of DIN information to Public Governance, Performance and Accountability (PGPA) bodies, courts and tribunals, the broader issue of the public disclosure of director details remains.
Currently, directors have an option to apply for the suppression of their usual residential address and use an alternative address in its place. It remains to be seen whether the use of DIN as a publicly available identifier will be sufficient and appropriate to replace the publication of directors’ residential addresses.
When should directors apply?
The change does not affect your obligations as a director or how you interact with ASIC at present time.
The Registrar is currently conducting a public beta trial of the technology systems involved in the director identification process, which is expected to conclude on 31 October 2021 but is subject to change.
The anticipated timeframe for application is as follows:
|When to apply
|Individual appointed as a director before 31 October 2021
|Between 31 October 2021 and 30 November 2022
|Individual appointed as a director between 31 October 2021 and 31 October 2022
|Within 28 days following appointment
|Individual seeking appointment as a director after 31 October 2022
|Within 12 months prior to appointment
|Individual appointed or seeking appointment as a director of an Aboriginal and Torres Strait Islander Corporation
|Between 31 October 2021 and 30 November 2023
What should directors expect between now and the end of the testing period?
Public consultation on the draft exposure materials on the DIN regime published by the Treasury closed on 16 April 2021. The Treasury has not advised which part of the MBR program will be the subject of the next consultation open to the public.
In the meantime, directors and prospective directors should ensure that they are keeping up to date with the most recent developments in the MBR program. It is particularly important that directors ensure that they are familiar with the new DIN regime and its requirements, in order to avoid potentially contravening the relevant legislation (i.e. penalties for non-compliance).
Keystone Lawyers would be closely following this development for any further updates.
If you would like to discuss the upcoming changes or have any questions please contact our team for a confidential discussion.