Director Identity Number (DIN) coming soon
All corporate directors will shortly be required to obtain a Director Identity Number (DIN) designed to increase their accountability and traceability.
The new DIN will be a unique identifier a director will keep for their lifetime, even if they change companies or stop being a director.
Once the new scheme takes effect, anyone who is considering becoming a director in the future but doesn’t hold a directorship yet needs to apply for a DIN in advance. Otherwise, companies won’t be able to appoint that person as a director easily.
According to the federal government, which has mandated the DIN, it will:
- help prevent the use of fictitious director identities and make it easier for government regulators to trace directors’ relationships with companies over time
- go a long way to identifying and eliminating director involvement in unlawful activity, such as fraudulent phoenix activity, which involves:
- deliberately liquidating a company to avoid paying its taxes, creditors and employee entitlements
- continuing to operate the business and take profits through another trading entity.
Non-compliance with the DIN scheme — including failing to apply for a DIN, applying for more than one, or providing a false DIN — will result in civil and criminal penalties.
Who will need to apply
The new DIN applies to appointed directors and acting directors of Australian corporations and registered foreign companies.
Currently, the DIN does not apply to unincorporated bodies, de facto or shadow directors, or company secretaries.’
When to apply
Directors don’t need to do anything now, as the electronic platform through which the DINs will be dispensed is still being tested.
Directors appointed between 1 November 2021 and 4 April 2022 must apply within 28 days of their appointment.
Once the testing is completed and the scheme commences — existing directors will have until 30 November 2022 to obtain a director ID.
Upon commencement, there will be a 12-month transitional period during which anyone newly appointed as a director will have 28 days to apply for a DIN.
After this transitional period, a person won’t be able to become a director until they’ve obtained a DIN.
Starting on 5 April 2022, intending directors must apply before being appointed.
Information to be supplied
The information requested in the DIN application is yet to be confirmed; it may include the person’s:
- name and former names (including proof of identity via an Australian driver’s license, passport, Medicare card, birth certificate or visa),
- address and former addresses,
- contact details,
- date and place of birth, and
- tax file number.
Australian Business Registry Services
The DIN is part of the federal government’s Modernising Business Registers program, which will streamline how you register, view and maintain your business information with government.
The program will bring together more than 30 ASIC registers and the Australian Business Register in one place — a new agency called Australian Business Registry Services (ABRS).
ABRS will be managed by the ATO and have the power to provide, record, cancel and re-issue a person’s DIN.
Get expert advice
If you need any advice on how the new DIN requirement will affect you or your business, a Modoras Professional can help.
We can give advice so you can be aware of the coming changes, be ready to implement procedures to ensure compliance and avoid delays on appointment of directors.
Contact us for a complimentary consultation at firstname.lastname@example.org or 1300 888 803.
IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (QLD) Pty. Ltd. ABN 81 601 145 215. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (QLD) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (QLD) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (QLD) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (QLD) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.