Director Identification Numbers to be introduced in 2021
The Director Identification Number (DIN) is a unique identifier for current directors, or people who want to become directors, of a company or a registered body. The DIN is expected to commence in 2021 and will apply to some associations.
Will the DIN apply to your association?
The DIN will apply to associations that are companies limited by guarantee under the Corporations Act 2001. It will not apply to associations incorporated under the State and Territory Associations Incorporation Act unless those entities are a registered body with an ARBN.
Impact on charities
It is currently unclear how the requirement for all directors to have a DIN will interact with the current reporting obligations of registered charities. More information has been sought.
DIN is applicable to all 'Eligible Officers' and to those intending to become eligible officers of a company or of a registered body. An 'Eligible Officer' has been defined as a director or an alternate director or any other officer to be prescribed by regulations.
The intending eligible officer is a person, who at the time of grant of DIN is not an eligible officer but intends to become an eligible officer within the next 12 months. In case the intending eligible officer is not able to become an eligible officer in the next 12 months, the DIN granted shall be taken to be cancelled at the end of the 12-month period.
ASIC likely to administer the DIN scheme
The commonwealth registrar shall administer the DINs. The name of the registrar is yet to be confirmed, however it is anticipated that ASIC will administer the scheme.
When to apply?
After the introduction of the scheme, existing directors or alternate directors will be given a prescribed time within which they will be required to apply for a DIN. Similarly, the newly appointed director or alternate director will have to apply for DIN within 28 days from the date of appointment.
However, after the transition period, directors will be required to obtain a DIN before appointment.
Penalties for non-compliance
There are civil and criminal penalties in addition to the registrar's power to issue infringement notices in case any person:
- Knowingly applies for multiple DINs; or
- Misrepresents a DIN to a commonwealth body, company or registered body.
Why is the DIN being introduced?
The introduction of DIN is a part of the Modernising Business Registers (MBR) program. It has been introduced through the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 passed in June 2020.
The reason for introduction of DIN is to:
- Assist regulators to better detect, deter and disrupt illegal "phoenixing" activities; and
- Prevent the use of dubious identities and provide traceability of a director's connections across companies.