Director identification numbers are coming

Summary

As part of the 2020 Budget Digital Business Plan, the government announced the introduction of a requirement for all directors to register for a unique director identification number (DIN) that is intended to mitigate illegal ‘phoenixing’ activity and provide more transparency.

Directors don’t need to do anything yet. Further details will be made available in due course once beta testing has been completed.

In Detail

The MBR program will establish a new modern registry service – the Australian Business Registry Services (ABRS) which will:

• Combine the Australian Business Register (ABR) and the Australian Securities and Investments Commission (ASIC) registers into one place; and
• Introduce DINs.

It is expected the MBR program will be rolled out progressively between 2021 and 2024 and is being administered by the ATO with the overarching goal to make registration obligations easier to manage and to make the information more accurate and trusted.

Director Identification Numbers

One of the earlier steps in the implementation of the MBR program is the introduction of the DIN system. A DIN is a unique identification number that all new and existing directors will need to apply for. The DIN will stay with that director permanently even after they cease to be a director.

The overarching purpose of the DIN system is to combat illegal phoenixing activity and it will also increase the ability for regulators and the public to trace director’s involvement with companies over time, thereby increasing accountability.

Who will need a DIN

A current director, or a person wishing to be appointed as a director, of a company registered under the Corporations Act 2001 (Corps Act) or the Corporations (Aboriginal and Torres Straight Islander) Act 2006 (CATSI Act) will be required to apply for a DIN and penalties will apply to those directors that fail to apply for a DIN within the timeframe.

The legislative instruments that have been issued provide for a 30 November 2022 deadline for directors of companies registered under the Corps Act and a 30 November 2023 deadline for directors of companies registered under the CATSI Act.

However, the DIN system is currently being tested via a private beta and so there is no action required by directors at this stage.  Once the DIN system is operational there will be further updates including specific instructions on how to register.