Director Identification Numbers (DINs) – Are your clients compliant?

In June 2020, the Australian Government introduced the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (cth). Within it was the introduction of a new regime to Part 9.1A of the Corporations Act 2001 (cth), which requires all company directors or anyone who intends on becoming a director to have a unique identification number, called a Director Identification Number (DIN).

The primary purpose of this legislative amendment is to:

• address the challenges associated with identifying and tracking individuals who engage in illegal phoenix activity.
• prevent the use of false or fraudulent director identities, and
• make it easier for external administrators and regulators to track directors' relationships with companies over time.

Who is required to have a DIN?

Any person who is, or intends to become a director of a:

• company
• Aboriginal and Torres Strait Islander corporation
• corporate trustee, for example, of a self-managed super fund
• charity or not-for-profit organisation that is a company or Aboriginal and Torres Strait Islander corporation
• registered Australian body, for example, an incorporated association that is registered with the Australian Securities and Investments Commission (ASIC) and trades outside the state or territory in which it is incorporated
• foreign company registered with ASIC and carrying on business in Australia (regardless of where you live)

How long do current directors have to obtain a DIN?

Since 30 November 2022, all current directors should now have a DIN. If you have a client that is a director (of one of the abovementioned types of entity) and doesn't have a DIN, they may have already committed an offence under the Corporations Act. In such circumstances, an application for a DIN should be made immediately. Also, an application for an extension of time to apply for a DIN can be made with the Australian Business Registry Services (ABRS) –https://www.abrs.gov.au/sites/default/files/2021-10/Application_for_an_extension_of_time_to_apply_for_a_director_ID.pdf

What about new directors?

From 5 April 2022, all new directors must apply for and obtain a DIN before being appointed as a director.

How do I apply for a DIN?

The ABRS is responsible for the administration and the implementation of DINs, while ASIC is responsible for the enforcement of any offences resulting from non-compliance by directors. DINs can be applied for at the ABRS website – https://www.abrs.gov.au/director-identification-number/apply-director-identification-number

Offences and Penalties for Non-Compliance

ASIC's enforcement role covers four new DIN offences under the Corporations Act 2001 and non-compliance by directors is now a key focus area for the regulator with substantial penalties, both civil and criminal, now in play. Failure to obtain a DIN, applying for multiple DINs or providing false information in the DIN application can result in severe penalties. These penalties are summarised below:

Given the above, it is now more important than ever that your clients have registered and obtained their DIN.

The introduction of DINs represents a significant step forward in enhancing corporate transparency and regulatory oversight in Australia. By establishing a framework for identifying and tracking directors' activities, DINs contribute to the prevention and detection of corporate misconduct, including illegal phoenix activity, fraud, and breaches of fiduciary duties.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.