To modernise Australian business registers, the Australian government has introduced a new company director tracking system, the Director Identification Number (DIN). Once the Australian Taxation Office (ATO) confirms a person’s identity, they will receive a unique DIN. Importantly, directors keep this number permanently. As a result, a director will be able to use this number across multiple companies for each directorship they hold.
The DIN has received strong support from the Australian Securities and Investment Commission (ASIC). They believe it will significantly benefit regulators and individuals doing business. Additionally, it will help provide greater security and modernise the way director information is collected. This article will explain how the company director tracking system works in Australia.
Individuals who are currently a director or will be acting as a director in the future must apply for a DIN. The Australian Business Registry Services (ABRS) will be responsible for introducing and maintaining the DIN regime.
The DIN Regime
The DIN regime has commenced with a transitional period applying from 1 November 2021. Notably, with the commencement of the DIN regime, the following applies:
existing directors will need to apply for a DIN by 30 November 2022;
new directors appointed between 1 November 2021 and 4 April 2022 will be required to apply within 28 days of their appointment; and
new directors appointed from 5 April 2022 will need to apply for a DIN before their appointment.
The table below outlines key dates you should note.
All directors, acting alternate directors and management committee members of ‘registered bodies’ will require a DIN. Registered bodies include companies and registered Australian bodies under the Corporations Act.
The Australian government has introduced a new tracking system, the Director Identification Number to modernise Australian business registers. Accordingly, a director will be able to use this number across multiple companies for each directorship they hold.
Why do you need a DIN?
The Federal Government wants to prevent the use of fraudulent or false director identities, in particular, illegal phoenixing, a widespread issue in Australia. Phoenixing occurs when a company is liquidated, abandoned or wound up to avoid paying its debts, and the same group of people start a new company.
What do you need to do?
You can apply for your DIN from 1 November 2021. If you are becoming a director, you can apply before your appointment. The law provides a clear timeframe for when you need to apply.
Why is the DIN being introduced?
Before the DIN regime, ASIC did not verify the identity of directors. Likewise, there was limited transparency of relationships between directors and multiple companies. Also, directors may have multiple records within ASIC systems. The new company director tracking system promotes good governance and significantly improves data security.
I am a company director. Is it compulsory for me to comply with the new tracking system?
All directors, acting alternate directors and management committee members of ‘registered bodies’ will require a DIN. Further, there will be significant civil and criminal penalties for directors who do not comply.