You may have seen recent news articles stating that all company directors will now be required to have a new lifelong Director identification number or “DIN”. The new laws came into being from 1 November 2021 as part of the Modernising Business Registers (MBR) program (which has been very slowly ticking along since being first announced in 2018), however, there is still some time before Australia’s existing 2.7 million directors will need to start panicking.
The changes are a long overdue regulatory overhaul, which amongst other things, is aimed at preventing shady business practices such as illegal phoenixing. Due to past lax identification and registry practices, it has been all too common for us in insolvency circles to see fake director names, deliberately mis-spelled names, incorrect birth dates, and even the names of real – but homeless or vulnerable people, all used to mislead and hide relationships and the true controllers of some entities, which we as Liquidators and Bankruptcy Trustees regularly need to try to decipher and unwind.
The new unique 15 digit DIN will allow regulators to track the activities of individual directors through various government databases and
trace their relationship to other directors and companies, and will also make it easier for people in business to conduct their own due
diligence when required.
The system accepting director ID applications opened 1 November 2021 however your own application deadline will depend on when you were/are appointed as a director:
- Existing directors have until 30 November 2022 to apply,
- New directors, appointed between 1 November 2021 and 4 April 2022, must apply within 28 days of their appointment,
- After 4 April 2022, intending directors must apply for a DIN before being appointed.
Whilst the application process is still new and the way the identifiers will be used when searching public registers is not yet completely clear, there will no doubt be more and more information available in public forums as time goes on. Note also, all individuals will have to apply for their own DIN – you can’t have someone else, like your friendly local accountant or lawyer, do it for you. There will be fines and penalties for failure to register in due course and it will be interesting to see the approach taken by regulators in relation to entities connected with individuals who fail to obtain a DIN after the 30 November 2022 cut off.
So let’s all watch this space. If you are an existing director and want to get your registration out of the way, here is a handy link to the Australian Business Registry for more information: https://www.abrs.gov.au/director-identification-number
If you have any queries regarding DIN’s or would like to discuss any aspect of your business entity’s position or performance, please feel free to contact us via the Contacts page, or just give us a call for a no obligation chat!