The Federal Government has approved amendments to the Corporations Act to introduce the ‘Director Identification Number’ (DIN). The DIN primarily targets directors involved in illegal phoenixing activity, but the requirements extend to all Directors, who must comply over the course of the transitionary period and into the future.
Summary of the effects on company Directors and corporate compliance:
- All Directors will be required to confirm their identity, be provided their DIN, and associate it will all directorships.
- The DIN will be a permanent unique identifier for each person who consents to be a Director.
- A DIN continues to exist even when a Director ceases to act as a Director.
- Any new person appointed as a Director of a body corporate will be required to apply to the registrar for a DIN prior to being registered as a Director.
- The DIN system will be administered by the ASIC, with information shared with the ATO and other Government departments.
- The DIN does not, at least initially, extend to what are commonly referred to as de facto or shadow Directors. The legislation allows these to be ‘brought in’ by the relevant government minister should it be deemed to be an issue.
- DIN requirement does not apply to unincorporated entities.
- ASIC will in due course write to all company Directors and advise them of their obligation to register for a DIN.
- The Law prohibits a person from knowingly applying for multiple DIN’s.
- The Law prohibits a person from misrepresenting a DIN to a Government body or registered body.
- Penalties will apply for Directors who fail to apply within the applicable timeframe.
The DIN legislations will bring an end the following practices:
- Using multiple names or aliases for Directorship of a company.
- It will clear up confusion, intentional or otherwise, where a Director is known by more than one name or spelling of their name.
- Foreign Directors will not be exempted from the DIN legislation.
- This regime will clear up confusion where Directors have a name in ‘non-alphabet’ characters as it will create a single DIN identifier for such persons.
- Security of the DIN continues to be an issue of concern for the Accounting and Legal profession because of inter-Government departments access to the DIN register.
As the DIN registration process commences and further information on application and processes is made available we will continue to update our website. If you wish to discuss the regime or its implications, please contact our office.
Date of Issue: 16 June 2020 Author: Noé Vicca
Disclaimer: The contents herein are intended for general information only and should not be construed as legal or accounting advice. Vicca Chartered Accountants Brisbane bears no responsibility for any loss that might occur from reliance on information contained in this publication. Please do not reproduce, transmit or distribute the contents herein in any form without prior permission from Vicca Chartered Accountants, Taxation Accountants Brisbane Australia.