As part of the modernising of Australia's business registers (ASIC currently manages 31 different registers), all new and current directors of Australian companies must hold a unique director identification number (DIN). Here, partner Langton Clarke discusses the DIN regime, how you receive a DIN, and what you need to do now.
The DIN regime aims to enhance traceability of a director's relationships across different companies, deter and penalise illegal phoenixing activity, and facilitate consumer confidence in the corporate marketplace.
Under the new rules, all directors will be required to confirm their identity, and there will be a unique identifier for each individual. A person keeps their unique DIN permanently, even if they cease to be a director and the same number will not be reissued to any other person.
A DIN should enable better tracking of directors of failed companies and prevent the use of fictitious identities—deliberately or otherwise, as directors can have multiple records within ASIC registers with minor variations (for example, no middle name or different addresses).
An applicant must be given a DIN if the registrar (who is in fact the Commissioner of Taxation) is satisfied the person's identity has been established. The registrar can request various information, including an individual's names and former names, current and former addresses, contact details, and date and place of birth. The registrar may request, but not compel, the individual's tax file number to establish the individual's identity.
The registrar may also request and collect identity documents (similar to a 100-point check when opening a bank account).
Individuals will apply through an electronic platform and verify their identity digitally, so documents like passports or driver's licences will need to be uploaded.
Individuals are required to apply for a DIN prior to being appointed as a director. However, for the first 12 months of the new regime, new company directors have up to 28 days after their appointment to apply for a DIN.
At the moment, you don't need to do anything. The Government will specify the transitional application period for existing directors but until that happens, there is no requirement for those individuals to apply for a DIN.
We will keep you updated about that transitional period for existing directors and further detail of the DIN regime as it is released.
If you have any queries about the new DIN regime, then please contact a member of our Funds Management team.