Director Identification Numbers (‘DIN’) – Registration required by 30 November 2022

• New legislation[1] requires all directors of a body corporate registered under the Corporations Act and Corporations (Aboriginal and Torres Strait Islander) Act to register for a Director Identification Number (‘DIN’). The DIN is a unique identifier, issued to the Director upon verification of their identity. A DIN applies for life.

• The legislation is intended to lessen corporate phoenix activity – the process of continuing business activity of a company that has been liquidated to avoid its debts. The DIN scheme increases accountability by making directors traceable.

• Compulsory DINs may be especially beneficial to creditors. A DIN will contain details of a director’s previous and concurrent appointments. Creditors will be able to ascertain whether they are dealing with a director who was appointed to act for liquidated companies.

The Legislation

The TLA Act introduces a mandate on the director’s application for a DIN in addition to associated penalties for noncompliance. The legislative package which was passed alongside with TLA Act delegates the director ID service to the Australian Business Registry Services (‘ABRS’), to which applications for a DIN will be made.

Prior to the TLA Act, the Australian Securities and Investments Commission (‘ASIC’) required the personal details of directors to be lodged as an aspect of registration of a body corporate. These personal details however were not verified by an independent body and could hide the true details of directors.

1. a DIN issued in respect of the person will apply permanently;
2. a person may not have more than one DIN;[2];
3. Directors will be required to verify their identity with the Registrar to be issued with a DIN; and
4. there are severe penalties for failure to register

Under the TLA Act, directors appointed on or before 31 October 2021 must apply for a DIN by 30 November 2022.

To apply for a DIN, directors should follow the process below;

1. Set up a MyGovID account by visiting the MyGov app – enter in your personal details and provide at least two recognised Australian identity documents;

• Recognised documents include – passport, driver’s license or learner’s permit, birth certificate, citizenship certificate, Medicare card, visa (if using foreign passport) or ImmiCard

2. Depending on the identity strength of the director’s myGovID additional information may be necessary:

• Strong identity strength – only TFN or residential address to be provided
• Standard identity strength – TFN, residential address and information from two of the following list; bank account details, an ATO assessment, APRA super fund account details, dividend statement, Centrelink payment summary, or a PAYG payment summary.

3. Full details can be obtained at click here
4. Use your myGovID details to login into ABRS by going through the ATO service

Comment

The introduction of DINs offers creditors another safety measure. As above, the DIN will include the details of the director’s current name and any former given and family name.[3]  For creditors who deal with directors trading concurrently with an anglicised and legal name, proper records should avoid confusion as to a director’s true identity.

Moving forward, the introduction of the DIN will possibly give more weight to personal guarantees signed by directors. Where credit facilities are provided to corporations guaranteed by directors, it may be prudent that loan application paperwork require provision of director DINs as another layer of protection for credit provider. The verified personal information registered as part of the DIN may aid in support of the lodgement of a caveat pursuant to an apt charging clause, or even in the service of documents.

The above was prepared for and is intended to provide a broad general overview of issues only.  

.It is not intended, and must not be relied upon, as definitive legal advice.

The writer acknowledges the contribution of Harry Eaton, paralegal at Eakin McCaffery Cox, to the content of this paper

If you have any queries, please feel free to contact Greg Ross (ross@eakin.com.au) or your usual Eakin McCaffery Cox contact.

Telephone: (02) 9265 3000

[1] Originally announced in September of 2017, legislation for the DIN received assent on 22 June 2020. Schedule 2 of the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2019 (Cth) (‘TLA Act) amends the Corporations Act 2001 (Cth) (‘Corps Act’) and Corporations (Aboriginal and Torres Strait Islander) Act 2001 (Cth) (‘CATSI Act’).

[2] Except in rare circumstances, such as in defects in records, see Explanatory Memorandum, Commonwealth Registers Bill 2019 Treasury Laws Amendment (Registries Modernisation And Other Measures) Bill 2019; Business Names Registration (Fees) Amendment (Registries Modernisation) Bill 2019; Corporations (Fees) Amendment (Registries Modernisation) Bill 2019; National Consumer Credit Protection (Fees) Amendment (Registries Modernisation) Bill 2019, 39, [2.4] [2.53] (‘Explanatory Memorandum’)

[3] Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019 (Cth) Schedule 2, 4 Subsection 304-5(4).