Director Identification Numbers for new Australian directors. Transition period finishes and enforcement and penalties begin.
Until recently, first time directors of Australian companies were able to apply for a Director Identification Number (DIN) within 28 days of their appointment. But since 5 April 2022, a new director must now apply for a DIN before being appointed.
Directors already being a director on or before 31 October 2021 will still have until 30 November 2022 to apply for their DIN.
Non-resident directors of Australian companies or of overseas companies registered for business in Australia must comply with the DIN registration regime.
Australian Business Registry Services, the entity responsible for delivering the director ID scheme, is contacting directors appointed for the first time after 1 November 2021 who have failed to apply for their DIN.
Failure by directors to apply for a DIN when required can lead to enforcement action by ASIC, with penalties up to $13,200 in criminal matters and $1,100,100 in civil matters.
DINs were an initiative arising from the Phoenix Taskforce, a taskforce of 32 Australian federal and state government agencies formed to combat the illegal phoenix activity that was estimated to cost the Australian economy as much as $5 billion in 2015-2016.
In addition to eliminating director involvement in illegal phoenix activity, DINs were introduced to prevent the creation and use of fraudulent director identities as well as enabling external administrators and regulators to trace a director’s movement across time and companies.
Similar to an Australian tax file number, DINs are permanent and stay with a director regardless of when or whether they change residence, companies, or name. Applications are free and can be completed online. While directors make applications themselves, we can assist with applications, including identity verification procedures.
It is imperative that new directors apply for a DIN prior to appointment in order to avoid substantial penalties.
If you would like assistance or more information about the DIN regime, please contact Brett Cowell.
This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.