DUE 30 NOVEMBER 2022

7 November 2022

The Regime

From  30 November 2022, Director Identification Numbers (DIN) are required for all directors of Australian companies, inclusive of the following:

• Directors of a SMSFs (Self-Managed Superannuation Funds);

• Corporate trustee of a family trust,

• Appointments in the capacity of an alternate director and

• Appointments for a specific period or on a temporary basis.

How it works

A director ID is a 15-digit identifier given to a director, or someone in the process of becoming a director, who has their identity verified by the Australian Business Registry Service (ABRS). A director ID will look like the following:

• Starts with 036, which is the 3-digit country code for Australia under International Standard ISO 3166

• Ends with an 11-digit number and one ‘check’ digit for error detection.

Quick facts:

• Free to apply

• Due to strict identity verification procedures, directors must apply for their own director ID. No one else can apply on their behalf

• Directors will keep their director ID forever, even if they change companies, stop being a director, change their name or move interstate or overseas.

Why have the DINs been brought in?

All directors are required by law to verify their identity with the ABRS before receiving a director ID. This is important because it will help to:

• Prevent the use of false or fraudulent director identities

• Make it easier for external administrators and regulators to trace directors’ relationships with companies over time

• Identify and eliminate director involvement in unlawful activity, such as illegal phoenix activity.

Illegal phoenix activity is when a company is liquidated, wound up or abandoned to avoid paying its debts. A new company is then started to continue the same business activities without the debt. When this happens:

• Employees miss out on wages, superannuation, and entitlements

• Suppliers and sub-contractors are left unpaid

• Other businesses are put at a competitive disadvantage

• The community misses out on revenue that could have contributed to community services.

Who needs a DIN?

You need a director ID if you are an eligible officer. An eligible officer is a person who is appointed as:

• a director  

• an alternate director who is acting in that capacity

If you are a director of the following, you need a DIN

• A company, a registered Australian body, or a registered foreign company under the Corporations Act 2001 (Corporations Act)

• An Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act).

• A charity or not-for-profit organisation registered with the ACNC (Australian Charities and Not-for-profits Commission)

• A registered Australian body e.g., an incorporated association that is registered with ASIC and trades outside the state or territory in which it is incorporated

Foreign directors are in for a DIN

Directors of foreign companies registered with ASIC and carrying on business in Australia (regardless of where the director lives) are all caught.

Non-Australian directors who have never lived in Australia may find it difficult to meet the identity verification documentation requirements.

This may see foreign companies and Australian subsidiaries of foreign companies rethink the membership of the board conducting business in Australia.

Who doesn’t need a DIN

A director ID is not required for the following:

• A person who is a company secretary but not a director

• A person referred to as a ‘director’ in their job title but has not been appointed as a director of a corporate body under the Corporations Act or the CATSI Act.

When?

Applications for a DIN are open. Applications will need to be made before a person is appointed as a director.

What happens if I don’t get a DIN

Directors who fail to obtain a DIN within the required timeframes may be issued an infringement notice and could face criminal charges and/or civil penalties of up to 5,000 penalty units (currently $1.11m).

How to get a DIN?

You need myGovID to apply for your DIN online.

BIG TIP – myGovID is different from myGov

Ø  myGovID is an app. You download the myGovID app to your smart device. It lets you prove who you are and log in to a range of government online services, including myGov.

Ø  myGov is an account. Your myGov account lets you link, and access online services provided by the Australian Taxation Office (ATO), Centrelink, Medicare etc.

Step 1 – Set-up a myGovID

You will need a myGovID with a standard or strong identity strength using two Australian identity documents, such as:

• Driver’s licence or learner’s permit

• Passport

• Birth certificate

• Visa (using foreign passport providing still in Australia)

• Citizenship certificate

• ImmiCard

• Medicare card

If you already have a myGovID start at Step 2.

Step 2 – Gather the documents required for identification

You will need to have information the ATO knows about you when you apply for your DIN to complete a ‘Proof of ATO Record Ownership’ (PORO) by providing:

• Your tax file number (TFN)

• Your residential address as held by the ATO

• Information from two documents to verify your identity

• Examples of the documents you can use to verify your identity include:

• Bank account details

• An ATO notice of assessment

• Superannuation account details

• A dividend statement

• A Centrelink payment summary

• PAYG payment summary

Step 3 – Complete your application

Once you have a myGovID with a standard or strong identity strength, and information to verify your identity, you can log in and apply for your DIN.

For those of us that were around at the beginning of the 1990’s, it will be just like the start of the Australian Company Number (ACN) regime. For those that weren’t there then, companies used to operate without a number set up at the time of incorporation. The vagaries of similar names and name changes to avoid creditors became much more difficult. Let’s hope the DIN does the same (and there are no data leakages!)