Why Every Company Director Now Needs a Director ID (DIN)
If you’re a director of an Australian company—or you plan to be—please read on.
All existing directors (and intending directors) of Australian companies should be aware that the Australian Government has announced the introduction of a new mandatory Director Identification Number (DIN) system. (You’ll notice the term director ID is also used for DIN.)
This system is the initial step in the Modernising Business Registry (MBR) Program which has been established under the Treasury Laws Amendment Act which was legislated by the Australian Government in 2020.
More information on the MBR program can be found here.
What is the DIN system trying to achieve?
The DIN aims to provide accountability and traceability of a director’s relationships over time, across all companies and will provide information on a director’s involvement in what may be repeated unlawful activity, including illegal phoenix activity.
It should also solve the problem of false or fraudulent director identities.
What are the key features?
- It is mandatory for all directors, foreign directors and alternate directors of Australian companies to hold a DIN.
- The DIN is a unique 15-digit number. The first 3 digits will be 036 which is the identifier for Australia. The last digit is a check digit to help with accuracy when quoting your DIN.
- Like your tax file number, you will only be issued with one DIN which you will hold for life – even if you cease acting as a director for any period.
- To obtain a DIN, you will need to prove your identity so you will not be able to hold multiple DINs.
- Other office holders (e.g. company secretaries) are not required to register.
- The director is responsible for updating the DIN records for any changes in personal information within 7 days of the change.
- The director must apply personally. The process cannot be completed by your accountant, lawyer, spouse or executive assistant.
- There are significant penalties for non-compliance.
How do you apply for a DIN?
Directors have 3 options for applying.
You can apply online from 1 November 2021. To use this method, you must first establish your identity via myGovID (an app you download on your smart device which is different from myGov).
Once set up, your myGovID will make accessing a wide range of government services easier. (It’s not just for your DIN application.)
For information on how to set up a myGovID please go to https://www.mygovid.gov.au/set-up
During the DIN application process, you will need additional information such as your tax file number (TFN) and your residential address as per ATO records. It would also be advisable to have other personal details such as bank account details, Medicare card or a recent income tax assessment available in case these are required.
You can also apply by phone (13 62 50).
During the call, the operator will ask for the identity documents you would have used to obtain your myGovID (passport and driver’s licence) as well as the additional information listed above.
These details will be confirmed with the records held on existing government databases and, assuming the details agree, your DIN will be issued.
Or you can apply by mail. However, this is not recommended as you can probably expect a lengthy process of certifying documents and coping with the vagaries of the postal system. One of the other two methods would be a better choice.
When will you need to apply for a DIN?
Transitional arrangements will allow directors to become familiar with the new requirement. When you need to have a director ID will depend on when you were appointed as a director.
Corporations Act 2001 (Corporations Act)
Appointment of directors When they need to apply New directors appointed from 5 April 2022 Before appointment Existing directors appointment on or before 31 October 2021 By 30 November 2022 New directors appointment between 1 November 2021 to 4 April 2022 (inclusive) Within 28 days of appointment
Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act)
|Appointment of directors
|When they need to apply
|Existing directors appointed on or before 31 October 2022
|By 30 November 2023
|New directors appointed after 1 November 2022
|Must apply before appointment
As the process of applying is simple, we recommend you apply now, if you haven’t already done so.
I have my DIN – now what?
For now, there will be no change to how a company is registered, therefore there is currently no requirement for you to include the director’s ID number on your company application or company change of details form.
However, directors are required to provide their DIN to all Australian companies they are directors of, and each company is required to store that information securely to preserve the privacy of the director.
Naturally, we will keep you informed of any further developments with the use of DINs or the MBR Program generally.
While we can’t complete your DIN application for you, we are happy to help with any questions you may have regarding the application process. Just get in touch, email your advisor, or contact us on 6362 1966.