News

Mandatory Director Identification Number requirements incoming

From 5 April 2022 any person wishing to be appointed as a director under the Corporations Act 2001 (Cth) must now apply for their individual director identification number (DIN) from the Australian Business Registry Services (ABRS) before they can be appointed as a director.1

Since 1 November 2021 a person could be appointed as a director without holding a DIN, however they were required to apply for their DIN within 28 days of their appointment.

For the purpose of issuing a DIN, the ABRS may collect the following information:2

(a) your name and any former names;

(b) your address and any former addresses;

(c) contact details; and

(d) your date and place of birth.

The ABRS may request but will not compel you to provide your Tax File Number.3

If the ABRS is not able to ascertain your identity using the documents you have provided, it may seek verification by third parties known to you.4

In our article in October 2021 we noted that the purpose of introducing strict DIN requirements is to prevent the use of false or fraudulent director identities. With this objective in mind the new provisions stipulate that it is a strict liability offence (that is, culpability for the offence does not need an intention for wrongdoing) to fail to comply with the requirement to have a DIN.5

The penalties for failing to meet the registration requirements include fines of up to $13,200 (criminal) or $1.1 million (civil).6 Applying for multiple DINs, or misrepresenting your DIN, may result in a term of 1-year imprisonment or a fine.7

Contravention of the DIN provisions of the Corporations Act extends to those who do not themselves contravene but are ‘involved’ in an intentional contravention of that law.8

The definition of conduct which could constitute being ‘involved’ includes aiding and abetting, counselling and being knowingly concerned or party to the contravention by act or omission, whether directly or indirectly.

Given the strict liability provisions explained above and the broad definition of ‘involved’, there are risks to those who, for example, assist in the setting up of companies or who currently sit on boards. What constitutes being ‘involved’ in a contravention of the new DIN legislative regime is yet to be seen.

Anybody considering a position as a director, or who is involved in the process of appointing new directors, should be aware of their potential exposure to substantial penalties under the DIN legislative regime.

The good news is that getting a DIN is a straightforward process. The ABRS advises that the fastest way to get a DIN is to apply online using the MyGov ID app.9 If your appointment is a matter of some urgency, you are encouraged to compile your identification verification documents beforehand.

For more information, please contact the authors:
Thaw Thaw Htin | Principal

Disclaimer: The information published in this article is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.

Footnotes

  1. Different dates apply to those seeking be appointed a director under the Corporations Aboriginal and Torres Strait Island Act 2006 (Cth)
  2. Director Identification Number Laws (Application) Data Standard 2022 [5(1)]
  3. Director Identification Number Laws (Application) Data Standard 2022 [5(2)]
  4. Director Identification Number Laws (Application) Data Standard 2022 [5(4), (5)]
  5. Corporations Act 2001 (Cth) s 1272C(4)
  6. Corporations Act 2001 (Cth) s 1272
  7. Corporations Act 2001 (Cth) s s1272G
  8. Corporations Act 2001 (Cth) ss 1272C (5) and 1271H; see s 79 for the definition of ‘involved’
  9. It is also possible to apply via phone or paper

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