Proposed Introduction of Director Identification Numbers (DINs)

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Background

Legislation has been introduced into the Commonwealth Parliament which has the proposed effect of merging the Australian Business Register (ABR) onto a single platform with 31 other ASIC Business Registers (including the registers for Business Name, Professionals and Banned and Disqualified Persons).  This new platform will be overseen by the Australian Taxation Office.

One of the key consequences of the legislation is the introduction of a Director Identification Scheme. It introduces a legislative framework for Director Identification Numbers (DINs), requiring all new and current directors to verify their identification with the Registrar, similar to the manner in which each Australian company has an ACN. The DIN scheme looks to assist regulators and external administrators by allowing them to easily identity and investigate directors and their alleged involvement in unlawful acts.

What Directors will need to do

New directors will need to apply for a DIN within 28 days or risk civil or criminal penalties (unless they satisfy the registrar they are in need of an extension). All current directors will have 15 months to apply. DINs will only apply to appointed directors and any acting alternate acting directors, suggesting it will not apply to de facto or shadow directors. There is no clarification yet as to whether this will remain the case once the legislation comes into force.

There is ongoing public debate about the extent of information that should be made publicly available on these registers. The Australian Institute of Company Directors  recently found 84% of directors surveyed were in favour of a 100-point verification scheme, similar to the process utilised by banks for opening new accounts.[1]

Key Takeaways

Directors should be aware of the significant civil and criminal penalties that will exist for contraventions of the DIN scheme.  Pragma will continue to monitor the progress of the legislation through Parliament and keep our followers updated.

[1] AICD, ‘Director Identification Numbers – Your Say!’ https://aicd.companydirectors.com.au/membership/membership-update/director-identification-numbers

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