In the Modern Corporate Office Meeting Room: Diverse Group of Businesspeople, Lawyers, Executives and Members of the Board of Directors Talking, Negotiating and Working on a Winning Strategy.

One step closer to the introduction of the Director Identification Number Regime

Malcolm Campbell ||

Current and future company directors are one step closer to being required to obtain director identification numbers (“DINs”). The legislation that introduced the new regime is Part 9.1A of the Corporations Act 2001 (Cth), which was inserted into the Corporations Act 2001 (Cth) by Schedule 2 of the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth). While the legislation commenced on 4 April 2021, it will be some time before all current and future directors will be required to obtains DINs.

What is a Director Identification Number?

A DIN is a unique identification number that existing directors and future directors of a company or a registered body will be required to obtain. To obtain a DIN, directors will be required to confirm their identity.

Once a DIN is issued, it will be kept by the individual permanently. Only one DIN will be made available to each director, and directors will require their DIN to interact with any government agency.

What is the purpose of the Director Identification Number Regime?

The key purpose of the DIN regime is traceability. DINs will provide a mechanism to trace a director’s history and a director’s relationships across different companies. Therefore, the regime will help regulators investigate a director’s involvement in unlawful activity, particularly illegal phoenix activities,[1] which is where a company’s liabilities are deliberately avoided by shutting down an indebted company and transferring its assets to a new company.

In addition to reducing illegal phoenix activities, the regime also aims to prevent the appointment of fictitious directors and improve data integrity.

Penalties

The following conduct will attract civil and criminal penalties:

  1. Failing to obtain a DIN within the prescribed period;
  2. Deliberately providing false identity information;
  3. Intentionally applying for multiple DINs; and,
  4. Intentionally providing a false DIN to a government body or body corporate.

Timeline of the Director Identification Number Regime

While the legislation has now commenced, directors will not be required to obtain DINs for some time.

Testing

The first step after the commencement of the legislation is a period of testing by the Commonwealth Registrar, which will ensure that the system is reliable and consistent. During the testing period, the DIN system will only be available to directors that the Registrar has invited to participate in testing.

Transitional Period

Existing directors will have between the end of testing and 30 November 2022 to obtain a DIN. Directors appointed during the transitional period will be required to obtain a DIN within 28 days of being appointed a director.

Directors of indigenous corporations under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) will have a further 12 months to obtain a DIN.

After the transitional period, individuals will be required to obtain a DIN prior to being appointed as a director.

How can we help?

If you require advice on the DIN requirements, please do not hesitate to reach out to a member of Coleman Greig’s Commercial Advice team, who would be more than happy to assist you.

This material is provided by Coleman Greig Lawyers as general information only in summary form on legal topics current at the time of first publication. The contents do not constitute legal advice and should not be relied upon as such. Formal legal advice should be sought in particular matters.

Share:

Send an enquiry

Any personal information you provide is collected pursuant to our Privacy Policy.

Categories
Archives
Author

More posts

A guide to intrafamily adoption

Adoption is the process where a parent’s legal rights for their child are transferred to another person. The formal adoption of a stepchild or close relative is known as intrafamily adoption.

Passenger movement and visa data-matching by the ATO

Heading overseas for work or a holiday? Taxation issues, including tax residency, should be on front of mind when departing from or arriving to Australia. Why? Because the Australian Taxation Office (ATO) can follow your footprints and, if you’re not careful, spring unexpected taxes on you.

Is it really necessary for my executor to have so many powers?

People often question why the executor of their estate needs to have so many powers. Simply put – if your executor isn’t given any additional powers by your Will, then they are limited to what is set out in the Trustee Act. One area that this can lead to issues in, is the family home – particularly if beneficiaries aren’t in agreement.

Essential terms of a commercial lease

A commercial lease is a contract that details the rights and obligations of a tenant and landlord. So, what are the necessary terms of a commercial lease?

Responding to data breaches

In the final part of our four-part series on your business’ responsibilities related to cyber attacks and data breaches, Special Counsel John Bennett how businesses should respond to data breaches, including application and requirements of the Notifiable Data Breaches Scheme.

Security of personal information

Part 3 of a four-part series on your business’ responsibilities related to cyber attacks and data breaches where Special Counsel, John Bennett provides an overview of some court decisions and proceedings where ‘security’ of personal information has come into issue.

Parental alienation in Family Law

The concept, Parental Alienation Syndrome, was initially brought about by American psychiatrist Richard Gardner in 1985. The term parental alienation is used to describe a situation where one parent is involved in psychologically manipulating their child to turn against the other parent.

Are you liable for labour hire workers if they are injured?

Many employers (host employers) engage employees of labour hire companies, particularly in the building and construction, hospitality and manufacturing industries. However, what happens when one of these employees gets injured at the host employer’s work site? Who is liable for the injuries?

The risks with cyber attacks and data breaches

Part 1 of a four-part series on your business’ responsibilities related to cyber attacks and data breaches. Cyber attacks and data breaches are the top business risk in Australia according to Aon’s 2023 Global Risk Management Survey.

© 2024 Coleman Greig Lawyers  |  Sitemap  |  Liability limited by a scheme approved under Professional Standards Legislation. ABN 73 125 176 230