The Australian government has taken the initiative to impose a deadline to obtain the Director IN. It is compulsory for the directors of the companies to get the IN as per the new regulations. Non-compliance to this regulation can have a severe impact on the existing and new directors of companies.
What is a Director Identification Number (DIN)
The Director Identification Number is a unique number like the Australian Business Number (ABN) and Australian Company Number (ACN). However the DIN is issued to each individual director to identify them apart from each other. The DIN must only be applied for once and keep it forever.
Why the government is taking this initiative
The Federal Government proposed this new initiative in 2018. The government implements this initiative with the acceptance of Modernizing Business Registers (MBR) legislation in Australia.
One of the main reasons to implement this initiative is to prevent the use of fake director identities. This new DIN system will make it easy for the government to trace the relationship between the directors and their companies. Thereby linking the directors to the actions and decisions that they take.
The government expects to identify, trace and eliminate the involvement of directors in unlawful and illegal activities. Thereby protecting the general public and the economy of Australia from such illegal involvements.
Who should apply for the Director IN
The current legislature suggests that a person who is a director or an alternate director of a company registered under the following acts must obtain the DIN.
- The Corporations Act 2001
- Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act)
The legislature defines an alternate director as to a person appointed by a director to act on his behalf for a certain time period.
Accordingly the directors or alternate directors of following entities must obtain the director identification number.
- Public Companies – The companies which are listed on the Australian Stock Exchange that the public could buy shares in. These companies will have an Australian Company Number (CAN) and their names would include Limited or Ltd.
- Private Companies – Small companies which are not listed on the stock exchange but has an ACN. These companies have Propriety Limited or Pty Ltd attached to their name.
- Aboriginal and Torres Strait Islander Corporations – The companies which are registered under the Aboriginal and Torres Strait Islander Act which are designed to suit the needs of indigenous people. These companies are regulated by the Office of Registrar of Indigenous Corporations. Such companies will have a Indigenous Corporation Number (ICN)
- Registered foreign companies – The foreign companies established in Australia must be registered under the Corporations Act. Therefore they must have an Australian Registered Body Number (ARBN). Their names would include Limited, Ltd, Proprietary Limited or Pty Ltd.
- Certain incorporated associations – These are not-for-profit organizations who operates outside the state or territory which they are incorporated. Such organizations must be registered under the Corporation Act. These organizations will have Incorporated or Inc. in their names and will have an ARBN.
- Registered charities – The not-for-profit charities who registers themselves with the Australian Charities and Not-for-profit Commission (ACNC).
What is the deadline to get the Director IN
From November 2021 the directors will have to verify their identity as a part of the Director IN requirement. The government has declared the following dates to be the deadlines to apply for a Director Identification Number.
|Director Type||Deadline to apply for Director IN|
|Existing Directors under Corporation Act||30th November 2022|
|Existing Directors under CATSI Act||30th November 2022|
|New Directors under Corporation Act appointed before 31st October 2021||30th November 2022|
|New Directors under CATSI Act appointed before 31st October 2021||30th November 2022|
|New Directors appointed from 1st November 2021 to 4th April 2022||Within 28 days of appointment|
|New Directors appointed on and after 5th April 2022||Director IN required before appointment|
|New Directors under CATSI Act appointed from 1st November 2022||Director IN required before appointment|
What is the penalty for non-compliance
The government has announced that all the directors of the respective companies must adhere to the respective deadline as mentioned in the above table. Non-compliance to this regulation could have a serious impact on the individuals.
Under the law, the directors who fail to comply would face criminal and civil penalties of 5000 units (which is currently $1.11 million).
The law dictates that, other than failure to comply with the deadlines, the following offences would also lead to civil and criminal penalties.
- Deliberately providing false identity information to the registrar.
- Providing a false Director IN to a government body intentionally.
- Applying for multiple Director IN intentionally.
Who shouldn’t get the Director IN
The government specifically states that it is not required to get the Director IN under following circumstances.
- A company secretary but not a director.
- Acting as an external administrator of a company.
- Running the business as a sole trader or partnership.
The law dictates that, it is compulsory and crucial to obtain the Director Identification Number if you are an eligible person of a registered company. You would get a unique identification number different from other individuals. This helps the government to trace and track the link between each director to the company.
The identification number is for a life time and you only have to apply for it once. Non-compliance can lead to both civil and criminal penalties with severe consequences.
Therefore it is always better to apply for the Director IN and comply with the law before the given deadline.
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