Director identification numbers are finally here but what do directors need to do to meet their legislative obligations?

From 1 November 2021, applications are open for directors to apply for a director identification number (DIN). As the first of its kind in Australia, the new regime will impact both foreign and domestic directors of Australian registered body corporates. Here we unpack what directors need to know about the implications and application process. 

What is a director identification number?

A DIN is a unique 15-digit identifier used to verify the identity of a director and is permanently assigned to the director. DINs were introduced as part of the broader effort to combat illegal phoenix activity and will enable regulators, administrators and liquidators to more easily trace a director’s corporate history and prevent the use of fictitious identities.

The DIN regime is administered by the Australian Business Registry Services (ABRS), who is overseen by the Australian Tax Office (ATO). DINs are not currently searchable by the public.

Current Australian-resident directors should set up their myGovID accounts and prepare the relevant identification information so they can apply for a DIN before 30 November 2022.   Current foreign directors must obtain certified copies of their identification documents and any necessary translation documents in order to apply for a DIN before 30 November 2022.

Who must apply?

A DIN must be applied for by a director or alternate director of a:

• company;
  
  
• registered Australian body that is a body corporate; or
  
  
• registered foreign company that is a body corporate, 

in each case which is registered under the Corporations Act. This includes Australian companies that are responsible entities and registered charities, even if they are also registered under other laws. The requirement does not apply to shadow or de facto directors. 

The ABRS must give a person a DIN if they are eligible to apply for a DIN and have established their identity. Likewise, the ABRS cannot give a person a DIN or cancel a person’s DIN without notifying the person.

When to apply

Deadlines apply to directors for the application of a DIN. The deadline varies depending on a director’s appointment date as follows:  

Deadlines for foreign directors

Applications for a DIN by foreign directors may be delayed because of the level of certification and translation (if applicable) required and the fact that the application can only be paper based. 

It is foreseeable that delays could cause issues where companies are required to be incorporated with representative foreign directors by certain transaction deadlines or when participating in competitive processes, where there is less flexibility to delay the appointment date.

While the new law requires all directors to have a DIN, it is a defence if the director applied for a DIN by the applicable deadline, notwithstanding that the director may not have a DIN by the applicable deadline because the application has not yet been dealt with by the ABRS. 

If there is limited flexibility in the deadline for the appointment of a foreign director, foreign directors should prepare their certified proof of identity documents and any necessary translations well in advance so that they can submit their DIN application by the applicable deadline. Ideally, the foreign director’s appointment date should be sequenced after the director has applied for a DIN by the applicable deadline.

Individuals to be appointed as a director within 12 months

For individuals (both resident and non-resident in Australia) that are not yet appointed as a director but anticipate being appointed within the next 12 months, applications for a DIN can be made now which will ensure the application deadline is met.   Even if the appointment does not proceed, there are no costs of applying and the DIN will be automatically cancelled within 12 months of it being provided.

What you need before applying

Directors must apply for their DINs, as they need to certify their own identity. 

If applying online and setting up a myGovID account or applying over the phone, directors will generally need at least one primary and one secondary identity document.

If applying via a paper application, directors within Australia will need copies of one primary and two secondary identity documents or two primary and one secondary identity documents, which must be certified. Directors applying outside Australia will need certified copies of one primary and one secondary identity document or two primary identity documents.

Within Australia, the following persons can certify: legal practitioner, medical practitioner, justice of the peace, minister of religion (who is authorised to celebrate marriage), police officer, bank, building society or credit union officer with at least five years of service, sheriff's officer or the Commissioner of Declarations (in Queensland only).

Outside Australia, notary publics or staff at the nearest Australian embassy, high commission or consulate, including consulates headed by Austrade honorary consuls can certify. Additionally, if the director is located in a country that is party to The Hague Apostille Convention, the competent authority in that country can certify by using an apostille.

Identity documents other than in English must be translated into English by an authorised translation service and certified as a true and correct copy. The Australian embassy, high commission or consulate in foreign jurisdictions can provide details of authorised translation services.

How to apply

Australian Directors

Australian directors can apply for a DIN online, over the phone or by filling out a paper application.  The fastest way for an application to be processed is to apply online. In our experience this should be almost instantaneous.

Steps for an Online Application

1. Set up a myGovID (https://www.mygovid.gov.au/set-up).  This is different to a myGov account.  If you already have a myGovID, the online application process is quite simple.
   
   
2. Gather supporting documents including tax file number (TFN) and residential address as held by the ATO.  Providing your TFN is optional but it speeds up the process. If you have a MyGov account, it will make the process easier as you will be able to review your last PAYG or income tax assessment.
   
   
3. Complete the online application process including answering two questions based on details included on, for example, your bank account statements or ATO communications. 

Steps for a Phone Application

1. Gather supporting documents including TFN, residential address as held by the ATO, one primary identity document and one secondary identity document (as listed above).  
   
   
2. Complete the phone application process including answering questions to complete the verification of identity process. 

Steps for a Paper Application

1. Gather supporting documents including TFN, residential address as held by the ATO, one primary identity document and two secondary identity documents or two primary and one secondary identity documents (as listed above).
   
   
2. Fill out the form available.
   
   
3. Print and submit the paper application and supporting materials to the ABRS at:

Australian Business Registry Services    

Locked Bag 6000          

ALBURY NSW 2640

Foreign Directors

Foreign directors can currently only apply for a DIN by filling out a paper application.

Steps for a Paper Application

1. Gather supporting materials including certified copies of one primary identity document and one secondary identity document or two primary identity documents and any translation documents.
   
   
2. Fill out the form available.
   
   
3. Print and submit the paper application and supporting materials to the ABRS.

What to do after acquiring a DIN

Once the DIN is issued, the director should provide it to each company of which they are a director.  Companies should keep the DIN on file as these are likely to be required for ASIC filings in the future.

Penalties for non-compliance

Penalties for non-compliance include an infringement notice or civil and criminal penalties. There is also civil liability for accessorial liability. Penalties are also associated with conduct that would undermine the DIN regime. For example, there are criminal penalties for deliberately providing false identity information to the ABRS, intentionally providing a false DIN to a government body or relevant body corporate, or intentionally applying for multiple DINs.

See the ABRS website for further information and developments.