Nov 2021 2 Minutes
New ID requirement for directors
Company directors need to verify their identity as part of a new director identification number (director ID) requirement.
A director ID is a unique identifier that a director will apply for once and keep forever - which will help prevent the use of false or fraudulent director identities.
Australian directors have a year to apply for their unique director identification numbers before fines of more than $1.1 million kick in.
Company directors must apply for a DIN by 30 November next year, and directors of Indigenous corporations that are governed by the Corporations (Aboriginal and Torres Strait Islander) Act 2006 must apply for the unique identifier by 30 November 2023.
The deadline was confirmed in Corporations (Director Identification Numbers—Transitional Application Period) Instrument 2021 made by the Minister for Superannuation, Financial Services and the Digital Economy Jane Hume.
DIN applications are free and will open next month on the newly established Australian Business Registry Service, a single platform administered by the taxation commissioner that brings together ASIC’s 31 business registers and the Australian Business Register.
Directors must personally apply for DINs and will be required to produce myGov IDs, and two identity documents from a list that includes bank-account details, super-account details, ATO notices of assessment, dividend statements, Centrelink payment summaries, and PAYG summaries.
Directors appointed between 1 November and 4 April next year will have just 28 days after appointment to apply for DINs. Directors appointed from 5 April 2022 will be required to apply for DINs before being appointed.
Directors who fail to apply for DINs within the stipulated deadlines can face criminal and civil penalties of 5000 units, which at the moment amounts to $1.11 million. Directors of a CATSI organisation can face penalties of up to $200,000.
Penalties will also apply for conduct that undermines the new requirements, including providing false identity information and intentionally applying for several DINs.
More than 2.5 million directors will need DINs. They will be permanent, even if holders cease to be directors, change their names, or move interstate or overseas.
We will be in contact with our clients over the coming months to ensure that they are all compliant with the new requirements. For further information, please visit the Australian Business Registry Services website.