Modernising Business Registers and Director Identification Numbers

Last year the Australian parliament passed a package of legislation designed to centralise Australian business registers. The Modernising Business Register Program (MBR) will unify the Australian Business Register (ABR) and 31 registers currently administered by the Australian Securities and Investments Commission (ASIC) on a new digital registry system that will exist as a separate statutory function of the Australian Tax Office (ATO). This will include the registers for companies, business names, and Australian business numbers (ABN) amongst others.

The MBR Program will also include the introduction of a Director Identification Number (DIN), which is a unique identifier that every existing and future director of a company or a registered body will be legally required to obtain and hold permanently.

The implementation of the DIN regime is intended to increase director accountability. It is expected that requiring a unique DIN of all company directors will prevent the appointment of fictitious directors, enable directors and their relationships to companies over time to be more easily traced, and reduce the practice of phoenixing, where a new company is created to continue the business trading of a company that has been deliberately liquidated to evade debts.

Civil and criminal penalties will apply for providing misleading information when applying for a DIN, misrepresenting a DIN to a government body, and for failure to apply for a DIN within the required timeframe. Persons are prohibited from applying for multiple DINs and all directors of companies will hold their DIN forever, even if they cease to be a director of any company. Existing regulatory and enforcement functions of ASIC will not be impacted by the new regime.

Throughout 2019 and 2020, thorough considerations by parliament were made and the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) (Act) received Royal Assent on 22 June 2020.

The commencement date of the new DIN regime has yet to be set, but will be no later than 22nd June 2022. While no action is required yet, the following has been announced:

·         Persons appointed as directors within 12 months of the commencement date are required to apply for a DIN within 28 days of their appointment as a director.

·         Persons appointed as a director after 12 months of the commencement date are required to apply for a DIN prior to their appointment as a director.

·         Existing and newly appointed directors appointed under the Corporations Act 2001 are required to apply for a DIN by 30th November 2022 to obtain a DIN.

·         Existing and newly appointed directors of Indigenous corporations that are governed by the Corporations (Aboriginal and Torres Strait Islander) Act 2006 are required to apply for a DIN by 30th November 2023.

We will be in contact with clients regarding their upcoming DIN application requirements as more details of the new legislation are released.