The Australian Government is working to modernise the Australian Business Register. As part of this project, as of November 1st 2021, The Australian Government has introduced the Director Identification Number (DIN) system.
What is a Director ID?
A Director Identification Number is a unique number given to each company director (or each person who intends to become a company director) in Australia who has verified their identity with the Australian Business Registry Service (ABRS).
What are Director IDs For?
The use of Director IDs will help to ensure that the names registered with the regulator as directors of a company are real people. Using fictitious names is one way that people have illegally used companies for personal gain. The director ID will help external administrators and regulators to clarify and trace a director’s relationship with the different companies they may be involved with over time.
The director identification number is intended to help identify and assist in preventing a range of illegal activity using Australian companies from occurring. For example phoenix activity (deliberate liquidation of a company with intent to avoid tax or other liabilities) and director fraud (use of company or investor money by directors for personal gain).
Why have Director IDs been introduced?
A key reason for introducing the Director ID is to discourage and prevent directors from using Australian companies for unlawful activities such as illegal phoenix activity.
It has been recognised that some directors choose to use the company structure to benefit themselves or to escape liability and/or debt when a company is liquidated, wound up or abandoned. For example a person may engage in illegal phoenix activity, where a company is liquidated (including the transfer of assets to a new company) with the intent to avoid tax or other liabilities. The directors then start a new company to carry on the same business activities but without the debt and/or liabilities of the old company. This commonly has significant ramifications for other people, such as employees who then miss out on wages, superannuation and entitlements, and suppliers or subcontractors being left unpaid.
Why do I need a Director ID?
The Australian Government has made it a requirement of being a director that you obtain a Director ID, thereby verifying your identity with the Australian Business Register. This information will be contained in the Australian Business Register.
People or entities with an entitlement to know the names and specified publishable details of the directors of a company will then be able to use the information to determine who was a director of a company at any given time, and determine a person’s relationship to various companies over time.
A director ID will provide clarity and transparency to those entitled to know the names and publishable details of the directors of a company (such as shareholders, employees, creditors, consumers, external administrators and regulators).
Put simply, the use of Director IDs will discourage directors from engaging in illegal activity by introducing a more transparent method to trace a director’s relationships with companies.
What is the format of a Director ID?
Director IDs are a 15 digit number that begins with 036 (the country code for Australia under International Standard ISO 3166), followed by an 11 digit number plus one ‘check’ digit to help detect errors.
Who needs a Director ID?
If you have been (or intend to be, pending appointment) appointed as a director or an alternate director acting in that capacity, of a company or a registered Australian body or a registered foreign company under the Corporations Act 2001 (Corporations Act), or an Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act), then you will need a director ID.
The ABRS has a list of examples to help identity if you need to apply.
I am on the board of an NFP organisation, do I need a Director ID?
If you are a director of an NFP organisation that is a company (is registered with Australian Securities and Investments Commission (ASIC) or the Office of the Registrar of Indigenous Corporations (ORIC)), then yes you will need a director ID.
If I am a committee member of an incorporated association, cooperative or unincorporated association do I need a director ID?
If you are a committee member of an unincorporated association, cooperative or incorporated association (created under various State or territory legislation) at this stage you will only need a director ID if your organisation is also a registered Australian body (is registered with ASIC or ORIC). Otherwise, no you will not need a director ID.
Do I need a Director ID for each (qualifying) board I am on?
You will only ever need one Director ID. Your DIN is connected to your verified identity and will remain linked to you even if you change companies, organisations, change your name, stop being a director, or change your location to interstate or overseas.
Who doesn’t need a Director ID?
Some people won’t need a director ID, for example if you are called a ‘director’ in your job title but are not appointed as a director under the Corporations Act or the Corporations (Aboriginal and Torres Strait Islander) (CATSI) Act. You also won’t need a director ID to run a business as a sole trader or partnership, or are a company secretary but not a director, or are acting as an external administrator of a company.
The ABRS has a list of examples to help identity if you need to apply.
What are my Director ID obligations?
You must apply for a director ID at the correct time for your situation. If you are directed to apply for a director ID by the Registrar, you must do so when asked. Additionally, you must not apply for more than one director ID or misrepresent your director ID to anyone, including your organisation.
If you are unable to apply for your director ID in time, it is possible to complete an application for an extension of time.
It is important to note that if you are required to apply for a director ID, it is a criminal offence to not apply on time. Any director ID offences are enforced by ASIC.
Does it cost anything to obtain a Director ID?
It is free to apply for your Director ID, you can do it online with the myGovID app.
Can my BAS or ASIC agent apply for a Director ID on my behalf?
Your authorised BAS or ASIC agent can help you decide if you need to apply, but you must verify your identity and apply for your director ID yourself.
When do I need to Apply for my Director ID?
If you are a director under the Corporations Act:
If you are already a director or became a director before 31 October 2021, you must apply by 30 November 2022.
If you become a director between 1 November 2021 and 4 April 2022 then you must apply within 28 days of your appointment.
If you are expecting to become a director from 5 April 2022 onwards, you must apply before your appointment.
If you are a director under the CATSI Act:
If you are already a director or become a director before 31 October 2022, you must apply by 30 November 2023.
If you are expecting to become a director from 1 November 2022 onwards, you must apply before appointment.
How do I apply for a Director ID?
Apply for your Director ID by going to https://abrs.gov.au
How do I keep up to date with my Responsibilities as a Director?
The implementation of a Director ID to verify and trace individual directors is a very good reason for all directors and prospective directors to make sure they are 100% clear and up-to-date on their responsibilities, duties, obligations and liabilities in relation to their company, organisation and their directorship. You and your board can use BoardWise to stay current.
How do I use my Director ID?
Once you have registered for your Director ID with the ABRS you will need to provide your new ID to the record-holder at your company or Aboriginal and Torres Strait Islander corporation.
Who is the record-holder at my company?
The record-holder at your company or Aboriginal and Torres Strait Islander corporation may be an authorised agent of the company, a fellow director or the company secretary. If you are unsure it is best to just ask.
Do I need to provide my Director ID directly to the Australian Securities and Investments Commission?
As of writing these is no requirement for you to provide your Director ID directly to ASIC. This part of the process, updating officeholder records with ASIC, will be done by the company record-holder.
ASIC Director ID Information
ABRS Director ID Information
ABRS Apply for a Director ID
For further information, clarification or assistance with matters relating to director identification numbers please visit https://www.abrs.gov.au/director-identification-number