Are you a Company Director? If so, you will need to register and obtain a Director Identification Number by 30 November.
From 30 November 2022 all Company Directors (including SMSF Corporate Trustee Directors, charities and not-for-profit organisations that are public companies limited by guarantee), must have a Director Identification Number (DIN) – a unique number used to identify directors of companies personally, rather than by company.
Who needs to apply for a director ID?
You need a director ID if you are a director of a:
- company registered with the Australian Securities and Investments Commission (ASIC) or the Office of the Registrar of Indigenous Corporations (ORIC)
- corporate trustee, for example of a self-managed super fund (SMSF)
- registered Australian body, for example an incorporated association registered with ASIC, like sporting clubs that trade outside of their state or territory
- charity or not-for-profit organisation that is a company or Aboriginal and Torres Strait Islander Corporation.
Why you need a director ID
Shareholders, employees, creditors, consumers, external administrators and regulators are entitled to know the names and certain details of the directors of a company.
All directors are required by law to verify their identity before receiving a director ID. This is important because it will help to:
- prevent the use of false or fraudulent director identities
- make it easier for external administrators and regulators to trace directors’ relationships with companies over time
- identify and eliminate director involvement in unlawful activity, such as illegal phoenix activity.
Illegal phoenix activity is when a company is liquidated, wound up or abandoned to avoid paying its debts. A new company is then started to continue the same business activities without the debt. When this happens:
- employees miss out on wages, superannuation, and entitlements
- suppliers or sub-contractors are left unpaid
- other businesses are put at a competitive disadvantage
- the community misses out on revenue that could have contributed to community services.
Failure to have a DIN when required to do so can lead to maximum penalties for individuals: $13,200 (criminal); $1,100,000 (civil) under s1272C of the Corporations Act 2011.
These fines are unlikely to be covered by any Insurance policy you may currently hold for your Business.
