Legislation was recently passed to bring in a new registration system for directors of companies in Australia.
Under the new regime, every director will be assigned a unique identifier known as a Director Identification Number (DIN) that will stay with them across all companies they are, or become, a director of.
Do I need to get a DIN?
If you are a director, you will need a DIN.
If you are not yet a Director, you can apply for a DIN, provided you will become a director within 12 months of applying.
When do I need to get one?
The exact start date for the system has not been determined yet, but all reports suggest it will be introduced in early 2021 or before June 2022 at the latest.
When the system is introduced, a 12-month transition period will commence where:
- a new director will be required to apply for a DIN within 28 days of appointment, and
- existing Directors will be given a grace period to apply for a DIN.
When the 12-month transition period expires, a new director must register for a DIN before being appointed.
How do I get one?
Only the Registrar will have the power to cancel, change, or reissue a DIN. The exact process has not been confirmed yet, but we do know each individual will be required to verify their identity.
What happens if I do not get a DIN?
There can be significant financial and criminal penalties if you:
- fail to apply for a DIN
- provide false information when applying for a DIN, or
- apply for multiple DINs.
It’s not small penalties either – it could be hundreds of thousands [even millions] of dollars and potentially lead to imprisonment. Therefore, it is important to get it right when the time comes.
Where to from here?
Given the implications of getting it wrong, directors, companies and aspiring start-ups should be prepared. Make sure you are across the upcoming changes and speak to your accountant or lawyer to ensure you are ready to organise a DIN when the time comes.