On 1 October 2018, the Government released draft legislation, Commonwealth Registers Bill 2018 and Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2018, proposing to implement its 2018-19 Federal Budget measures to modernise the ABR and ASIC business registers and introduce Director Identification Numbers (DINs).
The legislative package proposes the creation of a new Act (Commonwealth Registers Act 2018), as well as amendments to a range of existing laws.
Initially, the existing business registers administered by ASIC and the ABR will be moved onto a single platform to be administered by the ABR within the ATO. This includes the registers for companies, business names and ABNs (among other things). Additional registers may also be brought into the new regime under future legislative reforms.
The draft legislation will also introduce a legal framework for proposed DINs. This is intended to rectify the fact that while the law currently requires that directors’ details be lodged with ASIC, there is no requirement for the regulator to verify the identity of directors.
Broadly, the requirement to obtain a DIN will initially apply only to appointed directors and acting alternate directors of:
- a company, registered foreign company or registered Australian body (which are registered under the Corporations Act 2001(Cth); or
- an Aboriginal and Torres Strait Islander corporation (which are registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006).
The DIN will require all directors to confirm their identity and will be a unique identifier for each person who consents to being a director. The person will keep that unique identifier even if their directorship with a particular company ceases.
This is intended to provide traceability of a director’s relationships across companies over time and to assist regulators and external administrators in investigating a director’s potential involvement with unlawful activity.
Existing directors will have 15 months to apply from the start date of the new requirement. A person appointed as a director of a body corporate after this start date would be required to apply for a DIN within 28 days unless an exemption applies.
Civil and criminal penalties may apply to directors who fail to apply for a DIN within the applicable timeframes.