Companies and their directors should be preparing for the start of the new director ID regime in November 2021.
Starting November 2021, directors of Australian companies will need to verify their identity as part of a new director ID (DIN) requirement. A director ID is a unique identifier that a director will be required to apply for once and keep forever, with applications open from November 2021 via the Australian Business Registry Services (ABRS) website. Directors will keep their DIN regardless of whether they become a director of another company, cease to be a director, change their name or move interstate/overseas.
From November 2021, directors of Australian companies will be able to use the ABRS, established by the Modernising Business Registers (MBR) Program, to apply for a DIN. Directors must apply for a DIN themselves (and cannot have anyone else apply on their behalf) given they will need to verify their own identity. In addition, the Australian Taxation Office (ATO) has released the relevant timeframes within which directors must apply for their DIN as well as guidance on how to apply for one.
Who needs to apply?
A person must apply for a DIN if they are an eligible officer of:
- a company, a registered Australian body or a registered foreign company under the Corporations Act 2001 (Cth); and/or
- an Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (CATSI Act).
An eligible officer is a person who is appointed as (or will be appointed as come November 2021):
- a director; or
- an alternate director who is acting in that capacity.
Deadlines to apply for a DIN
Directors of corporations governed by the Corporations Act must apply for a DIN within the timeframes set out in the table below. Although the requirement is to apply within 28 days of appointment during the transitional period, it will still be open to directors to apply before they are appointed.
The later dates for CATSI Act directors is due to the MBR Program commencing the issuing of DINs to CATSI Act directors after Corporations Act directors have been fully onboarded into the system.
If an individual has applied for, or received, a DIN under one Act, that individual does not need to apply for a DIN under the other Act.
If a director cannot apply by the date they need to, they can apply for an extension. Further details on how to apply for such an extension will be made available on the ABRS website in November 2021.
What you need to apply for a DIN
From November 2021, directors can apply for a DIN by logging into ABRS online by using the myGovID app. In order to apply for a DIN, directors will be required to have the following on hand:
- a standard or strong identity strength myGovID;
- their tax file number;
- their residential address as held by the ATO; and
- information from two documents to verify their identity (for example, bank account details, an ATO notice of assessment, superannuation account details, a dividend statement, a Centrelink payment summary or a PAYG payment summary).
If the director does not have a myGovID, they can find information on how to download the app here. Alternatively, if a director cannot obtain a myGovID, they will be able to apply over the phone or in paper form. Details about the various options, and the requirements for each, are available on the ABRS website here.
Directors residing outside of Australia
In addition to the information requested on the online form set out above, directors residing outside of Australia will need to provide certified copies of one primary identity document (for example, a foreign or Australian birth certificate or passport) and one secondary identity document (for example, a national photo identification card or foreign government identification) to support their application for a DIN. For more information on the documents required in this instance, please see the ABRS website here.
Directors must ensure that they meet their obligations under the new DIN regime. These obligations include:
- applying for a DIN within the relevant timeframe applicable to them;
- applying for a DIN when directed by the Registrar to do so;
- not applying for multiple DINs (unless otherwise directed by the Registrar to do so);
- not misrepresenting their DIN to a Commonwealth body, company, registered Australian body or Aboriginal and Torres Strait Islander corporation; and
- not being involved in a breach of the above obligations.
If directors fail to meet their obligations:
- they may be issued with an infringement notice; and
- there may be civil or criminal penalties imposed (for example, directors who fail to apply for a DIN will be committing an offence of strict liability which, under the Corporations Act, currently carries a maximum civil penalty of the greater of A$1,050,000 (5,000 penalty units) or three times the benefit derived or detriment avoided because of the contravention and a maximum criminal penalty of A$12,600 (60 penalty units)).
How companies can get ready
All Australian companies should be aware of the incoming compliance requirements outlined above. In particular, now that the identification verification requirements have been released, we recommend companies begin informing their directors of their obligations and encouraging them to start collating their personal identification documents (and in particular, the documents of their foreign directors which could take more time) so that applications can be submitted in a timely manner. We also suggest encouraging directors to apply for a myGovID (if they do not have one already) now in preparation for submitting their application for a DIN.