What’s the Director’s Identification Number (DIN)?

Originally, the deadline to apply for a Director Identification Number (also called Director ID or DIN) with ASIC was Wednesday, 30 November 2022. That is for those directors that were appointed prior to 31 October 2021. On Wednesday, Chris Jordan, ATO Commissioner of Taxation and Registrar of the Australian Business Registry Services (ABRS) announced a deadline extension. The deadline has now been extended to 14 December 2022.  

If you were appointed as a Director on or after 1 November 2021, then you should have already registered (you have to do that within 28 days of appointment).  

Best to jump on it now if you haven’t already so you don’t miss the deadline – you never know what might happen next week. Also, there have been a lot of issues technically that has taken some time for Directors to figure out, so don’t delay.  

Fines and Penalties for failure to apply for a Director Identification Number or for unlawful application

If you have an Australian company, you may be liable for a $13,000 AUD fine and directorship restriction effective 14 December 2022, if you fail to sign up and register your identity as a director with the Australian Business Registry Services (ARBS). Changes to Director Identification Numbers implemented on 1 November 2021, will impact not only directors of listed companies, but of private ones and directors of trustee companies for trusts also.  

Failing to apply for the director identity number can result in civil and criminal charges, depending on the intent of the non-compliance. ‘The Corporations Act 2001’ governs the law on the appointment of directors. Under s1272c, directors who fail to have a DIN while already appointed and functioning as a director could receive a maximum civil and criminal penalty of $1.1 million AUD and $13,200 AUD respectively.  

Failure to register for the DIN when required to as per the time allowances outlined by the ARBS results in similar fines for both civil and criminal offences and is governed by s1272D. Furthermore, there are penalties for directors who deceptively produce more than one DIN, or who misrepresent their identity with a single DIN application which are set out in s1272G and s1272H respectively. The fines in these cases both amount to a maximum civil penalty of $1.1 million AUD, and a criminal penalty of $26,640, a one-year sentence, or both. 

Exceptions to the application

Currently, if you are a retiring company director, and will relinquish the director title on or after 1 December 2022, then you are still required to register your ID. This may be subject to change however, based on a draft legislative instrument from the ABRS which can be accessed here. 

The ‘Corporations (Eligible Officer Exclusion – non-individuals and resigned directors) Determination 2022’ draft is proposed for 1 December 2022. It would introduce an instrument to apply to s272b (3) of ‘The Corporations Act 2001’. 

S272b (3) states: “The Registrar may, by legislative instrument, determine that a class of persons are not eligible officers”. The proposed instrument would allow, for the purposes of s272b (3), the specified persons to be ineligible officers if they ceased directorship immediately before 4 April 2021, or if they were directors between 4 April 2021 and 31 October 2021; and no longer hold the director title or controls, nor have a DIN. Additionally, directors are excluded who “would otherwise be an eligible officer within the meaning of the ‘Corporations Act 2001’,” i.e. if they were under 18 years of age, non – Australian residents, or if they have been suspended from directorship etc. 

In addition, corporations which fall under the Corporations (Aboriginal and Torres Strait Islander) Act 2006, have until 30 November 2023 to register their DIN.  

Feasibility concerns

The common complaint amongst Australian business owners is that the online portal through which one accesses their account and verifies their identification is difficult to operate. With only a week for roughly 1 million directors to sign up, and a peak daily intake of 28,426 sign ups as of Monday 28 November 2022, it appears likely that hundreds of thousands of fines (or at least notices) may be delivered.  

Although the government proposes that they will take a “reasonable” approach to dealing with the administration of fines, there is no solid indication that reliefs will be given to directors that are otherwise unable to fulfill the director’s ID requirements from technological issues. 

Seemingly director’s identities and ID numbers are not being processed as easily if a director has been verified on the ‘myGov’ app before being verified on the new ‘myGovID’ app. The new version of the app requires directors to resubmit their identities for verification but seems to verify new accounts who have not previously been verified through the ‘myGov’ app. Evidently the crossover of data from the older app is causing pre-verified directors from the older app to have insufficiently strong identity documents.  

Why register for the Director’s Identification Number (DIN)?

In an effort to crack down on directors escaping their debtors through the winding up process, and to prevent the ‘phoenix syndrome’ from arising out of loose policy around director identity, the Australian government has mandated that Directors verify their identity through an online portal.  

If you have been a director since or before 31 October 2021, the deadline to apply for a director ID number is 14 December 2022. Directors appointed between 1 November 2021, 4 April 2022, will have been granted a 28 day period to register from the date of their appointment. Directors that were appointed on or after 5 April 2022, needed to apply for their Director’s IDs before becoming appointed. This information, and more on who needs to apply can be found here.  

How to register for the Director’s Identification Number (DIN)?

Directors can initiate the process of retrieving a Director Identification Number by first downloading the relevant app, ‘myGovID’, which is different from the ‘myGov’ app that most directors are familiar with. This app can be downloaded on the Apple Appstore or on Google Play. When directors go to open the app, they will be prompted to input information to verify their identity. The information required can vary depending on your identity strength level. There are three tiers of identity strength; basic, standard, and strong, but only standard and strong identity strength levels are accepted for creating the ID. 

Generally, directors will be asked to input identity documents like their passport, driver’s license, and Medicare card. The next step is for directors to input their tax file number, and their residential address held by the ATO. Directors will also need to input two forms of identifying records like bank records or tax returns which the ATO has documented, or an ATO notice of assessment, APRA super fund containing an ABN, a dividend statement, or a dividend or PAYG payment summary. That information can be found here.  

You can start the process of applying for your director ID by downloading the ‘myGovID’ app  with this link. 

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