If you’re the director of a company, you’ve got a lot of responsibilities on your plate. It can be a full-on buffet of managing business performance, financials, and more. As you may have heard, the federal government is rolling out a new Director Identification Number (DIN) program to streamline processes and more easily identify who is actually responsible for companies.
In this blog we’ll breaking down everything you need to know about the DIN program, from what it’s being used for, when and how to apply, as well as why this is a positive step forward for Australian businesses and the economy.
What is the Director Identification Number (DIN)?
The new Director Identification Number (DIN) is a 15 digit identification number that will be assigned to company directors by the Australian Business Registry Service (ABRS). The DIN program is part of the Modernising Business Registers initiative which is designed to reduce the complexity of registration processes for businesses, saving time by streamlining processes and making it easier to access trusted business information.
Do I need a Director Identification Number?
Yes! If you are a current company director or are looking to start a company or will be appointed a director in the future, you will require a DIN.
You’ll need to apply for a DIN if you fall into one of the following groups:
Director of a company
Director of an Aboriginal or Torres Strait Islander corporation
Director of a public company limited by guarantee
Director of a corporate trustee
Director of a self-managed super fund
When do I need to apply?
The due dates for completing a Director Identification Number application will vary depending on when you were appointed. The following table breaks down when you need to apply depending on your circumstances.
| Date you became a director | Date you must apply |
|---|---|
| On or before 31 October 2021 | By 30 November 2022 |
| Between 1 November 2021 and 4 April 2022 | Within 28 days of being appointed |
| From 5 April 2022 | Before being appointed |
Why do I need a DIN?
This DIN is designed to help the government identify, prevent and track fraudulent business activity. The main situation they will be using Director Identification Numbers for is to identify people engaging in “phoenixing” which costs the Australian economy billions of dollars.
Phoenixing is what occurs when a company incurs liabilities and debts but instead of paying them off, the company is dissolved and a new company is formed to replace it. This kind of sounds like how Dumbledore’s Phoenix rises from its own ashes doesn’t it?
Often when phoenixing occurs, a fraudulent name is used when registering the company director to prevent the old company’s debts being tracked to the new one. By requiring a DIN for company directors, ASIC will be able to identify and track directors even if they attempt to escape debts through the act of phoenixing.
What are the benefits?
As the system is still in its infancy, we are yet to see the full impact of these changes designed to reduce fraud. If the program is successful, the economy and business owners will likely benefit from:
- Less fraud in the business industry
- Less unpaid debts costing businesses money
- Greater accountability of company directors
- Improved trust, knowing that directors are real people and not fictional entities.
What do I need to apply for a DIN?
To get your DIN, you will need the following:
- Your myGovID – myGovID is an app you keep on your smart device to authenticate you when logging into government online services. This is different to myGov which is an account that is used to access personal government services like the ATO, Centrelink or Medicare
- Your Tax File Number
- Your Residential Address that should be current with the ATO.
- 2 identity verification documents such as:
- Bank account detail
- An ATO notice of assessment
- Superannuation account details
- Dividend statement
- Centrelink payment summary
- PAYG payment summary
How do I apply for a Director Identification Number?
Good News! The process for applying for a Director Identification Number is quite simple and can take less than 5 minutes if you’re already ready to go with your myGovID!
Step 1 – Set up your myGovID
Make sure you’ve downloaded and set up the myGovID app. Your myGovID will require Standard or Strong Identity Strength to apply for a Director Identification Number.
Step 2 – Gather your documents.
Ensure you have your information on hand including your TFN and personal details as well as your identity verification documents as mentioned above.
Step 3 – Complete your application
Visit the Australian Business Registry Services (ABRS) website to complete your Director Identification Number application. You’ll be required to log in with your myGovID to complete the registration. Applications are available from November 2021.
What if I can't apply for a myGovID?
If you can’t get a myGovID with Standard or Strong Identity strength, you have a couple of options depending on your situation.
If you have an Australian Tax File Number and verification documents, you can apply over the phone with the ABRS.
If you can’t apply online or over the phone (for example you are living overseas), you can complete a paper application. You will also have to provide certified copies of your documents to verify your identity.
You can access these contact details and alternative application methods from the ABRS website.
How do I manage my Director ID?
If you have a myGovID, you can login to ABRS online to view your director ID or update your details whenever you need to.
You can:
- check your director ID number and status, including when it was issued
- view things to do, actions in progress and past activity
- edit your profile preferences and some of your personal details.
Who will be able to see my Director ID?
Your Director ID can only be disclosed to you or to:
- someone you give us permission to disclose to
- certain Commonwealth, state and territory government bodies
- courts and tribunals.
A director ID isn’t governed by the same rules or laws that apply to a tax file number (TFN). An authorised agent or company secretary must ensure that information about a company and its officeholders is:
- handled according to their legal obligations
- securely stored.
The law isn’t authorised to disclose director IDs to the public without the director’s consent. For now, your director ID will not be searchable by the public. The Registrar will consult the community about what details can be disclosed and searched in the future.
Need some more information? Speak to us today!
If you need some more information about how these changes will impact your company, our accountants are here to help. Call us today on 1300 180 630!
Don’t forget to check out our blog on Company Director Responsibilities and Duties to brush up on your knowledge and ensure your business is on track!
