The objective of a Director Identification Number (“DIN”) for company directors is to assist with identifying company conduct that involves dummy directors and phoenix transactions.
The Treasury Laws Amendment Act 2020 (“the Act”) was passed with the aim of centralising Australian business registers. Under the Act, all current and future directors of an Australian corporation must hold a unique DIN.
The legislation states that every person holding the position of director, whether for an Australian corporation or any registered foreign corporation, must confirm their identity by obtaining a personal DIN. The DIN is then required to be used by each director for all respective director appointments.
The DIN regime benefits the Australian business community by:
- increasing a director’s accountability and traceability;
- limiting potential fraudulent activity and phoenixing;
- preventing the use of fictitious identities;
- assisting administrators and liquidators in increasing the accessibility of important information;
- making a director’s historic relationship with a company more readily available;
- ensuring that sensitive personal director information available on publicly accessible corporate registers is no longer available.
It is important that all company directors are aware of the Act and their obligations under the Act. As soon as a DIN is obtained, this must be registered against all existing director appointments.
Penalties can be imposed for directors who do not apply for a DIN within the allowed time and who otherwise contravene the legislation. The Registrar to the Commonwealth Business Registry is the appointed corporate regulator.
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