Director Identification Number (DIN)
In the words of British poet John Masefield’s poem, Sea Fever, ‘And all I ask is a tall ship and a star to steer her by;’ we find is not too dissimilar to a director steering their corporate ship on a successful business journey. However, back in 1916, when Masefield’s poetic works were in a much simpler world, we find that today there are still more new rules and regulations pertaining to directors, this time relating to their identity.
This new director identity situation applies to all company directors, registered Australian bodies, a registered foreign company or Aboriginal and Torres Strait Islander corporations.
Directors under the Corporations Act 2001 have always been required to act in good faith in the interests of the company and for proper purposes, with reasonable care and without conflict. So, to keep directors honest, once they have their DIN, they will be traceable in their capacity with different companies. This measure prevents the appointment of fictitious individuals because a director will have to prove their identity to acquire their DIN. Another reason is to prevent directors from engaging in phoenix actions, i.e. shutting down a company to avoid its debts and transferring the assets to a newly incorporated body. Besides this, if directors want to conduct business with government bodies, they will need their DIN.
The legislation now exists, and if someone is or will be a director on or before 31 October 2021, then the deadline to apply is by 30 November 2022.
If a director is appointed between 1 November 2021 and 4 April 2022, then that person must apply within 28 days of appointment.
If a director is appointed from 5 April 2022, then that person must apply before being appointed.
Applications commence in November 2021. The applications can be made in one of three ways, and the DIN application is free of charge.
Firstly, through myGovID, if the director has this because it is different to myGov; otherwise, they will have to set one up. Once this is done, the director will be required to prove their identity when completing the DIN application.
Secondly, an application can be made by phone; again, proof of identity will be required.
The third alternative is a paper form application and will be available from November 2021.
Then, when this task is done, the director will receive their unique Director Identification Number (DIN), and they can steer their corporate ship in safety once again.