As a CFO, regulatory and risk management responsibilities are an increasing focus, with Boards relying on you to communicate on and ensure compliance with changing regulations.
With this in mind, a new requirement that you should be communicating to management and the Board is that of all directors to obtain a Director Identification Number (DIN). This requirement commenced on 1 November 2021.
A DIN is a unique identifier that has been introduced by the Commonwealth to combat illegal phoenixing activity, to help reduce fraud and fictitious behaviours and to enable tracking of directors and their relationships with different companies. Proof of identify will improve traceability and prevent the existence of fictitious directors and prevent unscrupulous parties from installing ‘dummy directors’ who are unaware of their position and are used to ‘take the fall’.
Once a director has applied for and received their DIN, they will keep it permanently, even if they cease to be a director or move overseas. Read our previous article on the scheme here, to find out more about the scheme, its governing legislation and penalties that apply should a director fail to obtain a DIN within the prescribed timeframe.
Who needs a DIN?
Directors of Australian registered bodies or of a foreign company registered with ASIC and carrying on business in Australia (regardless of where you live). Those who wish to become a director in the future will also need a DIN.
When do directors need to apply?
This is dependent on the date the applicant became a director, as set out below.
|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 appointment|
|From 5 April 2022||Before appointment|
How should directors apply?
The fastest way for your directors to receive their DIN is to apply online via the myGov ID app using the following steps:
1.Set up myGovID – note that myGovID (an app that can be downloaded to your smart device and provides access to government online services including myGov) is different to myGov (an account that links services such as the ATO, Centrelink and Medicare).
2. Gather identification documents – including tax file number, residential address (as held by the ATO) and two of the following identity verification documents:
- Bank account details
- ATO notice of assessment
- Super account details
- Dividend statement
- Centrelink payment summary
- PAYG payment summary
3. Complete DIN application – once the applicant’s identity is verified in myGovID, they can complete their application via ABRS online.
Applications can also be made by phone and paper. Applying by phone may be the simplest option for older or less tech savvy Directors. Find out more here.
Foreign directors will need to lodge a paper application and provide:
- A certified copy of one primary document, such as a foreign birth certificate or foreign passport, and
- A certified copy of one secondary document, such as a national photo ID or driver’s license.
These documents must be certified by Notary publics or staff at an Australian embassy, high commission or consulate, including consulates headed by Austrade honorary consuls. The paper application is available to download here.
What should I advise our directors to do with their DIN once they have it?
When your directors receive their DIN, they need to give it to their corporation record-holder. This could be you, as the CFO, your company secretary, another director, a contact person or an authorised agent of the company.
If we provide corporate secretarial services for your company, we’ll be in touch to obtain your DIN over the course of the next year if you have not already supplied it.