The Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019 received Royal Assent on June 22, 2020 and is set to commence within the next two years. The Bill amends the Corporations Act to require all directors of Australian companies to hold a unique Director Identification Number (DIN) issued and administered by the Australian Securities and Investments Commission (ASIC).
- The legislation introduces the Modernising Business Registers (MBR) Program to unify the Australian Business Register (ABR) and 31 registers administered by ASIC.
- The unified Commonwealth business registers will be operated by the ABR.
- The DIN is intended to provide traceability of a directors relationships across companies, to directly tackle phoenix activity and enable the prosecution of culpable directors in Australia.
- Every director will need to register to receive a permanent, unique director identification number. They will be required to submit prescribed personal information and undergo a 100-point identity verification with ASIC.
- The ABR and existing ASIC registers will continue to operate as per normal, until the new registry service is in place.
Impact on directors and companies
Currently, directors can have multiple records within ASIC systems with minor variations of name (with a middle name, without a middle name), address and/or other personal details. The legislation will mean that a director will keep a DIN identifier for life and across appointments at each company they are a director of. Even if he or she ceases to be a director, the same identifier will not be re-issued to any other person.
Transitional requirements for the first 12 months of the program will allow a new company director to apply for a DIN within 28 days of their appointment. After the transition period, directors will be required to apply for a DIN prior to being appointed. For existing directors, there will be a grace period to continue in their current roles.
The legislation includes criminal and civil penalties for applying for multiple DINs or misrepresenting a DIN.
When will the DIN come in?
We expect that the DIN will be implemented in the first half of 2021. However, there are some practical challenges which will affect timing. Combining the ABR (administered by the Australian Taxation Office) with the ASIC business registers is a major project and there are hurdles to overcome regarding concerns about privacy.
- Marsh & Partners will continue to update you as news about the implementation and timing of this new program is released.
- Prior to the new regime’s operation, we will contact all clients who are company directors to ensure that your registrations are compliant with the new regulations.
- If you have any questions regarding the impact of this legislation on your business operations, please feel free to contact us for a chat.
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