Understanding the new Director Identification Number
The Australian government announced the implementation of the Modernising Business Registers program as part of the 2020 Budget Digital Business Plan. The program will establish an Australian Business Registry Services (ABRS) to enhance how businesses register and manage their information with the government.
The ABRS will roll out progressively between 2021 and 2024, with the first change being that business directors must obtain a Director Identification Number (DIN). For most Directors, the due date will be 30 November 2022 however a new appointment as a director prior to that time will require you to acquire a DIN at that time.
Here is what you need to know.
1. Director identification number definition
The director identification number is a unique number you as a director apply for once and keep forever. It’s designed to prevent the false or fraudulent use of your identity and to ensure each director has a unique director record. It will be added to every company of which you are a director.
The number is 15 digits long and will be allocated to any director—or someone who plans to become a director—who has verified their identity with the ABRS. All Australian director identification numbers will start with the digits 036 (Australia’s country code under International Standard ISO 3166), and end with an 11-digit number plus one digit designed for error detection.
This ID number is a permanent personal identifier, even if you change companies, stop being a director, change your name or move overseas.
2. Why you need a director ID
Verifying your identity with the ABRS is intended to help prevent fraudulent or false IDs being used. The intent is for regulators to be able to trace directors’ relationships with companies over time and identify and eliminate unlawful director activity. It safeguards your identity and reduces the chance of identity fraud. A director ID will not be searchable by the public.
The importance of safeguarding confidential personal information used in the application process, and cyber security awareness, cannot be over-emphasised.
Additionally, various groups including employees, creditors and shareholders are entitled to know the names of a company’s directors.
3. Who must obtain a director ID
Any eligible officer of a company, including people who are appointed as a director or an alternate director of a company must obtain a director ID. This includes people who are a director of a company, registered Australian body, registered foreign company, Aboriginal and Torres Strait Islander corporation, or corporate trustee.
Under the Corporations Act, a director must be at least 18 years old and cannot be disqualified from managing corporations, unless ASIC or the Court has given permission. There are similar, although slightly different rules under the CATSI Act for Aboriginal and Torres Strait Islander corporations and persons.
There are some people who do not need an ID, such as are those who are a company secretary but not a director; a company’s external administrator; running a business as a sole trader or partnership; or have “director” in the job title, but were not appointed officially as a director under the Corporations Act or the CATSI Act.
Find out more on who needs to apply and when, at the Australian Business Registry Services site.
4. Applying for a director ID
From November 2021 you must apply for a director ID if you meet the director criteria outlined above. Your deadline depends on the date you became a director. If you became a director under the Corporations Act, then:
- On or before 31 October 2021, you must apply by 30 November 2022 (this will apply for many directors of stable companies and corporate trustees of discretionary trusts and self managed super funds)
- Between 1 November 2021 and 4 April 2022, you must apply within 28 days of appointment
- From 5 April 2022 on, you must apply before appointment.
Application details are described here https://www.abrs.gov.au/director-identification-number/apply-director-identification-number. In summary:
- Set up your myGovID
- Gather your documents, including your tax file number (TFN), your residential address and ID verification
- Login to ABRS and apply
It is free to apply for your director identification number, but you must apply for your own number and verify your identity. Note that an accountant cannot apply for an ID on behalf of a director (although there will no doubt be some clients needing assistance with the task). Those without a myGovID will still be able to apply by phone or written application.
5. myGovID – time to get on board (there is no avoiding it…)
The myGovID process is becoming increasingly common across government in areas such as ATO, Centrelink, NDIS, Medicare (including Covid vaccine registers), My Health Record, so if you are not already signed up it is worth taking the time and effort to do so. You may use this ID frequently, so ensure you understand the sign in and communication process.
There will be a process to apply for a DIN without a myGovID via phone or mail however we don’t expect it to be easy.
Despite a November 2021 commencement the ABRS processes are still in beta phase and we expect a bumpy start. As we learn more we will keep you updated.
To guide you along the way, we may integrate reminders on the DIN process with your annual company statement review process.