The package of Bills creates a new Commonwealth business registry regime, which will initially apply to the business registers administered by ASIC and the Australian Business Register. Additional government registers may be brought into the regime by future legislative reforms. Currently, the Registers are kept under the Corporations Act, the ABN Act, the Business Names Act, the Credit Act, and the SIS Act.
The information in the Registers will be subject to uniform rules that are flexible, technology neutral and governance neutral.
The Commonwealth Registers Bill 2019 commences the day after Royal Assent.
Director Identification Number
The Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019 amends the Corporations Act and the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act) to introduce a director identification number (DIN) requirement.
It sets out:
• the persons to which the new requirement applies;
• the obligations associated with the new requirement;
• how the new requirement is administered; and
• the consequences of contravening the new law.
The DIN will require all directors to confirm their identity; it will be a unique identifier for each person who consents to be a director. The person will keep that unique identifier permanently, even if they cease to be a director. It is not intended that a person’s DIN will ever be re-issued to someone else or that one person will ever be issued with more than one DIN (except in limited circumstances such as when a record is corrupted).
The DIN will provide traceability of a director’s relationships across companies, enabling better tracking of directors of failed companies and will prevent the use of fictitious identities. This will assist regulators and external administrators to investigate a director’s involvement in what may be repeated unlawful activity including illegal phoenix activity.
Before becoming a director
Under the new requirement, a person appointed as a director of a body corporate registered under the Corporations Act or the CATSI Act must apply to the registrar for a DIN before they are appointed a director. After receiving an application, the registrar must provide the director with a DIN if the registrar is satisfied that the director’s identity has been established.
Existing directors will be required to obtain a unique ID number which they will keep permanently, even if they cease to be a company director.
The new requirement contains transitional provisions that apply in relation to a person that is appointed as a director at the time the new requirement starts to apply. Such a person has the period specified in a legislative instrument made by the Minister to apply for a DIN. In addition, during the first 12 months of the operation of the new requirement, a person who is appointed as a director will have an additional 28 days to apply for a DIN (that is, for the first 12 months a person must apply for a DIN within 28 days of being appointed as a director).
There will be civil and criminal penalties for directors who fail to apply for an identification number within a timeframe which will be set out by the relevant minister once the law passes. The change commences two years after Royal Assent or on such earlier date as may be proclaimed by the Governor-General.