The Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019 has been introduced into the House of Representatives. It amends the Corporations Act and the Corporations (Aboriginal and Torres Strait Islander) Act 2006 to introduce a director identification number (DIN) requirement. It will commence within two years after Royal Assent. Background.
The Bill also creates a new Commonwealth business registry regime which will consolidate registries under the Corporations Act, the ABN Act, the Business Names Act, the Credit Act, and the SIS Act.
Under the new DIN 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. The person must apply before they are appointed a director unless the period is extended by the regulations or unless they are provided an exemption or extension by the registrar. 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.
The DIN 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). As such, 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.
There are civil and criminal penalties for directors that fail to apply for a DIN within the applicable timeframe.
There will be transitional provisions that apply in relation to a person that is appointed as a director at the time the new requirement starts to apply. For the first 12 months, a person must apply for a DIN within 28 days of being appointed as a director.