Permanent Director Identification Numbers

For some time, the Government has been concerned about Australia’s inability to deal with phoenix activity, which creates an unfair advantage for companies which engage in wrongful activity and costs the economy billions of dollars each year.

The Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019 (Bill) is the Government’s latest measure to combat illegal phoenixing activity.

The Bill will amend the Corporations Act 2001 (Cth), requiring all company directors, including foreign and alternate directors, to hold a unique Director Identification Number (DIN) administered by ASIC.

Existing company directors will be notified by ASIC of the requirements and be given a time frame to make an application for a DIN.

New company directors, and any person intending to become a director, must make an application for a DIN prior to consenting to act as a Director.

There will be a transitional provision for 12 months, allowing new company directors to apply for a DIN within 28 days of their appointment to that role.

At this stage, directors of unincorporated entities, such as joint ventures and partnerships, will not be required to have a DIN.

Directors who fail to apply for a DIN within the relevant time frame may be liable for civil and criminal penalties. Therefore, it is essential for directors to be aware of these changes and prepare for DIN compliance moving forward.

The Bill is currently awaiting royal assent, with the requirements expected to begin in the first half of 2021.

If you require advice in relation to your obligations as a company director, please do not hesitate to contact:

Alexander Gulli
Lawyer
T: 03 5226 8573
E: agulli@ha.legal

Paul Gray
Principal
T: 03 5225 5231
E: pgray@ha.legal

Rod Payne
Principal
T: 03 5226 8541
E: rpayne@ha.legal

Alasdair Woodford
Senior Associate
T: 03 5225 5217
E: awoodford@ha.legal

This article was prepared with the assistance of Hugo Le Clerc, Graduate Lawyer