In its 2020 Budget Digital Business Plan, the Australian government announced the full implementation of the Modernising Business Registers (MBR) program. The program is designed to both establish the new Australian Business Registry Services (ABRS), and enhance how businesses register and manage their information with the government.
If a director of an organisation is registered under the Corporations Act fails to apply for a DIN within the applicable time frame, they can face a civil penalty of 5,000 penalty units (which is currently $1,110,000) or three times the benefit derived, or detriment avoided because of the contravention (whichever number is higher).
Here is what you need to know.
1. Director identification number definition
A 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.
The number is 15 digits long and is 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 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 yours forever, 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 helps prevent fraudulent or false IDs from being used, which makes it easier for regulators 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.
Additionally, various groups including employees, creditors and shareholders are entitled to know the names of a company’s directors.
3. People who don’t need a director ID
See the attached list of people who do not need a director ID
- A company secretary but not a director
- acting as an external administrator of a company
- running a business as a sole trader or partnership
- referred to as a director in your job title but have not been appointed as a director under the Corporations Act or the CATSI Act
- A director of a registered charity with an organisation type that is not registered with ASIC or ORIC to operate throughout Australia
- An officer of an unincorporated association, cooperative or incorporated association established under state or territory legislation, unless the organisation is also a registered Australian body.
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, a registered Australian body, a registered foreign company, an Aboriginal and Torres Strait Islander corporation, or a 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. Under the CATSI Act, a director must be at least 18 years old, a member of the Aboriginal and Torres Strait Islander corporation and an Aboriginal and Torres Strait Islander person, and not disqualified from managing a corporation, unless permitted by the Registrar.
Finally, some people 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
Starting in 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 become a director under the Corporations Act, then:
If you become a director under the CATSI Act, then:
To apply (Domestic residents):
- Verify your identity
- Apply for your director ID through ABRS
- Provide Director Identification Number to ASIC/Tax Agent
It is free to apply for your director identification number, but you must apply for your own number and verify your identity. No one else can apply for the ID on your behalf.
Important Note Regarding International Residents
If you have a Tax File Number, you will be able to conduct this process via MyGovID.
If you do not have a Tax File Number, you will need to do a paper application. There are two important details here. You must get all your documents certified by the notary public or any of the staff at your nearest Australian consulate or high commission.
If your documents are not in English, you will need to arrange for those documents to be translated into English by a certified translator.
For more information on the director identification number, visit the Australian Government Australian Taxation Office on Modernising Business Registers or the Australian Business Registry Services site with a full overview of the Director Identification Number process.