Australian directors and corporations now face a significant new administrative burden as the long-time-coming registry modernisation legislation passed without amendment on 12 June 2020. This will bring in a new Director Identification Number (DIN) regime as the ATO commits to rolling out the new unified business registry service in early 2021.
This new register will upgrade and consolidate 32 separate business registers, including the Australian Business Register (ABR), into a single system.
“The Modernising Business Registers program will deliver a modern, whole-of-government business register platform with high levels of reliability, accessibility and security, which will reduce the regulatory burden for business,” the ATO said in its corporate plan.
They will also introduce director identification numbers to help address illegal phoenixing, and help protect honest businesses and individuals from directors involved in unlawful activity.
The legal framework has established that the DIN will require all existing and new directors to confirm their identity to a unique identifier that will be kept permanently, even if they cease to be a director. Timelines are yet to be advised.
New directors will have to apply for a DIN before they are appointed as a director, unless the period is extended by the regulations or unless they are provided an exemption or extension by the registrar.
Those appointed as a director within the first 12 months of the new regime’s operation will be granted an additional 28 days to apply for a DIN.
A transitional period for existing directors will be specified by a legislative instrument made by the minister.
There will be civil and criminal penalties for directors that fail to apply for a DIN within the applicable time frame, and for conduct that undermines the new requirements, including providing false identity information to the registrar or intentionally applying for multiple DINs.
Please ring Helen of our office who deals with all ASIC related matters if you have any queries.
Source: Accountants Daily