Bill lapsed as federal election called
The 45th parliament of Australia was prorogued on 11 April 2019. This means that the Bill to which this event relates to has lapsed.
In order for this event to become law, it would need to be re-introduced into the new parliament.
Should a new bill be introduced into parliament which covers this event, the new Bill will be referenced here via a link to the new CCH iQ event. The new event would reference this event, and eventually this event will be removed.
Director identification number
The federal government has introduced legislation which will implement a Director identification number (DIN) for company directors in Australia. The objective of the new system is to promote good corporate conduct.
Once enacted, it will be up to the registrar to announce when the operation of the DIN system will commence. This provides the organisation who will be charged with administering the system time to install a program that will handle the operations.
Transitional rules/Current directors
For current directors and officeholders of Australian companies, this will be no immediate obligation to apply for a DIN once legislation is enacted. Similarly to the commencement of the DIN regime, the registrar will announce transitional arrangements via legislative instrument once the particulars have been arranged.
Requirements
An individual who is a director or an acting alternate director is required to obtain a DIN. At the initial stage of this regime, no other officeholders will be required to register. However, this may change with the abilities of the registrar to keep additional registers in the future.
Four obligations will exist for individuals who are appointed as a director, being:
- requiring to apply for a DIN before being appointed as a director
- requiring to apply for a DIN within 28 days of being directed by the registrar to apply for a DIN
- prohibiting a person from knowingly applying for multiple DINs, and
- prohibiting a person from misrepresenting a DIN to a government body or registered body.
A transitional rule will apply for the first 12 months of operation of the new legislation. A new director will have 28 days after an appointment to register for a DIN.
A person may apply for a DIN if they are not a director but intend to become a director within the ensuing 12 months. It is not compulsory for a person to do this, but nevertheless they are allowed to. However, the DIN allocated to a prospective director will be cancelled if the person does not become a director within 12 months.
Identification of Directors
A key component of this proposed legislation relates to the new registrar being able to separate identify different directors to give them a unique identifier. Via the proposed legislation, the registrar has little or no discretion in the exercise of obtaining information which would identify people separately.
However, additions to ITAA 1936 s 202 will allow the new registrar to request the Tax file number (TFN) of an individual in order to verify their identity. It should be noted that, like other applications, it is not mandatory in the draft legislation for an individual to quote their TFN, if they have one.
As noted above there is little or no discretion given in the proposed legislation to the operation of the registrar. However, similar registrars already exist for the administration and handling of other identifiers such as TFN’s, ABN’s, ACN’s and TAN’s.
There is also proposed merger of certain registers held by ASIC and the Commissioner of Taxation. This intends to make rules relating to these systems more uniform. With that in mind, it is conceivable that the new register relating to Director Identification Numbers will be similar to that of the current ACN or ABN process.
Therefore, it should be acknowledged that any forms that are lodged on behalf of directors relating or applying to DIN’s would need to have the same standards applied to them as what already exists for an ABN or ACN application.