A faraway DIN for company directors
A new regime requiring company directors to have a unique identification number – a director identification number (DIN) – is on the way. The purpose of the DIN regime is to assist regulators and external administrators to investigate a director’s involvement in what may be repeated unlawful activity including illegal phoenix activity.
Phoenixing occurs when the controllers of a company deliberately avoid paying liabilities by shutting down an indebted company and transferring its assets to another company. The Government estimates that the total cost of phoenixing to the Australian economy is between $2.9 billion and $5.1 billion annually.
The DIN will require all directors (but not “shadow directors”) to confirm their identity and it will be a unique identifier for each person who consents to being a director. The person will keep that unique identifier permanently, even if they cease to be a director.
The new DIN regime won’t commence until administrative arrangements supporting the new regime are in place. This will take up to 2 years (hence a faraway DIN). Persons who are existing directors when the new regime begins will be given time (yet to be determined) to apply for a DIN.
Ref: TaxWise Business February 2020