Company directors will have a unique director identification number as a way of tracking them, under new anti-phoenixing law passed in the current sitting of the Australian Parliament.
Directors will keep the DIN permanently, even if they cease to be a director, and that number will never be issued to another person. The DIN will be used to trace a director’s relationships across companies, with the aim of enabling better tracking of directors of failed companies.
It is also intended to stop the use of fake identities.
“This will assist regulators and external administrators to investigate a director’s involvement in what may be repeated unlawful activity including illegal phoenix activity,” according to the information memorandum accompany Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019.
Although the law to date required that directors’ details be lodged with ASIC, the regulator has not been required to verify the identity of directors.
Under the law, which takes effect in June 2022, a person must apply for a DIN before they are appointed a director. The rule applies to anyone who is a director of a registered body, which means a company, registered foreign company, a body registered under the Corporations Act or an Aboriginal and Torres Strait Islander corporation.
There are civil and criminal penalties for directors who fail to apply for a DIN and also for misrepresenting a DIN.