Company directors have a responsibility to act in the best interests of the company. If…
Director ID regime
If you’re a director (i.e. most business owners / founders are) then you should note the new Director Identification Number regime.
Directors will be required to register for a unique identification number that they will keep for life, much like a tax file number, under a rewrite of Australia’s business registers.
The introduction of the Director Identification Number (DIN) regime is part of the Government’s Modernisation of Business Registers (MBR) Program creating greater transparency and tracking the movements of individuals over time. The MBR will unify the Australian Business Register and 31 ASIC business registers, including the register of companies. In effect, the system will create one source of truth across Government agencies for individuals and entities and will be managed by the Australian Taxation Office (ATO).
- The DIN is very broad and introduces the concept of an ‘eligible officer’. An eligible officer is a director who:
- is appointed to the position of director, or is appointed to the position of an alternate director and is acting in that capacity (regardless of the name that is given to that position); or
- any other officer of the registered body who is an officer of a kind prescribed by the regulations.
The definition picks up the concept of ‘shadow directors’ who act in the capacity of directors through influence and control but are not directors by title. That is, it’s feasible that someone who is not a director but is seen to be making decisions on behalf of the company can be held to account.
- An eligible officer is a director of a:
- registered foreign company
- registered Australian body under the Corporations Act such as an association or a charity, or
- an Aboriginal and Torres Strait Islander corporation (which are registered under the CATSI Act).
The new regime is expected to start shortly with Directors provided with a transitional period until 30 November 2022 (or 2023 under the CATSI Act).
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Stuart Reynolds is the founder of Fullstack Advisory, an award-winning accounting firm for businesses leading the future. He is a 3rd generation accountant who specialises in tech companies, agencies and entrepreneurs.