Director Identification Numbers (DIN) – ASIC brings first action for non-compliance – Directors and Officers

First director charged for skipping vital step.

ASIC (the Australian Securities & Investments Commission)
has recently commenced its first prosecution of a director for
failing to comply with their obligations to have a Director
Identification Number (DIN).

Refresher

From 1 November 2021, company directors have been required to
verify their identity.

The DIN requirement was introduced as part of the provisions to
combat illegal phoenix activity. It allocates a unique identifier
for each director to help prevent fictious directors and trace
directors’ associations with companies over time.

When the legislation was introduced, existing directors had
until 30 November 2022 to apply for a DIN. Since 5 April 2022, all
new directors have been required to apply for a DIN prior to their
appointment. The Australian Business Registry Services (ABRS) is
responsible for administering the DIN and instructions on how to
apply can be found on their website.

Directors who fail to apply for a DIN may face the following
actions:

• Being asked to attend an interview with a delegate of the
  Registrar to explain why they have not obtained a DIN, and/or;




• Referral to ASIC to consider investigation and
  prosecution.

ASIC Action

On 19 March 2024, a director was formally charged with one count
of failure to have a DIN when required to do so (s1272C(1) of the
Corporations Act 2001). The defendant is facing a maximum
penalty of $13,320. The matter is currently subject to an interim
non-publication order.

It is apparent that ASIC is looking to put directors on notice
that they are monitoring director compliance with the new
requirements and failure to do so may result in penalties.

Any existing directors who have not complied with the obligation
to obtain a DIN should obtain advice on how they can mitigate any
potential breaches with the obligations. Reach out to your local
Worrells Principal for a complimentary and confidential
discussion.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.