Director Identification Numbers | Make sure you rise above the DIN and get registered

From 1 November 2021, directors of Australian companies are required to apply for and verify their identity under the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth), which introduces reforms to Part 9.1A of the Corporations Act 2001 (Cth).

Applications are now open for a Director Identification Number (DIN). Below we outline what directors need to know about DINs and the application process.   

Why have Director Identification Numbers?

The DIN regime is a first of its kind in Australia and has been established in an effort to suppress both illegal phoenix activities and fraud through the tracing of company directors over time. The Australian Business Registry Services (ABRS) is responsible for the implementation and processing of DINs, whilst ASIC will enforce related breaches. Through this single source of business data, ABRS will be able to: 

•	prevent use of fraudulent identities;

•	monitor directors’ association with companies over time; and

•	ascertain directors’ involvement in phoenixing or unlawful activities.

What is a Director Identification Number?

A DIN is a permanent and individual 15-digit identifier provided to a director or someone who intends to become a director of a registered Australian company and who has verified their identity with the ABRS. Directors are required to apply for their own DIN, which directors will keep indefinitely. 

Who is required to hold a Director Identification Number?

If a person is a director or alternate director of a: 

•	registered Australian body that is a body corporate; or

•	registered foreign company that is a body corporate, 

under the Corporations Act, they are required to apply for a DIN. The requirement does not apply for shadow or de facto directors and the regime is relevant to both foreign and domestic directors of registered Australian companies. 

Both existing and new directors are required to apply for a DIN in accordance with the dates outlined below.

Date of directorship on or before 31 October 2021	- apply by 20 November 2022

Date of directorship between 1 November 2021 and 4 April 2022 - apply within 28 days of appointment

Date of directorship from 5 April 2022 - apply before appointment

1.	Persons who were directors on or prior to 31 October 2021, have 12 months to register;

2.	However, directors appointed between 1 November 2021 and 4 April 2022 (i.e. newly appointed directors) will have only 28 days from the date of their appointment to register; and

3.	Newly appointed directors from 5 April 2022 will be required to register before the date of their appointment.

The simplest way to apply for a DIN is online via the ABRS website www.abrs.gov.au/director-identification-number/apply-director-identification-number The online process requires that directors have a myGovID account (not to be confused with myGov). 

The myGovID app enables directors to prove their identity and the myGovID can be set up here www.mygovid.gov.au/

To apply for a DIN, the following documents are required for verification of identity:

•	Residential address held by the Australian Taxation Office; and

•	Information from two documents to verify their identity, for example an Australian passport, birth certificate, or driver’s licence.

The application process and timeframes for foreign resident directors remains the same as Australian resident directors. However, to complete an online application, the foreign director is required to lodge a paper application to verify their identity and provide a:

•	Certified copy of one primary document, for example a birth certificate or foreign passport; and

•	Certified copy of one secondary documents, for example a driver’s licence.

These documents can be certified by a notary public or staff at an Australian embassy, high commission, or consulate in the presence of the foreign director.

Once the identity has been verified in myGovID, the application process can be completed online through ABRS www.abrs.gov.au/director-identification-number/apply-director-identification-number

Once a DIN has been received, directors need to provide their DIN to the person responsible for holding company records for each ASIC registered entity in which the director is appointed. Directors must also inform any other companies to whom they are appointed in the future.  Presently, there is no requirement to provide DINs directly to ASIC, however, this will likely change, possibly by September 2023.

Causing an offence or failing to meet obligations under the DIN regime, may give rise to an infringement notice which may lead to civil penalties and/or criminal charges (1 year imprisonment). These offences include intentionally applying for multiple DINs and intentionally using false information in an application for a DIN.

All Australian companies are required to ensure that directors (and alternate directors) are aware of their requirements and obligations under the regime.

Although the deadline for current directors is 20 November 2022, we recommend that directors begin collating the required personal information and commence the application process now, while this announcement is fresh in their minds.

ABRS Website: www.abrs.gov.au/director-identification-number/apply-director-identification-number

Article written with the assistance of Molly Richardson, GDLP Student

Australia’s Director Identification Number Regime - What do directors need to do to meet their obligations?

Australia’s Director Identification Number Regime - What do I need to do to meet obligations?

Potential pitfalls when settling disputes without a written deed

Mr Koon Wong (the Applicant) commenced proceedings against the bankrupt estate of his estranged daughter, Ms Mei Wong, relating to a property that he and Ms Wong owned as tenants in common in NSW.   Ms Wong’s trustee in bankruptcy (the Trustee) defended the proceedings.

On 29 July 2021, the Applicant’s solicitor sent a letter to the Trustee proposing to settle on the following terms (the Offer):

the property be sold as soon as possible under the instruction of the Applicant;

the Trustee be paid from the net proceeds of sale a sum estimated to be approximately $220,000; and

the balance of the net proceeds of sale be paid to the Applicant.

On 2 August 2021 the solicitor for the Trustee responded, accepting the Offer and paraphrasing the terms of the Offer as follows:

the property is to be sold as soon as possible under the Applicant’s instructions;

the amount of $220,000 will be paid to the Bankrupt Estate from the net proceeds of sale; and

the balance of the net proceeds of sale will be retained by the Applicant.

The Trustee’s solicitor also stated that a draft deed of settlement would “be sent to you for review shortly” (the Draft Settlement Deed), even though the Offer had been silent about a deed.

 On 3 August 2021, the Trustee’s solicitor sent the Draft Settlement Deed to the Applicant’s solicitor, which not only included the terms referred to above, but also added additional terms, such as that the property would be transferred in its entirety to the Applicant, a requirement that the Applicant indemnify the Trustee against any taxes payable on the transfer, and full releases.   Of particular significance was the fact that the Trustee’s acceptance of the Offer was not made conditional upon the parties executing a deed.   Further, when the Draft Settlement Deed was provided, the Trustee’s solicitor had expressly invited the Applicant’s solicitor to advise of any changes that he was instructed to request. 

The Applicant rejected the Draft Settlement Deed and by email dated 11 August 2021 the Applicant’s solicitor asserted that the Draft Settlement Deed constituted a counter offer which the Applicant did not accept.  The Applicant’s solicitor went one step further and stated that the Applicant’ Offer was no longer open for acceptance.  Unsurprisingly, the Trustee did not accept that the Offer was capable of being withdrawn and maintained that a binding agreement had been concluded, when the Trustee’s solicitor had accepted the Offer on 2 August 2021.

At paragraphs 27 – 39 of the judgment, the Court restated the principles governing whether parties have entered into a binding and enforceable agreement, including by noting that:

the law is not concerned with parties’ subjective intentions, or what they may have subjectively thought had been agreed;

the law is only concerned with ascertaining the objective intention of the parties, which is determined by reference to what a reasonable person would have understood from the other party’s words and conduct;

in determining whether a contract has been formed, it is not necessary to identify a precise offer or acceptance, nor a precise time at which an offer or acceptance can be identified;

rather, the question is to be answered by asking what a reasonable person in the position of the parties would think as to whether there was a concluded bargain; and

whether a communication accepts the terms of an offer without modification, or instead varies its terms, is a question of construction.

The Court found that a binding agreement was formed when the Trustee accepted the Offer on 2 August 2021, even though in its response the Trustee had made reference to a draft deed of settlement that would be provided separately.

The Court determined that an agreement had been formed for the following reasons:

The first and third terms of the Offer were accepted by the Trustee without qualification. The acceptance of the second term included a difference that was not material (i.e. a fixed sum of $220,000, rather than an “approximate” sum of $220,000) and did not change the substance of the agreement. The Court considered the reasonable person would not view the difference as introducing a new term which would result in a counter offer.

The Offer was expressed as operating as a Calderbank letter, meaning that the Applicant intended to rely on the Offer on the question of costs, if it was not accepted.  This ran counter to a submission made by the Applicant at the hearing that the Offer was conditional upon him obtaining consent from third parties.

The Trustee’s acceptance of the Offer was not made conditional upon the parties entering into the Draft Settlement Deed in the terms propounded by the Trustee.   The Draft Settlement Deed did not materially vary the terms of the agreement and simply addressed matters that sought to give effect to, or were otherwise incidental to, the agreed terms.

The Court found that as the Applicant had rejected the Draft Settlement Deed, when it was presented on 3 August 2021, the parties were left with a binding agreement that was recorded by the exchange of emails dated 29 July and 2 August 2021.

The case demonstrates the importance of stating an offer in definitive terms and that if a party wishes to make acceptance of a settlement offer conditional upon the execution of a formal deed or agreement, this should be made clear from the beginning.

Otherwise, parties may find themselves immediately bound by an agreement without having agreed to additional terms in formal documentation.

In the recent case of Wong v Wong [2022] FCA 78, the Federal Court of Australia has recently re-visited a question that occasionally arises when settling disputes, namely, whether a binding contract can be formed upon the acceptance of an offer where the offeree then proposes additional terms in a draft deed of settlement.

End of year message from the team at RECL

2021 has been a year of challenge and change for many. Richards and Evans have had some wonderful changes and helped many of our clients through challenges they have faced. We are very thankful to each and every one of our clients for trusting us to help them in 2021.

This year we celebrated 20 years of the firm with a night of delicious food and great wine held at our offices. Founding partner Rob Richards marked the occasion by embracing retirement, after an impressive 48 years in practice. Despite his retirement, Rob still manages to find the time to make the occasional appearance, so perhaps old habits die hard!

We thank you for your support during 2021 and wish you and your family a very Happy Holiday season and a peaceful and prosperous New Year. Please note our office is now closed, we look forward to working with you from the 5th of January.

The whole team at Richards & Evans are fully vaccinated against Covid-19. With South Australian borders now open to interstate travellers, we have put in place procedures to protect our clients and staff from risks related to the spread of Covid-19. This in no way impacts the work we can do for our clients.

We ask that you do not attend our office unless you are fully vaccinated against Covid-19. We require you to check-in either with the MySA GOV app COVID-Safe Check-in or use our paper check-in register and to show proof of your vaccination status upon attending our office. Please plan ahead as we try to keep our staff, clients and families safe.

Our team is able to work with you remotely if you are unable to attend our office in person. We have phone and video conferencing available as well as electronic file transfer systems that will allow us to continue to deliver the service you’ve come to expect from Richards & Evans.

We will continue to monitor SA Health guidelines and amend our procedures as necessary. We encourage you to check SA Health advice regularly, their website is www.sahealth.sa.gov.au

Existing Clients: If you have any questions, please contact your solicitor directly who can advise the best solution should you not be able to attend our office in person.

New Clients: We look forward to meeting with you, whether that be in person or not, please discuss meeting options with one of our solicitors when you call us.

We are here to help and look forward to continuing to work with you in a Covid safe environment.

The safety of our staff, clients and families is important to us. Please read this article before visiting our office.

Our Office

Social Media

Articles

Keep up to date with the latest legal issues and our news when you read our articles.

Director Identification Numbers | Make sure you rise above the DIN and get registered

Potential pitfalls when settling disputes without a written deed

End of year message from the team at RECL

Covid-19 Policy