Why a DIN is necessary for some SMSFs

In recent years, Australia has introduced several measures to enhance corporate transparency and combat illegal activities within the business sector. One significant development is the implementation of the Director Identification Number (DIN). This unique identifier aims to create a robust system for tracking and managing directors of companies, thereby improving accountability and governance. Let's delve into what a DIN is, why it's essential, and how it impacts directors in Australia.

What is a Director Identification Number (DIN)?

A Director Identification Number (DIN) is a unique identifier assigned to a director who has verified their identity with the Australian Business Registry Services (ABRS). Once obtained, this identifier is permanent and remains with the director regardless of any changes in their roles or companies over their lifetime. The introduction of the DIN system is part of the Australian Government's broader initiative to modernize business registers and reduce fraudulent activities.

Why is the DIN Important?

The implementation of the DIN aims to address several key issues within the corporate landscape:

• Enhancing Transparency: By providing each director with a unique identifier, the DIN system helps create a transparent and traceable history of directorships. This makes it easier to identify individuals involved in illegal or unethical activities.
  
  

• Preventing Fraud: The DIN helps prevent the use of fictitious identities and reduces the risk of directors concealing their involvement in multiple companies, which can often be associated with fraudulent activities like phoenixing (where a company is deliberately liquidated to avoid paying debts, and a new company is started to carry on the same business).
  
  

• Improving Accountability: The DIN system holds directors accountable for their actions by creating a permanent record of their directorships. This accountability encourages better corporate governance and ethical behavior.

Who Needs to Apply for a DIN?

All directors of companies registered with the Australian Securities and Investments Commission (ASIC) must apply for a DIN. This includes directors of:

• Companies, including trustee companies for Self Managed Super Funds

• Registered Australian bodies

• Registered foreign companies

• Aboriginal and Torres Strait Islander corporations

Even if you are a director of a non-profit organization or a charity, you are still required to obtain a DIN.

How to Apply for a DIN?

Applying for a DIN is a straightforward process that can be completed online through the ABRS website. Here are the steps to follow:

• Verify Your Identity: Before applying for a DIN, you must verify your identity. This typically involves providing personal information and identity documents such as your driver's license, passport, or Medicare card.
  
  

• Complete the Application: Once your identity is verified, you can complete the DIN application form on the ABRS website. You will need to provide details such as your full name, date of birth, and residential address.
  
  

• Receive Your DIN: After submitting your application, you will receive your unique DIN. Keep this number safe as it will be required for all future directorships and interactions with ASIC.

  
  

Quick Tip

It's a lot quicker and simpler to apply by phone, especially for those who do not wish to have a Digital ID. Simply call 13 62 50.

Conclusion

The introduction of the Director Identification Number (DIN) is a significant step towards improving corporate governance and accountability in Australia. By providing a unique and permanent identifier for each director, the DIN system enhances transparency, prevents fraudulent activities, and promotes ethical behavior within the business community. If you are a director, it's crucial to understand the importance of the DIN and ensure you apply for it within the required timeframe.

Embrace this change as part of your commitment to good corporate governance and contribute to a more transparent and accountable business environment in Australia.

 for your director ID | Australian Business Registry Services (ABRS)