radford tax logo
07 5495 4100 ◆

Director Identification Number Compliance Reminder For Businesses

Posted on May 2, 2022 by admin

As of 5 April 2022, new Directors will need to have applied for their Director Identification Number (DIN) prior to their appointment to the position.

Existing directors were required to obtain a DIN prior to the end of the transitional period (30 November 2022), whereas directors of Indigenous Corporation have until 30 November 2023. Failure to do so could result in penalties for non-compliance.

What Is A Director Identification Number?

Previously a company or business was registered through ASIC, where a Tax File Number and an Australian Business Number would be required. These are obtained through the Australian Taxation Office (ATO) and are a critical part of setting up a business or company.

Introduced in November 2021, there will be an additional step introduced in the registering of a company, involving a Director Identification Number (DIN). This director identification number is a unique identifier that a director will apply for once and keep forever.

They were brought in as a part of a broader regulatory strategy to address the issue of phoenixing – this is where controllers of a company deliberately avoid paying liabilities by shutting down indebted companies and transferring assets to another company.

DINs are recorded in a database to be administered and operated by the Australian Tax Office and are made available to the public.

The ATO has the power to provide, record, cancel and re-issue a person’s DIN. A DIN will be automatically cancelled if the individual does not become a Director within 12 months of receiving the DIN.

Who Does A DIN Apply To? 

Director ID only applies to companies and corporate bodies registered under the Corporations Act and CATSI Act.

Director ID does not apply to sole traders, partnerships or trusts unless the trust has a corporate trustee.

Deadlines For Applying For A DIN

When the announcement of DINs was made in April 2021, there were set deadlines in place for those involved in profit and not-for-profit entities, as well as for Indigenous Directors. As of 5 April 2022, those deadlines have changed.

For profit entities, the deadline for applying for a DIN under the Corporations Act must be done before your appointment as a director.

For non-profit entities (including those entities registered under the ACNC Act as either private or public companies), you also need to have applied for your DIN before you are appointed as a director.

For new directors of Indigenous Corporations, the same requirements for applying are advised (prior to appointment).

How To Apply For A DIN

All directors must apply for their own DIN. This cannot be done by a third part, unless it can be proven to the Registrar that the director is unable to make the application on their own behalf (such as suffering some sort of incapacity, etc).

There are three ways to apply for a DIN:

  1. Online application via the myGovID app. This is different to myGov and is the quickest way to obtain a DIN.
  2. Phone application.
  3. Paper application (which is the slowest process).

These methods require proof of identity documentation, however, you may be able to use certified copies (witnessed by a Justice of the Peace) if you are using the paper application.

maximise your business's value

latest news

How You Structure Your SMSF Could Impact The Trustees In The Fund

Posted on May 16, 2022 by admin

The way in which a self-managed super fund is structured could change its legal compliance requirements. If you are in the process of setting up an SMSF, you will need to make a decision about how to structure it appropriately to suit. 

An SMSF can be structured as a single-member fund or a multiple-member fund, with the trustees of those funds deemed as either to be individual trustees or a corporate trustee

Examining the circumstances of your members could help to narrow down the structure that will be best suited. You can also work out from the requirements of each structure whether or not a fund structure would be suitable for the needs of your members. 

Individual Trustees

Individual trustees in a single-member fund will have two trustees within the fund. One trustee must be the fund member, but cannot be the other trustee’s employee (unless they are also relatives). An example of a single member trust fund structure could be a family super fund, where the members are trustees for the fund.

Individual trustees in a multiple-member fund structure generally have between two to six members. Each fund member must be a trustee and each trustee must be a fund member. Like the single-member fund, members of this fund structure cannot be the employee of another member (unless they are relatives). 

SMSFs that use individual trustees or are looking to use individual trustees in their structure may benefit from the following: 

Corporate Trustees

SMSFs that are set up using corporate trustees, typically set up a business or company to act as a trustee. The members within these kinds of funds are known as directors and will need to apply for a director identification number as such.

Corporate trustees within a single-member fund structure may have one or two directors, but one of those directors must be the fund member. If there are two directors, the member cannot be the other director’s employer (unless they are relatives).

Corporate trustees within a multiple-member fund structure generally number between two to six members, with each fund member also being a director. A member cannot be the employee of another member (unless they are relatives). An example of a corporate trustee SMSF could be a business acting as the trustee for a super fund, where the members are also directors of the fund. 

SMSFs that use corporate trustees or are looking to use corporate trustees in their structure may benefit from the following: 

The setup of an SMSF can be a complicated process. You may benefit from speaking with a professional assisting you in its preparation and establishment. Choose someone who is qualified, registered and licensed, and right for you and your circumstances. 

radford tax associationsradford tax associationsradford tax associations