ASIC has commenced the first prosecution action against a director for failing to comply with the obligation to have a director identification number (DIN).
Background
Changes to the Corporations Act 2001 (Cth) (Corporations Act) which came into effect on 1 November 2021, require all directors to obtain a DIN.
A DIN is a unique identifier for every director, which is allocated once and kept forever (similar to a tax file number), for the purpose of preventing the use of false or fraudulent director identities.
ASIC brings first action
On 19 March 2024, a director appeared in the Downing Centre Local Court and was formally charged with one count of contravening section 1272C(1) of the Corporations Act by failing to have a DIN.
The maximum penalty for an offence against section 1272C(1) of the Corporations Act is 60 penalty units. The defendant in this matter is facing a maximum penalty of $13,320.
The charges were listed for a further mention before the Downing Centre Local Court on 16 April 2024.
The message from ASIC is clear – they are monitoring compliance and will take steps if a director fails to comply with the obligation to have a DIN.
When should you apply for a DIN?
Any new appointee to a board made under the Corporations Act who does not already have a DIN will need to apply for their DIN before being appointed by following the steps that we have previously outlined.
If you are an existing director and have not obtained a DIN, you should seek advice.
Based on the current penalty unit value, contraventions can now result in a maximum penalty of $18,780.
Should have any queries, please get in touch with our Corporate Advisory and Governance Team.