On 1 October 2018, Treasury released draft legislation proposing to implement its 2018-19 Federal Budget measures to modernise business registers and introduce Director Identification Numbers (DIN). SUBMISSIONS were due by 26 October 2018 (and are now closed).
The legislative package, includes:
- The draft Commonwealth Registers Bill 2018 (Bill 1) – which establishes a statutory regime by which Commonwealth agencies may delegate their registry functions to a specified Commonwealth agency.
- The draft Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2018 (Bill 2) – containing a suite of enabling amendments, initially for 34 registers currently kept by ASIC and the Australian Business Register, which is currently kept by the Commissioner of Taxation. The amendments proposed by the Government will allow ASIC’s registry functions to be shifted to the Australian Business Registrar (within the ATO). The DIN proposals are also in this draft Bill.
- The draft Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2018 (Bill 3) – which was released on 16 October 2018 and includes the remainder of the referrals of functions and consequential changes.
The new Registry Regime
The new law facilitates a modern government registry regime that is flexible, technology neutral and governance neutral. The regime initially applies to the business registers administered by ASIC and the Australian Business Register. Additional government registers may be brought into the regime by future legislative reforms.
Under the new regime the Minister appoints an existing Commonwealth body to be the registrar. Different registrars can be appointed for different functions or powers of the registrar.
The functions and powers of the registrar are largely set out in existing Commonwealth laws. In particular, most powers and functions are set out in the Commonwealth acts that contain the registers being brought into the new regime. These acts include the: Corporations Act; the ABN Act; the Business Names Act; the Credit Act; and, the SIS Act.
The registrar performs its functions and exercises its powers in accordance with the data standards and other Commonwealth laws. The data standards are disallowable instruments made by the registrar. They may deal with a variety of matters including what information may be collected for the purposes of performing the registrar’s functions, how such information is to be given to the registrar, and how information held by the registrar is to be stored.
The new law provides for the protection and disclosure of information held by the registrar. It is an offence for an official to disclose information held by the registrar unless the disclosure is authorised. A disclosure is authorised where: it is for the purposes of the new registry regime; it happens in the course of the performance of an official’s duties; each person to whom the information relates consents to the disclosure; the information is disclosed to a government agency for the performance of its functions; or, the benefits associated with the disclosure outweigh the risks (including privacy risks) after those risks have been mitigated.
All decisions made by the registrar under the new Act are reviewable by the Administrative Appeals Tribunal except those made by disallowable instrument.
Director Identification Number requirement
Perhaps the most significant matter, in these bills, is the new requirement that directors have an ‘directors identification number’ (DIN). This will be inserting a new Part9.1A into the Corporations Act 2001 (see Bill 2, Schedule 2, item 7).
- The DIN is a unique identifier that will provide traceability of a director’s relationships across companies and over time to assist regulators and external administrators investigate a director’s involvement in what may be unlawful activity, including illegal phoenix activity.
- The core requirement would be in new s1233(1) of the Corporations Act 2001, which requires, simply “An eligible officer must have a director identification number.”
- A person appointed as a director of a body corporate would be required to apply for a DIN within 28 days.
- Existing directors will have 15 months to apply from the date the new requirement starts.
DATE OF EFFECT: To be set by proclamation.
CPD questions (answers available)
- Will this legislative package allow 34 ASIC registry functions be moved to the Australian Business Registrar (who is the Commissioner of Taxation)?
- Will this be achieved in 1 Bill?
- Is the transfer of registry functions limited to just this 34 ASIC functions?
- Will most powers and functions are set out in the Commonwealth acts that contain the registers being brought into the new regime, such as the Corporations Act; the ABN Act; the Business Names Act; the Credit Act; and, the SIS Act?
- Will this legislative package also amend the Corporations Act 2001 to require directors to have an ‘identification number’?
- Will this have any use in tackling illegal phoenixing?
- How long with existing directors have to apply?