Director identification numbers (DINs) have been on the cards for some time in New Zealand and other countries around the world.
The Ministry of Business, Innovation and Employment (MBIE) consulted on the introduction of DINs in 2017 and 2018 noting the following benefits:
The IoD supported DINs and also removing directors’ residential addresses from the public register and substituting them with a service address. However, progress has been slow and these matters have now been combined with another initiative aimed at increasing the transparency of beneficial owners of companies and limited partnerships (eg via a public register) as a measure to combat money laundering and terrorist financing. A ‘beneficial owner’ essentially means a natural person who ultimately owns or exercises effective control over a corporate entity (as distinct from the legal owner of the entity which may be another entity for example). See MBIE’s discussion document on beneficial ownership for more information.
MBIE is now working on how this will all operate in practice and stakeholder consultation is expected.
Directors of companies registered under the Australian Corporations Act 2001 will soon be required to obtain a DIN*. This will apply to New Zealanders who are also directors of Australian companies or foreign companies registered in Australia.
Earlier this year the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (the Act) passed into law setting out a framework for DINs. However, much of the operational detail is still to come. The Act provides that DINs will be in effect by June 2022, but there is scope for DINs to be introduced earlier.
Under the regime, directors will be required to prove their identity and will then be issued with a unique number for life (even if they cease to be a director in the future).
Obligations under the Act
The new law imposes four obligations in relation to DINs:
The Registrar has the power to administer the requirements under the Act including issuing DINs, keeping records, determining how directors will establish their identity and making data standards (which will cover operational/administrative matters).
Civil and criminal penalties
Failure to apply for a DIN can result in civil and criminal penalties for directors or infringement notices. Civil and criminal penalties also apply for conduct that undermines the integrity of DINs such as providing a false DIN or providing false identity information to the Registrar.
For more see information, see MinterEllison’s article Centralised business registers and DINs are on the way
*Directors of companies registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 will also be required to register for a DIN.
The UK doesn’t have identification numbers for directors. However, the UK government signalled this month a number of changes to the companies register that are relevant to directors including:
The UK government will continue to consult with stakeholders while developing operational policy and will provide guidance for directors. For more, see the government’s report Corporate Transparency and Register Reform.
We will continue to update members on director identification developments in New Zealand and overseas.