Time's Up for Non-Compliant Directors as ASIC takes Enforcement Action

[Update] Convictions Announced

On 3 July 2024, ASIC announced the conviction of two West Australian company directors for failure to hold a DirectorID. Both directors were convicted by the Magistrates Court of Western Australia on 5 March 2024 and fined $5,000.

The Magistrate stated the director ID service had been enacted for a proper public purpose and considerable efforts had been made by government agencies to bring the accused’s attention to the service and comply.

Previously...

On 25 March 2024, ASIC announced the first prosecution of a company director for alleged failure to hold a mandatory Director Identification Number (DIN).

The proceedings were commenced against the unnamed director (whose identity is subject to a non-publication order) on 19 March 2024.

If convicted, the director faces a fine of up to AU$13,320.00 (60 penalty units).

Requirement to Hold a Director Identification Number (DIN)

All directors of Australian companies must now hold a Director Identification Number (DIN). Failure to do so is an offence under section 1272C(1) of the Corporations Act 2001 (Cth).

The requirement was progressively introduced from 30 November 2022 as a means of verifying the identity and eligibility of all Australian company directors, to trace directors across different corporations, and to assist with anti-phoenixing and anti-fraud measures.

ASIC and the Australian Business Registry Service (ABRS) previously annouced that they were commencing active pursuit of enforcement actions against non-compliant directors, who would potentially be summoned to provide an explanation for their non-compliance.

Ultimately, non-compliant directors may be referred to ASIC for prosecution under the Act.

Further Information

• ASIC brings first action against a director for failing to have a director identification number, ASIC Media Release (24-058MR, 25 March 2024)
• ASIC In Focus - July 2024 (Vol 33 Issue 5, 3 July 2024)

Cover Image Credit: Jan Huber via Unsplash