While being touted as a means of reining in dodgy practices by rogue directors, the Director Identification Number (DIN) proposal has raised fears that SMEs will be tied up in yet more red tape.
Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell welcomed the move to introduce the DIN, but suggested the implementation could bring unintended burden for business owners.
“We support a unique identifier that will enable identification of rogue directors to ensure they can’t be involved in multiple instances of phoenixing,” she said in a statement.
“The challenge for the government is to ensure this is not just another number with more red tape.”
Ms Carnell noted that businesses already need to jump through hoops and complete significant paperwork to receive and maintain their Australian Business Number (ABN), Australian Company Number (ACN) and Tax File Number (TFN), as well as other industry and regulatory required licences and documentation.
“We want to see a scenario where all of this data is consolidated into a single portal that contains all relevant information.”
The government is hoping that by having registration of individual directors, it will be able to better track ownership of companies and establish links between previously unrealised related entities.
Theoretically, the implications could be far-reaching, enabling the government to better track tax liabilities and a range of other uses.
My Business understands that at present, ASIC does not retain data on companies that are wound down, given the high turnover volume.
What are your thoughts – is the Director Identification Number (DIN) a good idea, or simply more paperwork for already lumbered business owners? Share your thoughts below.