Director ID Number a Good Idea If Personal Safety Protected
3 July 2017
Chapman Tripp supports the introduction of a personalised Director Identification Number (DIN), subject to the proviso that directors can choose not to have their residential address made public.
This is the substance of the firm’s submission on the discussion document issued by the Ministry of Business, Innovation
and Employment (MBIE), says Chapman Tripp partner Roger Wallis.
“A DIN would fulfil some useful functions. For example, it would help:
• people searching the Companies Office to better identify who they are looking for, particularly when there are two or
more directors with the same name, or with similar names and small differences in spelling
• maintain multiple records efficiently, and
• provide stronger protections against “phoenix companies”. Under the Companies Act, it is sometimes possible in the
event of a liquidation for the failed company’s promoters to transfer out the assets into a new company, give it a
similar name and then trade on with the same board. A DIN would make that more obvious, and should raise a red flag for
potential investors.
“But the DIN should be enacted alongside an option which would allow directors to provide a contact address where papers
can be served, which is separate to their home”, Wallis said.
“Directors can become targets of disgruntled shareholders, employees, competitors and/or interest groups. They have the
right to ensure that their families are protected.
“MBIE acknowledges that the imposition of a DIN will intrude on a director’s privacy. In this context, we consider that
residential addresses should be filed with the Companies Office but not made public, as already applies to birth dates
which must be provided but are not searchable.
“Because these safety concerns have been raised with MBIE, MBIE’s present intention is to shelve the address issue for a
further, separate consultation next year.
“We see no logic in that approach. It is imperative that both matters are dealt with at the same time because one is
integral to the other,” Wallis said.