Corporations Act reforms - online lodgement and continuous reporting
New lodgment and notification requirements for companies
From 1 July 2003, the requirements for reporting company particulars to ASIC have changed.
There is also an amnesty available for companies which have not complied fully up until now.
Most of the familiar forms for lodging with ASIC have become obsolete, and there are altered deadlines for notifying ASIC of company changes under the new regime.
Read on, and make sure you're compliant.
Annual company statement and annual review
This is the key reform in the package.
In the past, companies had to lodge an annual return, in most cases before 31 January each year. Now companies will be sent an extract Company Statement around each anniversary of their registration. If the particulars are correct, nothing needs to be lodged.
If on review some details in the annual statement need updating, the company must lodge, not the Company Statement, but a form 484 (see below).
Either way, whether updating is required or not, a company's annual review is not complete without two steps which directors will recognise from the old lodgment of an annual return:
making a solvency resolution; and
paying a fee to ASIC.
The old annual return contained a section for a director of the company to indicate to ASIC whether the company had resolved it could pay its debts as and when they became due and payable. The new Company Statement is for review purposes only and contains no solvency declaration.
The requirement for a solvency resolution continues independently. Only a negative resolution must be notified to ASIC (using new form 485).
Under the new laws, a company has to pass a solvency resolution within two months of its review date (unless it has lodged accounts within the last 12 months).
In recent years, a company lodged its annual return with a $200 lodgment fee. Under the reforms, a company whose Company Statement is correct at review time and does not have any lodging obligation does not avoid ASIC fees. Companies will be sent an invoice along with the Company Statement each year and are expected to pay annual company dues whether or not there are changes to report to ASIC. Late fees will apply if the invoice is not paid within two months of the review date.
ASIC has warned that multiple late fees may be payable. If the Company Statement needs updating but that is not done within 28 days of the review date, then additional late fees apply.
Continuous reporting obligations
The updating obligation is now continuous and not just able to be done once a year as was previously the case for some details. A significant change is that proprietary companies must notify ASIC of changes to issued shares, top 20 members and ultimate holding company throughout the year.
Public companies must notify ASIC of share issues, cancellations and conversions throughout the year. Public companies must also notify changes to top 20 members and ultimate holding company and update their share structure annually, following their review date.
The notification period has been extended from 14 days to 28 days in many cases, and a new single form (form 484) has replaced the previous array of forms for notifying various common changes.
Form 484 is to be used to notify ASIC of changes to:
principal place of business
ultimate holding company
shares on issue; and
register of members
Penalties will still apply if a company does not comply with its obligation under the law to notify ASIC within the prescribed periods.
One innovation under the reforms is the electronic lodgement of the new form 484 at the ASIC website. A company can update its particulars by means of a unique corporate key.
Transitional arrangements and amnesty
There are some transitional concessions available. These include:
for companies which have failed to notify changesat any time,a form 484 can be lodged before30 September 2003 without any late lodgment fee. Effectively this is an amnesty for those companies which may not have previously complied with notification obligations.companies whose review date is between1 July and 28 October 2003 have until28 October 2003to bring their records up to date with no late review fee.share and member changes which occurred before1 July 2003 do not have to be notified until28 days after the first review date.
The concession for non-compliant companies to lodge up to 30 September 2003 is a useful opportunity to review compliance now.