Is your company ASIC compliant?
If you have a Pty Ltd company, have you ever stopped to wonder “Why am I getting an invoice from ASIC? What does ASIC do? What does ASIC required me to do?”
You might want to get these questions answered, so read on…
“ASIC is an acronym for Australian Securities and Investments Commission. ASIC is Australia’s corporate, markets and financial services regulator”.
It’s an independent government body, governed by an Act of parliament and charged with contributing to “Australia’s economic reputation and wellbeing by ensuring that Australia’s financial markets are fair and transparent supported by confident and informed investors and consumers.”
Specifically for Pty Ltd companies, ASIC makes “information about companies and other bodies available to the public as soon as practicable.”
So what does ASIC require of you?
The main issues affecting Micro and Small Pty Ltd Companies are:
- Prompt notification of changes in Company Details e.g. name or address details of the company, its directors or shareholders as well as changes in shareholding, share structures, places of business operation etc. You generally have 28 days to Notify ASIC of the changes or else fine will apply. Director’s resolutions may be required for some changes.
- Requirement for Opening Hours for the Registered office. Not applicable to private companies but you must provide a “physical address” for the company’s registered office and principal place of business that is verifiable on a search engine.
- Display your company name. If your company is open to the public, you must display the company name prominently at every place you carry out business
- Use your ABN correctly. This number must appear on every public document issued, signed or published by, or on behalf of, the company and all lodgment with ASIC. It is not required on business cards, “with compliments” slips, cash register dockets, packaging and labeling and advertisements.
- Check the details on the ANNUAL REVIEW Form are correct. Each year within a few days after your business’ annual review date (e.g. date of registration) ASIC will send your company an annual statement that includes a snapshot of the company’s details and an invoice. You should ensure that all the information contained in the annual statement is correct and up-to-date and lodge any changes with ASIC accordingly (see above). You should also make sure that you pay the invoice for annual review fee within 2 months.
- Pass annual solvency statement. The director(s) need to pass a solvency resolution when there is “reason to believe that the company will be able to pay its debts as and when they become due and payable”. You must keep a copy of the solvency resolution, but you do not need to send it to ASIC. (Example of a Solvency Resolution below)
- Promptly pay ASIC Annual Statement Invoice and Other ASIC fees as appropriate. Most ASIC forms are free of fees if lodged on time but legislated fines apply for late notifications and late payment of invoices. If after two warnings/fines ($75 then $312 at Jan 16), the fees are not paid within the prescribed time frame, ASIC will automatically deregister the company. Re-registering a company is a complex process and a successful outcome is uncertain. As the fines are prescribed by legislation, there is very little room for ASIC to move in terms of waiving fees, regardless of how good your argument may be.
ASIC and their requirements are easy to miss as we get on with the day-to-day activities of running our businesses. Having said that, it is very important to ensure your company is compliant and that you are mindful of changes in activity that will trigger a “change of details” ASIC notification requirement, in order to avoid unnecessary fines.
All too much?
For the average Micro and Small Business owner, dealing with ASIC, finding your company’s ASIC Corporate Key, navigating the website, finding the right form, etc., can be poor and inefficient use of your time.
At Fraser Scott, we have developed a cost effective, simple process with checks and balances to make sure that if you notify us of a change in time, we take care of the forms and resolutions and follow you up if invoices remain unpaid.
Best part, is that we offer all this for less than the potential ASIC fines.