Newsflash Item – ASIC class order changes Dec 10

ASIC CLASS ORDER CHANGES –
 
Effecting Australian Companies Owned by Foreign Shareholders

ASIC Class Order (CO 98/1417), Audit relief for proprietary companies which provides relief to proprietary companies that meet all the requirements from having to undertake an annual audit.

Recent changes to this class order reduce how often companies relying on the relief need to lodge a Form 382 – Notification of resolutions for audit relief – proprietary companies with ASIC.

• Previously, directors and shareholders of a company had to pass resolutions and the company had to lodge notice of the resolutions using Form 382 each year it intended to rely on the relief.

• Now, directors and shareholders will need to pass resolutions and the company will have to lodge a Form 382 for the first financial year it intends to rely on the relief.  In subsequent financial years, directors and shareholders will still have to pass resolutions, but notice of the resolutions using Form 382 will not need to be lodged.

• Companies that stop relying on (CO 98/1417) relief for a financial year (for example, if they cease to meet one of the conditions of the class order) are required to lodge a Form 396 Notice of cessation of reliance on Class Order 98/1417 with ASIC within 4 months after the end of that financial year.

Impact on Australian Companies Owned by Non-Residents

Assuming the company lodged a Form 382 for its current financial year on time, the company will be able to rely on relief in future financial years without lodging another Form 382, provided the company continues to meet all requirements of the class order.

We will review and advise clients, individually, however, in most cases no further action should be required.