Disputes about financial reporting by small proprietary companies - video transcript
Transcript of video about disputes about the financial reporting of small proprietary companies, presented by Kristy, ASIC's Misconduct and Breach Reporting team, uploaded 11 December 2014.
Do domestic small proprietary companies need to lodge financial reports?
As the law stands, small domestic proprietary limited companies aren't required to lodge financial reports and circulate them to their members or shareholders at any specific time.
In addition to that, they are not actually required to lodge financial or directors' reports with ASIC. It's usually fairly uncommon for small proprietary limited companies to lodge those reports with ASIC.
Who needs to lodge financial reports?
There are actually only five categories of entities that need to lodge financial reports. The main ones include:
- public companies
- large proprietary limited companies, and
- some small foreign-controlled entities.
What can I do about getting financial reports?
Members with at least five per cent of voting rights can compel the company to provide financial reports. It's a good idea to seek some legal advice so that you can make sure that your request complies with the Corporations Act.
If the company fails to provide those reports within a set period of time you can actually seek a court order compelling them to do so. Again, we recommend you seek some legal advice before doing this. And if you are looking for a list of lawyers in your area, I would suggest that you contact your local law society.
What's ASIC's role here?
Financial reports contain important information and ASIC has compliance programs which help companies understand and meet their reporting requirements, but it's important to note that ASIC doesn't intervene in private disputes regarding the provision of reports. That's because those rights relate to the rights of individuals and don't affect the broader public as a whole.
Where can I find more information?
If you would like more information about the definition of large and small proprietary limited companies, about our compliance programs or about financial reporting in general, see our website.