Changing a company financial year

How to notify ASIC of a change of financial year

You need to notify us in writing of any change to the company or registered scheme's financial year. This will allow us to amend the public register to reflect the new financial year for each affected entity.

Notification should include:

• the start and end dates of the old financial year
• the start and end dates of the new financial year, and
• the exception under which your entity has changed, or is changing, its financial year.

To notify us of the change, you can write us a letter or contact us online.

Legislative requirements for a financial year

Section 323D of the Corporations Act 2001 (Corporations Act) requires the first financial year for a company, registered scheme or disclosing entity (an entity) to start on the day of its registration. The first financial year may last for 12 months or a period, no longer than 18 months, determined by the directors (section 323D(1)).

Each subsequent financial year must:

• start at the end of a previous financial year
• be 12 months long (section 323D(2)).

Exceptions to the 12-month rule

Some entities may be exempt from being required to have a 12-month financial year, as set out in the following table:

Exception	Requirement
Shorter or longer by seven days	The directors may make the financial year shorter or longer than 12 months by no more than seven days, to accommodate entities with week-based internal reporting (section 323D(2)). You do not need our permission to make this change, but you do need to notify us.
Shorter than 12 months	An entity’s financial year may be shorter than 12 months (section 323D(2A)), provided that: during the previous five financial years, each financial year has been of 12 months duration the change in length of the subsequent financial year is made in good faith, in the best interests of the entity. You do not need our permission to make this change, but you do need to notify us.
Synchronisation with consolidated entities	If an entity has to prepare consolidated financial statements, you must do whatever is necessary to ensure that the financial years of the consolidated entities are synchronised (section 323D(3)). To facilitate the synchronisation, the financial year of a consolidated entity may be extended or shortened. An extended financial year cannot be longer than 18 months (section 323D(4)). Under section 323D(4), entities that have to prepare consolidated financial statements have the power to synchronise. This power is only available if the accounting standards require the preparation of consolidated financial statements. It is to be used only once, in the 12 months after the need to consolidate arises; it is not otherwise available. Because this ability to change a financial year is available through the Corporations Act, you do not need to seek our permission to change the financial year of your consolidated entities. You do need to notify us.
Synchronisation with foreign parent	ASIC Corporations (Synchronisation of Financial Years) Instrument 2016/189 may allow a foreign controlled company to have a financial year of up to 18 months, in order to synchronise its financial year with that of its foreign parent. See Regulatory Guide 58 Reporting by registered foreign companies and Australian companies with foreign shareholders (RG 58). For the relief set out in the instrument to apply, the conditions of the instrument must be met. The onus is on the foreign controlled company itself to determine whether it can meet the conditions of the instrument and obtain the relief. It is not necessary to seek permission from us to change the financial year under the instrument.
Relief under section 340 of the Corporations Act	Where none of the other exceptions apply, an entity can apply to ASIC under section 340 for relief from the requirements of section 323D(2). In accordance with section 342, you would generally have to demonstrate to us that complying with the requirement for the entity’s financial year to be a period of 12 months would impose unreasonable burdens. When preparing your application, you should refer to Regulatory Guide 43 Financial reports and audit relief (RG 43) and to Regulatory Guide 51 Applications for relief (RG 51). Applications should comply with the requirements of the Corporations Act. Applications for relief should be submitted through the ASIC Regulatory Portal. For more information, see how you apply for relief.

How to apply for an extension of time to hold your AGM

A change of financial year will affect the timing of a public company’s annual general meeting (AGM). An AGM must be held within 18 months of a public company’s registration, with subsequent AGMs held at least once in each calendar year and within five months after the end of each financial year (section 250N).

If these timing requirements cannot be met, the company needs to apply to ASIC for an extension of time to hold its AGM (section 250P).

You can apply, using Form 2501 Application for extension of time to hold annual general meeting (Form 2501) before the latest possible date on which the AGM is due to be held. A lodgement fee applies. Refer to Regulatory Guide 44 Annual general meeting: Extension of time (RG 44).

Where can I get more information?

• Contact ASIC on 1300 300 630 or submit an online enquiry.
• RG 43 Financial reports and audit relief
• RG 44 Annual general meeting: Extension of time
• RG 51 Applications for relief
• RG 58 Reporting by registered foreign companies and Australian companies with foreign shareholders

Important notice

Please note that this information sheet is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice. We encourage you to seek your own professional advice to find out how the applicable laws apply to you, as it is your responsibility to determine your obligations.

You should also note that because this information sheet avoids legal language wherever possible, it might include some generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases, your particular circumstances must be taken into account when determining how the law applies to you.