If the company is a 'grandfathered' large proprietary company, it is required to prepare a financial report but is exempt from lodging it with ASIC if it meets certain conditions.

'Grandfathered' proprietary companies are those former exempt proprietary companies that satisfy the criteria in section 319(4) of the Corporations Act, that is they:

• continue to meet 'exempt proprietary company' definition at all times since 30 June 1994

• were large at end of first financial year ending after 9 December 1995

• had the financial report audited for 1993 and each subsequent year

• lodged notice within four months of end of first financial year ending after 9 December 1995.

ASIC Corporations (Exempt Proprietary Companies) Instrument 2015/840 allows large proprietary companies with foreign company shareholders (but not controlled by a foreign company) to be 'grandfathered'.

This exemption arises under section 319(4)–(6) of the Corporations Law (as preserved in the Corporations Act through the transitional provision in the table in section 1408(7) of that Act), and requires the company to have its financial report audited before the reporting deadline specified in Chapter 2M of the Corporations Act in order to maintain its exemption from lodging financial reports.

Following amendments made by the Treasury Laws Amendment (2022 Measures No. 1) Act 2022, the exemption is only available to grandfathered large proprietary companies for financial years ended before 9 August 2022.

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