The majority of small proprietary companies are not required to prepare financial reports, though there are instances (outlined below) when this will be required, which may also include having the financial report audited, lodged with ASIC or sent to members. In cases where a small proprietary is controlled by a foreign company, relief is sometimes available from complying with some or all of these requirements, as outlined below.
Small proprietary companies controlled by a foreign company (and are not disclosing entities)
A small proprietary company that is controlled by a foreign company, which is not a disclosing entity, must comply with certain financial reporting and audit reporting requirements, as set out in the following table:
Entity
Requirements
Small proprietary companies controlled by foreign companies that are not part of a large group
You are not required to appoint auditors or prepare or lodge financial reports if the directors resolve to rely on the relief provided by ASIC Corporations (Foreign-Controlled Company Reports) Instrument 2017/204 and lodge notice of that resolution within the time requirements under that instrument
The directors must resolve to rely on the relief and lodge Form 384Resolution by directors of a small proprietary company controlled by a foreign company which is not part of a 'large group' within the deadlines set out in Instrument 2017/204.
Small proprietary companies controlled by foreign companies for all or part of the financial year where a parent company (which must be an Australian company or a registered foreign company) lodged consolidated financial statements for that financial year with ASIC
You are not required to appoint auditors or prepare or lodge financial reports.
Other small proprietary companies controlled by foreign companies that have not been audited in any financial year since 1993 with the exception of a year ending after 9 December 1995 and before 24 April 1997
You must prepare financial reports in accordance with Chapter 2M of the Corporations Act.
These financial reports must be:
lodged with ASIC within four months of financial year end
sent to members within four months of financial year end.
Small proprietary companies (not controlled by a foreign company) where ASIC requests a financial report
You must prepare:
a financial report
which is
prepared in accordance with the requirements of Pt 2M.3 of the Corporations Act2001 (Corporations Act) in the ASIC request under s294(1) of the Corporations Act
audited if ASIC requests it under s294(1) of the Corporations Act
sent to members within four months after financial year end if ASIC requests it under s294(1) of the Corporations Act
lodged with ASIC if ASIC requests it under s294(1) of the Corporations Act and specifies the date under s321(2) of the Corporations Act to be at least 14 days after the direction is given.
Small proprietary companies not controlled by a foreign company (and are not disclosing entities) where shareholders request a financial report
You must prepare:
a financial report
which is
prepared in compliance with accounting standards if requested by the shareholder/s under s293(3)(a)
audited when requested by the shareholder/s under s293(3)(c) or when the company had one or more crowd-sourced funding (CSF) shareholders during the year and the amount raised from all the CSF offers it has ever made is $3 million or more
sent to members within four months after the end of the financial year, or within the later of four months after the financial year end or two months after a request by shareholders.
The financial statements do not have to be lodged with ASIC unless the company had one or more CSF shareholders at any time during the year.
