From the beginning of July 2019 the financial thresholds for categorising a “large proprietary company” will be significantly increased. This in turn will increase the number of companies exempted from the requirement to make accurate financial statements publically available through the Australian Securities & Investments Commission (ASIC).
The changes are summarised in this table:
||Post 1 July 2019
|Annual consolidated revenue for the company and any entities it controls (control being determined based upon the accounting standards)
|Value of consolidated gross assets at the end of each financial year
|Employees of the company and any entities it controls
As with most legislative reform, there are positives and negatives.
The Federal Government estimates that the changes will reduce the cost of regulatory compliance by about $80 million per annum for approximately 2,200 businesses.
However, credit providers are concerned that without access to accurate financial information, costs for access to credit will increase. Concerns have also been expressed that a relaxation of the discipline involved with a regular reporting of financial position to ASIC will lead to an increased incidence of corporate insolvency and insolvent trading.
The amendments are contained in the Corporations Regulations 2001 and will become operable on 1 July 2019.
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If you require any further details or wish to discuss these issues with one of their specialist lawyers, please do not hesitate to contact Matthews Folbigg:
Address: Level 7, 10-14 Smith St, Parramatta NSW 2150
Phone: (02) 9635 7966