Post-Registration Compliances in Australia - An Overview Post-registration compliances in Australia is the process whereby the company and its officers follow all the applicable laws, regulations, ethical practices and standards that apply to their respective businesses. Following all the applicable compliances helps the company to identify and reduce the risk of being on the wrong side of the law, remedy the breaches that have occurred and create a culture of compliance with the laws. Benefits of Post-Registration Compliances in Australia Following all the post-registration compliances in Australia allows the companies to: Demonstrate your commitment towards the compliance obligations; Improves customers’ and investors’ confidence in your business; Enhances the reputation of your company; Effectively identify and manage the applicable risks; and Reduces the chances of landing up in legal trouble and simultaneously improves the awareness of your employees about the applicable law. Major Post-Registration Compliances in Australia The following post-registration compliances must be adhered to by all the companies registered in Australia after the successful incorporation/ registration: Disclosures about the details of the directors of the company Irrespective of the fact you have incorporated your business as a company or partnership, or trust in Australia, you must ensure that ASIC has a copy of all the directors’ names, residential addresses, and dates of birth. In the case your company has appointed a company secretary, such a person should also be registered with the ASIC. It must be noted that every director should be registered with their respective home address and not a Post Office Box number. Registered Office It is mandatory for every company registered in Australia to have a registered office right from the date of its registration. The name of the company should be prominently displayed at every place where the company carries out its business, and that is open to the public. The law makes it compulsory for every public company in Australia to keep the premises of its registered office open to the public for at least three hours between 9 am and 5 pm on every business day. On the other hand, a proprietary company does not need to keep its office open to the public; however, it needs to give access to its registers when requested by the government authorities. Continuous Disclosure by the Disclosing entities Disclosing entities in Australia typically refer to the listed public companies or trusts. These disclosing entities are supposed to disclose on a continuous basis information that a reasonable person would expect to have a material impact on the price or value of the business’s securities. There are certain exceptions to these disclosures, such as the information that is incomplete and confidential or is a trade secret. Most of these listed companies adopt a rigorous monitoring and reporting system to enable the identification of price-sensitive information and its timely disclosure in the market. Civil penalties are usually imposed for non-compliance with the continuous disclosure requirements. These entities can be fined by ASIC for their failure to comply with the disclosure requirements. The directors of these entities can be held criminally liable if they intentionally fail or are reckless in making disclosures on time. If the failure to make disclosure originates from a negligent act, the entity, along with the directors knowingly involved in the contravention, may be liable to incur civil liability to any person who has suffered loss as a result. It must be noted that these requirements of continuous disclosures are not applicable to the branch offices of a foreign registered entity unless such a foreign company has been listed on the Australian Stock Exchange. However, these branch offices are supposed to make limited continuing disclosures. Filing of the annual financial reports of the company All the public companies in Australia, large proprietary companies and the registered managed investment schemes (MIS) are obligated to prepare and submit to the ASIC an annual financial report of the company, in compliance with the accounting standards, giving a true and fair view of the company’s financial position during that period along with the annual director’s report. In certain cases, the companies have the option of seeking relief from this obligation by requesting ASIC. The annual financial statements of the company comprise the financial statements of the financial year, notes to these statements and the director’s declaration on these financial statements along with the declaration stating whether a company will be able to pay its debts or not as and when they become due. The financial statements are supposed to be lodged with the ASIC within a period of 3 months of the end of the financial year by all the disclosing entities, such as the listed companies and the registered MIS. Additionally, the registered MIS is supposed to lodge their financial reports within a period of 75 days from the end of the half year. All other reporting companies are required to submit their financial reports within a period of 4 months from the end of the financial. On the other hand, small proprietary companies are required to maintain proper accounting records and are only required to prepare an annual financial report and a director’s report and submit the same with the ASIC if they are: Required to do so by ASIC or if the shareholders of the company, holding at least 5% of the votes, ask them to do so; or Controlled by a foreign company that has not filed the audited consolidate accounts to the ASIC. The registered foreign companies are bound to submit their financial statements at least once every calendar year and at intervals of not more than 15 months. The financial statements that need to be submitted comprise a copy of company’s balance sheet, P & L statement and cash flow statement (prepared till the end of the financial year) and any other necessary paper that a company is required to submit according to the law of the place of its origin along with an ASIC necessary paper verifying those financial statements. A foreign-controlled small proprietary company can also request the ASIC to provide them relief from the filing of the annual financial report and the director’s report. Filing of Annual Statement: Every company’s annual review date is usually the anniversary of its registration in Australia. The companies are provided with an option to change their review date. Every year, the ASIC issues a company with an annual statement along with an invoice for the company’s annual fee. The annual statement of the company comprises information about the company, such as details of its shareholders, registered office, share structure and office holders. This annual statement is open for inspection by the public. The obligation to respond to the annual filings should not be confused with financial report obligations as it is a separate obligation. Appointment of an Auditor for the company Every public company and large proprietary company in Australia has to appoint an auditor. The appointment of the auditor, in the case of a public company, has to be done within a period of 1 month from the date of registration. If the law requires a small proprietary company to prepare consolidated financial statements of the company, then such company needs to appoint an auditor. The obligation of appointment of an auditor is also mandatory in case of companies that are controlled by foreign companies that have not lodged their audited consolidated accounts with the ASIC or are otherwise qualified for relief. Conduct Annual General Meeting Australian law does not make it mandatory for a proprietary company to hold an annual general meeting (AGM) of its shareholders unless its constitution states otherwise. However, a public company is bound to hold an AGM within a period of 18 months from the date of registration of the company. Further, such companies are required to hold AGM at least once in every calendar year within a period of 5 months of the end of its financial year. The Auditor of the company is obligated to attend all the AGMs of the company. A notice must be sent at least 21 days prior to all the general meetings, including the AGM of the company. Where a public company is concerned that is listed on the Australian Securities Exchange Commission, a notice of at least 28 days must be given before holding the AGM. Every resolution of a proprietary company in Australia is supposed to be passed by a written circulating resolution that is signed by all the shareholders of the company. Ongoing Post-Registration Compliances in Australia Apart from the major post-registration compliances that are supposed to be done immediately within 1 year of the registration of the company, there are certain other post-registration compliances in Australia that need to be met every year. The compliances to be met are as follows: Maintenance of Company’s books and registers: All the companies are required to maintain their minute books and registers at their registered office or principal place of doing business within Australia. These registers can also be kept at a place where the register is prepared such as the company’s solicitor’s office or someplace else after taking due permission from ASIC. In addition to these, the company is also supposed to maintain the minutes of the directors’ and shareholders’ meetings, the register of shareholders, debenture holders and option holders. The reason behind keeping books and registers at the place of doing business is to allow the shareholders of the company to have easier access to the minutes of books for inspection purposes and for free of charge. Reporting major changes in the company: if any changes take place with respect to the name, registered official address, officers of the company and certain other matters related to the company; ASIC needs to be notified of such changes within a reasonable time after such changes have occurred. The company also needs to keep updating its registers and records. Failure to apprise ASIC of such changes can result in the imposition of late fees and penalties. Maintain accurate records of the personal property securities: a company is also obligated to maintain accurate records about the personal property securities register about the creation or discharge of any registrable security interests in respect of its personal property under the Personal Property Securities Act of 2009 (PPSA). PPSA is generally applicable to personal property that is located in Australia or if the grantor of the security interest is an Australian. Failure on the part of the company to register promptly can result in company losing its priority regarding the security interest, or it may also happen that the security interest may become unenforceable in the insolvency or bankruptcy of the grantor. Filing of company’s constitution in the public record: unless the resolution of the company related to the share capital, status or share capital of the proprietary company, the proprietary companies are not required to file their constitution in the public records at the time of their registration or when resolution affecting the changes in the constitution are made.