CHAPTER 2M
-
FINANCIAL REPORTS AND AUDIT
PART 2M.1
-
OVERVIEW
Note: This Chapter applies to CCIVs with modifications: see Division
4
of Part
8B.4
.
History
Pt 2M.1 amended by No 8 of 2022, s 3, Sch 2[109] (effective 1 July 2022).
SECTION 285
OVERVIEW OF OBLIGATIONS UNDER THIS CHAPTER
Obligations under this Chapter
-
companies, registered schemes, registrable superannuation entities and disclosing entities
285(1)
Under this Chapter, all companies, registered schemes, registrable superannuation entities and disclosing entities must keep financial records (see sections
286
-
291
)
-
and some must prepare financial reports (see sections
292
-
323D
). All those that have to prepare financial reports have to prepare them annually; disclosing entities have to prepare half-year financial reports as well. The following table sets out what is involved in annual financial reporting:
Table
Table
Annual financial reporting for companies, registered schemes, registrable superannuation entities and disclosing entities
|
|
steps
|
sections
|
comments
|
1 |
prepare financial report |
s.
295 |
The financial report includes:
•
financial statements
•
disclosures and notes
•
directors
'
declaration. |
2 |
prepare directors
'
report |
s.
298 |
Unless the report relates to a company limited by guarantee, it has a general component (sections
299
and
299A
), a specific component (section
300
) and a special component for listed companies (section
300A
) and registrable superannuation entities (section
300C
). See section
285A
for an overview of the obligations of companies limited by guarantee. |
3 |
have the financial report audited and obtain auditor
'
s report |
s.
301
,
307
,
308 |
A small proprietary company preparing a financial report because it has CSF shareholders only has to have an audit if it has raised a total equal to or exceeding the CSF audit threshold from CSF offers. A small proprietary company preparing a financial report in response to a shareholder direction under section
293
usually only has to have an audit if the direction asks for it.
There are similar rules for companies limited by guarantee (see section
285A
for an overview).
Under s
312
, officers must assist the auditor in the conduct of the audit.
ASIC may use its exemption powers under s
340
and
341
to relieve large proprietary companies from the audit requirements in appropriate cases (s
342(2)
and
(3)
). |
4 |
provide the financial report, directors
'
report and auditor
'
s report to members |
s.
314
,
314AA |
Unless the report relates to a company limited by guarantee or a registrable superannuation entity, a concise financial report may be provided to members instead of the full financial statements (subsections
314(1)
and
(2)
). For registrable superannuation entities, see section
314AA
. For deadline, see subsections
315(1)
to
(4)
. See section
285A
for an overview of the obligations of companies limited by guarantee. |
5 |
lodge the financial report, directors
'
report and auditor
'
s report with ASIC |
s.
319 |
For deadline see s
319(3)
. |
6 |
[
public companies only] lay financial report, directors
'
report and auditor
'
s report before AGM |
s.
317 |
For the AGM deadline see s
250N
. |
[
CCH Note:
S 285(1) will be amended by No 69 of 2020, s 3, Sch 1[606], by substituting
"
the Registrar
"
for
"
ASIC
"
in table item 5, column headed
"
steps
"
, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
History
S 285(1) amended by No 29 of 2023, s 3, Sch 6[19]
-
[
25] (effective 1 July 2023).
S 285(1) amended by No 35 of 2022, s 3, Sch 4, Pt 7[2] (effective 10 August 2022).
S 285(1) amended by No 106 of 2018, s 3, Sch 1
[
16] and
[
17] (effective 19 October 2018).
S 285(1) amended by No 61 of 2018, s 3, Sch 2
[
86] (effective 18 September 2018).
S 285(1) amended by No 66 of 2010, s 3, Sch 1, Pt 1
[
11
-
13].
S 285(1) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
22] and
[
23].
S 285(1) amended by No 103 of 2004, s 3, Sch 2, Pt 2
[
3].
Obligations under this Chapter
-
notified foreign passport funds
285(1A)
Under this Chapter, all notified foreign passport funds must provide reports on financial matters to Australian members of the fund (see section
314A
) and to ASIC (see section
319
).
History
S 285(1A) inserted by No 61 of 2018, s 3, Sch 2[87] (effective 18 September 2018).
Application to disclosing entities
285(2)
This Chapter covers all disclosing entities:
(a)
incorporated or formed in Australia; and
(b)
whether or not they are companies or registered schemes.
History
S 285(2) amended by No 103 of 2004, s 3, Sch 11
[
8].
Application to registered schemes
285(3)
For the purposes of applying this Chapter to a registered scheme:
(a)
the scheme
'
s responsible entity is responsible for the performance of obligations in respect of the scheme; and
(b)
the directors and officers of the responsible entity are taken to be the directors and officers of the scheme; and
(c)
the debts incurred in operating the scheme are taken to be the debts of the scheme.
Application to registrable superannuation entities
285(3A)
For the purposes of applying this Chapter to a registrable superannuation entity, the RSE licensee for the entity is responsible for the performance of obligations in respect of the entity (see section
345AAA
).
History
S 285(3A) inserted by No 29 of 2023, s 3, Sch 6[26] (effective 1 July 2023).
Application to notified foreign passport funds
285(4)
For the purposes of applying this Chapter to a notified foreign passport fund:
(a)
the operator of the fund is responsible for the performance of obligations in respect of the fund; and
(b)
the debts incurred in operating the fund are taken to be the debts of the fund.
History
S 285(4) inserted by No 61 of 2018, s 3, Sch 2[88] (effective 18 September 2018).
SECTION 285A
285A
OVERVIEW OF OBLIGATIONS OF COMPANIES LIMITED BY GUARANTEE
The following table sets out what is involved in annual financial reporting for companies limited by guarantee:
Annual financial reporting for companies limited by guarantee
|
Item
|
Nature of company
|
Obligations
|
Sections
|
1 |
Small company limited by guarantee. |
No obligation to do any of the following unless required to do so under a member direction or ASIC direction:
•
prepare a financial report;
•
prepare a directors
'
report;
•
have financial report audited;
•
notify members of reports. |
Sections
292
,
301
and
316A |
2 |
Company limited by guarantee with annual revenue or, if part of a consolidated entity, annual consolidated revenue of less than $1 million. |
Must prepare a financial report.
Must prepare a directors
'
report, although less detailed than that required of other companies.
Need not have financial report audited unless a Commonwealth company, or a subsidiary of a Commonwealth company or Commonwealth authority. If the company does not have financial report audited, it must have financial report reviewed.
Must give reports to any member who elects to receive them. |
Sections
292
,
298
,
300B
,
301
,
316A |
3 |
Company limited by guarantee with annual revenue or, if part of a consolidated entity, annual consolidated revenue of $1 million or more. |
Must prepare a financial report.
Must prepare a directors
'
report, although less detailed than that required of other companies.
Must have financial report audited.
Must give reports to any member who elects to receive them. |
Sections
292
,
298
,
300B
,
301
,
316A |
History
S 285A inserted by No 66 of 2010, s 3, Sch 1, Pt 1
[
14] (effective 28 June 2010).