Is your small business a company? Are you aware of ASIC (one of your company’s key regulators) and your company’s basic obligations to stay registered? Here’s a quick overview.
1. Keep details up to date
You will need to update ASIC of changes affecting your company such as:
- change of officer (director or company secretary)
- change of address (of an officer, shareholder or the company)
- change of shareholder or shareholdings
- change to the share structure (e.g. share splits or consolidations)
These notifications to ASIC are typically due within 28 days.
Officers can make changes using ASIC’s online services, or alternatively your registered agent (perhaps your accountant or lawyer) can help you out.
You will get a reminder once a year from ASIC in the form of the annual statement – this arrives on or about the anniversary of incorporation. Check it carefully and act swiftly to make any necessary updates.
2. Pay the fees
Once you’ve checked your annual statement, be sure to pay the annual review fee before the due date.
Late fees can be incurred through:
- Late lodgment of forms updating your company’s details
- Failure to make updates within 28 days of the annual statement
- Late payment of the annual review fee
Pay the late fees too.
Failure to pay fees may lead to your company being deregistered (which is not good for business!).
3. Solvency statement
Most small businesses don’t file financial statements with ASIC, but there is a requirement that the directors pass a solvency resolution that the company can (positive), or can’t (negative), pay its debts as and when they are due.
That resolution must be passed within 2 months of the annual review date. If that resolution is not passed or it is a negative resolution, ASIC must be notified.
To streamline compliance, if you have multiple companies, you may wish to consider aligning the annual review date (that is, rather than using the anniversary of incorporation, choose one of those dates and bring the others into line).
If there is any concern the company can’t pay its debts, seek professional advice urgently. Insolvent trading is a breach of directors’ duties and attracts significant penalties.
4. Statutory record
There are lots of documents your company will be keeping, but key company files that are typically kept together include:
- Certificate of incorporation
- Registers of shareholders, option holders and debentures
- Minutes of shareholder meetings/shareholder resolutions
- Minutes of directors meetings/board resolutions
- Officer consents and resignations
Thank you for reading an Abledale Tale. As the name suggests, this isn’t advice, it’s just a story. Whether you are looking to incorporate or your company is established, please get in touch to discuss how we may be able to assist you.