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ASIC Annual Reporting Obligations and why it’s so important!

Posted 21 Jul '22

As a company owner in Australia, it is important to be mindful of the Australian Securities and Investment Commission (ASIC) requirements. All companies established in Australia will be issued an Australian Company Number (ACN).  This will be advised to you upon setting up the company but is also publicly available online.  If you have an ACN then you will have obligations assigned by ASIC.

The most important compliance point that is relevant to our client base is to pay your ASIC fees on time. If you pay late or not at all you will incur penalties and at risk at being deregistered by ASIC.  If you are deregistered this means you are not legally allowed to use that entity within Australia – a pretty serious consequence! The second most important measure is to ensure your information is accurate and up to date with ASIC.  Notifying ASIC late of a name or address change can result in a late fee payable.

From details about ASIC late fees to insights into when information needs to be updated, we’ve compiled the basic information every company owner needs to know about ASIC requirements!

What is The ASIC Annual Statement?

The annual ASIC statement is a packet that you will receive about two months before it is required to be resubmitted. This can either be sent directly to you via post or if you have engaged us to look after your ASIC corporate compliance, we will issue this information to you through our online system, NowInfinity. Since this piece of mail is quite important, it is essential to be mindful of keeping your address accurate and updated with the ASIC at all times so this piece of very important correspondence can reach you.

Annual ASIC Statement Contents:

  • Solvency Resolution: Within your annual ASIC statement, you’ll receive a solvency resolution that you will need to sign and return. A solvency resolution is a resolution made by the directors of a company as to whether or not, in their opinion, the company will be able to pay back its debts when they are due. The directors must have a reasonable basis for their opinion and the resolution must be passed by a majority. If you are not sure about this declaration or if you should be signing it, please reach out to your Accountant.
  • Company Statement: Keep an eye out for your company statement or profile. This will contain all of the details about your company that were submitted when you registered. It’s helpful to review this information to ensure all of the information is still accurate. If anything is out of date and we look after your corporate compliance, then please reach out to the team and they will organise the forms to update.  If you look after it yourself, you will need to lodge the appropriate form with ASIC to make the required changes.
  • Annual Invoice: This is where they tell you how much you owe for the year! Follow the payment directions provided in the packet, and make sure you submit your payment by the indicated due date. You wouldn’t get stuck with any late fees!

Paying ASIC Fees on Time

As mentioned above, you’ll have about two months after receiving your annual ASIC statement to pay the assigned $290 dues (for the 2022 year). Those who pay late will be stuck with an $82 late fee. Unfortunately, those who default past 28 days will be hit with a whopping $340 on top of the already-added $82.

Late fees will be applied every 28 days that the dues aren’t paid.  ASIC doesn’t remit late fees (not like our friends at the ATO). So, with such heavy penalties for late payments, we recommend all businesses mark their calendars to ensure the original amount is paid on time!

Companies that don’t pay at all are at risk of becoming deregistered. This means that they are no longer able to trade under that specific company, which can be detrimental to the longevity of the establishment as a whole. Keep in mind that, in order to register again, all back-due fees and late fees must be paid.

Importance of Updating ASIC Information

Companies who do not go through a registered agent to help them keep track of ASIC tasks are responsible for keeping their own information updated through the system. If anything changes about your company or those in charge of your company, it is recommended that you head to the ASIC website to keep them updated.

Register your company on the ASIC Connect program to ensure you have access to the capabilities to keep your information accurate. As a heads up, you’ll need your 8-digit Corporate Key in order to register on the site. This is issued via a letter when you first setup your company. If you have misplaced this, you will need to reach out to ASIC directly to work out how to get a new one sent to you.

Top ASIC Information to Keep Updated:

  • Address: How will ASIC send you your statement on time if you haven’t updated them on your most current address? If you don’t have your items sent directly to an agent, you need to make sure your address is accurate on the ASIC website. You also wouldn’t want the ASIC to send your private information to an old address where it can fall into the wrong hands!
  • Phone Number: ASIC will send your mobile reminders about upcoming payments, updates, and more. Keep your number updated to ensure you receive these essential cues to pay your annual fees!
  • Email: Much like the text reminders, ASIC will send approximately 3 reminders through the platform about upcoming annual dues.
  • Director: If the Director of your company resigns, has a change of name, or passes away, it is important that they are removed from the company ASIC profile within 28 days of the event.

New ASIC Requirements for Directors

A company needs to have a Director’s ID number in order to set up a company through the ASIC and, to do so, there are some new regulations in place. Directors are required to apply before they can be appointed, and each Director must apply for this status themselves.

This is meant to prevent false and fraudulent Director identities, and it also eliminates the Director’s involvement if unlawful activity arises. For the specific updated cut-off dates by which new directors must apply, visit the ASIC.gov site!

As a reminder, treat your Director’s ID number like you would a Tax File Number. If you work with an agent, it is important to keep them updated on what your Director’s ID number is so they can add it to the ASIC system and keep it safe in their system as well.

More information on Director ID requirements can be found here.

We’re Here to Help!

Our Empire Accountants team would be happy to help you manage your annual ASIC responsibilities. We’ll send out your annual statement, follow up with you when due dates are nearing, and make sure your dues are paid on time. Reach Out to us today to inquire about adding this to your engagement if we don’t already do it for you!

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