ASIC Compliance: What You Need to Know
The Australian Securities and Investments Commission (ASIC) is Australia’s corporate, markets, and financial services regulator, responsible for ensuring compliance across companies, financial markets, and individuals to protect investors, consumers, and the economy.
For companies, complying with ASIC requirements and maintaining accurate records are critical obligations under the Corporations Act 2001. Non-compliance can lead to penalties, legal action, and even deregistration of the company.
Key ASIC Compliance Obligations for Companies
Every company registered with ASIC must meet a range of compliance obligations. These obligations vary based on the company’s type (proprietary or public), size, and business activities.
Annual Statement and Review Fee
All registered companies must pay an annual review fee to ASIC. Each year, ASIC sends a company statement to registered businesses on the anniversary of their registration. This statement includes the company’s registration details and a review fee invoice. The review process allows companies to confirm that the information held by ASIC is up to date.
Failing to pay the annual review fee on time may incur late fees or legal consequences.
Company Change Notifications
Companies must notify ASIC of any changes to their structure or details within specific timeframes. These changes include:
- Change of officeholders (e.g., appointing or ceasing directors or secretaries)
- Changes to the registered office or principal place of business
- Changes to the company name
- Changes in the share structure
- Issuance or cancellation of shares
Each of these changes requires a specific form to be submitted to ASIC within the given time limit.
Key Forms Required by ASIC
ASIC compliance includes lodging various forms applicable to different corporate changes or requirements. Some key forms include:
- Form 484: Changes to Company Details – used for updates like officeholders, addresses, or share structure. Must be lodged within 28 days of the change.
- Form 201: Application for Registration as an Australian Company – used for registering new companies.
- Form 205: Notification of Resolution – used to notify ASIC of special resolutions, such as changing the company name or share capital.
- Form 362: Notification of Appointment or Cessation of a Registered Agent.
- Form 370: Resignation of Officeholder – lodged within 28 days of a director’s resignation.
- Form 388: Financial Reports and Directors’ Reports – for public companies and large proprietary companies to file annual financial reports.
- Form 529: Directors’ Statement – required when a company enters voluntary administration or winding up.
Record-Keeping Obligations
Under the Corporations Act 2001, companies must maintain certain records, both financial and non-financial. Key records include:
- Financial records: Reflecting the company’s financial position, including transaction records, invoices, and receipts. These must be kept for at least seven years.
- Meeting minutes: Minutes of directors’ and shareholders’ meetings.
- Statutory registers: A register of members (shareholders), option holders, and charges (if applicable).
- Documents filed with ASIC: Copies of all lodged documents must be retained by the company.
Non-compliance with these record-keeping obligations can result in fines and penalties. Poor record-keeping can also lead to difficulties during audits or inspections.
Consequences of Non-Compliance with ASIC Requirements
Failure to meet ASIC compliance obligations or lodge documents on time can lead to serious consequences, including:
Financial Penalties
Late lodgement of ASIC forms incurs fees. For example, failing to lodge Form 484 within 28 days results in:
- $91 if lodged within one month after the due date.
- $381 if lodged more than one month after the due date.
Late payment of the annual review fee incurs similar penalties:
- $91 for up to one month late.
- $381 for more than one month late.
Court Action and Criminal Penalties
For more serious breaches, ASIC can pursue legal action, resulting in substantial fines or even imprisonment for directors and officeholders. In some cases, directors can be disqualified from managing corporations.
- Deregistration of the Company
If a company fails to pay its annual review fee for over 12 months, or consistently fails to meet its lodgement obligations, ASIC may deregister the company. Deregistration removes the company’s legal standing, and its assets are transferred to the Commonwealth. - Reputational Damage
Non-compliance can significantly harm a company’s reputation. Suppliers, customers, and investors may lose confidence in a company that fails to maintain good standing with ASIC, leading to potential business and investment losses.
Best Practices for Ensuring ASIC Compliance
To avoid non-compliance, companies should adopt proactive measures:
- Use a Registered ASIC Agent
Many companies appoint a registered ASIC agent to manage their compliance and lodgement obligations. - Regularly Review Company Information
Regularly review company details to ensure that all information filed with ASIC is accurate and up to date. - Automate Reminders and Lodgements
Companies can use accounting software or compliance tools to automate reminders for key lodgement deadlines. - Maintain Accurate Records
Good record-keeping practices, such as keeping digital copies of important financial and legal documents, can help companies meet reporting obligations and prepare for audits.
ASIC compliance and record-keeping are essential for the smooth operation of any company in Australia. Non-compliance can result in significant penalties and harm a company’s financial health and reputation. By staying informed about their obligations and maintaining accurate records, companies can ensure they remain in good standing with ASIC.
Credits
Soundera Pandian Selvaraj
One Business Services Team
