Fact Sheet 2 – Compliance with Corporate Law Administered by the Australian Securities and Investments Commission (ASIC)
The Australian Securities and Investments Commission (ASIC) is Australia’s corporate, markets and financial services regulator. It is the independent Commonwealth Government body responsible for (among other things) registering and ensuring companies, schemes and various individuals and entities meet their obligations under the Corporations Act 2001 (the Act).
Foreign companies intending to carry on a business in Australia are generally required to register with ASIC as a foreign company. These companies are discussed further below.
Alternatively, a foreign entity may choose to incorporate an Australian company (for example, a subsidiary), to conduct business in Australia.
Australian companies are generally governed by a constitution; in the absence of a constitution, a company will be governed by a set of common rules provided in the Act.
In order to be registered as an Australian company by ASIC, the company must have at least one member. The majority of Australian companies are ‘proprietary companies’. Proprietary companies must have at least one director who ordinarily resides in Australia, and a registered office in Australia. Companies with more than 50 non-employee members and/or who wish to offer shares to the public must be ‘public companies’. Public companies must have at least three directors, with two directors that reside in Australia. Large proprietary companies (for example, those meeting a threshold level of revenue, assets and employees) and public companies are required to lodge an audited financial report and directors’ report with ASIC each financial year.
All companies must also comply with various notification requirements under the Act, including certain changes to a corporation’s and directors’ details.
Registered foreign companies
A foreign company intending to carry on a business in Australia is generally registered with ASIC. For the purposes of this requirement, ‘foreign company’ includes incorporated bodies (other than a corporation sole or exempt public authority) and certain unincorporated bodies that are formed in an external territory of Australia or outside of Australia.
Registered foreign companies are required to lodge financial statements with ASIC at least once every calendar year and at intervals of not more than 15 months. These financial statements comprise:
- a copy of the company’s balance sheet, profit and loss statement, and cash flow statement (all made up to the end of the last financial year of the company); and
- any other documents the company is required to prepare by the law that applies in the company’s place of origin, together with a statement in writing in the prescribed form, verifying that the copies are true copies of the documents required.
A registered foreign company must appoint a local agent, who is ‘answerable for the doing of all acts, matters and things that the foreign company is required by or under the Corporations Act 2001 to do’. The local agent may also be personally liable to a penalty imposed on the foreign company for a contravention of the Corporations Act.
Registered foreign companies must also notify ASIC of certain changes, including amendments to: its constitution or any other lodged documents; its directors (including changes to the powers of Australian resident directors); and/or its local agent.
Please refer to ASIC’s website for further details regarding the regulatory obligations of Australian and registered foreign companies.