Explanatory Memorandum
(Circulated by the authority of the Minister for Small Business, Minister Assisting on Deregulation and Public Sector Superannuation, Minister Assisting the Minister for Tourism, Senator the Hon Nick Sherry)Chapter 10 Administration
Outline of chapter
10.1 Chapter 9 of this explanatory memorandum outlines:
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- various administrative matters in respect of the administration of the new regime
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- the ability of the Minister to provide directions to ASIC in relation to the administration of the regime
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- the ability of ASIC to share information with the Registrar of the Australian Business Register (ABR)
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- an offence in relation to the improper use by employees of information provided under the business names legislation.
Detailed explanation of new law
10.2 Section 63 provides that ASIC has the powers and functions conferred on it by or under this Bill or the Transitional Bill. ASIC has the power to do whatever is necessary for or in connection with, or reasonably incidental to, the performance of its functions under this Bill and the Transitional Bill. ASIC has the general administration of this Bill and the Transitional Bill, subject to the Australian Securities and Investments Commission Act 2001.
10.3 Section 64 provides that the Minister may give directions to ASIC as to its policies and priorities in relation to the administration of the business names regime, but not without consulting with ASIC first and not in relation to a particular case. Such a direction is not a legislative instrument within the meaning of the Legislative Instruments Act 2003. The statement in subsection 64(3) has been included for the sake of clarity only, to assist the reader, and does not amount to a declaration under the Legislative Instruments Act 2003. Directions must be published in the Gazette and laid before each House of Parliament within 15 sitting days after publication. ASIC must comply with these directions.
10.4 Section 65 provides that ASIC can, with the consent of the Minister, enter into agreements with the States and Territories for the performance of functions or the exercise of powers by ASIC as an agent of the State and Territory. Although ASIC has such functions and powers as referred to in such an agreement, under section 65(2) ASIC is not under a duty to perform such functions or exercise such powers. In addition, ASIC is not subject to any directions of the Minister in relation to entering into such an agreement or performing functions under such an agreement.
10.5 Section 66 provides that other than for the decisions relating to the review of any decisions, ASIC may arrange for the use of computer programs under ASIC's control to make decisions. For example, it is intended that decisions regarding whether a proposed business name is identical or nearly identical to any of the hundreds of thousands of existing business name expected to be on the Register will be largely automated.
10.6 Section 67 provides that any document which the Bill or the Transitional Bill requires to be lodged with ASIC must be in the prescribed form and must contain or be accompanied by any materials required by the form. In the absence of a form being prescribed, the Bill authorises ASIC to instead approve a form.
10.7 Section 68 provides that a document that is required to be lodged must be lodged in the manner prescribed by the regulations. However, this section likewise provides that if the regulations do not prescribe a manner ASIC may approve the manner in which the form must be lodged.
10.8 Section 69 provides that ASIC may refuse to receive a document if it considers that it: contains matter that, in a material particular, is false or misleading in the form or context in which it is included; is incomplete; is to be lodged in a prescribed form or in a prescribed manner but is not submitted in that form or manner; otherwise contravenes the Bill or Transitional Bill; or contains an error, alteration or erasure.
10.9 Further, if ASIC refuses to accept a document, it can make a request under subsection 69(2) for the document to be corrected, a fresh document submitted or a supplementary document lodged.
10.10 Subsection 69(3) provides ASIC with a power to request by a written notice an additional document or further information, once it receives a document. The information or document that ASIC can request is such that ASIC considers necessary in order to form an opinion as to whether it may refuse to receive the first document. In the written notice that ASIC is required to send out, it must specify the day by which the entity must comply with the notice. If the entity does not comply with the notice, ASIC may refuse to accept the first document and it is taken to have never been lodged with ASIC
10.11 Decisions under this section are reviewable under Part 7 of the Bill. Further detail is provided in the commentary for that Part.
10.12 Section 70 provides that the fees payable to ASIC are received on behalf of the Commonwealth of Australia.
10.13 Section 71 provides ASIC with a power to determine, by legislative instrument, the circumstances where fees are taken to be fully paid. For example, a determination may provide rules regarding when payments made by cheque are considered to be effective for the purpose of the business name regime.
10.14 Section 72 provides that nothing in the Bill prevents ASIC on behalf of the Commonwealth to waive or reduce fees that would be otherwise payable or to refund fees if circumstances are appropriate.
10.15 Section 73 sets out the methods by which ASIC may give notices (in relation to the administration of the Register) to an entity. It entitles ASIC to rely upon the address for service specified on the Register. Similarly, if an entity has provided an email address to be included on the Register and the entity has given ASIC consent to use the email address, it may rely on that address to send notices to it.
10.16 Section 74 provides that ASIC may destroy or dispose of a document that it has received under the provisions of the Bill or the Transitional Bill, if ASIC considers that it is no longer desirable or necessary to retain the document. ASIC can only do this if the document has been its possession for the period of time that is prescribed in the regulations or an electronic copy of the document has been retained by ASIC. It is intended that a period of 7 years will be provided for in the regulations.
10.17 Section 75 provides that ASIC may issue formal warnings to an entity where ASIC has reasonable grounds to believe that the entity has contravened a provision of the Registration Act. The entity will be warned of the action that ASIC may take under the Registration Bill in response to such a contravention.
10.18 Section 76 provides that ASIC may disclose information to the Registrar of the Australian Business Register (ABR), for the purposes of identifying business names registered to an entity on the ABR and ensuring consistency between the ABR and the Register in the details registered on those registers.
10.19 ASIC is permitted by subsection 76(2) to record and use information disclosed to ASIC by the registrar of the ABR for the purposes of ensuring consistency between the ABR and the Register.
10.20 Subsections 77(1) and (2) creates an offence in relation to the unauthorised recording, use or disclosure of information obtained in the course of performing functions or exercising powers under the new business names regime. It is punishable by up to one year of imprisonment. The recording, use or disclosure of information is permitted if done with the consent of the entity, in accordance with a provision of the Bill or the Transitional Bill or for the purpose of performing functions or exercising powers under the Bill or Transitional Bill. Provision of information to a court or tribunal is also permitted.
10.21 Subsection 77(3) creates an offence where a person obtains information in the performance of their functions for that body or agency, to which they would not have had access but for section 62, and they record, use or disclose the information other than for the purpose for which it was initially provided. To commit the offence a person must also be reckless as to whether the purpose for which it was provided is same as the purpose for which it is subsequently recorded, used or disclosed. The offence attracts a penalty of up to six months' imprisonment.
10.22 Subsection 77(4) provides an exception from the offences created under subsection 77(3) for third party disclosure of information when it is reasonably necessary for the enforcement of criminal law, a law imposing pecuniary penalty or the protection of public revenue.
10.23 These provisions seek to protect information held in the business names register from misuse.
10.24 Section 78 provides that the Minister, ASIC, a member of ASIC, a staff member of ASIC, a person authorised to exercise a function or power of ASIC or an APS employee or employee of a Commonwealth authority whose services are available to ASIC are not liable for damages for any act done or omitted to be done under the provisions of the Bill or the Transitional Bill in the performance or purported performance of any function or exercise or purported exercise of any power under the Bill or the Transitional Bill, provided that the act was done in good faith.
10.25 Section 79 provides that ASIC may delegate its functions and powers to an employee. ASIC's coercive information gathering powers and associated functions under section 37 (requesting information and correcting the register) and subsection 41(1) (giving notice requiring entity to lodge information) may only be delegated to a person who is an ASIC member or in the Senior Executive Service, or who is acting in such a position. The same restriction on delegation applies to the power in subsection 47(1) to cancel a business name on the basis that the entity is not carrying on business under that name, given the complexities and uncertainties expected to arise in respect of the exercise of this power.
10.26 The power under subsection 41(2) (relating to applying to court for orders to compel the production of information) and subsection 65(1) (relating to entry into arrangements with the States and Territories with the Minister's consent) cannot be delegated at all.
10.27 Otherwise ASIC may delegate functions and powers to an employee, provided that the employee has the expertise appropriate to the function or power delegated.
10.28 Section 80 provides that the Minister may, by a signed instrument, delegate to either an ASIC Member or a staff member who is a Senior Executive Service employee, either acting or permanent, any of the Minister's functions under the Bill or the Transitional Bill that are specified as being capable of delegation by regulations. The person who receives the delegation must comply with any directions that the Minister gives in relation to the exercise of the delegation.
Application and transitional provisions
10.29 All provisions in Part 9 will commence on a single day to be fixed by proclamation. The date of proclamation will depend on when the final State or Territory passes its referral legislation or adopts the Commonwealth legislation.
10.30 Transitional provisions are contained in the Business Names Registration (Transitional and Consequential Provisions) Bill 2011.
Consequential amendments
10.31 Consequential provisions are contained in the Business Names Registration (Transitional and Consequential Provisions) Bill 2011.