Company Law Review Act 1998 (61 of 1998)

Schedule 1   Main amendments of the Corporations Law

6   Divisions 2 and 3 of Part 3.7 and Part 3.8

Repeal the Divisions and Part, substitute:

Part 2M.5 - Accounting standards

334 Accounting standards

AASB's power to make accounting standards

(1) The AASB may make accounting standards for the purposes of this Law. The standards must be in writing and must not be inconsistent with this law or the Regulations.

(2) Section 46A of the Acts Interpretation Act 1901 of the Commonwealth applies to a standard made under subsection (1) as if it were a disallowable instrument for the purposes of that section.

Application of standards

(3) Accounting standards may:

(a) be of general or limited application (including a limitation to specified bodies or undertakings); and

(b) differ according to differences in time, place or circumstance.

(4) An accounting standard applies to:

(a) periods ending after the commencement of the standard; or

(b) periods ending on or after a later date specified in the standard.

(5) A company, registered scheme or disclosing entity may elect to apply the accounting standard to an earlier period unless the standard says otherwise. The election must be made in writing by the directors.

335 Equity accounting

This Chapter (and, in particular, the provisions on consolidation of financial statements) does not prevent accounting standards from incorporating equity accounting principles.

336 Comparative amounts

The accounting standards for the preparation of financial reports for a period may require the inclusion in those reports of comparative amounts for earlier periods.

337 Interpretation of accounting standards

In interpreting an accounting standard, unless the contrary intention appears:

(a) expressions used in the standard have the same meaning as they have in this Chapter; and

(b) the provisions of Part 1.2 apply as if the standard's provisions were provisions of this Chapter.

338 Severing invalid provisions

If an accounting standard would otherwise have been interpreted as being inconsistent with this Law, the standard is nevertheless to be valid to the extent to which it is not inconsistent with this Law.

339 Evidence of text of accounting standard

(1) This section applies to a document that purports to be published by or on behalf of the AASB or ASC and to set out the text of:

(a) a specified standard as in force at a specified time under section 334; or

(b) a specified provision of a standard of that kind.

It also applies to a copy of a document of that kind.

(2) In the absence of evidence to the contrary, a document to which this section applies is proof in proceedings under the Corporations Law of this jurisdiction that:

(a) the specified standard was in force at that time under that section; and

(b) the text set out in the document is the text of the standard referred to in paragraph (1)(a) or the provision referred to in paragraph (1)(b).

Part 2M.6 - Exemptions and modifications

340 ASC's power to make specific exemption orders

(1) On an application made in accordance with subsection (3) in relation to a company, registered scheme or disclosing entity, the ASC may make an order in writing relieving any of the following from all or specified requirements of Parts 2M.2 and 2M.3:

(a) the directors

(b) the company, scheme or entity

(c) the auditor.

Note: For the criteria for making orders under this section, see section 342.

(2) The order may:

(a) be expressed to be subject to conditions; and

(b) be indefinite or limited to a specified period.

(3) The application must be:

(a) authorised by a resolution of the directors; and

(b) in writing and signed by a director; and

(c) lodged with the ASC.

(4) The ASC must give the applicant written notice of the making, revocation or suspension of the order.

341 ASC's power to make class orders

(1) The ASC may make an order in writing in respect of a specified class of companies, registered schemes or disclosing entities, relieving any of the following from all or specified requirements of Parts 2M.2 and 2M.3:

(a) directors

(b) the companies, registered schemes or disclosing entities themselves

(c) auditors of the companies, registered schemes or disclosing entities.

Note: For the criteria for making orders under this section, see section 342.

(2) The order may:

(a) be expressed to be subject to conditions; and

(b) be indefinite or limited to a specified period.

(3) Notice of the making, revocation or suspension of the order must be published in the Gazette.

342 Criteria for specific exemption orders and class orders

(1) To make an order under section 340 or 341, the ASC must be satisfied that complying with the relevant requirements of Parts 2M.2 and 2M.3 would:

(a) make the financial report or other reports misleading; or

(b) be inappropriate in the circumstances; or

(c) impose unreasonable burdens.

(2) In deciding for the purposes of subsection (1) whether the audit requirements for a proprietary company, or a class of proprietary companies, would impose an unreasonable burden on the company or companies, the ASC is to have regard to:

(a) the expected costs of complying with the audit requirements; and

(b) the expected benefits of having the company or companies comply with the audit requirements; and

(c) any practical difficulties that the company or companies face in complying effectively with the audit requirements (in particular, any difficulties that arise because a financial year is the first one for which the audit requirements apply or because the company or companies are likely to move frequently between the small and large proprietary company categories from one financial year to another); and

(d) any unusual aspects of the operation of the company or companies during the financial year concerned; and

(e) any other matters that the ASC considers relevant.

(3) In assessing expected benefits under subsection (2), the ASC is to take account of:

(a) the number of creditors and potential creditors; and

(b) the position of creditors and potential creditors (in particular, their ability to independently obtain financial information about the company or companies); and

(c) the nature and extent of the liabilities of the company or companies.

343 Modification by regulations

The regulations may modify the operation of this Chapter in relation to:

(a) a specified company, registered scheme or disclosing entity; or

(b) all companies, registered schemes or disclosing entities of a specified kind.

Part 2M.7 - Sanctions for contraventions of Chapter

344 Contravention of Part 2M.2 or 2M.3

(1) A director of a company, registered scheme or disclosing entity contravenes this section if they fail to take all reasonable steps to comply with, or to secure compliance with, Part 2M.2 or 2M.3.

Note: This section is a civil penalty provision (see section 1317DA).

(2) Subsection (1) does not apply to section 310, 312, 323A or 323B.

(3) This section does not affect the application of the provisions of Part 2M.2 or 2M.3 to a director as an officer.

Chapter 2N - Annual returns and lodgments with the ASC

Part 2N.1 - Annual returns

345 Deadline for lodging annual return

Companies

(1) A company must lodge an annual return with the ASC by
31 January each year, unless the ASC and the company agree to a different lodgment date (see subsection (3)).

Responsible entities of registered schemes

(2) The responsible entity of a registered scheme must lodge an annual return for the scheme with the ASC. The return for a scheme must be lodged within 3 months after the end of the scheme's financial year unless the ASC and the responsible entity agree to a different lodgment date (see subsection (3)).

Agreed lodgment date

(3) The ASC and the company or the ASC and the responsible entity may agree to a different lodgment date. The agreement must be in writing and may cover 1 or more years. The annual return must be lodged by the agreed date.

Company's obligation to lodge some notices ceases on lodgment of annual return

(4) A company's obligation to lodge a notice under section 142, 146, 242 or 254X, ceases when:

(a) the company lodges an annual return; and

(b) the annual return sets out the information required by the notice.

This subsection does not affect the company's liability for late lodgment fees incurred before the annual return is lodged or continuing offences committed before that time.

Note: The ASC has a practice of sending out partly completed annual returns. The partly completed return may be used to comply with the obligation to lodge an annual return by correcting any information in it that is not accurate, completing the rest and lodging it with the ASC.

346 Solvency resolution - companies

(1) Within 1 month before the annual return is lodged, the directors of a company must resolve whether, in their opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

(2) Subsection (1) does not apply to a company that has lodged a financial report of the company with the ASC under
Chapter 2M within 12 months before the annual return is lodged.

347 Lodging annual return with ASC

An annual return may be lodged with the ASC:

(a) in writing in the form approved by the ASC and signed in accordance with section 351; or

(b) electronically in accordance with section 352.

348 Contents of annual return - companies

A company's annual return must contain the information set out in the following table, current as at the date when the annual return is signed or authenticated. It must also contain any other information required by the regulations.

Note: If the details referred to in items 3, 4, 5 and 6 change after the annual return is lodged, the company must notify the ASC of the change (see section 142 (registered office), section 146 (principal place of business), section 242 (director and company secretary) and section 254X (issued shares)).

349 Contents of annual return - registered schemes

An annual return for a registered scheme must contain the information set out in the following table, current as at the date when the annual return is signed or authenticated. It must also contain any other information required by the regulations.

Part 2N.2 - Lodgments with ASC

350 Forms for documents to be lodged with ASC

A document that this Law requires to be lodged with the ASC in a prescribed form must be:

(a) if a form for the document is prescribed in the regulations - in the prescribed form; or

(b) if a form for the document is not prescribed in regulations but the ASC has approved a form for the document - in the approved form.

351 Signing documents lodged with ASC

(1) A document lodged with the ASC in writing by, or on behalf of, a corporation or a registered scheme must be signed by a director or secretary of the corporation or of the responsible entity of the registered scheme. If the corporation is a foreign company, it may be signed by:

(a) its local agent; or

(b) if the local agent is a corporation - a director or secretary of the agent.

(2) An individual who lodges a document with the ASC in writing must sign it.

(3) The person's name must be printed next to the signature.

352 Documents lodged with ASIC electronically

(1) A document may be lodged with ASIC electronically only if:

(a) ASIC and the person seeking to lodge it (either on their own behalf or as agent) have agreed, in writing, that it may be lodged electronically; or

(b) ASIC has approved, in writing, the electronic lodgment of documents of that kind.

The document is taken to be lodged with ASIC if it is lodged in accordance with the agreement or approval (including any requirements of the agreement or approval as to authentication).

(2) Any agreement or approval must provide for a signed copy of the document to be held by the person lodging the document and for the person to make the signed copy of the document available to the ASIC if required.