Large proprietary company thresholds increasedApril 16, 2019

AUSTRALIA – The government has reduced the financial reporting burden for some proprietary companies by increasing the thresholds for determining what constitutes a large proprietary company under section 45A of the Corporations Act 2001. Currently, companies that meet the thresholds are required to lodge an annual audited financial report including a director’s report with ASIC. The thresholds were increased so as to satisfy at least two of the following three:

$50m or more consolidated revenue for the financial year of the company and the entities it controls (up from $25m);

$25m or more consolidated gross assets at the end of the financial year of the company and the entities in controls (up from $12.5m); or

The company and the entities it controls having 100 employees at end of the financial year (up from 50).

The requirement for large proprietary companies to lodge and audit their financial reports was introduced in 1995 to focus regulation of reporting on the financial affairs of proprietary companies which have a significant economic influence.The financial reports of companies that have economic significance should be publicly available because of their size and potential to affect the community and the economy. The larger the size, the more likely it is that there will exist users dependent on general purpose financial reports as a basis for making economic decisions. The revenue and assets thresholds are being increased to account for nominal economic growth (as measured by changes in nominal gross domestic product (GDP)) since the thresholds were last adjusted in 2007.

Approximately one third of proprietary companies that lodged audited financial reports with ASIC for the 2017-18 financial year will no longer be required to lodge financial reports under the increased thresholds. Average access rates for the financial reports of these proprietary companies through ASIC is significantly lower than the average access rates for the remaining large proprietary company reporting population. Read more here>>>>>Pty Ltd threshhold increases Bill April 2019

Subscribe to our newsletter