RSM Australia

Reporting Obligations for Australian Proprietary Companies

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This guide is designed to assist proprietary companies in determining their financial reporting obligations. It explains whether your proprietary limited company needs to prepare, have audited, and lodge financial statements with the Australian Securities and Investments Commission (ASIC).

The Corporations Act Requirements

The default requirements of the Corporations Act 2001 are that large proprietary companies must:

  • annually prepare a financial report (which includes the financial statements, the notes to the financial statements, and the directors’ declaration) [s292(1)]asset_11.png
  • annually prepare a directors’ report [s298]
  • appoint an auditor and have the financial report audited [s301(1)]
  • lodge the financial report with ASIC within 4 months after year-end [s319(1),(3)(b)]
  • distribute the financial report to members within 4 months after year-end [s314, 315(4)]

A proprietary company is classified as large from 1 July 2019 if it satisfies any two of the following three criteria, which must be calculated on a consolidated basis and in accordance with Australian Accounting Standards.

  • The consolidated revenue for the financial year of the company and the entities it controls (if any) is $50 million or more;
  • The consolidated gross assets at the end of the financial year of the company and the entities it controls (if any) are $25 million;
  • The company and the entities it controls (if any) have 100 or more employees (full- time equivalent) at the end of the financial year.

A small proprietary company is generally not required to prepare financial reports, unless directed to by ASIC, or directed to by shareholders; and is generally not required to prepare and lodge audited financial reports annually unless the company is controlled by a foreign company.

Exemptions and Reliefs Available

asset_15.pngThere are some exceptions and amendments to the general rules, mostly based on ASIC Legislative Instruments.

Corporations Act s319(4)

Relief from what?

  • Lodgement of financial reports only
  • No relief from preparation and auditing 

To whom, and when, does it apply?

  • “Grandfathered” companies, being those who were an “exempt proprietary company” on 30 June 1994, and have continued to meet that definition ever since

Main conditions

  • The company’s financial statements for 1993 and each subsequent year have been audited before the statutory deadline
  • A notice was lodged with ASIC applying for this relief within 4 months of the end of the first financial year after 9 December 1995

ASIC Corporations Exempt Proprietary Companies) Instrument 2015/840

Relief from what?ASIC Corporations Exempt Proprietary Companies) Instrument 2015/840

  • Lodgement of financial reports only.
  • No relief from preparation and auditing

To whom, and when, does it apply?

  • Similar relief to “grandfathered” companies for Large Proprietary companies where a non-controlling ownership interest was held by a foreign company

Main Conditions

  • The company’s financial statements for 1993 and each subsequent year have been audited before the statutory deadline
  • A notice was lodged with ASIC applying for this relief within 4 months of the end of the first financial year after 24 April 1997

ASIC Corporations (Foreign-Controlled Company Reports) Instrument 2017/204

ASIC Corporations (Foreign-Controlled Company Reports) Instrument 2017/204

Relief from what?

  • Preparation, audit, and lodgement of financial reports

To whom, and when, does it apply?

  • Foreign-controlled small proprietary companies, so long as the company is not part of a large Australian group.

Main Conditions

  • Directors’ resolution and lodgement of Form 384 within the deadlines set out in Instrument 2017/204.

ASIC Corporations (Audit Relief) Instrument 2016/784

Relief from what?ASIC Corporations (Audit Relief) Instrument 2016/784

  • Audit only.
  • No relief from preparation or lodgement.

To whom, and when, does it apply?

  • Non-disclosing large proprietary companies
  • Non-disclosing small foreign-controlled proprietary companies

Main Conditions

  • The company has not had its financial report or financial statements audited for a financial year ending during 1993 or any later financial year;
  • Unanimous shareholder & directors’ resolution within a prescribed period.
  • Quarterly management accounts must be prepared
  • The directors must resolve that, at the end of each quarter, total liabilities do not exceed 70% of total tangible assets
  • The company must have made a profit for the current year or the prior year
  • The year-end financial statements must be prepared by a prescribed accountant, who must issue a compilation report


ASIC Corporations (Wholly owned Companies) Instrument 2016/785

Relief from what?ASIC Corporations (Wholly owned Companies) Instrument 2016/785

  • Preparation, audit, and lodgement of report *
  • * but requires the preparation and lodgement of consolidated financial statements by the holding company.

To whom, and when, does it apply?

Applies to both:

  • Non-disclosing large proprietary companies, and
  • Non-disclosing small foreign-controlled proprietary companies,

So long as they have a holding company which is not small at the end of the financial year, with a co-terminus year-end.

Main Conditions

Applies if:

  • The subsidiary is wholly-owned;
  • They are deeds of cross-guarantee in place between the holding company and the large proprietary subsidiary
  • The deed of cross-guarantee must be enforceable in the holding company’s place of incorporation
  • The holding entity has prepared and lodged consolidated financial statements which comply with the instrument (‘how’ depends on whether the holding entity is an Australian company or a registered foreign company) and are audited if required to in their jurisdiction

Corporations Act, s340

Relief from what?

  • Preparation, audit, and lodgement

To whom, and when, does it apply?

  • Any entity otherwise required to comply with Part 2M.2, 2M.3, and 2M.4 of the Corporations Act, including large proprietary companies

Main Conditions

Applies if requiring the entity to comply with the Corporations Act would:

  • render the financial report or other reports misleading (s342(1)(a));
  • be inappropriate in the circumstances (s342(1)(b)); or
  • impose unreasonable burdens (s342(1)(c)).
  • This relief is only rarely granted


Further information can be found in:

ASIC Regulatory Guide 58 Reporting by registered foreign companies and Australian companies with foreign shareholders. Further information can be found in:

Registered foreign companies and foreign-owned companies

Unless the relief in ASIC Corporations (Foreign-Controlled Company Reports) Instrument 2017/204 applies to the entity, any registered foreign company – that is, a company incorporated outside of Australia, which registered with ASIC in order to carry out business operations in Australia – must prepare financial statements which:

  • Registered foreign companies and foreign-owned companiescomply with the reporting regulations in its country of incorporation (or in accordance with the Corporations Act, if none are required in its country of incorporation),
  • are audited if required in the country of origin (or if ASIC requires an audit, and one has not already been performed in the country of origin); and
  • are sent to members if required in the country of origin.

The relief from preparation and lodgement of an audited financial report with ASIC applies to registered foreign companies which are subject to similar restrictions to those an Australian proprietary company is, are not large, and are not required to prepare financial statements in their place of origin:

  • if they are not part of a 'large group' or
  • if a parent consolidates the registered foreign company for the entire financial year and lodges its financial statements with ASIC.

Additionally, small foreign-owned companies, owned by a registered foreign company which has lodged consolidated financial statements with ASIC, into which the small company is consolidated, is exempt from the requirement to prepare and lodge financial statements of their own with ASIC.

Significant Global Entities

Section 3CA of the Tax Administration Act 1953 introduced new reporting obligations for Australian subsidiaries of Significant Global Entities. A Significant Global Entity is a group of entities consolidated for accounting purposes with annual global revenue and other income of over A$1bn.

Significant Global Entities

Any Australian entity that is part of a Significant Global Entity must lodge general purpose financial statements with either ASIC or the ATO. None of the exceptions listed in the table above apply to Significant Global Entities.

Our article on the reporting requirements for Significant Global Entities provides more detail in this area.

For more information about financial reporting obligations, please don’t hesitate to contact Ralph Martin, or get in contact with your local RSM contact today!