The Government’s response includes:
- Directors’ duties: The Government will release a consultation paper on the merits and risks of “turning on” directors’ duties under the Corporations Act for charitable companies;
- Reducing Red Tape:
- the Government is consulting with states and territories on the appropriate level of revenue thresholds for minimum reporting requirements;
- the Government will continue to work closely with the states and territories (via relevant cross-jurisdictional fora) to streamline and harmonise charities regulation:
- Minimum reporting requirements for small registered entities should be amended to allow in an Annual Information Statement an option to provide a simplified balance sheet or a statement of resources;
- The Government will continue to support efforts by the states and territories to harmonise state and territory fundraising laws;
- The Government supports in principle removing any ambiguity in the interactions between the ACNC Act and Corporations Act. However, the priority now is to implement reforms in response to the panel’s other recommendations before considering further reforms;
- Related party transactions: The Government supports all registered entities being required to disclose related party transactions. To minimise the compliance burden on small charities, the Government will require small registered entities to make a simplified disclosure involving a brief description of a related party transaction.
The Government will implement this recommendation by changes to regulations. The start date for this measure will align with any change to the revenue thresholds for financial reporting requirements;
- Remuneration: Large registered entities will be required to disclose remuneration paid to responsible persons and senior executives on an aggregated basis. This disclosure will only be required from entities with two or more key management personnel to accommodate privacy concerns. The start date will align with any change to the revenue thresholds for minimum reporting requirements;
- Disqualification:The Australian Charities and Not-for-profits Commission Regulation 2013 should be changed to disqualify a person from being a responsible person if they have a conviction for terrorism, terrorism financing, money laundering, fraud, importation or distribution of illicit drugs or a child sexual offence under Commonwealth, state or territory law.
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Author: David Jacobson
Principal, Bright Corporate Law
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.