The Corporations Legislation Amendment (Simpler Regulatory System) Bill 2007 when passed will simplify company reporting obligations.
Amendments will remove duplication in the executive remuneration disclosure requirements between the Corporations Act and accounting standards so that the remuneration disclosure requirements for individual directors and executives of listed companies will be exclusively contained in the Corporations Act. Following on from the amendments to the Corporations Act in this Bill, the remaining remuneration disclosure requirements in the accounting standards will be incorporated into the Corporations Regulations.
The Act will adopt the standards’ definition of ‘key management personnel’.
Disclosures will be made in a company’s directors’ report instead of the financial report.
The amendments regarding executive remuneration will apply to financial years that begin on or after commencement.
Companies that are disclosing entities must disclose their policy in relation to directors and executives hedging their incentive remuneration and how the company enforces this policy.
Thresholds for financial reporting of large proprietary companies
The revenue and asset thresholds for financial reporting of large proprietary companies will be increased. The revenue and assets thresholds that determine a large proprietary company will be increased by 150 per cent from $10 million in revenue to $25 million in revenue and from $5 million in assets to $12.5 million in assets. The threshold regarding the number of employees will remain at 50 employees.
The changes to thresholds for reporting for large proprietary companies will take effect in the financial year that ends on or after commencement.
Change in office holders
The requirement for a company to notify ASIC of a change in officeholder, where the officeholder has already notified ASIC, will be removed. The changes to requirements for companies to inform ASIC when officeholders change will commence on a date to be proclaimed, or if no date is proclaimed, six months after Royal Assent
A single process for notification of an update of all company addresses will be implemented. This will allow companies to nominate an address, separate from the
registered office address, at which they prefer to receive documents from ASIC. But if they do so a company must lodge a change to its contact address in the prescribed form. This will commence on a date to be proclaimed, or if no date is proclaimed, six months after Royal Assent
Amendments will allow deregistration of a company to proceed where an annual review fee becomes payable or is incurred after the application for
deregistration is approved. This will commence on Royal Assent.
Upfront payment of annual fees for companies
Amendments will allow companies to pay a single sum to cover review fees for an extended period.
For example, instead of $212 per year for 10 years ($2,120), proprietary companies would only be required to pay a one-off fee of $1,600.
The change will commence on a date to be proclaimed, or if no date is proclaimed, six months after Royal Assent
Electronic distribution of annual reports
The default option for receiving annual reports will be changed to be via
the Internet if a company does not wish to send every shareholder a hard copy. But if a company chooses to distribute reports in this way it must comply with new section 314(1AA). Members will continue to be able to choose to receive a hard copy or an electronic copy of annual reports free of charge if they so elect.
Under section 314(1AA)(c) a company must directly notify those members who did not receive a hard copy that the reports are accessible on the web site, and specify the direct address of the web site (ie the URL of the reports). This notification can be made in hard copy, or by electronic means (for example, e-mail or fax).
The amendments regarding distribution of annual reports apply to a financial year that ends on or after commencement.