The Corporations Legislation Amendment Act 2003 (No. 24) was assented to on 11 April 2003. Most of it will take effect on Tuesday 1 July, except for the abolition of the 72 years of age restriction on directors (effective from 11 April 2003 – as explained below).
Certain provisions are operative from 15 July.
The amendments embody reforms pursuant to the so-called 'CLERP 7' program.
Secretaries of proprietary companies should be aware of the new and important requirements to lodge details of changes in shareholders and other changes with ASIC within 28 days. Some now are only notified in the Annual Return.
A Secretary can be guilty of a contravention of section 188 if the requirements are not complied with.
Annual returns (not accounts) abolished and replaced with an 'Annual Statement'
The amendments eliminate the requirement for annual returns for companies and schemes, but replace that with a number of other requirements which company secretaries and companies generally must be aware of, which may require filings from time to time, rather than annually.
The following are principal points.
New Annual Statement – companies and schemes
- The requirement to lodge Annual Returns is replaced by an obligation to provide an Annual Statement. ASIC will send the Annual Statement using the date of the company's registration as its 'review date'. That Statement includes details which must be reviewed. An Annual Review fee, listed on the Statement, will be payable within two months on a review date. ASIC will update details in the first statement to 23 April 2003.
- If the information has altered, the document must be lodged. The review fee must be paid regardless.
- Changes must be notified within 20 days of the review date.
- If Schemes are affected, the form for Scheme Change Notification is a new Form 491.
Changes to the review date
- A company can apply to alter the review date, for example, where there are a number of companies with a common holding company.
Directors' solvency resolution
The directors of each company are required to pass a solvency resolution within two months of their review date. If of opinion that there are not reasonable grounds to think the company will be able to pay its debts as they fall due, the directors must lodge a Form 485 Statement.
Proprietary companies: notifications of changes
As mentioned, there are new notification requirements imposed on proprietary companies.
Member's register and share structure
A proprietary company must notify ASIC within 28 days of changes of the details required to be kept in the members' register under section 169. These include the member's name and address, the number and class of shares, whether the shares are fully or partly paid, details of new allotments and whether any shares are not held beneficially.
It must update changes in details of the total number of issued shares, their division into classes and number and of the amounts paid and unpaid for the class.
If it has more than 20 members, the notification requirements with respect to members only relates to the top 20 members.
Proprietary companies will also be required to lodge a notice of changes to the ultimate holding company (section 349A) within 28 days.
Companies generally will be required to notify changes in the registered office or principal place of business or changes in its directors or secretary within 28 days instead of 14 days.
Changes to details to be notified throughout the year as they happen
A new Form 484 must be used for companies to notify ASIC of those changes of details, including:
- registered office and principal place of business address
- office holder – these can be office holder details
- the top 20 in each class of members
- share structure
- the ultimate holding company for proprietary companies only.
Form 484 will replace a number of forms which have been used for years, specifically Forms 203, 304, 207, 284 and 316.
Forms 484 and 485 have been released and are on the ASIC website.
Late payment fees will apply where company or scheme details are not brought up-to-date within 28 days of the review date.
The new changes to details statements are obviously something which the market will have to adjust to, requiring the company secretary of a proprietary company, more frequently than prior to the changes, to act positively to ensure that the changes are notified within 28 days. While the Annual Statement for review will be sent by ASIC, proprietary companies particularly will have to take the initiative to meet the new requirements.
As mentioned, under section 188(1)(d), as amended by this new legislation, the company secretary has a responsibility to ensure that the required notices are lodged; failure to meet this requirement is a contravention.
Changes in members' details and share structure of public companies are notified at the time of the Annual Review.
72 years age limit for directors abolished
The provisions of section 201C requiring that directors cease at 72 years of age, unless reappointed by a special resolution annually, was repealed with effect from 11 April 2003, the date of assent.
The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.