What constitutes a ‘Large’ Proprietary Company?
The Government has proposed an increase to thresholds for determining what constitutes a large proprietary company under the Corporations Act 2001.
Large proprietary companies that meet the criteria (unless exempted under certain circumstances) are required to prepare and lodge an audited financial report with the Australian Securities and Investments Commission (ASIC) each financial year.
A company iused to be considered ‘large’ if it meets any two of the three thresholds within a given financial year:
- $25 million or more in consolidated revenue
- $12.5 million or more in consolidated gross assets, or
- 50 or more employees.
The changes doubled these thresholds as follows:
- $50 million or more in consolidated revenue,
- $25 million or more in consolidated gross assets, or
- 100 or more employees.
This will reduce the number of proprietary companies that are required to report under the Corporations Act 2001.
‘Small’ proprietary companies will still need to keep written financial records and may be required to prepare and lodge audited financial reports if directed by ASIC or 5% or more of their shareholders.
Applicable from 1 July 2019
The proposed changes, which are yet to be approved by parliament, are due to take effect for financial years beginning on or after 1 July 2019.
This will not have an impact on the financial reporting obligations for the year ending 30 June 2019.