The relief provided by both CO 98/98 and CO 02/1432 has been retained in Instrument 2017/204, except that ASIC may now give notice to a small proprietary company controlled by a foreign company or a registered foreign company that it cannot rely on that relief for a particular financial year.
Small foreign-controlled proprietary companies
Section 292(2)(b) of the Corporations Act 2001 (Cth) (Act) requires a small proprietary company that was controlled by a foreign company for all or part of a financial year to comply with the financial reporting obligations under Pt 2M.3 of the Act (to prepare and lodge accounts with ASIC and to have the accounts audited), unless it was consolidated for that period in financial statements lodged with ASIC by a registered foreign company, a company, a disclosing entity or a registered scheme.
Instrument 2017/204 provides relief for small proprietary companies controlled by a foreign company from the requirements of Pt 2M.3 of the Act.
To qualify for relief, the directors of a small foreign-controlled proprietary company must resolve to rely on the relief available under Instrument 2017/204 no earlier than three months before the commencement of each financial year to which relief under the instrument is relied on.
For the first financial year relief under the instrument is to be relied on, and the first financial year following a financial year in which relief was not relied on (if any), a notice of the resolution must be lodged with ASIC using a Form 384 during the period starting three months before the start of the relevant financial year and ending four months after the end of the relevant financial year.4
Provided such small proprietary companies are not part of a ‘large group’, as defined in Instrument 2017/204, they are not required to lodge financial reports with ASIC (if all the conditions of Instrument 2017/204 are met).
Registered foreign companies
Section 601CK of the Act requires a registered foreign company to lodge with ASIC a copy of its balance sheet, cash flow statement and profit and loss statement for its last financial year at least once in every calendar year. These financial statements are those required by the law in the company’s place of origin. However, if such financial statements are not required in the company’s place of origin or if the disclosures contained within are not sufficient, ASIC can require the company to prepare and lodge financial statements prepared as if the company were a public company formed under the Act.
Instrument 2017/204 also provides relief for registered foreign companies from the requirements to prepare and lodge accounts with ASIC subject to restrictions, limitations and prohibitions corresponding to, and no less strict than, those applicable to an Australian proprietary company under section 113 of the Act. The company must also meet the definition of a small proprietary company as if subsection 45A(2) of the Act applied.