What is the ASIC Annual Review?
Not everyone is good at remembering birthdays. On the anniversary of your company registration, it may seem like ASIC will give your company a birthday present – a bill.
Not the greatest gift.
But there is much more to your company’s annual review than just an expense. The Annual Review is more of a health check. There are three parts to the ASIC Annual Review:
Annual Company Statement
This document lists the essential details of your company, as recorded with ASIC. Here you can check:
If the registered office and business addresses are correct.
If the details of the company officer are correct.
If the company share structure are correct.
By signing the Company Statement, you are agreeing that the above details are correctly recorded with ASIC.
If any details are incorrect, you will need to lodge an ASIC Form 484 to make the correction.
2. Annual Review Fee
Consider this the necessary downside of selecting a company structure. Your company will need to pay an annual fee to ASIC for life.
The fee is due 2 calendar months after the date of the company registration anniversary. Currently the fees are:
A proprietary company - $263
A special purpose proprietary company (ie corporate trustee of a SMSF) - $53
A special purpose public company - $49
A public company - $1,224
If the review fee is not paid by the due date, ASIC will impose late fees:
Up to 1 month late - $79
More than 1 month late - $329
If the annual review fee is not paid for 2 years, ASIC can forcibly deregister the company. That is why it is essential that you pay the annual review fee on time.
3. Solvency Resolution
This is the final, and possibly the most important part of the annual review. This is your health check, or in legal terms ensuring that the company is able to pay its debts when they fall due.
Company directors have a duty to ensure a company does not trade whilst insolvent. If the company trades whilst insolvent, the directors may be open to direct liability of any debts incurred during the period of insolvency.
By signing the Solvency Resolution, the directors acknowledge they have considered the current solvency of the company.
There are two options here:
Positive Resolution – if the company is solvent, the directors need to sign the resolution store the document with their corporate documents. There is no need to send this to ASIC, but it must be kept.
Negative Resolution – if the company is insolvent, the directors need to prepare, sign and lodge ASIC Form 484 within 7 days of the resolution date. If a company trades while insolvent, the directors may be personally liable for any debts incurred while the company is insolvent.
Contact us at Dolman Bateman or Buildersbooks if you are looking for an experienced accountant or Bookkeeper.
This information is not to be relied upon without speaking to your accountant, tax agent or financial adviser depending on the advice.