Starting a Business
14. Regulation of Companies
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 07 Jul 2015
- All companies in Australia are regulated by the Australian Securities and Investments Commission (ASIC) which also administers the Corporations Act 2001 (Cth). This legislation governs the procedure for:
- acquiring public companies;
- director duties;
- protection of shareholders;
- corporate governance;
- reporting;
- fundraising; and
- insolvency.
- The level of regulation which your company will be subject to depends on its size.
- Small proprietary companies are not subject to the same onerous reporting and regulatory requirements as large companies under the legislation.
- The small proprietary company has the most appeal for a family business.
- Small proprietary companies including the entities it controls (other companies) must fall under at least two of the following descriptions:
- revenue for the financial year must be less than $25 million;
- the value of consolidated assets at end of financial year must be less than $12.5 million; and
- there must be fewer than 50 employees at the end of financial year.
- These thresholds are quite high and usually mean that small and medium family businesses will fall under the 'small proprietary company' definition.
- Small proprietary companies are:
- exempt from lodging certain financial reports;
- sometimes exempt from holding and documenting shareholder meetings; and
- subject to less stringent (easier) requirements for keeping financial records.
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