The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP, has welcomed today's passage of legislation that will reduce the red-tape burden on business and improve Australia's corporate reporting framework.
"The Government has today taken action to reduce the regulatory burden facing Australian companies. The Bill makes life easier for businesses of all sizes - from the 11,000 companies limited by guarantee, most of which are not-for-profits, to large corporate groups, which can face unnecessarily duplication in their reporting requirements," Mr Bowen said.
The package of reforms, contained in the Corporations Amendment (Corporate Reporting Reform) Bill 2010 and accompanying Regulations, will deliver much-needed relief from red-tape for Australian companies and implement a number of other important refinements to Australia's corporate regulatory framework.
The key measures to reduce red-tape include:
- significantly reducing the regulatory burden on companies limited by guarantee, which typically have a not-for-profit purpose, by introducing a three-tiered differential reporting framework;
- streamlining parent-entity reporting;
- providing greater flexibility for companies to pay dividends, by replacing the profits test with a solvency-type test; and
- allowing companies to more easily change their year-end date to minimise the burden on companies and their auditors during peak reporting periods.
The reforms will also implement refinements to the regulatory framework, including:
- improving disclosure of non-financial information in the directors' report;
- refining the statement of compliance with International Financial Reporting Standards contained in the directors' declaration; and
- clarifying the circumstances in which a company can cancel its share capital.
Mr Bowen acknowledged the assistance of the Opposition and minor parties, which unanimously agreed to pass the Bill through the Senate without amendment
The main provisions of the Bill will come into effect for the financial year ending 30 June 2010, subject to Royal Assent. Associated Regulations are scheduled to be considered at an Executive Council meeting on 29 June 2010.
24 June 2010