CorpSec Services can align the annual review dates of all or certain companies within your group.
What is an annual review date?
The annual review date (ARD) of a company is the anniversary of a company's incorporation/registration, as recorded on ASIC's database. ASIC issues an Annual Company Statement to all companies within 2 weeks of a company's ARD. The statement contains an extract of the company's particulars, as recorded by ASIC. The Corporations Act 2001 requires directors to:
review the company's particulars and update any details that are not up to date;
pass a solvency resolution (whether a ‘positive’ or ‘negative’ resolution) within two months after the ARD (unless exempted because the company has lodged a financial report with ASIC within the past 12 months); and
pay the annual ASIC fee.
What is ASIC’s criteria for approving changes in ARD’s?
A company may apply to ASIC for consent to change a ARD if the company or companies have:
a common holding company;
a common officeholder;
a common responsible entity; or
due to exceptional circumstances.
Why align your companies' ARDs?
Aligning your companies' ARDs enables you to only have to review the company details for multiple entities within the same group, once every year, at the same time. If changes to the company particulars are required and they are the same changes across the companies, they can conveniently be processed for all the entities at the same time.
It can also be convenient for companies with one or more common directors to deal with their annual compliance requirements at the same time for all their related companies.
You could potentially save on ASIC late fees or penalties, by only having to meet one payment deadline, as opposed to multiple payment deadlines throughout the year.
The strongest argument in favour of aligning ARDs of subsidiary companies is to facilitate the proper consideration of the solvency of the entities. It allows the group as a whole to consider the solvency of each entity at the same time. Passing a solvency resolution should be based on the proper consideration of each company's financial situation. The directors of each subsidiary must examine the current financial position and forecast cash flows to satisfy themselves that they believe they can meet all current and projected actual and contingent liabilities, as at the date of passing the solvency resolution. Doing this as a group exercise rather than at multiple times throughout the year has its advantages. Synchronising the ARDs 2-3 months after the parent entity's financial year-end has the additional benefit of considering the solvency of each entity at a time when the parent is also considering the approval of its financial statements.
If any subsidiaries rely on the support of their parent company, then a letter of support/comfort from the parent should be obtain clarifying the extent of the support.
How can CorpSec Services help?
Our service for aligning ARDs includes the preparation of Directors' minutes for each company changing its ARD, an analysis of the effect of the change on the first year and lodgement of the prescribed ASIC form.
You can apply at any time of the year to align your companies' ARDs, but you should consider the effect of this on the first year as it can result in two annual reviews for some companies in that first year. In the event of two annual reviews, the annual fee is only payable on the first annual statement and no charge applies on the second annual statement. All other requirements apply to both annual reviews. This includes the need to review and change your details and pass a solvency resolution.
What are the costs to align companies?
The ASIC application fee is $41 per company for up to 9 companies or a total of $402 for over 10 companies.
Contact CorpSec Services at firstname.lastname@example.org for a quote to align the ARDs of your companies.