Tag: ASIC

ASIC insolvency statistics update

 

Australian Securities and Investments Commission (“ASIC”) has released the following summary and observations after a review of statutory reports lodged by liquidators, receivers and voluntary administrators for the year ending 30 June 2016.

• 10,078 external administrator reports were lodged, with NSW accounting for 38.2%.

• Of those, 79% related to companies with less than 20 employees.

• The industries with the highest levels of representation were business and personal services (31%) and construction (21%).

• 86% of the failed companies were assessed at having estimated assets of $100,000 or less with 61.2% had estimated assets of $10,000 or less.

• The top three claimed causes of failure comprised inadequate cash flow (46%), poor strategic management (46%) and poor financial control (34%).

• Possible causes of misconduct leading to insolvency included insolvent trading (61%), obligation to keep financial records (42%), and failure of directors to act with care and diligence (38%).

• Most categories of potential misconduct related to

alleged breaches of civil obligations (81.1%).

• The dividends estimate to unsecured creditors in

97% of cases was less than 11 cents in the dollar.

A postal address can now be used for a business name’s address for service of documents

ASIC has responded to privacy concerns raised by home-based businesses by giving the option of using a postal address instead of a physical address as the address for service of documents. It also benefits rural and remote businesses where mail can’t be delivered to a physical address.

Holders of new business names can provide a postal address as their address for service of documents when completing their registration application using ASIC Connect.Opens new window Existing business name holders can update their details using the ‘Change business address’ transaction.

New national business names legislation replaces current state systems

 

From 28 May 2012, the regulation and administration of business names throughout Australia will shift from the current state and territory based system to a national system regulated by the Australian Securities and Investments Commission.

The new national scheme will introduce a number of efficiencies into the business name regime in Australia, including:

  • one register and registration process — with registration of new business names taking effect Australia-wide; and
  • easing the administrative burden of registering and maintaining many registrations for one name.
  • to address the confusion caused under the current system that allows identical, or nearly identical, names to be registered in various states and territories. The new system will prevent identical, or nearly identical, business names from being registered.

What happens with current business name registrations?

One state or territory If you currently have a business name registered in a state or territory, then you will not be required to register it again with ASIC. Instead, ASIC will automatically transfer all current business names registered in any state or territory to the national register. The registration details from the previously registered business name, including the principal place of business and expiry date, will be transferred to the new register.

More than one state or territory If you have a business name registered in more than one state or territory, then each of those registrations will be transferred to the new register. You may then decide:

  • to retain all the registrations, or:
  • to keep one business name registration (for example, the one with the latest expiry date) and to cancel the others.

However, ASIC has said[1] that if it is able to reliably determine that the business names are identical and registered to the same holder then it may act on its own to combine multiple identical registrations.

Identical business names in different jurisdictions owned by different people When the business names are transferred to the new register, there may be two or more identical or nearly identical business names registered in different states or territories to different people. To reduce confusion, ASIC has said that it will provide additional information on the new register to assist people to differentiate between identical, or nearly identical, business names – for example:

  • the state or territory in which the business name was registered; or
  • the former state or territory business name registration number.

If these identifiers are not sufficient to reduce confusion, then ASIC may add a distinguishing word as an additional identifier – for example, the name of the relevant state or territory. Although this identifier will not form part of the business name, it will help people distinguish between identical registered business names. ASIC will notify the people who own the relevant business names before making any changes.