As we foreshadowed last August the federal government has taken a small step towards what it calls “lifting the compliance burden”
Legislation proposed by the government and designed to reduce red tape in the corporate community and financial services sector is expected to be given the legislative approval in the winter sitting of Federal Parliament.
The Simpler Regulatory System Bill retains the bulk of the contents in the proposals paper released by the government in November 2006 as part of its corporate and financial services regulation review.
The bill proposes to implement a range of reforms in areas such as financial services, financial reporting, takeovers, auditor independence, corporate governance and fundraising.
Mooted changes to company reporting obligations include the increase of revenue and asset thresholds for financial reporting of large proprietary companies.
When the bill is approved, the thresholds that determine a â€˜large proprietary companyâ€™ will be increased by 150 per cent, from $10 million in consolidated gross operating revenue to $25 million in consolidated revenue, and from $5 million in assets to $12.5 million. The threshold relating to the employee numbers will remain at 50.
Any company that meets two out of the three thresholds is a â€˜large proprietary companyâ€™. Future changes to the thresholds are to be prescribed by regulations.
Consequently, a â€˜large proprietary companyâ€™ under the current thresholds may be re-classified to a â€˜small proprietary companyâ€™ and the reporting obligations will be reduced. Public lodgment of a small proprietary companyâ€™s accounts is generally not required.
For the companies affect this does offer significant relief.
The press release from Chris Pearce MP, Parliamentary Secretary to the Treasurer can be found here.