Am I eligible for a reduced annual review fee?
Certain “special purpose” companies, as well as charities registered with the Australian Charities & Not-for-profits Commission (ACNC) are eligible for a reduced annual review fee, or are exempt from paying these fees altogether.
A special purpose company is generally one that’s created for a set reason, not just general business, and is usually one of the following:
- Superannuation Trustee Company - created to act solely as the trustee of a regulated superannuation fund.
- Home Unit Company - created to act solely as a body corporate to administer a property divided into a block of units or flats.
- Not-for-profit Company – created solely to pursue charitable purposes.
Each of these company types need to have particular wording and restrictions included in their constitution which allows them to benefit from the reduced annual review fee.
Charities are generally exempt from paying the annual review fees altogether.
How much is the annual review fee?
Different company types are charged different annual review fees by ASIC. The annual statement pack sent out to the company will include an invoice that shows exactly how much the company owes. Public companies (including LBGs) are charged a different fee to private companies and then special purpose companies are charged a lower, concessional rate from those fees.
ASIC Annual Review Fees at 1 July 2020
A public company - $1,267
A proprietary company - $273
A special purpose company (public) - $51
A special purpose company (proprietary) - $55
Why do I need to pay the annual review fee?
In order to keep your company registered, you must pay the total amount on the invoice issued by ASIC by the due date. If a company ignores its obligation to pay the annual review fees, ASIC may deregister the company.
Are late fees imposed for late payment of ASIC invoices?
Yes, late fees apply if you don’t pay your annual review fee to ASIC within the prescribed two months. These late fees are imposed by ASIC. They are currently charged at up to one month late and increase at more than one month late.
Late fees as at 1 July 2020
Payment up to one month late $82
Payment more than one month late $340
What is an annual review?
Every registered company in Australia has an annual review date. This is usually the anniversary of its registration date. Soon after this date, ASIC will issue each registered company an annual statement and an invoice for the annual review fee. Each year the annual statement will outline the company’s current information extracted from the ASIC register concerning the company’s officeholders, registered addresses and members details and share structure.
If there are discrepancies between the company’s information and the data on the ASIC register, these will need to be corrected. If all details are correct, then the invoice should be paid and a solvency resolution prepared.
How will Patricia Holdings handle the Annual Review process for me?
If you appoint Patricia Holdings as your registered agent, or engage us to handle your corporate compliance solution, every year for each company we manage we will:
- review the annual statement to ensure consistency with the company’s current details and those on the ASIC register. If any changes are required, we will prepare the appropriate forms and forward through to the company for signing before lodgement
- prepare the minutes required for the company directors to pass a solvency resolution whether solvent or insolvent. If a negative solvency resolution is reached, we will prepare the required form 485 for lodgement with ASIC.
- forward the completed annual review to the company, together with the ASIC annual review fee invoice and the solvency resolution for signing by the directors.
- lodge the signed and completed documents with ASIC.
- send out a courtesy email to the company reminding them to pay the ASIC invoice by the due date to minimise the risk of late fees imposed.
What if my annual statement arrives late?
If you have not received your annual statement within a week of your review date, you should contact ASIC.
What is a solvency resolution?
Unless you have lodged a financial report with ASIC in the last 12 months, it is a requirement that company directors must pass and store a solvency resolution within two months of the annual review date.
A solvency resolution is made by the directors of a company that, in their opinion, the company can or cannot pay back its debts when they are due. The directors must have a reasonable basis for their opinion and the resolution must be passed by a majority.
The solvency resolution may be a positive solvency resolution which is passed when the directors believe that the company will be able to pay its debts when they are due, or, a negative solvency resolution which is passed when directors believe the company will not be able to pay its debts when they are due. If the solvency resolution passed is negative, the company will need to lodge a form 485 – statement in relation to company solvency.
What do I need to do when I receive my annual statement?
After you receive your annual statement from ASIC, you should follow these steps:
- Check the invoiced annual review fee is correct and organise payment before the due date. Payment can be made via cheque or electronic payment such as BPay.
- Check all of the information on your company statement carefully. If there are any discrepancies, the details will need to be changed on ASIC's register via a form 484.
- Hold a directors meeting and prepare a solvency resolution. A solvency resolution is made by the directors of a company that, in their opinion, the company can or cannot pay back its debts when they are due. A negative solvency resolution will need to be lodged with ASIC via a form 485.
What is an annual statement?
Each year ASIC sends your company an annual statement shortly after the annual review date (which is generally the date the company was registered).
The annual statement contains:
- a statement of the company's current details (similar to a company extract),
- an invoice for the company's annual review fee, and
- the company's corporate key
If there are any outstanding fees on the company's account, this will also be included in the annual statement package.
