Directors’ legal obligations in Australia
Healy Consultants helps our multi-national Clients’ timely discharge their annual Australian accounting and tax and audit obligations. It is important our Clients’ cooperate with us to meet Australian statutory deadlines.
Our Client’s responsibility
- The directors (click link) of an Australian company are obliged to act with the degree of care and diligence (click link) to timely prepare reliable and accurate annual financial statements;
- The directors of an Australian company are responsible (click link) for keeping proper company records;
- Annually, the directors are responsible (click link) for submitting a legal annual return to ASIC (click link), comprising signed financial statements;
- Annually, the directors are responsible (click link) to pay an annual company business license renewal fee AUD246 to ASIC (click link);
- Annually, the directors are responsible (click link) for submitting a corporation tax return to ATO (click link), including signed financial statements;
- The directors of an Australian company remain ultimately responsible for the company’s compliance with the Corporations Act;
- The directors of an Australian company have a duty to not trade while insolvent.
Healy Consultants' responsibility
- Timely inform our Client of upcoming statutory deadlines;
- Prepare financial statements from the trial balance supplied to us by our Client;
- From the signed financial statements, submit a quality corporation tax return to the Australian Government;
- Legally minimize our Client’s international tax burden;
- Secure an exemption from independent statutory annual audit obligation;
- Healy Consultants’ accounting and tax team can assist our Client to timely discharge their annual accounting and tax and audit requirements stipulated by ASIC (Australian Securities & Investments Commission) and minimize the administration burden;
- Our help includes; i) conducting monthly bookkeeping services, ii) reconciliation of bank statements and management account, iii) schedule and liaison with independent auditor, iv) compilation and preparation of our accounting reports and financial reports for in accordance with ASIC (Australian Securities & Investments Commission), v) filing legal annual return with ASIC and submission of corporation tax return to ATO.
Failure to comply with Director’s Duties
- In accordance with the Corporation Act, if a director of an Australian company has dishonest behavior, they can attract a civil or criminal penalty. The maximum penalty is fine of AUD$220,000 or five years imprisonment or both. Further there will be automatic disqualification from managing a corporation;
- Furthermore ASIC can apply to the court for a breach of director’s duties for i) declaration of contravention, ii) pecuniary penalty order, and ii) compensation order;
- A failure to lodge your corporation tax on time will result in an administrative penalty. A penalty may be applied on documents that lodged late, or on documents that are overdue. The amount of the penalty is between AUD$180 to a maximum of AUD$900;
- ASIC imposes a fee for not paying the annual fee and to file annual return that will amount to AUD$75 for up to one month late and AUD$312 for filing after one month. Furthermore, Under Part 9.4 of the Corporation Act, ASIC can issue a penalty notice, subject to ASIC the fees for a body corporate can amount to $687.50 or greater;
- False and misleading financial statements is a strict liability of offence and It carries a penalty of AUD$495 or more or imprisonment for 10 years or both;
- A breach of any director’s duty can lead to ASIC applying to the court for a for i) declaration of contravention, ii) pecuniary penalty order, ii) compensation order, iv) criminal penalties (strict liability);
- The directors of an Australian company have a duty to not trade while insolvent. Trading while insolvent can result in civil and criminal charges being up to a maximum of $220,00 or up to 5 years’ imprisonment or both;
- If a company ceases trading, they remain registered thus are still subject to the legal requirements, including payment of annual fees to ASIC. The company can alternatively de-register or voluntarily wind up the company through a member’s declaration.
ConclusionI thank our Clients’ for helping us complete their annual Australian accounting and tax obligations.