[ESTABLISHING A BUSINESS ENTITY IN AUSTRALIA]
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CORPORATE GOVERNANCE AND REGULATION Individuals, partnerships and corporate entities that operate businesses in Australia are subject to a broad range of regulatory and reporting requirements which vary depending on a range of factors, including the: • structure, nature and ownership of the entity which conducts the business; • state or territory in which the business is being conducted; and • nature of the business being conducted (such as the type of goods or services that are provided). Australian Securities and Investments Commission (ASIC) Australian corporate entities are primarily governed by the Corporations Act. ASIC is the national body that is responsible for regulating the incorporation, operation and management of corporate entities in Australia. ASIC also hosts and maintains a public register of Australian corporate entities, which is accessible by the general public. The Corporations Act places ongoing disclosure and reporting obligations on Australian companies, including requirements for certain information to be provided to ASIC for the purposes of public records. These reporting obligations include: • reporting any changes to their company details and structure (such as changes to company officers, shareholders, registered addresses or issued share capital) to ASIC within a specified time period after such change occurs; • notifying ASIC before undertaking certain actions (such as providing financial assistance to a person who is seeking to acquire securities in that company); and
• lodging financial reports with ASIC each financial year (this obligation applies only to entities that are considered “disclosing entities”, as defined in the Corporations Act). Australian Securities Exchange In addition to the obligations set out in the Corporations Act, public companies that are listed on the Australian Securities Exchange ( ASX ) must also comply with the ASX’s listing rules and regulations. The key functions and responsibilities of the ASX are to: • act as a market operator, clearing house and payments system facilitator for companies listed on Australia’s public securities market exchange; and • oversee the compliance with, and enforcement of, the ASX listing rules and other regulations. Taxation Obligations The Australian taxation system can be described as a self-assessment model, whereby taxpayers are responsible for lodging their own tax returns with the Australian Taxation Office ( ATO ) at the end of each relevant reporting period. Tax File Numbers and Australia Business Numbers Given that companies are considered as separate legal entities, Australian companies are required to obtain their own Tax File Number (commonly known as a TFN ) for the purposes of complying with their taxation obligations. Australian companies that conduct business activities are also required to apply for an Australian Business Number (commonly known as an ABN ), which is used for the purposes of allocating and calculating any tax payable on the company’s business income.
ILN Corporate Group – Establishing a Business Entity Series
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