[ESTABLISHING A BUSINESS ENTITY IN AUSTRALIA]
26
Australian
Securities
and
Investments
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. Income Tax Returns Individuals and companies are generally required to lodge an annual income tax return at the end of each Australian financial year (which runs from 1 July to 30 June each year). The income tax rate applicable to Australian business structures will depend on the type of entity that conducts the business. For example, the income tax rate for Australian companies is generally fixed at 30%, except for those which qualify as a “Base Rate Entity” which have an income tax rate of 25%. A Base Rate Entity is a company with an aggregated turnover of less than $50 million AUD or if 80% or less of its assessable income is base rate entity passive income such as interest, dividends, or rent.
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
ILN Corporate Group – Establishing a Business Entity Series
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