A small business owner will often first encounter a company structure when in the midst of purchasing their first business. In the blur of settlement and commencing the operation of a new business venture, it is easy to forget about compliance.
The following are three very simple tips aimed at making sure the easy (but important) compliance steps don’t get overlooked:
Selecting the right registered office
As obvious at it seems, it is important that you select an appropriate registered office.
Your registered office is the address where most important notices will be sent to the company. For example, if the company is sued, a valid method of service is posting the claim to the company’s registered office.
In some cases, the best registered office will be your business premises. However, if you aren’t at your business premises every day, you may wish to consider your registered office being the office of one of your professional advisors or you should ensure that your staff are briefed on the importance of providing you with any notices that are received immediately.
You need to update ASIC of key changes
You have an obligation to update ASIC every time your company updates its registered office, shareholders, directors or place of business. There is no cost involved with updating ASIC of any changes to your company provided you notify ASIC within 28 days of the date the change is made. If you update ASIC up to one month after the due date, a late fee of $80 will apply. The late fee will be $333 if you update ASIC more than one month after the due date.
Don’t ignore your ASIC annual statement
You will receive an annual statement from ASIC every year. Your annual statement will:
- confirm the annual fee you are required to pay to ASIC;
- require you to confirm that your company details remain correct; and
- require the directors of the company to pass a resolution that the directors believe on reasonable grounds that the company is solvent (ie, able to pay its debts as and when they fall due).
If you fail to pay your annual review fee within 12 months of the review date, ASIC may take steps to deregister your company. If your company is deregistered, is ceases to exist as a legal entity until it is reinstated. Deregistration is very serious and may have serious implications for the company’s officers and guarantors. You should seek legal advice immediately if your company has been or is at risk of deregistration.
Our commercial team can assist small business owners with their company compliance obligations. For any queries, get in touch with our expert team of lawyers in Cairns.