Corporations Law Notes

Reporting and Disclosure

Purpose of Regulation:

So members and creditors can know whats going on with the company and have access to info. Companies must comply with:

* Corps Act

* Accounting standards

* For listed public companies, the ASX listing rules

Chapter 2M of the Corporations Act

Who has obligations under 2M?

* S285 (1) All companies, registered schemes and disclosing entities must keep financial records (see section 286-291) and some must prepare financial reports (s292-323D)

* Financial records; s 286 (1) companies, registered schemes and disclosing entities must keep all financial records necessary to record and explain correctly their transactions and financial position. Records must be kept in a form that enables true and fair accounts to be prepared. Not sufficient to keep source documents: Van Reseema v Flavel (1992) 10 ACLC 291.

* Def of financial records: s 9 dictionary: includes invoices, receipts, orders, etc see section.

* Financial Reports: s292 reqs disclosing entities, public companies, lge prop companies and registered schemes to prepare:

* A financial report and

* A directors report

* For each financial year. First financial year starts on day it is registered and goes for 12 months (or period det by directors) All subsequent fin years start at end of fin year and are 12 months long s323D.

FINANCIAL REPORTS

Financial reports

* Must comply with accounting standards

* Must give true and fair view

* Must incl declaration by director

Half year financial Reports & directors reports

* Must be prepared by disclosing entities s292 (1) (a)

Small propreietary companies

* Not req to prepare annual financial reports unless directed to do so by

* Members holding 5% or more of the voting shares (s292 (2) and s293) or

* ASIC s 294.

Contents of Financial reports

S295 Contents of annual financial report...