From 1 July 2019, the threshold for what constitutes a ‘large proprietary company’ will be doubled. The aim of this change is to reduce the financial reporting burden on small to medium-sized enterprises (SMEs) who may be relieved of certain financial reporting obligations under the Corporations Act 2001 (Cth).
Currently, a large proprietary company is a company that, alone or as part of a corporate group, meets any two of the following criteria: revenues over $25 million; assets over $12.5 million; or more than 50 employees.
As of 1 July 2019, the criteria will double as follows:
- annual consolidated revenue threshold of $50 million or more;
- gross assets of $25 million or more; or
- 100 employees or more.
Treasury estimates that the increase will reduce regulatory costs by $81.3 million annually for SMEs, as a third of proprietary companies will be exempted from reporting obligations under the new threshold. Check your company’s status prior to 1 July 2019 to ensure you are aware of and compliant with your reporting requirements.