Corporate charities reporting requirements for this year and next
First, let’s assume the Australian Charities and Not-for-Profits Commission (ACNC) is here to stay, despite the recent change of government.
If you are a charity that is registered with the ACNC (whether small, medium or large) you will be aware that, (assuming your financial year ended on 30 June 2013), you have until 31 December 2013 to file your first annual information statement (AIS) with the ACNC. If your charity is (like most) run through a company structure your reporting obligations will already, since registration with ACNC, have been split between the Australian Investments and Securities Commission (ASIC) and the ACNC.
According to ASIC, as a registered charity with the ACNC:
- A public company no longer needs to lodge changes to its constitution with ASIC or tell ASIC of the adoption or repeal of a constitution
- A company is no longer required to send a copy of its constitution to members who request a copy
- A company and registered body is no longer required to notify ASIC of a change of their address details, including their registered office address, principal place of business address or contact address. The ACNC will advise ASIC of changes to the registered office address of a company
- A company and registered body is no longer required to notify ASIC of the appointment, resignation or retirement of directors, secretaries and alternate directors or submit personal details of directors and secretaries
- A company will not be sent an annual statement by ASIC each year (on the company’s review date) and will not have to review their details or pay the annual review fee. However, if the last annual review date was before registration with the ACNC, the company must pay the annual review fee to ASIC.
Financial reporting for 2012/13 and 2013/14
ASIC advises as follows: For the 2012–13 reporting period, companies that are required to lodge financial reports with ASIC must still do so, even if they are registered with the ACNC.
Companies that are registered with the ACNC do not need to lodge financial reports for the 2013-2014 reporting period with ASIC.
Instead, medium and large charities registered with the ACNC will be required to provide annual financial reports to the ACNC.
The ACNC Act defines charity size according to annual revenue as follows:
- Small registered charity – annual revenue is less than $250 000
- Medium registered charity – annual revenue is $250 000 or more but less than $1 million
- Large registered charity – annual revenue is $1 million or more.
Registered charities will be required to prepare their first financial reports for the ACNC for the 2013-14 financial year. As a result, the first financial report will need to be lodged with the ACNC by 31 December 2014, or within six months after the end of an approved substituted accounting period that commences after 1 July 2013. Large registered charities will be required to have their financial reports audited, and medium registered charities can generally choose to either have their financial reports reviewed or audited.
The Government has released draft regulations and accompanying explanatory material outlining the proposed financial reporting requirements applying to charities registered with the ACNC. The final financial reporting requirements have not yet been published.
Companies that are not registered with the ACNC, or cease to be registered with the ACNC, must continue to lodge their annual financial reports with ASIC if they are required to do so under the existing tests in the Corporations Act.
Things to note:
- The AIS information and annual financial reports will be published on the ACNC Register
- The ACNC does not charge fees for charities to submit their AIS and annual financial reports
- Small charities can provide financial information voluntarily to the ACNC if they wish and all charities have the option of voluntarily providing it in the 2012-2013 reporting period
- Charities that are basic religious charities do not have to provide annual financial reports and do not have to answer financial questions in the 2013-14 AIS and future AISs.
Where do you go to:
|apply to register a company, a foreign company or a registrable Australian body||ASIC|
|apply to register a charity||ACNC|
|apply to change the name of a company to omit the word ‘Limited’||ASIC|
|apply to change the name of a company||ASIC|
|notify changes to member details and share structure of a company||ASIC|
|notify of changes to company details including:
|notify changes to details of a foreign company or registered body including:
|request to revoke registration of a charity or cease to be entitled to registration as a charity||ACNC|
|notify external administration of a company||ASIC|
|apply to deregister a company, foreign company or registered body||ASIC|