In 2017, ASIC established the Office of Small Business and launched its Small Business Strategy 2017-2020. This movement by ASIC reflects their recognition of small business as a key driver of the Australian economy, as well as a key employer of Australians.
Central to the Small Business Strategy 2017-2020 is ASIC’s three key visions to:
- assist small business through their registry services and educational resources;
- engage with small business and government bodies, to understand and respond to the challenges and opportunities faced by small business; and
- protect small business through working to level the playing field for small business.
ASIC recently released Report 571: ASIC and Small Business (“Report’) which provides an overview of ASIC’s “Small Business Strategy 2017-2020”, and the progress this strategy has achieved to date.
Assisting Small Business
The Report summarises a number of initiatives implemented by ASIC over the past few years as part of its vision to assist Australian small business. Some of these initiatives include:
- creating a single online portal for company and business registrations that connects with the Australian Taxation Office (“ATO”);
- the monthly publication of InFocus, ASIC’s newsletter for the small business community;
- the establishment of ASIC’s Innovation Hub which aims to help fintech start-ups navigate ASIC’s regulatory system;
- ASIC’s online self-service gateway, “ASIC Connect”;
- the small business hub on ASIC’s website which provides useful information for starting, operating or closing a small business; and
- in conjunction with their active social media channels and website information pages, ASIC has also developed the “ASIC web chat” which allows for instant enquiry responses.
In terms of results for ASIC’s efforts in assisting small business in Australia, the Report notes that:
- there have been more than 351,000 enquiries answered by ASIC across their mediums between July and December 2017 - 20,000 of which were answered by ASIC’s web chat capability; and
- there has been a 20% increase in proposition of financial accounts lodged online in the July-December 2017 period (when compared with this period in 2016).
Looking to the future, the Report states that the Government is considering establishing a whole-of-Government registry platform that will deliver modernised business registration and licensing services for the Australian community. This initiative is aimed at modernising the business registers administered by ASIC, as well as the Australian Business Register administered by the ATO.
Engaging with Small Business
ASIC is committed to engaging with small businesses in order to understand and respond to challenges and opportunities they face. The Report summaries a number of ASIC’s initiatives which facilitate engagement with the small business community. These include:
- ASIC’s attendance and engagement with small business operators at forums and other small business related events;
- ASIC’s work with government departments to support initiatives to drive growth in the number, size and diversity of Indigenous-owned businesses; and
- the launch of the First Business online resource and app in 2017 which aims to support young Australians starting a small business.
In terms of results for ASIC’s efforts in engaging the small business community, the Report notes that:
- ASIC been involved in 85 meetings, events and small business presentations (between 1 July-31 December 2017);
- there are 8,144 subscribers to the InFocus newsletter (as at 31 December 2017); and
- there has been 7,406 downloads of the First Business app (as at 31 December 2017).
Protecting Small Business
As well as assisting and engaging small business, ASIC is focused on protecting small businesses through its investigative and surveillance powers. ASIC’s aim is to ensure all businesses comply with their obligations so that “everyone is on a level playing field”.
The Report summarises ASIC’s areas of focus as part of their efforts to protect the small business community, which include:
- unfair contract terms, evidenced by ASIC’s successful review of the big four bank’s small business loan contract in 2017, which resulted in a commitment from the banks to implement a number of changes so that small business borrowers are protected from unfair contract terms;
- illegal phoenix activity, evidenced by ASIC’s contribution to the Government’s Phoenix Taskforce in 2017 to assist in identifying and responding to illegal phoenix activity; and
- director disqualification for dishonesty-related offences, evidenced by ASIC’s campaign aimed at educating director and business name holders, as well as identifying and removing directors who may be automatically disqualified from managing a company for having relevant, dishonesty related criminal convictions.
In terms of results for ASIC’s efforts in protecting small businesses in Australia, the Report notes that:
- 32 individuals/entities were prosecuted for 476 criminal offences (between 1 July-31 December 2017);
- there were 27 director disqualifications (between 1 July-31 December 2017); and
- there were outcomes for actions against 17 registered liquidators, 2 companies, and at least 15 directors between August 2013 and January 2018 for behaviour that involved, assisted or facilitated illegal phoenix activity.
Starting and maintaining a small business can be difficult and confusing. This Report demonstrates ASIC’s efforts in assisting small businesses navigate the regulatory landscape. Cowell Clarke can provide tailored advice for your small business needs and ensure your business satisfies its compliance obligations under Australian law.