A reminder that companies wishing to take advantage of the ASIC relief for financial reporting of wholly owned subsidiaries for this financial year must lodge the necessary documents with ASIC by the end of this financial year.
Chapter 2M of the Corporations Act 2001 (Cth) requires public companies and large proprietary companies to lodge financial statements and reports with ASIC and for public companies to appoint an auditor. Relief is available under ASIC Class Order [CO 98/1418] (Class Order) for certain wholly-owned subsidiaries, where the parent entity and the relevant wholly-owned subsidiary enter into a deed of cross guarantee and meet certain other conditions.
The deed of cross guarantee (DCG) makes the group of companies that are parties to that deed akin to a single legal entity in many respects. Creditors and potential creditors can then focus on the consolidated position for those entities rather than the individual financial statements of the wholly-owned subsidiaries that are parties to the deed. The cross guarantee only applies in the event of certain types of winding up of a company within the group (including insolvency).
Once determined that all entities seeking relief satisfy the requirements under the Class Order, certain documents must be lodged with ASIC before the end of the financial year in which the entities wish to take advantage of the Class Order.
Helping your business
If you are interested in obtaining relief for a wholly owned subsidiary in your group of entities under the Class Order for this financial year, we can help assess whether your entity satisfies the requirements and prepare the relevant documentation in order to obtain relief under the Class Order.
For more information on the Class Order, click here.