BLAW20001 Lecture Notes - Lecture 10: Louis Brandeis, Proprietary Company, Cash Flow Statement
19 Jun 2018
School
Department
Course
Professor
CORPORATE LAW WEEK 10
Reporting and disclosure; revision and exam preparation advice.
Disclosure: the aims of corporate regulation include investor protection, efficiency in capital raising, and systematic
stability. Mandatory disclosure has a role to play in achieving each of these aims.
“Sunlight is the best disinfectant”-U.S. Supreme Court Justice Louis Brandeis.
Record Keeping:
Financial records:
s 286: all companies must keep sufficient records to enable the preparation of financial statements if required.
Minute Books:
Part 2G.3: minutes of meetings and resolutions of directors and members.
Resolutions of members:
S254A(2): Resolution to issue preference shares.
Resolutions of boards:
ASIC v Hellicar
Registers
s 169: register of members
s 173: searching the registers. Must be related to shareholding e.g. to requisition a meeting.
s 177: Limits use of information- can’t be used to make offer to buy shares.
ASIC filings:
Ch 2N: Annual review. Review date and extract of particulars (may include request for particulars). Company must
correct, and respond to request.
s 347A: Solvency resolution (For companies not reporting under Ch. 2M)
Ch. 2M:
s 348A: Return for particulars(for dormant companies).
Event based notifications: The Corporations Act requires a company to notify ASIC when certain events occur.
These include change of director, change of name or type of company. Charges are not registered with the Personal
Property Securities Register.
Periodic Reporting: Ch 2M
Consists of financial report, directors’ report and audit report. These include annual and (for some companies) half-
yearly reports. Applies to all public and large proprietary companies; small proprietary company shareholders can
request. Reports are first lodged with ASIC and then sent to shareholders.
Large Proprietary company:
s 45A: must meet two of the following three tests on a consolidated basis:
-Gross operating revenue of $25m or above.
-Gross assets $12.5 million or more
-50 or more employees
This only applies to disclosure requirements. For all other purposed it is still Pty Ltd.
Financial Reports:
s 295: Comprises financial statements (balance sheet, profit and loss statement and cash flow statement), disclosures
and notes.
s 295(4): include a directors’ declaration.
Must be prepared in compliance with accounting standards- a true and fair view.
ASIC v Healey Breach of s 344
s 344:
Other reports:
s 298: Directors’ report. Has a general component, a specific component and a special component for listed
companies.
Auditors report: Financial reports must be audited in accordance with Division 3 of Part 2M.3. The purpose of the
audit is to provide assurance about the integrity of the financial reporting. There is an auditors obligation to report to
ASIC.
Reports by disclosing entities: all listed companies are disclosing entities.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Reporting and disclosure; revision and exam preparation advice. Disclosure: the aims of corporate regulation include investor protection, efficiency in capital raising, and systematic stability. Mandatory disclosure has a role to play in achieving each of these aims. Sunlight is the best disinfectant -u. s. supreme court justice louis brandeis. Financial records: s 286: all companies must keep sufficient records to enable the preparation of financial statements if required. Part 2g. 3: minutes of meetings and resolutions of directors and members. Registers s 169: register of members s 173: searching the registers. Must be related to shareholding e. g. to requisition a meeting. s 177: limits use of information- can"t be used to make offer to buy shares. Review date and extract of particulars (may include request for particulars). Company must correct, and respond to request. s 347a: solvency resolution (for companies not reporting under ch. 2m: s 348a: return for particulars(for dormant companies).
