More than 2000 small-to-medium companies will be excused from lodging annual financial reports to the corporate regulator, under a red-tape-cutting exercise announced by Treasurer Josh Frydenberg.
The revenue threshhold for proprietary companies to report to the Australian Securities and Investments Commission will be lifted to $50 million, from $25 million.
The companies are required to prepare and lodge a financial report, a director’s report and an auditor’s report with ASIC each financial year.
Under the updated thresholds, a company will be required to submit the information to the regulator if it reaches two of the following three thresholds – $50 million consolidated revenue, $25 million (previously $12.5 million) or more in consolidated gross assets, or at least 100 employees (previously 50 staff).
About 2200 of the 6600 proprietary companies technically defined as “large” by ASIC will no longer be required to comply with financial reporting and audit requirements.
Mr Frydenberg said it would save smaller businesses about $81 million annually, given the average cost of preparing and auditing financial reports is about $36,950 per company each year.
The announcement builds on a series of Coalition government initiatives designed to support small and medium businesses in Australia, including cutting company tax rates, implementing the $20,000 instant asset write-off, expanding employee share schemes and improving access to lending through the Australian Business Securitisation Fund, all aimed at making lives easier for small businesses.
By Lee Xie (Senior Project Manager)
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