There is only one reason accountants and others have corporate compliance software: To comply with the Corporations Law requirements!
Then why does so much ASIC corporate compliance software NOT comply? And why would people buy a non compliant ASIC corporate compliance solution?
Let’s look first at what the law requires:
Section 168 of the Corporations Law requires Australian companies to keep the following register (where relevant):
- Members,
- Options,
- Debenture Holders,
- Prescribed Interests,
- Charges, and
- Unclaimed Property;
The Register of Officers is no longer required by law as ASIC are now deemed to hold this register – but probably not a bad idea in any case.
Most companies, however, will in practice only require a Register of Members.
The Register of Members must contain the following information about each member and about each member’s holdings:
- the member’s name and address (including details of joint holders),
- the date on which the entry of the member’s name in the register is made,
- the date on which every allotment of shares takes place,
- the number of shares in each allotment,
- the shares held by each member,
- the class of shares,
- the share numbers (if any), or share certificate numbers (if any), of the shares,
- the amount paid on the shares,
- whether or not the shares are fully paid,
- the amount unpaid on the shares (if any), and
- whether shares are held beneficially or non beneficially.
Not listed specifically in the ASIC requirements (but certainly implied), is the need to keep details of ALL share transactions – and this is more than just a simple allotment or transfer. Companies may have any of the following share transaction types:
- Allotments
- Cancellations
- Change to Beneficial Ownership
- Changes to Amounts Paid
- Consolidation
- Conversions
- Redemptions
- Return of Capital
- Share Buy Backs
- Share Transfers
- Subdivisions
- Subscriptions
So lets be very clear: Any so called ASIC corporate compliance solution that does not provide a historical register ie from Day 1 of a company, with all this data, is simply non compliant.
I suppose the next question is: what does your client expect you to be keeping on their behalf? Do you think you clients would be happy if they found out you are not keeping proper records for their companies? Would this be a breach of your professional responsibilities ? And what would happen if your client ended up in Court and were required a complete share register – but you simply could not provide one?
Here this is the problem! You are entrusted by you clients with their ASIC compliance work so you need to ensure the ASIC corporate compliance software you use complies with the Law.
So, before you invest in a half built corporate compliance solution, there are four questions you should ask the supplier:
1. Does your software keep a database of ALL company information – past and present?
2. Will you to cover my liability resulting from legal action taken by my clients for incomplete corporate records?
3. Do you guarantee to pay for my time to reconstruct any records should I find your software is non compliant?
4. Do you GUARANTEE your ASIC corporate compliance software complies with the Corporations Law?
At BGL, our answers would uncategorically be YES, YES, YES and YES.
And we have been able to answer YES, YES, YES and YES for almost 30 years….
Can others say the same?
