What it means
Every company incorporated in Australia is registered by ASIC and issued an Australian Company Number, the identifier that belongs on invoices, contracts and public documents. The regulator holds the register of directors, shareholdings and registered addresses, and expects changes to be notified within set deadlines.
Late notifications attract fees, which is how most small businesses first encounter it. Its second role is licensing.
Anyone who gives financial product advice, deals in financial products or operates a managed investment scheme generally needs an Australian Financial Services licence, while consumer lenders and finance brokers need a credit licence. Licensees must meet competence, conduct and financial requirements, keep records and report significant breaches.
Its third role is enforcement and market supervision. ASIC investigates misleading disclosure, insider trading, market manipulation, unlicensed advice and breaches of directors' duties, and it can ban individuals, cancel licences, accept enforceable undertakings or bring civil and criminal proceedings through the courts.
The maximum penalties are set by legislation and have been increased several times, so current figures should be taken from the legislation itself. The regulator also reviews financial reporting.
Public companies and large proprietary companies must lodge audited financial statements, and ASIC runs periodic reviews of filed accounts, typically focusing on asset values, revenue recognition, tax balances and going concern disclosure. A letter asking how a particular judgement was reached is a normal part of that programme rather than a sign of wrongdoing.
Australian financial regulation is shared between agencies, so it helps to know who does what. ASIC covers companies, markets, conduct and disclosure; the Australian Prudential Regulation Authority supervises the financial strength of banks, insurers and superannuation funds; the Australian Taxation Office administers tax and issues the Australian Business Number.
One bank can answer to all three on completely different questions. Fees and deadlines are the day-to-day reality for most businesses.
Annual review fees fall due on the anniversary of registration, most changes to company details must be notified within 28 days, and directors must hold a director identification number. Keeping a compliance calendar is far cheaper than paying penalties for missed lodgements.
In practice
Real-world examples.
Example
A founder registers a new proprietary company and receives an Australian Company Number the same day. Six months later she appoints a second director and notifies the change within the 28-day window, avoiding a late lodgement fee. The updated details then appear on the public register that customers, suppliers and lenders can search.
Example
A mortgage broking firm applies for a credit licence before it takes on its first client. ASIC assesses the experience of its responsible managers and the adequacy of its compliance arrangements before granting the licence. Arranging loans without one would have been an offence and would have put every deal the firm wrote at risk.
Example
A listed mining company delays announcing that a key drilling result was far weaker than expected. The regulator examines the timing against the continuous disclosure obligations, and the company ends up paying a penalty and rebuilding its disclosure committee process. Its share price had moved sharply during the period of silence.
Case study
Seen in the real world.
Take Coralview Advisory, a fictional financial planning firm used purely as an illustrative example. It grew quickly by hiring advisers from a competitor that had closed, and its compliance documentation fell well behind its headcount.
A routine surveillance visit in this illustrative scenario found that three advisers had given personal advice without the required statements of advice and that the firm's annual compliance review had not been completed for two years. The outcome was an enforceable undertaking, an independent expert review costing about $180,000 and a twelve-month pause on hiring new advisers.
Coralview survived, but the episode cost it roughly a year of growth and a good deal of referral goodwill. Its fictional managing director now treats licence conditions as operating requirements rather than paperwork, with a named person accountable for each one.
Watch out
Common mistakes.
- Confusing the Australian Company Number issued on registration with the Australian Business Number used for tax, which comes from the tax office instead.
- Missing the deadline to notify a change of director, address or shareholding, which triggers a late fee that grows the longer it is left unreported.
- Assuming a general business registration covers financial advice or consumer lending, when a specific licence is required for both.
Questions
People also ask.
Does ASIC regulate bank capital and solvency?
No, prudential strength is the Australian Prudential Regulation Authority's responsibility, while ASIC focuses on conduct, disclosure, licensing and market integrity.
Is the company register public?
Yes, anyone can search company details, directors and lodged documents, which is why keeping the register accurate has commercial as well as legal value.
Does a foreign company need to deal with ASIC?
Yes, a foreign company carrying on business in Australia generally has to register and lodge documents even if it has no Australian subsidiary.
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