Companies Act Overseas Incorporated Companies Australian Wholly owne....pdf

Departmental
Companies Act (Overseas Incorporated
Companies—Australian Wholly–owned
Entities) Exemption Notice 2015
Pursuant  to  section  207L  of  the  Companies  Act  1993,  the  Registrar  of  Companies  gives  the
following notice (to which is appended a statement of reasons of the Registrar).
N o t i c e
1.  Title—This  notice  is  the  Companies  Act  (Overseas  Incorporated  Companies—Australian
Wholly-owned Entities) Exemption Notice 2015.
2. Commencement—This notice comes into force on its notiﬁcation in the New Zealand Gazette.
3. Expiry—This notice expires on the close of 31 July 2020.
4. Application—An exemption granted by this notice applies to the following accounting periods
of an exempt overseas company:
a. an accounting period of the exempt overseas company that commenced before the exemption is
granted (including an accounting period that ended before the exemption is granted) if:
i. in the case of copies of ﬁnancial statements or group ﬁnancial statements for that period
that are required to be delivered for registration under sections 201 or 202 of the Act, the
exemption is granted before those documents are required to be delivered for registration
under that section; or
ii. in  any  other  case,  the  exemption  is  granted  before  the  ﬁnancial  statements  or  group
ﬁnancial statements for that period are required to be completed; and
b. subsequent accounting periods.
5. Interpretation—In this notice, unless the context otherwise requires:
Act means the Companies Act 1993;
Class  Order  means  the  Australian  Securities  and  Investment  Commission’s  Class  Order
[98/1418] Wholly-owned entities;
exempt overseas company means a company that:
a. is incorporated in Australia;
b. is a company to which sections 201 or 202 of the Act applies; and
c. has been granted relief under the Class Order;
speciﬁed  ﬁnancial  statements,  in  relation  to  an  exempt  overseas  company,  means  the
consolidated  ﬁnancial  statements  that  are  required  to  be  prepared  in  accordance  with  the
relief granted under the Class Order in respect of the exempt overseas company;
Australian GAAP means generally accepted accounting principles in Australia.

6.  Exemptions  for  directors  of  exempt  overseas  companies—Every  director  of  an  exempt
overseas  company  is  exempted  from  the  following  provisions  in  respect  of  the  exempt  overseas
company:
a. sections  201  and  202  of  the  Act,  except  to  the  extent  that  these  sections  require  ﬁnancial
statements  to  be  prepared  for  the  exempt  overseas  company’s  New  Zealand  business  in
accordance with section 204 of the Act; and
b. section  207E  of  the  Act  to  the  extent  that  it  requires  copies  of  the  ﬁnancial  statements  and
group ﬁnancial statements of the exempt overseas company to be delivered to the Registrar for
registration.
For  the  avoidance  of  doubt,  this  notice  does  not  exempt  an  exempt  overseas  company  from  the
requirement to prepare audited ﬁnancial statements for its large New Zealand business.
7. Conditions—The exemptions in clause 6 are subject to the conditions that:
a. the speciﬁed ﬁnancial statements comply with Australian GAAP; and
b. the  speciﬁed  ﬁnancial  statements  are  audited  by  a  qualiﬁed  auditor  in  accordance  with  the
relevant standards relating to auditing or assurance that are in force in Australia;
c. the directors of the exempt overseas company ensure that, within 20 working days after the
speciﬁed ﬁnancial statements are required to be signed, the following documents are delivered
to the Registrar for registration:
i. a copy of the speciﬁed ﬁnancial statements together with a copy of the auditor’s report on
those statements;
ii. a memorandum signed by the directors of the exempt overseas company which states that:
A. the  speciﬁed  ﬁnancial  statements  are  the  consolidated  ﬁnancial  statements  that  are
required to be prepared under the Class Order and are not the ﬁnancial statements of
the exempt overseas company; and
B. the exempt overseas company has been granted relief under the Class Order and the
basis for which the exempt overseas company qualiﬁes for such relief; and
C. the nature of the relief granted.
iii. a copy of the Class Order.
Dated at Wellington this 15th day of June 2015.
Statement of reasons
This notice, which comes into force on its notiﬁcation in the New Zealand Gazette and expires on
31 July 2020, exempts the directors of certain overseas companies incorporated in Australia from
various provisions of the Companies Act 1993 (“the Act”).
The eﬀect of the exemptions is to allow overseas companies incorporated in Australia, which are
wholly-owned  subsidiaries  that  have  been  granted  relief  under  the  Australian  Securities  and
Investment Commission’s (ASIC) Class Order [98/1418] Wholly-owned entities (the Class Order),
to provide the consolidated ﬁnancial statements that they are required to prepare under ﬁnancial
reporting requirements in Australia.
The  Class  Order  provides  that  certain  wholly-owned  subsidiaries  may  be  relieved  from  the
requirement  to  prepare  and  lodge  audited  ﬁnancial  statements  under  Chapter  2M  of  the
Corporations Act 2001 (Aust), where they enter into deeds of cross guarantee with their parent

entity and meet certain other conditions. The relief is granted on the basis that the deed of cross
guarantee 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  ﬁnancial
position  for  those  entities  rather  than  the  individual  ﬁnancial  statements  of  the  wholly-owned
subsidiaries that are parties to the deed.
The principal diﬀerences in ﬁnancial statements provided by overseas companies relying on the
exemptions are:
a. the directors of the overseas company will prepare and register audited ﬁnancial statements for
the New Zealand business and the consolidated ﬁnancial statements prepared for the parent
entity only (not stand-alone parent company ﬁnancial statements):
b. the consolidated ﬁnancial statements will comply with generally accepted accounting practice
in Australia (rather than generally accepted accounting practice in New Zealand):
c. the  consolidated  ﬁnancial  statements  will  be  audited  in  accordance  with  auditing  and
assurance standards in force in Australia (rather than the applicable auditing and assurance
standards in force in New Zealand).
The Registrar considers that it is appropriate to grant the exemptions because:
the  Registrar  has  had  regard  to  the  ﬁnancial  reporting  requirements  that  must  be  complied
with by Australian incorporated companies who rely on the exemptions. The exemptions are
limited to overseas companies that have been granted relief by ASIC under the Class Order;
an overseas company relying on the exemptions will still be required to ﬁle audited ﬁnancial
statements for the group’s New Zealand business prepared in accordance with New Zealand
generally accepted accounting practice as if the members of the group were companies formed
and registered in New Zealand;
the Registrar is satisﬁed that the consolidated ﬁnancial statements for the parent company that
are required to be prepared under the Class Order provide suﬃcient information to avoid any
detriment  to  members  of  the  public  who  have  dealings  with  companies  incorporated  in
Australia who have been granted relief under the Class Order; and
the  exemptions  address  the  particular  diﬃculties  experienced  by  Australian  incorporated
companies that carry on business in New Zealand, and that have been granted relief under the
Class Order from the requirement to prepare stand-alone parent company ﬁnancial statements
in  Australia.  The  exemptions  are  not  broader  than  what  is  reasonably  necessary  to  address
these  diﬃculties  and  still  require  that  consolidated  ﬁnancial  statements  be  ﬁled  in
New Zealand.
Dated this 18th day of June 2015.
This notice is administered by the Registrar of Companies.
18
JUN
2015

Notice Number
2015go3563
Issue Number
68
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Principal Edition, 18 June 2015
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