CORPORATIONS AMENDMENT (CORPORATE REPORTING REFORM) BILL 2010

i Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010

Contents

1 Short

title

...........................................................................................

2 Commencement

.................................................................................

3 Schedule(s)

........................................................................................

Schedule 1--Amendments relating to the Corporations Act

2001

Part 1--Main amendments

Corporations Act 2001

Part 2--Transitional provisions if this Act receives the Royal

Assent before the commencement of item 34 of

Schedule 1 to the Corporations Amendment (Financial

Market Supervision) Act 2010

Corporations Act 2001

Corporations Amendment (Financial Market Supervision) Act 2010

Part 3--Transitional provisions if this Act receives the Royal

Assent on or after the commencement of item 34 of

Schedule 1 to the Corporations Amendment (Financial

Market Supervision) Act 2010

Corporations Act 2001

Part 4--Consequential amendments

Financial Sector (Business Transfer and Group Restructure) Act 1999

Income Tax Assessment Act 1936

Medibank Private Sale Act 2006

Schedule 2--Australian Securities and Investments

Commission Act 2001

Part 1--Amendments

Australian Securities and Investments Commission Act 2001

Part 2--Application, saving and transitional provisions

Australian Securities and Investments Commission Act 2001

Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010 1

A Bill for an Act to amend the law in relation to

corporations, and for related purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Corporations Amendment (Corporate

Reporting Reform) Act 2010.

2 Commencement

(1) Each provision of this Act specified in column 1 of the table

commences, or is taken to have commenced, in accordance with

column 2 of the table. Any other statement in column 2 has effect

according to its terms.

2 Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010

Commencement information

Column 1

Column 2

Column 3

Provision(s) Commencement

Date/Details

1. Sections 1 to 3

and anything in

this Act not

elsewhere covered

by this table

The day this Act receives the Royal Assent.

2. Schedule 1,

Part 1

The day this Act receives the Royal Assent.

3. Schedule 1,

Part 2

The day this Act receives the Royal Assent.

However, if this Act receives the Royal

Assent on or after the day on which item 34

of Schedule 1 to the Corporations

Amendment (Financial Market Supervision)

Act 2010 commences, the provision(s) do

not commence at all.

4. Schedule 1,

Part 3

The later of:

(a) the start of the day this Act receives the

Royal Assent; and

(b) immediately after the commencement of

item 34 of Schedule 1 to the

Corporations Amendment (Financial

Market Supervision) Act 2010.

However, if this Act receives the Royal

Assent before the day on which item 34 of

Schedule 1 to the Corporations Amendment

(Financial Market Supervision) Act 2010

commences, the provision(s) do not

commence at all.

5. Schedule 1,

Part 4

The day this Act receives the Royal Assent.

6. Schedule 2

The day this Act receives the Royal Assent.

Note:

This table relates only to the provisions of this Act as originally

passed by both Houses of the Parliament and assented to. It will not be

expanded to deal with provisions inserted in this Act after assent.

(2) Column 3 of the table contains additional information that is not

part of this Act. Information in this column may be added to or

edited in any published version of this Act.

Schedule 1 Amendments relating to the Corporations Act 2001

Part 1 Main amendments

4 Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010

Schedule 1--Amendments relating to the

Corporations Act 2001

Part 1--Main amendments

Corporations Act 2001

1 Section 9 (definition of audit)

After "a financial report for", insert "a financial year or".

2 Section 9

Insert:

deductible gift recipient has the same meaning as in the Income

Tax Assessment Act 1997.

3 Section 9

Insert:

small company limited by guarantee has the meaning given by

section 45B.

4 After section 45A

Insert:

45B Small companies limited by guarantee

(1) A company is a small company limited by guarantee in a

particular financial year if:

(a) it is a company limited by guarantee for the whole of the

financial year; and

(b) it is not a deductible gift recipient at any time during the

financial year; and

(c)

either:

(i) where the company is not required by the accounting

standards to be included in consolidated financial

statements--the revenue of the company for the

financial year is less than the threshold amount; or

Amendments relating to the Corporations Act 2001 Schedule 1

Main amendments Part 1

Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010 5

(ii) where the company is required by the accounting

standards to be included in consolidated financial

statements--the consolidated revenue of the

consolidated entity for the financial year is less than the

threshold amount; and

(d) it is not one of the following:

(i) a Commonwealth company for the purposes of the

Commonwealth Authorities and Companies Act 1997;

(ii) a subsidiary of a Commonwealth company for the

purposes of that Act;

(iii) a subsidiary of a Commonwealth authority for the

purposes of that Act; and

(e) it has not been a transferring financial institution of a State or

Territory within the meaning of clause 1 of Schedule 4 to this

Act; and

(f) it is not a company that is permitted to use the expression

building society, credit society or credit union under

section 66 of the Banking Act 1959 at any time during the

financial year.

(2)

The

threshold amount, for the purposes of subparagraphs (1)(c)(i)

and (ii), is $250,000, or any other amount prescribed by the

regulations for the purposes of this subsection.

(3) Revenue and consolidated revenue are to be calculated for the

purposes of this section in accordance with accounting standards in

force at the relevant time (even if the standard does not otherwise

apply to the financial year of some or all of the companies

concerned).

5 Paragraph 9.1 of the small business guide in Part 1.5

Repeal the paragraph, substitute:

9.1 Dividends

Dividends are payments to shareholders. They can only be paid if:

�

the company's assets are sufficiently in excess of its liabilities

immediately before the dividend is declared; and

Schedule 1 Amendments relating to the Corporations Act 2001

Part 1 Main amendments

6 Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010

�

the payment of the dividend is fair and reasonable to the

company's shareholders as a whole and does not materially prejudice the

company's ability to pay its creditors.

It is a replaceable rule (see 1.6) that the directors decide whether

the company should pay a dividend.

[sections 254T, 254U]

6 Before section 254T

Insert:

254SA Companies limited by guarantee not to pay dividends

A company limited by guarantee must not pay a dividend to its

members.

7 Section 254T

Repeal the section, substitute:

254T Circumstances in which a dividend may be paid

(1) A company must not pay a dividend unless:

(a) the company's assets exceed its liabilities immediately before

the dividend is declared and the excess is sufficient for the

payment of the dividend; and

(b) the payment of the dividend is fair and reasonable to the

company's shareholders as a whole; and

company's ability to pay its creditors.

Note 1:

As an example, the payment of a dividend would materially prejudice

the company's ability to pay its creditors if the company would

become insolvent as a result of the payment.

Note 2:

For a director's duty to prevent insolvent trading on payment of

dividends, see section 588G.

(2) Assets and liabilities are to be calculated for the purposes of this

section in accordance with accounting standards in force at the

relevant time (even if the standard does not otherwise apply to the

financial year of some or all of the companies concerned).

8 Section 258F

Amendments relating to the Corporations Act 2001 Schedule 1

Main amendments Part 1

Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010 7

Before "A company", insert "(1)".

9 Section 258F (second sentence)

Repeal the sentence.

10 At the end of section 258F

Add:

(2) This power does not apply if:

(a) the company also cancels shares; or

(b) the cancellation of paid-up share capital is inconsistent with

the requirements of any accounting standard.

11 Subsection 285(1) (cell at table item 2, column headed

"comments")

Repeal the cell, substitute:

Unless the report relates to a

company limited by

guarantee, it has a general

component (sections 299 and

299A), a specific component

(section 300) and a special

component for listed

companies (section 300A).

See section 285A for an

overview of the obligations of

companies limited by

guarantee.

12 Subsection 285(1) (cell at table item 3, column headed

"comments", after the first paragraph)

Insert:

There are similar rules for

companies limited by

guarantee (see section 285A

for an overview).

13 Subsection 285(1) (cell at table item 4, column headed

"comments")

Repeal the cell, substitute:

Schedule 1 Amendments relating to the Corporations Act 2001

Part 1 Main amendments

8 Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010

Unless the report relates to a

company limited by

guarantee, a concise financial

report may be provided to

members instead of the full

financial statements

(subsections 314(1) and (2)).

For deadline, see subsections

315(1) to (4). See

section 285A for an overview

of the obligations of

companies limited by

guarantee.

14 After section 285

Insert:

285A Overview of obligations of companies limited by guarantee

The following table sets out what is involved in annual financial

reporting for companies limited by guarantee:

Annual financial reporting for companies limited by guarantee

Item Nature

company

Obligations

Sections

1 Small

company

limited

by guarantee.

No obligation to do any of the

following unless required to

do so under a member

direction or ASIC direction:

� prepare a financial report;

� prepare a directors' report;

� have financial report audited;

� notify members of reports.

Sections 292,

301 and 316A

Company limited by

guarantee with annual

revenue or, if part of a

consolidated entity,

annual consolidated

revenue of less than $1

million.

Must prepare a financial

report.

Must prepare a directors'

report, although less detailed

than that required of other

companies.

Need not have financial report

audited unless a

Sections 292,

298, 300B,

301, 316A

Amendments relating to the Corporations Act 2001 Schedule 1

Main amendments Part 1

Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010 9

Annual financial reporting for companies limited by guarantee

Item Nature

company

Obligations

Sections

Commonwealth company, or a

subsidiary of a

Commonwealth company or

Commonwealth authority. If

the company does not have

financial report audited, it

must have financial report

reviewed.

Must give reports to any

member who elects to receive

them.

Company limited by

guarantee with annual

revenue or, if part of a

consolidated entity,

annual consolidated

revenue of $1 million or

more.

Must prepare a financial

report.

Must prepare a directors'

report, although less detailed

than that required of other

companies.

Must have financial report

audited.

Must give reports to any

member who elects to receive

them.

Sections 292,

298, 300B,

301, 316A

15 At the end of section 292

Add:

Small companies limited by guarantee

(3) Despite subsection (1), a small company limited by guarantee has

to prepare the financial report and directors' report only if it is

directed to do so under section 294A or 294B. The rest of this Part

does not apply to any other small company limited by guarantee.

Note:

The following heading to subsection 292(2) is inserted "Small proprietary companies".

16 After section 294

Insert:

Schedule 1 Amendments relating to the Corporations Act 2001

Part 1 Main amendments

10 Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010

294A Small company limited by guarantee--member direction

(1) Members with at least 5% of the votes in a small company limited

by guarantee may give the company a direction to:

(a) prepare a financial report and directors' report for a financial

year; and

(b) send them to members who have elected to receive them

under section 316A.

(2) The direction must be:

(a) signed by the members giving the direction; and

(b) made no later than 12 months after the end of the financial

year concerned.

(3) The direction may specify all or any of the following:

(a) that the financial report does not have to comply with some

or all of the accounting standards;

(b) that a directors' report or a part of that report need not be

prepared;

294B Small company limited by guarantee--ASIC direction

(1) ASIC may give a small company limited by guarantee a direction

to comply with the requirements of this Division and Divisions 3,

4, 5 and 6 for a financial year.

(2) An offence based on subsection (1) is an offence of strict liability.

Note:

For strict liability, see section 6.1 of the Criminal Code.

(3) The direction may be general or may specify the particular

requirements that the company is to comply with.

(4) The direction must specify the date by which the documents have

to be prepared, sent or lodged. The date must be a reasonable one

in view of the nature of the direction.

(5) The direction must:

(a) be made in writing; and

(b) specify the financial year concerned; and

year.

Amendments relating to the Corporations Act 2001 Schedule 1

Main amendments Part 1

Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010 11

(6) A direction given under subsection (1) is not a legislative

instrument.

17 Subsection 295(2)

Repeal the subsection, substitute:

Financial statements

(2) The financial statements for the year are:

(a) unless paragraph (b) applies--the financial statements in

relation to the company, registered scheme or disclosing

entity required by the accounting standards; or

(b) if the accounting standards require the company, registered

scheme or disclosing entity to prepare financial statements in

relation to a consolidated entity--the financial statements in

relation to the consolidated entity required by the accounting

standards.

18 After paragraph 295(4)(c)

Insert:

(ca) if the company, registered scheme or disclosing entity has

included in the notes to the financial statements, in

compliance with the accounting standards, an explicit and

unreserved statement of compliance with international

financial reporting standards--that this statement has been

included in the notes to the financial statements; and

19 Subsection 296(1) (second sentence)

Repeal the sentence.

20 After subsection 296(1)

Insert:

Small proprietary companies

(1A) Despite subsection (1), the financial report of a small proprietary

company does not have to comply with particular accounting

standards if:

(a) the report is prepared in response to a shareholder direction

under section 293; and

Schedule 1 Amendments relating to the Corporations Act 2001

Part 1 Main amendments

12 Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010

(b) the direction specifies that the report does not have to comply

with those standards.

Small companies limited by guarantee

(1B) Despite subsection (1), the financial report of a small company

limited by guarantee does not have to comply with particular

accounting standards if:

(a) the report is prepared in response to a member direction

under section 294A; and

(b) the direction specifies that the report does not have to comply

with those standards.

Note:

The following heading to subsection 296(2) is inserted "Further requirements".

21 Subsection 298(1) (second sentence)

Repeal the sentence.

22 After subsection 298(1)

Insert:

(1AA) Except in the case of a company limited by guarantee, the report

must include:

(a) the general information required by sections 299 (all entities)

and 299A (additional requirements for listed entities); and

(b) the specific information required by sections 300 and 300A;

and

relation to the audit for the financial year.

(1AB) In the case of a company limited by guarantee, the report must

include:

(a) the general information required by section 300B; and

(b) a copy of the auditor's declaration under section 307C in

relation to the audit or review for the financial year.

23 At the end of section 298

Add:

Amendments relating to the Corporations Act 2001 Schedule 1

Main amendments Part 1

Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010 13

Small companies limited by guarantee

(4) A small company limited by guarantee does not have to comply

with subsection (1) for a financial year if:

(a) it is preparing the financial statements for that year in

response to a member direction under section 294A; and

(b) the direction specified that a directors' report need not be

prepared.

Note:

The following heading to subsection 298(3) is inserted "Small proprietary companies".

24 Subsection 299A(1)

Omit "a company or disclosing entity that is a listed public company

must also contain information that members of the company", substitute

"a company, registered scheme or disclosing entity that is listed must

also contain information that members of the listed entity".

Note:

The heading to section 299A is altered by omitting "public companies" and

substituting "entities".

25 Paragraph 299A(1)(b)

Omit "the entity", substitute "the entity reported on".

26 Paragraph 299A(1)(c)

Repeal the paragraph, substitute:

years, of the entity reported on.

27 Paragraph 299A(2)(a)

Repeal the paragraph, substitute:

(a) the company, registered scheme or disclosing entity that is

listed (if consolidated financial statements are not required);

28 Subsection 299A(3)

Omit "the company or disclosing entity" (wherever occurring),

substitute "the company, registered scheme or disclosing entity".

29 After section 300A

Insert:

Schedule 1 Amendments relating to the Corporations Act 2001

Part 1 Main amendments

14 Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010

300B Annual directors' report--companies limited by guarantee

(1) The directors' report for a financial year for a company limited by

guarantee must:

(a) contain a description of the short and long term objectives of

the entity reported on; and

(b) set out the entity's strategy for achieving those objectives;

and

(d) state how those activities assisted in achieving the entity's

objectives; and

(e) state how the entity measures its performance, including any

key performance indicators used by the entity.

(2) The entity reported on is:

(a) the company (if consolidated financial statements are not

required); or

(b) the consolidated entity (if consolidated financial statements

are required).

(3) The directors' report for a financial year for a company limited by

guarantee must also include details of:

(a) the name of each person who has been a director of the

company at any time during or since the end of the year and

the period for which the person was a director; and

(b) each director's qualifications, experience and special

responsibilities; and

the year and each director's attendance at those meetings; and

(d) for each class of membership in the company--the amount

which a member of that class is liable to contribute if the

company is wound up; and

(e) the total amount that members of the company are liable to

contribute if the company is wound up.

30 At the end of section 301

Add:

Amendments relating to the Corporations Act 2001 Schedule 1

Main amendments Part 1

Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010 15

Companies limited by guarantee

(3) A company limited by guarantee may have its financial report for a

financial year reviewed, rather than audited, if:

(a) the company is not one of the following:

(i) a Commonwealth company for the purposes of the

Commonwealth Authorities and Companies Act 1997;

(ii) a subsidiary of a Commonwealth company for the

purposes of that Act;

(iii) a subsidiary of a Commonwealth authority for the

purposes of that Act; and

(b) one of the following is true:

(i) the company is not required by the accounting standards

to be included in consolidated financial statements and

the revenue of the company for the financial year is less

than $1 million;

(ii) the company is required by the accounting standards to

be included in consolidated financial statements and the

consolidated revenue of the consolidated entity for the

financial year is less than $1 million.

(4) A small company limited by guarantee's financial report for a

financial year does not have to be audited or reviewed if:

(a) the report is prepared in response to a member direction

under section 294A; and

(b) the direction does not ask for the audit or review.

Note:

The following heading to subsection 301(2) is inserted "Small proprietary companies".

31 Subsection 303(2)

Repeal the subsection, substitute:

Financial statements

(2) The financial statements for the half-year are:

(a) unless paragraph (b) applies--the financial statements in

relation to the disclosing entity required by the accounting

standards; or

(b) if the accounting standards require the disclosing entity to

prepare financial statements in relation to a consolidated

Schedule 1 Amendments relating to the Corporations Act 2001

Part 1 Main amendments

16 Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010

entity--the financial statements in relation to the

consolidated entity required by the accounting standards.

32 Paragraphs 307A(1)(a) and (2)(a)

After "audit", insert "or review".

33 Subparagraphs 307B(1)(b)(i) and (3)(a)(i)

After "audit", insert "or review".

34 Paragraphs 307C(1)(a) and (3)(a)

After "audit", insert "or review".

35 After subsection 308(3)

Insert:

(3AA) An auditor who reviews the financial report for a company limited

by guarantee must report to members on whether the auditor

became aware of any matter in the course of the review that makes

the auditor believe that the financial report does not comply with

Division 1.

(3AB) A report under subsection (3AA) must:

(a) describe any matter referred to in subsection (3AA); and

(b) say why that matter makes the auditor believe that the

financial report does not comply with Division 1.

36 Subsection 308(4)

Repeal the subsection, substitute:

(4) A report under subsection (1) or (3AA) must specify the date on

which it is made.

37 Subsection 308(5)

After "(3),", insert "(3AA), (3AB),".

38 After subsection 314(1)

Insert:

(1AAA) This section does not apply to a company limited by guarantee.

Note:

The requirement for annual financial reporting to members for those

companies is in section 316A.

Amendments relating to the Corporations Act 2001 Schedule 1

Main amendments Part 1

Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010 17

39 At the end of section 316

Add:

(5) This section does not apply in relation to a company limited by

guarantee.

40 After section 316

Insert:

316A Annual financial reporting to members of companies limited

by guarantee

(1) A member of a company limited by guarantee may, by notice in

writing to the company, elect to receive a hard copy or an

electronic copy of the following reports:

(a) the financial reports;

(b) the directors' reports;

(2) If a member makes an election in a financial year, the election:

(a) is made by the member for that financial year; and

(b) is a standing election made by the member for each later

financial year until the member changes the election.

(3) If the company prepares a financial report or a directors' report for

a financial year, or obtains an auditor's report on the financial

report, the company must send a copy of the report, free of charge,

to each member who has made an election for that financial year,

in accordance with the election, by the earlier of:

(a) 21 days before the next AGM after the end of the financial

year; and

(b) 4 months after the end of the financial year.

Note:

For the deadline for holding an AGM, see section 250N.

(4) If a member direction is given to a small company limited by

guarantee under section 294A after the end of a financial year,

subsection (3) does not apply and the company must send a copy of

the reports that the company prepares or obtains as a result of the

direction to each member who has made an election for that

financial year, in accordance with the election, by the later of:

(a) 2 months after the date on which the direction was given; and

Schedule 1 Amendments relating to the Corporations Act 2001

Part 1 Main amendments

18 Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010

(b) 4 months after the end of the financial year.

(5) An offence based on subsection (3) or (4) is an offence of strict

liability.

Note:

For strict liability, see section 6.1 of the Criminal Code.

41 After subsection 317(1)

Insert:

(1A) Subsection (1) does not apply to a small company limited by

guarantee in relation to a report if the company is not required

under a member direction made under section 294A or an ASIC

direction made under section 294B to prepare or obtain the report.

42 Subsection 319(2)

Repeal the subsection, substitute:

(2) Subsection (1) does not apply to:

(a) a small proprietary company that prepares a report in

response to a shareholder direction under section 293 or an

ASIC direction under section 294; and

(b) a small company limited by guarantee that prepares a report

in response to a member direction under section 294A or an

ASIC direction under section 294B.

43 Subsection 323D(2)

Omit "subsection (4)", substitute "subsections (2A) and (4)".

44 After subsection 323D(2)

Insert:

(2A) A subsequent financial year may last for a period of less than 12

months determined by the directors if:

(a) the subsequent financial year starts at the end of the previous

financial year; and

(b) there has not been a period during the previous 5 financial

years in which there was a financial year of less than 12

months in reliance on this subsection; and

faith in the best interests of the company, registered scheme

or disclosing entity.

Amendments relating to the Corporations Act 2001 Schedule 1

Main amendments Part 1

Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010 19

45 After section 324BD

Insert:

324BE Exception from registration requirement--reviewing

financial reports of companies limited by guarantee

(1) An individual is taken to be a registered company auditor for the

purposes of a review of a financial report of a company limited by

guarantee if the individual:

(a) is a member of a professional accounting body; and

(b) holds a practising certificate of the kind specified in the

regulations.

(2) The provisions of this Act apply, with the necessary modifications,

in relation to the individual accordingly.

46 Subsection 324CH(9) (definition of relevant financial year)

Omit "an audit of a financial report for a financial year", substitute "an

audit or review of a financial report for a financial year".

47 Subsection 329(9)

After "proprietary company", insert "or a small company limited by

guarantee".

48 Schedule 3 (after table item 82)

Insert:

82A

Section 254SA

100 penalty units or imprisonment for 2 years,

or both.

49 Schedule 3 (after table item 103)

Insert:

103AA

Section 294B

10 penalty units or imprisonment for 3 months,

or both.

50 Schedule 3 (cell at table item 104, column headed

"Provision")

After "(3),", insert "(3AA), (3AB),".

51 Schedule 3 (after table item 109)

Amendments relating to the Corporations Act 2001 Schedule 1

Transitional provisions if this Act receives the Royal Assent before the commencement

of item 34 of Schedule 1 to the Corporations Amendment (Financial Market

Supervision) Act 2010 Part 2

Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010 21

Part 2--Transitional provisions if this Act receives

the Royal Assent before the commencement

of item 34 of Schedule 1 to the Corporations

Amendment (Financial Market Supervision)

Act 2010

Corporations Act 2001

52 At the end of Chapter 10

Add:

Part 10.14--Transitional provisions relating to the

Corporations Amendment (Corporate

Reporting Reform) Act 2010

1510A Definition

In this Part:

amending Act means the Corporations Amendment (Corporate

Reporting Reform) Act 2010.

1510B Application of Part 1 of Schedule 1 to the amending Act

(1) The amendments made by items 1 to 4, items 11 to 16, items 18 to

23, items 29 and 30, items 32 to 42, items 45 to 47 and items 49 to

51 of Schedule 1 to the amending Act apply in relation to a

company, registered scheme or disclosing entity for financial years

of the company, registered scheme or disclosing entity ending on

or after 30 June 2010.

(2) The amendments made by items 6, 7 and 48 of Schedule 1 to the

amending Act apply in relation to dividends declared on or after

the commencement of those items.

(3) The amendments made by items 8, 9 and 10 of Schedule 1 to the

amending Act apply in relation to cancellations of paid-up share

capital that occur on or after the commencement of those items.

Schedule 1 Amendments relating to the Corporations Act 2001

Part 2 Transitional provisions if this Act receives the Royal Assent before the

commencement of item 34 of Schedule 1 to the Corporations Amendment (Financial

Market Supervision) Act 2010

22 Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010

(4) Despite the amendment made by item 17 of Schedule 1 to the

amending Act, accounting standards made for the purposes of

subsection 295(2) of this Act that were in force immediately before

the commencement of that item continue in force, after that

commencement, as if they were made for the purposes of

subsection 295(2) of this Act as amended by that item.

(5) The amendment made by item 17 of Schedule 1 to the amending

Act applies to a report of a company, registered scheme or

disclosing entity for financial years of the company, registered

scheme or disclosing entity ending on or after 30 June 2010.

(6) The amendments made by items 24 to 28 of Schedule 1 to the

amending Act apply in relation to a company, registered scheme or

disclosing entity for financial years of the company, registered

scheme or disclosing entity ending on or after 30 June 2011.

(7) Despite the amendment made by item 31 of Schedule 1 to the

amending Act, accounting standards made for the purposes of

subsection 303(2) of this Act that were in force immediately before

the commencement of that item continue in force, after that

commencement, as if they were made for the purposes of

subsection 303(2) of this Act as amended by that item.

(8) The amendment made by item 31 of Schedule 1 to the amending

Act applies to a report of a disclosing entity for half-years of the

disclosing entity ending on or after 30 June 2010.

(9) The amendments made by items 43 and 44 of Schedule 1 to the

amending Act apply where the previous financial year of the

company, registered scheme or disclosing entity ends on or after

30 June 2010.

Corporations Amendment (Financial Market Supervision)

Act 2010

53 Item 34 of Schedule 1

Omit "Part 10.14", substitute "Part 10.15".

Amendments relating to the Corporations Act 2001 Schedule 1

Transitional provisions if this Act receives the Royal Assent on or after the

commencement of item 34 of Schedule 1 to the Corporations Amendment (Financial

Market Supervision) Act 2010 Part 3

Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010 23

Part 3--Transitional provisions if this Act receives

the Royal Assent on or after the

commencement of item 34 of Schedule 1 to

the Corporations Amendment (Financial

Market Supervision) Act 2010

Corporations Act 2001

54 At the end of Chapter 10

Add:

Part 10.15--Transitional provisions relating to the

Corporations Amendment (Corporate

Reporting Reform) Act 2010

1514 Definition

In this Part:

amending Act means the Corporations Amendment (Corporate

Reporting Reform) Act 2010.

1515 Application of Part 1 of Schedule 1 to the amending Act

(1) The amendments made by items 1 to 4, items 11 to 16, items 18 to

23, items 29 and 30, items 32 to 42, items 45 to 47 and items 49 to

51 of Schedule 1 to the amending Act apply in relation to a

company, registered scheme or disclosing entity for financial years

of the company, registered scheme or disclosing entity ending on

or after 30 June 2010.

(2) The amendments made by items 6, 7 and 48 of Schedule 1 to the

amending Act apply in relation to dividends declared on or after

the commencement of those items.

(3) The amendments made by items 8, 9 and 10 of Schedule 1 to the

amending Act apply in relation to cancellations of paid-up share

capital that occur on or after the commencement of those items.

Schedule 1 Amendments relating to the Corporations Act 2001

Part 3 Transitional provisions if this Act receives the Royal Assent on or after the

commencement of item 34 of Schedule 1 to the Corporations Amendment (Financial

Market Supervision) Act 2010

24 Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010

(4) Despite the amendment made by item 17 of Schedule 1 to the

amending Act, accounting standards made for the purposes of

subsection 295(2) of this Act that were in force immediately before

the commencement of that item continue in force, after that

commencement, as if they were made for the purposes of

subsection 295(2) of this Act as amended by that item.

(5) The amendment made by item 17 of Schedule 1 to the amending

Act applies to a report of a company, registered scheme or

disclosing entity for financial years of the company, registered

scheme or disclosing entity ending on or after 30 June 2010.

(6) The amendments made by items 24 to 28 of Schedule 1 to the

amending Act apply in relation to a company, registered scheme or

disclosing entity for financial years of the company, registered

scheme or disclosing entity ending on or after 30 June 2011.

(7) Despite the amendment made by item 31 of Schedule 1 to the

amending Act, accounting standards made for the purposes of

subsection 303(2) of this Act that were in force immediately before

the commencement of that item continue in force, after that

commencement, as if they were made for the purposes of

subsection 303(2) of this Act as amended by that item.

(8) The amendment made by item 31 of Schedule 1 to the amending

Act applies to a report of a disclosing entity for half-years of the

disclosing entity ending on or after 30 June 2010.

(9) The amendments made by items 43 and 44 of Schedule 1 to the

amending Act apply where the previous financial year of the

company, registered scheme or disclosing entity ends on or after

30 June 2010.

Amendments relating to the Corporations Act 2001 Schedule 1

Consequential amendments Part 4

Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010 25

Part 4--Consequential amendments

Financial Sector (Business Transfer and Group Restructure)

Act 1999

55 Subsection 36G(2) (note 2)

Repeal the note, substitute:

Note 2:

Section 254T of that Act provides that dividends may only be paid if:

(a) the company's assets are sufficiently in excess of its liabilities

immediately before the dividend is declared; and

(b) the payment of the dividend is fair and reasonable to the

company's shareholders as a whole and does not materially

prejudice the company's ability to pay its creditors.

Income Tax Assessment Act 1936

56 After subsection 44(1)

Insert:

(1A) For the purposes of this Act, a dividend paid out of an amount

other than profits is taken to be a dividend paid out of profits.

57 Application of income tax amendment

Subsection 44(1A) of the Income Tax Assessment Act 1936 (as inserted

by this Schedule) applies in relation to dividends declared on or after

the commencement of item 7 of this Schedule.

Medibank Private Sale Act 2006

58 Subitem 57(1) of Schedule 2

Omit ", section 254T of the Corporations Act 2001".

59 Subitem 57(3) of Schedule 2

Omit "section 254T of the Corporations Act 2001 or".

Schedule 2 Australian Securities and Investments Commission Act 2001

Part 1 Amendments

26 Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010

Schedule 2--Australian Securities and

Investments Commission Act 2001

Part 1--Amendments

Australian Securities and Investments Commission Act 2001

1 Subsection 5(1) (definition of CPAA member)

Repeal the definition.

2 Subsection 5(1) (definition of ICAA member)

Repeal the definition.

3 Paragraphs 203(1)(c) and (d)

Repeal the paragraphs, substitute:

subsection (1B) for appointment as a member; and

4 Subsection 203(1A)

Repeal the subsection, substitute:

(1A)

The

accounting members are the members appointed under

paragraph (1)(c), and the business members are the members

appointed under paragraph (1)(e).

5 Subsection 203(1B)

Repeal the subsection, substitute:

(1B) A person is eligible under this subsection for appointment as an

accounting member if the person:

(a) is resident in Australia; and

(b) is a member of:

(i) a professional accounting body; or

(ii) any other body prescribed by the regulations for the

purposes of this subparagraph.

6 Subsection 210A(5)

Repeal the subsection, substitute:

Australian Securities and Investments Commission Act 2001 Schedule 2

Amendments Part 1

Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010 27

(5) If the Chairperson is satisfied that it is practicable and appropriate

to do so, the Chairperson is to constitute the Panel so that it is a 5

person Panel.

7 After subsection 221(1)

Insert:

(1A) The Chairperson of the Board has, in the performance of his or her

functions or the exercise of his or her powers in relation to a

conference under section 1294A of the Corporations Act, the same

protection and immunity as a Justice of the High Court.

8 After subsection 221(2)

Insert:

(2A) A barrister, solicitor or other person appearing on behalf of a

person at a conference under section 1294A of the Corporations

Act has the same protection and immunity as a barrister has in

appearing for a party in proceedings in the High Court.

9 Subparagraph 225(2)(h)(ii)

Omit "; and", substitute ".".

10 Paragraphs 225(2)(i) and (j)

Repeal the paragraphs.

11 Subparagraph 225(2A)(h)(ii)

Omit "; and", substitute ".".

12 Paragraphs 225(2A)(i) and (j)

Repeal the paragraphs.

Schedule 2 Australian Securities and Investments Commission Act 2001

Part 2 Application, saving and transitional provisions

28 Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010

Part 2--Application, saving and transitional

provisions

Australian Securities and Investments Commission Act 2001

13 At the end of the Act

Add:

Part 18--Transitional provisions relating to the

Corporations Amendment (Corporate

Reporting Reform) Act 2010

289 Definitions

In this Part:

amending Act means the Corporations Amendment (Corporate

Reporting Reform) Act 2010.

old Act means this Act as in force immediately before the

commencement of the amending Act.

Schedule 2 commencement means the day on which Part 1 of

Schedule 2 to the amending Act commences.

transition period means the period:

(a) beginning at the start of the day Part 1 of Schedule 2 to the

amending Act commences; and

(b) ending when there is no longer any person holding an

appointment as a member of the Companies Auditors and

Liquidators Disciplinary Board under paragraph 203(1)(c) or

(d) of the old Act.

290 Application of Companies Auditors and Liquidators

Disciplinary Board amendments

(1) The amendments made by items 1 to 5 of Schedule 2 to the

amending Act do not apply until after the transition period.

(2) During the transition period:

Australian Securities and Investments Commission Act 2001 Schedule 2

Application, saving and transitional provisions Part 2

Corporations Amendment (Corporate Reporting Reform) Bill 2010 No. , 2010 29

(a) a person holding an appointment as a member of the

Companies Auditors and Liquidators Disciplinary Board

under paragraph 203(1)(c) or (d) of the old Act immediately

before the Schedule 2 commencement continues to hold that

appointment on and after that commencement for the

remainder of the term of the person's appointment as if those

amendments had not been made; and

(b) paragraph (a) does not prevent the Minister terminating the

appointment under section 207 or the person from resigning

under section 206; and

Companies Auditors and Liquidators Disciplinary Board; and

(d) any member appointed after the Schedule 2 commencement:

(i) must be selected by the Minister; and

(ii) must be eligible to be appointed under subsection

203(1B) as inserted by item 5 of Schedule 2 to the

amending Act; and

(e)

accounting member means:

(i) a member appointed under paragraph (d); or

(ii) a member appointed under paragraph 203(1)(c) or (d) of

the old Act.

(3) After the transition period, accounting member is taken to include

a member appointed under paragraph (2)(d).

291 Application of pre-hearing conference amendments

The amendments made by items 7 and 8 of Schedule 2 to the

amending Act apply in relation to conferences conducted before,

on or after the Schedule 2 commencement.

Commonwealth of Australia Bills

CORPORATIONS AMENDMENT (CORPORATE REPORTING REFORM) BILL 2010