{"id":"F2017L00307","name":"ASIC Corporations (Foreign-Controlled Company Reports) Instrument 2017/204","slug":"asic-corporations-foreign-controlled-company-reports-instrument-2017-204","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":439155,"registerId":"F2017L00307-fast-fetch-1775955271589","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"ASIC Corporations (Foreign-Controlled Company Reports) Instrument 2017/204","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\nmeta-generator: Aspose.Words for .NET 22.10.0\ntitle: ASIC Corporations (Foreign Controlled Company Reports) Instrument 2016\n---\n\n![Commonwealth Coat of Arms and ASIC logo](image.001.jpeg)\n\nASIC Corporations (Foreign-Controlled Company Reports) Instrument 2017/204\n\nI, Stephen Yen PSM, delegate of the Australian Securities and Investments Commission, make the following legislative instrument.\n\nDated: 23 March 2017\n\n \n\n \n\nStephen Yen\n\n \n\nContents\n\nPart 1—Preliminary \n\n1 Name of legislative instrument.....................................\n\n2 Commencement................................................\n\n3 Authority.....................................................\n\n4 Definitions....................................................\n\nPart 2—Order \n\n5 Relief from the requirement to prepare and lodge an audited financial report\n\nPart 3—Declaration \n\n6 Relief from lodging financial statements\n\nPart 4—Transitional \n\n7 Application of this instrument and ASIC Class Order [CO 98/98].........\n\nPart 1—Preliminary\n\n1 Name of legislative instrument\n\nThis instrument is ASIC Corporations (Foreign-Controlled Company Reports) Instrument 2017/204.\n\n2 Commencement\n\nThis instrument commences on the later of:\n\n(a) the day after it is registered on the Federal Register of Legislation; and\n\n(b) the day it is gazetted.\n\nNote: The register may be accessed at <http://www.legislation.gov.au>.\n\n3 Authority\n\nThis instrument is made under subsections 341(1) and 601CK(7) of the Corporations Act 2001.\n\n4 Definitions\n\nIn this instrument:\n\nAct means Corporations Act 2001.\n\ncombined revenue of the group means the sum of the revenue of all of the entities in the group, while they are members of the group, making all adjustments as would be required in preparing consolidated financial statements under 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).\n\ncombined value of gross assets of the group means the sum of the value of the gross assets of all of the entities in the group, making all adjustments as would be required in preparing consolidated financial statements under 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).\n\ncontrol has the same meaning as in Australian Accounting Standard AASB 10 Consolidated Financial Statements.\n\nentity means a company, a registered scheme, a disclosing entity, any other corporation, a partnership, an unincorporated body or a trust.\n\ngroup means, in relation to an entity for a financial year, the entity together with all of the following;\n\n(a) any other entity which controlled the entity at any time during, or at the end of, the financial year and which was registered or formed in Australia or carries on business in Australia;\n\n(b) any other entity (a corresponding entity) which is:\n\n(i) controlled at any time during, or at the end of, the financial year by any foreign company which at the same time controls the entity; and\n\n(ii) incorporated or formed in Australia or carries on business in Australia during that part of the financial year when it is controlled by the same foreign company as controls the entity;\n\n(c)              any entity which is controlled at any time during, or at the end of, the financial year by the entity;\n\n(d)  any entity which is controlled by a corresponding entity during that part of the financial year when the corresponding entity is controlled by the same foreign company as controls the entity.\n\nlarge group means a group which, for a financial year, satisfies at least 2 of the following paragraphs:\n\n(a)              the combined revenue of the group for the financial year is $25 million, or any other amount prescribed for the purposes of paragraph 45A(2)(a) of the Act, or more;\n\n(b)              the combined value of gross assets of the group at the end of the financial year is $12.5 million, or any other amount prescribed for the purposes of paragraph 45A(2)(b) of the Act, or more;\n\n(c)             the group has 50, or any other number prescribed for the purposes of paragraph 45A(2)(c) of the Act, or more employees (part-time employees being counted as an appropriate fraction of a full-time equivalent) at the end of the financial year.\n\n \n\nPart 2—Order\n\n5 Relief from the requirement to prepare and lodge an audited financial report\n\n \n\nRelief\n\n(1) A small proprietary company (the Company) which is controlled by a foreign company for all or part of a financial year (the relevant financial year) does not have to comply with Part 2M.3 of the Act as it applies because of paragraph 292(2)(b) of the Act in relation to the relevant financial year.\n\nWhere relief applies\n\n(2) The relief in subsection (1) may be relied on where all of the following apply:\n\n(a)              the Company is not part of a group controlled by a foreign company which is a large group for the relevant financial year;\n\n(b)              the directors of the Company have resolved, no earlier than 3 months before the start of the relevant financial year, that the relief in subsection (1) be relied on in respect of the relevant financial year;\n\n(c)              one of the following applies:\n\n(i)              the Company relied on the relief in subsection (1) in respect of the financial year immediately before the relevant financial year; or\n\n(ii)   notice of the resolution mentioned in paragraph (b) signed by a director or company secretary is lodged with ASIC using Form 384 during the period commencing 3 months before the commencement of the relevant financial year and ending 4 months after the end of the relevant financial year; or\n\n(iii) both of the following apply:\n\n(A) the Company relied on the relief in subsection (1) in respect of a previous financial year (the last reliance year);\n\n(B) the company was not able to rely on that relief in respect of each financial year since the last reliance year and before the relevant financial year because of the operation of paragraph (e);\n\n(d)              either of the following applies:\n\n(i)     the relief in subsection (1) is not relied on other than because of the operation of paragraph (e) in respect of the financial year (the first non-reliance year) immediately after a financial year in which the relief was relied on and the Company lodges an annual financial report prepared under Chapter 2M of the Act for the first non-reliance year; or\n\n(ii) notice the Company has stopped relying on the relief in subsection (1) signed by a director or company secretary is lodged with ASIC using Form 394 during the period starting 3 months before the commencement of the first non-reliance year and ending 4 months after the end of the first non-reliance year;\n\n(e)              ASIC has:\n\n(i) not notified the Company in writing that it may not rely on this order or may not rely on this order for the relevant financial year; or\n\n(ii) notified the Company in writing that it may not rely on this order or may not rely on this order for the relevant financial year but has subsequently revoked or varied in writing that notice so that it does not cover the relevant financial year.\n\n\nPart 3—Declaration\n\n6 Relief from lodging financial statements\n\nDeclaration\n\n(1) Subsections 601CK(1) to (6) inclusive do not apply in relation to a calendar year (the relevant calendar year) commencing on or after 1 January 2017 in respect of a registered foreign company that satisfies subsection (2).\n\n(2) A registered foreign company satisfies this subsection if all of the following apply:\n\n(a)              the foreign company is registered under Division 2 of Part 5B.2 of the Act;\n\n(b)              the foreign company is subject to restrictions, limitations and prohibitions of the kind that section 113 of the Act imposes on proprietary companies that are:\n\n(i)  contained in the law of the place of origin of the foreign company or in the foreign company's constitution as required by that law; and\n\n(ii) no less strict than those in that section;\n\n(c)              the foreign company is not required by the law in its place of origin to prepare any of the following:\n\n(i)              a balance sheet at the end of its last financial year;\n\n(ii)           a profit and loss statement for its last financial year;\n\n(iii)         a cash flow statement for its last financial year;\n\n(d)              the foreign company has not been a disclosing entity, borrower in relation to a debenture or guarantor of such a borrower at any time during the calendar year;\n\n(e)              the foreign company satisfies at least 2 of the paragraphs in subsection 45A(2) (small proprietary companies) of the Act in relation to its last financial year;\n\n(f)               either of the following applies:\n\n(i)     the foreign company is not part of a group which is a large group in relation to its most recent financial year; or\n\n(ii)     the foreign company was consolidated in financial statements which:\n\n(A)        cover the whole of that financial year; and\n\n(B)       were lodged with ASIC by a company, registered foreign company, registered scheme or disclosing entity which controlled the foreign company for the whole of that financial year (or by two or more such entities which controlled the foreign company at different times during that financial year provided that at any time during the financial year the foreign company was controlled by at least one of those entities).\n\nWhere declaration applies\n\n(3) The declaration in subsection (1) applies in relation to a foreign company where ASIC has:\n\n(a)          not notified the foreign company in writing that it may not rely on subsection (1) or may not rely on that subsection for the relevant calendar year; or\n\n(b)          notified the foreign company in writing that it may not rely on subsection (1) or may not rely on that subsection for the relevant calendar year but has subsequently revoked or varied in writing that notice so that it does not cover the relevant calendar year.\n\n\n\n\nPart 4—Transitional\n\n7 Application of this instrument and ASIC Class Order [CO 98/98]\n\n \n\n(1)          Subparagraph 5(2)(c)(i) does not apply in relation to a Company for a relevant financial year where the Company relied on the relief in ASIC Class Order [CO 98/98] for the financial year immediately preceding the relevant financial year.\n\n \n\n(2)          A Company to which subsection 7(1) applies is taken to have relied on the relief in subsection 5(1) for the purposes of subparagraph 5(2)(c)(i) for the financial year immediately following the relevant financial year.\n","sortOrder":0}],"analysis":{"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"This instrument consolidates and formalises relief previously provided under ASIC class orders (notably CO 98/98) for foreign‑controlled small proprietary companies and registered foreign companies. It does not materially broaden the categories of entities that can be exempted; rather it reproduces eligibility tests, procedural requirements and ASIC discretion in a legislative instrument. The transitional provision (section 7) maintains continuity with the prior class order for companies that relied on it, so the instrument preserves the original scope rather than expanding it."},"complexity_factors":["Multiple cross‑references to the Corporations Act (subsections 341(1), 292(2)(b), Part 2M.3, 45A(2), 601CK(1)–(6), section 113) requiring readers to consult the Act for the full rules","Extensive definitions in section 4 (e.g. 'group', 'combined revenue', 'combined value of gross assets', 'control', 'large group') that affect eligibility tests","Conditional and alternative eligibility paths in section 5(2) with nested options (paragraphs (c)(i)–(iii), (d)(i)–(ii), (e)(i)–(ii))","Section 6 contains multiple conjunctive and disjunctive conditions (a)–(f) with an internal alternative in (f)(i)/(f)(ii) that requires checking consolidation and lodgement status","Time‑sensitive administrative requirements (resolutions no earlier than 3 months before year start; Form 384 and Form 394 lodgement windows) create procedural complexity","Transitional rule in section 7 that links this instrument to an earlier ASIC class order (CO 98/98), requiring historical compliance tracing","Regulatory discretion provisions (ASIC may issue, revoke or vary notices) add uncertainty and conditional compliance outcomes","Technical accounting cross‑references (AASB 10 for 'control') which may require accounting judgement to determine applicability"],"plain_english_summary":"**What this instrument does (mechanics)\n\n- Grants certain small proprietary companies that are controlled by a foreign company relief from the requirement to prepare and lodge an audited financial report for a financial year (see Part 2, especially section 5).\n- Declares that certain registered foreign companies need not lodge financial statements with ASIC under subsections 601CK(1)–(6) for a calendar year if they meet specified conditions (see Part 3, section 6).\n- Sets definitions and thresholds (for example, what counts as a \"group\", \"combined revenue\", and what makes a \"large group\") used to test eligibility (see Part 1, section 4).\n- Preserves continuity with an earlier ASIC class order for companies that relied on that class order in the prior year (transitional rules in Part 4, section 7).\n\nWho is affected\n\n- Small proprietary companies that are controlled by a foreign company and that are not part of a \"large group\" as defined in the instrument (see definition of \"large group\" in section 4 and the relief in section 5).\n- Registered foreign companies (those registered under Division 2 of Part 5B.2 of the Corporations Act) that meet the tests in section 6 (for example, subject to home‑jurisdiction limits like those in section 113, are small under the s45A(2) tests, are not disclosing entities, and either are not in a large group or are consolidated into financial statements lodged in Australia) — these companies may be excused from lodging financial statements with ASIC for a calendar year (see section 6).\n- ASIC and company directors: ASIC may notify that a particular company cannot rely on the relief (see section 5(2)(e) and section 6(3)); directors decide to rely on the relief and must resolve to do so within time limits (see section 5(2)(b) and (c)).\n\nWhy it matters (practical effects and incentives)\n\n- Lowers compliance costs and paperwork for eligible foreign‑controlled small proprietary companies by removing the obligation to prepare and lodge audited financial reports under Part 2M.3 of the Corporations Act for the relevant year (section 5(1)). That reduces time and audit fees for companies that qualify.\n- Lowers lodging obligations for certain registered foreign companies that already have restrictive home‑jurisdiction rules or consolidated reporting arrangements (section 6). This avoids duplication where equivalent or stricter obligations exist in the company’s place of origin.\n- Places the decision and administrative burden on company directors to resolve to rely on the relief (section 5(2)(b)), and to file notices with ASIC in prescribed form and time windows when required (Form 384 or Form 394 references in section 5(2)(c)(ii) and 5(2)(d)(ii)).\n- Gives ASIC a gatekeeping role: it can notify a company that it may not rely on the relief, or revoke such a notification (section 5(2)(e) and section 6(3)). That creates regulatory discretion and operational compliance risk for companies.\n\nPolicy purpose claims and practical tests\n\n- The instrument’s stated operational purpose is to avoid duplicate or unnecessary Australian reporting for companies effectively governed or limited by foreign law (see Part 3, section 6). Mechanically, it does so by exempting eligible companies from specific Australian reporting obligations.\n- Costs and trade‑offs: the direct beneficiary is the foreign‑controlled company (reduced audit and lodgement costs). The cost is reduced public and creditor access to audited Australian financial reports for those companies, which can increase information asymmetry for Australian creditors, suppliers or other counterparties relying on ASIC lodgements.\n- Incentives and possible behavioural responses: firms may prefer corporate structures or accounting/consolidation arrangements that keep them under the \"large group\" thresholds or ensure consolidation into lodgements by a controlling Australian entity (see the ‘‘large group’’ tests in section 4 and the consolidation exception in section 6(2)(f)(ii)). This creates a modest incentive to organise reporting paths to preserve relief.\n- Implementation and compliance friction: directors must make timely board resolutions (no earlier than three months before the financial year starts — section 5(2)(b)) and must use specific ASIC forms in tightly defined filing windows (section 5(2)(c)(ii); 5(2)(d)(ii)). ASIC’s ability to refuse or revoke reliance (section 5(2)(e); section 6(3)) requires companies to monitor ASIC correspondence and maintain documentary evidence of eligibility.\n- Effects on markets and competition: the measure reduces compliance costs unevenly (concentrated benefit to eligible foreign‑controlled small companies). It does not directly change market entry rules, taxation, or substantive corporate governance duties, but it can alter the information environment for counterparties and investors in ways that could affect credit pricing or negotiation leverage.\n\nKey procedural points (where decisions and costs fall)\n\n- Directors decide whether to rely on the relief; a resolution is required (section 5(2)(b)).\n- Companies must keep within the numeric thresholds for small‑company tests (section 4 definitions and the reference to s45A(2) tests in section 6(2)(e)).\n- ASIC retains discretion to prevent a company using the relief (section 5(2)(e); section 6(3)); companies must monitor ASIC notices and comply with the Form 384/Form 394 lodgement windows if they are using or ceasing to use the relief (section 5(2)(c) and (d)).\n\nReferences to notable provisions: definitions (section 4), relief for foreign‑controlled small proprietary companies (section 5), relief for registered foreign companies (section 6), transitional continuity with earlier class order (section 7)."},"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":6,"scope_assessment":{"changed":false,"description":"The instrument appears to maintain its original scope. It replaces ASIC Class Order [CO 98/98] (referenced in Part 4) but serves the same purpose: providing relief from financial reporting requirements for foreign-controlled entities. The structure (relief for small proprietary companies in Part 2, relief for registered foreign companies in Part 3) aligns with the instrument's title and stated authority under the Corporations Act. No significant scope creep is evident."},"complexity_factors":["Nested conditional logic with multiple 'if/then' layers (e.g., section 5(2) has 5 main conditions with sub-conditions (c)(i)-(iii) and (d)(i)-(ii))","Cross-references to external legislation: Corporations Act sections 45A, 113, 292, 341, 601CK, and Australian Accounting Standard AASB 10","Temporal complexity: Multiple timing requirements ('no earlier than 3 months before', 'during the period commencing... and ending...', 'financial year immediately before')","Defined terms section with 7 complex definitions including recursive definitions ('group' defines itself by reference to 'corresponding entity' which is defined within the same definition)","ASIC discretion mechanism: ASIC can unilaterally revoke relief via written notice (sections 5(2)(e) and 6(3)), creating regulatory uncertainty","Transitional provisions linking to repealed instrument (ASIC Class Order [CO 98/98]) creating historical dependency","Dual-track relief system (Order vs Declaration) with different trigger conditions and different affected entities"],"plain_english_summary":"This instrument lets certain foreign-controlled Australian entities skip the usual audited financial‑report lodgement with ASIC. It targets small proprietary companies owned by overseas parents and registered foreign companies that meet strict size, timing and notification conditions and are already consolidated into group accounts.\n\nIt cuts costly audit and lodgement burdens for tiny or intra‑group entities while preserving transparency: the exemption falls away if the foreign‑controlled group is “large” (meets key revenue, assets or employee thresholds)."}},"importantCases":[],"_links":{"self":"/api/acts/asic-corporations-foreign-controlled-company-reports-instrument-2017-204","history":"/api/acts/asic-corporations-foreign-controlled-company-reports-instrument-2017-204/history","analysis":"/api/acts/asic-corporations-foreign-controlled-company-reports-instrument-2017-204/analysis","conflicts":"/api/acts/asic-corporations-foreign-controlled-company-reports-instrument-2017-204/conflicts","importantCases":"/api/acts/asic-corporations-foreign-controlled-company-reports-instrument-2017-204/important-cases","documents":"/api/acts/asic-corporations-foreign-controlled-company-reports-instrument-2017-204/documents"}}