17 May 2019

Large proprietary companies: Significant changes to financial reporting thresholds

From 1 July 2019, the thresholds for determining whether an Australian proprietary company is considered a ‘large’ proprietary company under the Corporations Act 2001 (Cth) (Act) will increase. This is the first time the thresholds will have been adjusted since 2007.  Companies that will no longer be classified as large proprietary companies will have a reduced compliance burden.

Summary of the changes

Following the changes, a proprietary company will be considered a ‘large’ proprietary company if it satisfies at least two of the following three thresholds:

  • annual consolidated revenue of $50 million or more (an increase from $25 million);
  • consolidated gross assets of $25 million or more (an increase from $12.5 million); and
  • employees of 100 or more (an increase from 50).

The thresholds apply to a financial year. In determining whether the thresholds have been satisfied, the consolidated revenue, consolidated gross assets and employees of the company and its controlled entities are to be considered.

Effect of the changes

The Commonwealth Treasury predicts that the changes will result in approximately one-third of existing large proprietary companies being re-classified as ‘small’ proprietary companies for the purposes of the Act. Small proprietary companies are subject to significantly less onerous financial reporting obligations under the Act than large proprietary companies.

The changes will be welcomed by any companies that are re-classified as small proprietary companies.

Financial reporting obligations unaffected

It is important to note that the changes to the thresholds do not affect the respective financial reporting obligations that apply to large and small proprietary companies under the Act.

Large proprietary companies are required to prepare and lodge with ASIC an audited financial report, director’s report and auditor’s report on an annual basis. Further information about these requirements is set out in Division 1 of Part 2M.3 of the Act.

Small proprietary companies are only required to keep written financial records and there are no audit or lodgement requirements (unless required to do so under section 292(2) of the Act, including upon direction by ASIC or by at least 5% of the company’s shareholders).

Please contact us should you have any questions about the changes to the thresholds for determining whether a proprietary company is a ‘large’ proprietary company under the Act.


  • Fluent in French - Conversational

In the corporate space, Jacqui regularly advises and assists client with mergers and acquisitions, corporate structuring, corporate compliance and governance, capital raisings and managed investment schemes.

More about Jacqui
  • Fluent in French - Conversational | German - Conversational

Chris Brown is a commercial lawyer with 20 plus years’ experience in corporate transactions and advice.

More about Christopher

Deborah has extensive experience across a broad range of commercial transactions, including mergers and acquisitions, equity capital markets and other corporate transactions...

More about Deborah

James has a broad range of both corporate and general commercial experience, particularly in the areas of equity capital markets, corporate advice, and public and private M&A...

More about James

William specialises in private M&A and general commercial transactions and provides strategic advice on acquisitions, restructures and exits...

More about William

You might be also interested in...

Thinking | Thu 07 2019

Beware the (fair market) value trap

Vague, incomplete and ambiguous valuation clauses in shareholders agreements are traps for the unwary and create unintended consequences. Shareholders Agreements often include valuation provisions to be invoked when one party wishes to sell its shares or upon the forced transfer of shares in a breach situation. Two cases in the New South Wales Court of […]

Thinking | Mon 07 2019

Merkblatt: Regulierung von ausländischen Investitionen in Australien

Einführung Dieses Merkblatt soll einen ersten Überblick über die wichtigsten regulatorischen Anforderungen für ausländische Investitionen in Australien geben. Ausländische Investitionen in Australien, die bestimmte Schwellenwerte überschreiten, müssen bei der zuständigen australischen Behörde, der Foreign Investments Review Board (FIRB), angemeldet werden. Ausländischer Investor Der Begriff des „ausländischen Investors” (ein sogenannter „Foreign Investor“) ist weit gefasst. Erfasst […]