Special Purpose Companies qualify for reduced ASIC annual review fees. The current ASIC annual review fee for a public company is $1,069.00 per annum. For a Special Purpose Company this reduces to $40.00 per annum. This is a significant saving. So how do you qualify as a Special Purpose Company?
“Special Purpose Company” is defined in the Corporations (Review Fees) Regulations 2003. The definition includes the following not-for-profit companies:
- A company holding a licence that is continued in force by Section 151 of the Corporations Act and allows the company to omit “Limited” from its name.
- A company that, under sub-section 150 (1) of the Corporations Act, is registered without “Limited” in its name.
- A company, the Constitution of which:
- requires the company to pursue charitable purposes only and to apply its income in promoting those purposes; and
- prohibits the company making distributions to its members and paying fees to its directors; and
- requires its directors to approve all other payments the company makes to them.
ASIC can be notified that a company is a Special Purpose Company at the time of registration. It is also possible to advise ASIC subsequent to registration that your company is a Special Purpose Company (and qualifies for the reduced annual review fees).
Before notifying ASIC that you are a Special Purpose Company, you must be careful to ensure that your company, and its constitution, meets all the legal requirements, as a company officer is required to make a declaration to that effect. We are happy to assist companies in determining whether or not they qualify.
If your constitution doesn’t specifically address all the requirements and prohibitions of 3 above, but in practice you think your company complies with each of them, consideration could be given to amending your constitution. Constitutional amendments need to be made with care, especially if you are an endorsed Tax Concession Charity, to ensure you do not put your endorsement at risk. ASIC must also be notified of any changes to a public company’s constitution (including a company limited by guarantee). We are happy to assist with reviewing your constitution.
A company must also notify ASIC when it ceases to be a Special Purpose Company.
If you have a query regarding Special Purpose Company, contact us
Contact our Business Development Officers for an appointment with our Brisbane Commercial and/or not for profit lawyers. Call (07) 3252 0011.
This article was written by Kensie Corney (November 2011).