If a foreign company does not wish to incorporate a separate Australian entity to manage its Australian operations, another option is for the foreign company to register directly with the Australian Securities and Investments Commission (“ASIC”). In practice, this is similar to establishing a Representative Office or branch of a foreign company in another country.
The key steps to doing so are as follows:
Step 1—Ensure the name you wish to register is available
The ASIC website has a business name search tool under which you can search whether your business name is available. A business name cannot be used if it is reserved by another entity, currently in use or is unacceptable or misleading (see Schedule 6 of the Corporations Regulations 2001 for specific details).
If the desired name is available and you wish to reserve it to prevent others from adopting the name while you are organising your registration, you can reserve the name by filling out ASIC Form 410 – Application for reservation of a name. If approved, the name will only be valid for two months, so it is imperative that the name is then registered in a timely manner.
The fee for reserving a name at the time of this blog is $44.
Step 2—Complete the relevant application form and compile accompanying documents
ASIC Form 402 must then be completed in order to register the foreign company.
A number of documents must also be lodged along with ASIC Form 402, including:
- A certificate from the company’s governing body in its home jurisdiction that confirms that the company is registered. This certificate must be dated no earlier than 3 months before lodgement with ASIC.
- A certified copy of the company’s constitution (certified by ASIC, a notary public or a company officer with a duly certified affidavit)
- A completed ASIC Form 418 – Memorandum of appointment of local agent (see post-registration obligations below for information on retaining a local agent)
- A memorandum stating the powers of certain directors. If the directors listed in Form 402 include directors resident in Australia, or if there are members of a local board of directors, the company must lodge a memorandum stating the powers vested in those directors.
Step 3—Lodge the form and accompanying documents with the prescribed lodgement fee
The cost of lodgement of ASIC Form 402 is $444. Once the application is processed and approved, ASIC will issue an Australian Registered Body Number (ARBN) which is a unique, 9 digit code. This is similar to an ACN (Australian Company Number), but specific to registered foreign companies.
ASIC can take up to 28 days to process an application to register a foreign company.
Post Registration Obligations for ARBN Holders
Once the foreign company is registered with ASIC, there are a number of post-registration obligations that the company must comply with.
1. Local Agent
At all times, a registered foreign company must have a local agent. By definition, a local agent:
- is answerable for the doing of all acts, matters and things that the foreign company is required by or under the Corporations Act to do; and
- is personally liable to a penalty imposed on the foreign company for a contravention of the Corporations Act if a court or tribunal hearing the matter is satisfied that the local agent should be so liable.
ASIC Form 418 is used to initially appoint the initial local agent, as well as to appoint new or replacement local agents. ASIC Form 404 must also accompany the Form 418 when appointing a replacement local agent.
Local agents act as a representative of the foreign company in Australia; and as such, are able to lodge ASIC forms on behalf of the company.
2. Display Company Name
A registered foreign company must display its name in a conspicuous position and in legible characters outside every office and place of business in Australia that is open and accessible to the public. It must also display its place of origin, the words ‘registered office’ at its registered office, and the word Limited, Ltd. or notice that the liability of its members is limited, if that is the case.
3. Correct Use of ARBN
There are strict guidelines regarding the use of the registered foreign company’s ARBN. In summary, it must be displayed in legible characters in company correspondence, along with the words “Australian Registered Body Number” or ARBN.
4. Financial Statement Lodgement
Registered foreign companies must lodge financial statements with ASIC annually (at intervals no longer than 15 months). Financial statements comprise of a balance sheet, P&L and cash flow statement, as well as any other documents the company is required to prepare by the law that applies in its home jurisdiction (such as an audit report), along with an ASIC Form 405 – Statement to verify financial statements of a foreign company. Lodgement fees are $1,107. Financial statements must be lodged in original, hardcopy format.
For companies exempt from lodging a form 405, a Form 406 Annual Return of a Foreign Company is required to be lodged, for the same fee of $1,107.
For a complete list of reporting requirements and exemptions, please refer to ASIC Regulatory Guide 58.
Notifying ASIC of Other Changes
Registered foreign companies must also notify ASIC of the following changes:
- Change of name, constitution or powers of local director (Form 409)
- Change of registered office address or opening hours (Form 489)
- Change in directors (Form 490)
- Ceasing business or winding up (Form 407)
At Cosec Consulting, we have extensive experience in managing the registration of foreign companies with ASIC, as well as acting as Local Agent for a number of foreign companies.
Please contact us if you would like to discuss our service offering further.
NB: This blog does not constitute legal advice. All lodgement fees are current at the time the blog was authored and may be subject to change.