Commonwealth Numbered Regulations - Explanatory Statements

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CORPORATIONS REGULATIONS (AMENDMENT) 1994 NO. 35

STATUTORY RULES 1994 No. 35

Issued by the Authority of the Attorney-General

Corporations Act 1989

Corporations (Fees) Regulations (Amendment)

Corporations Regulations (Amendment)

Section 22 of the Corporations Act 1989 (the Act) empowers the Governor-General to make regulations not inconsistent with the Act or the Corporations Law (the Law), prescribing matters which are required or permitted by the Law to be prescribed by regulations, or are necessary or convenient to be prescribed by regulation for carrying out or giving effect to the Law.

Section 25 of the Act provides that regulations may prescribe fees (including fees that are taxes) for chargeable matters.

The purposes of the amendments to the Corporations (Fees) Regulations are:

1.       to introduce a lower incorporation fee for superannuation trustees electing to be regulated as corporate entities for the purpose of the Superannuation Industry (Supervision) Act 1993 ('the SIS Act');

2.       to introduce a lower annual return fee for superannuation trustees electing to be regulated as corporate entities for the purpose of the SIS Act. This will be a continuing concession; and

3.       to introduce a claw back mechanism to prevent abuse of the lower incorporation and annual return fees for trustees electing to be regulated as corporate entities. This claw back mechanism will operate in conjunction with the company annual return provisions. The claw back of the incorporation fee concession would apply in the first year that any corporate trustee commences activities other than acting solely as the trustee of a regulated superannuation fund.

Details of the amendments to the Corporations (Fees) Regulations are at Attachment A.

The amendment to the Corporations Regulations will facilitate the operation of the proposed annual return fee and claw back mechanism to prevent abuse of the lower incorporation fee to be prescribed by the Corporations (Fees) Regulations, by enabling the Australian Securities Commission ('the Commission') to include a question in the annual return forms which will assist the Commission to determine whether a company is acting solely as the trustee of a regulated superannuation fund for the purposes of the SIS Act.

Details of the amendment to the Corporations Regulations is at Attachment B.

As required under the Heads of Agreement and the draft Corporations Agreement ('the Agreement') between the Commonwealth, States and Northern Territory, the Attorney-General has consulted with the State and Territory Attorneys- General on the amendments to the Corporations (Fees) Regulations and Corporations Regulations.

The amendments to the Regulations will commence on the date of gazettal.

ATTACHMENT A

DETAILS OF CORPORATIONS (FEES) REGULATIONS (AMENDMENT)

Regulation 1

Amendment

Subregulation 1.1 provides that the Corporations (Fees) Regulations are amended as set out in the Regulations.

Regulation 2

Schedule (Prescribed fees)

Subregulation 2.1 will amend the Schedule (Prescribed fees) to insert item 15A.

Item 15A will prescribe a fee of $100 for the incorporation and registration of a company before 1 January 1995 under subsection 118(1) Division 1 of the Corporations Law. To be eligible for the fee, a company must:

(a)       state in the memorandum of the company that the company is formed for the purpose of acting solely as the trustee of a regulated superannuation fund within the meaning of section 19 of the Superannuation Industry (Supervision) Act 1993 ('the SIS'); and

(b)       prohibit in the memorandum of the company the distribution of the company's income or property among its members.

Subregulation 2.2 will amend item 26 (which prescribes annual return and account fees) to include a reference to the new annual return fee in item 32A.

Subregulation 2.3 will amend the Schedule (Prescribed fees) to insert items 32A and 32B.

Item 32A will prescribe a $30 annual return fee. To be eligible for the fee, the Australian Securities Commission ('the Commission') must be satisfied when an annual return is lodged:

(a)       that the memorandum of the company prohibits the distribution of the company's income or property among its members; and

(b)       that the company operates solely for the purpose of acting as the trustee of a regulated superannuation fund within the meaning of section 19 of the SIS Act.

Item 32B will prescribe a fee of $450. This fee is the difference between the incorporation fee prescribed by item 15 in the Schedule (Prescribed fees) and the incorporation fee prescribed by item 15A in the Schedule (Prescribed fees). Item 32B will be a one-off payment to operate as a claw back of the incorporation concession, in order to prevent abuse of Schedule (Prescribed fees) item 15A.

Item 32B will be paid in addition to any annual return fee due under items 26, 27, 28, 29, 30 or 31. It will be paid:

ATTACHMENT B

DETAILS OF CORPORATIONS REGULATIONS (AMENDMENT)

Regulation 1

Amendment

Subregulation 1.1 provides that the Corporations Regulations are amended as set out in these Regulations.

Regulation 2

Regulation 3.8.01 (Annual return)

This amendment will facilitate the operation of the lower annual return fee and the claw back mechanism to prevent abuse of the lower incorporation fee, under the Corporations (Fees) Regulations, for superannuation trustees incorporated for the purpose of the Superannuation Industry (Supervision) Act 1993 ('the SIS').

Subregulation 2.1 will amend regulation 3.8.01 to include a new paragraph (ka). This paragraph will specify questions to be included in the company annual return forms, which will provide evidence to satisfy the Commission as to whether the company is eligible for the lower annual fee. The questions will be:

(i)       whether the company operates solely for the purpose of acting as the trustee of a regulated superannuation fund within the meaning of section 19 of the SIS Act; and

(ii)       whether the memorandum of the company prohibits the distribution of its income or property among its members, regardless of whether or not the company has a share capital.

(a)       when a company lodges an annual return with the Commission and that company had paid the item 15A fee prior to incorporation; and

(b)       when the company's annual return indicates that it is no longer operating solely as the trustee of a regulated superannuation fund within the meaning of section 19 of the SIS Act.