The thought of managing and maintaining a large or complex corporate structure can be nightmare fuel for some company secretaries, or other executives tasked with the duty.
Responsibilities of subsidiary company administration, to list a few, include regulatory compliance and lodgements with ASIC, appointment and resignations of directors, maintaining officeholder and shareholder addresses, incorporations and deregistrations, and allotting or transferring shares. Each task can require a suite of documents and an associated lodgement, which can change as rules and regulations are implemented or amended.
Consequently, busy executives may experience headaches from heavy administration, a high volume of unfamiliar documentation, potential fines for late or incorrect lodgements, and the need to unwind errors. In some circumstances this can lead to the corporate structure and the recorded details of entities being neglected, further resulting in the companies falling out of good-standing.
Good-standing in Australia includes not only maintaining company information like the name of directors and registered addresses, but strict accuracy with important details including the number and value of shares on issue, dates of allotment or transfer of securities, director and officer appointment dates, date of lodgement of financial statements, and more. Maintaining the accuracy of these details and strong subsidiary entity governance is important for several reasons, including:
- Companies may seek to engage with corporate advisors, banks, other lenders, and investors who require evidence of good standing or up-to-date company details.
- Companies may be subject to due diligence or audit as part of a transaction, acquisition or potential-IPO and have their data acutely inspected for up-to-date and accurate record-keeping.
- In the event of legal action, companies and officeholders may be required to provide legal or financial records and evidence supporting that proper processes were followed.
- Fines and the risk of investigation by ASIC increases when companies do not maintain their information and meet required deadlines.
Appointing an expert to manage your subsidiary company compliance can greatly reduce the burden and potential risks involved, and specialist company secretarial service providers like BoardRoom can form an integral part of a company’s governance framework. If you would like more information on BoardRoom’s subsidiary management services, please do not hesitate to contact us via the form below.
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