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Extensions on financial reporting and annual general meetings have been afforded to companies in external administration in a bid to offer red tape relief to businesses experiencing financial distress.
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ASIC offers red tape relief to companies in external administration
07 October 2021
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ASIC on Wednesday (6 October) announced that it will issue regulatory relief to help offer certainty to companies in external administration by offering extensions on both financial reporting and annual general meeting periods.
As part of the relief, a company will be able to defer the preparation and lodgement of financial reports for a minimum period of six months and a maximum period of 24 months.
Companies in external administration will also receive a grace period to hold an annual general meeting for up until two months after the deferral relief ends.
ASIC commissioner Sean Hughes said the new relief aims to ease the burden shouldered by companies entering external administration.
“Our new legislative relief will provide companies in financial distress more time to comply with financial reporting and AGM obligations while ensuring members are able to continue to access information about the externally administered company,” Mr Hughes said.
The relief package will be triggered once either a voluntary administrator, provisional liquidator, or managing controller that steers the whole of the company’s property is appointed.
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ASIC’s external administration relief will end between six and 24 months later, or when the external administration ends.
For companies whose administrations are followed by a deed of company arrangement, the relief will continue up to 24 months after the voluntary administration commenced.
In such cases, the deed administrator must exercise all or most of the management functions and powers of the company.
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