ASIC provides relief for companies in external administration

The relief relates to certain financial reporting and annual general meeting (AGM) obligations that continue to apply when a company is in external administration.

ASIC states the relief will firstly extend the time by which a company is required to prepare and lodge financial reports for a minimum period of six months and a maximum period of up to 24 months (deferral relief), and secondly, extend the time by which a public company is required to hold an AGM until two months after the deferral relief ends.

“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,” ASIC commissioner Sean Hughes said.

The deferral relief commences when a voluntary administrator or provisional liquidator, or a managing controller over substantially the whole of the property of the company, is appointed. The relief will cease after a minimum period of six months and up to a maximum period of 24 months, or when the external administration ends.

If a voluntary administration is followed by a deed of company arrangement, the relief will continue up to 24 months after the voluntary administration commenced, so long as the deed administrator exercises all or most of the management functions and powers of the company.

The relief is affected by ASIC Corporations (Amendment) Instrument 2021/506, which amends ASIC Corporations (Externally-Administered Bodies) Instrument 2015/251.

ASIC has also updated its guidance in Regulatory Guide 174 Relief for externally administered companies and registered schemes being wound up (RG 174) in relation to deferral relief for externally administered companies and AGM relief for externally administered public companies. RG 174 provides guidance on the circumstances in which an externally administered company may rely upon ASIC’s relief. ASIC will continue to consider individual relief applications in relation to financial reporting and AGM obligations for situations outside of the legislative relief.