“I need help with ASIC compliance”
The Australian Securities and Investment Commission (ASIC) is Australia’s government regulatory body responsible for financial services and consumer credit. They contribute to the financial wellbeing of Australians through promoting investor and consumer trust and ensuring fair and efficient markets.
The laws which ASIC regulate give them a variety of powers, including registering companies, banning those misusing the system from engaging in credit activities, and even the ability to seek civil penalties from the courts and commence prosecutions.
As such, it’s highly important to comply with all ASIC requirements. Here are our tips to make sure you get it right.
Choose a business structure that suits your needs
When starting a business, it is important to select a structure that suits your needs – but with so many types, it can be confusing to know which is best for you.
You can select from structures such as a sole trader, partnership, joint venture, trust or a company. The main and most important difference between companies and the other structures is that a company is a separate legal entity, meaning that it has a separate legal existence from its owners and employees.
Understand your registration requirements
Of course, by registering your company you will have requirements that must be fulfilled. If you are registering as a sole trader, partnership, joint venture or trust you will need to hold an Australian Business Number (ABN), pay the cost to register, renew your registration and eventually if need be, close or cancel the business name.
If you are however registering as a company, you must pay the higher cost to register, annual review fees and additionally, follow the requirements set out in the Corporations Act.
Maintain your financial records
By law, you must keep financial records that correctly explain and record your business transactions, financial position and performance, as well as enable true and fair financial statements to be prepared and checked. Keeping these up to date means less hassle for you come tax time, and guaranteed compliance with ASIC.
If you are unsure of which records you must keep, check out the ASIC website for more information. As a general rule, you will need to keep records such as invoices, receipts, cheques and working papers – ultimately all documents that explain why your financial statements are the way they are. Don’t throw these records away the next year either, as records like these have to be kept for seven years!
Organise an audit
Like always, professionals can help to ensure compliance and accuracy, so organise an audit when possible. In addition to this, get professional advice prior to selecting your business structure to ensure it is the best structure for you.
At Rising Tide, your business goals are important. We’re here to help you put together an effective financial plan to support you on your way to achieving success.