Composition Fines

Companies and directors that breach these statutory obligations may be offered an opportunity to pay a composition sum of $300 per breach instead of facing prosecution. Separately, a late lodgement fee will be imposed at the time of lodgement, for each AR that is lodged late. The composition sum and late lodgement fees are as follows: 

Requirements Type of Breach Type of Penalty Imposed against Penalty
Section 175  The AGM is held late  Composition  Company Composition sum of $300
Section 197
The AR is lodged late  
Late lodgement fee Company 

Late lodgement fee of $300

(Second Schedule of Companies Act) (Fees and Late Lodgement Penalties Regulations 2015)

Section 201(1)*

Financial statements laid at AGM are more than 6 months old for a non-listed company or more than 4 months old for a listed company

Composition  Director(s)

Composition sum of $300

*Applicable for FYE ending before 31 Aug 2018

For FYE ending on or after 31 Aug 2018

Example 1

ABC Company Private Limited is due to hold its AGM by 1 Mar 2019 (section 175) and to lay its financial statements made up to FYE 1 Sept 2018 (section 201). 
The company held its AGM on 14 June 2019 and lodged the AR on 10 July 2019 (section 197). The company has breached sections 175 and 197.

Requirements Due Date AGM Date/Lodgement Date Amount payable
Section 175 1 Mar 2019 (FYE + 6 months) 14 June 2019 Composition sum of $300
Section 197 1 April 2019 (FYE + 7 months) 10 July 2019 Late lodgement fee of $300

Example 2

DEF Company Private Limited meets the conditions of section 175A(1) and is not required to hold an AGM. The company’s FYE is  30 Sep 2018, and it sent out its financial statement to its members on 20 Feb 2019. The company then lodged its AR on 15 May 2019 (section 197). The company has breached section 197. The penalty imposed is as follows:    

Requirements Due Date AGM Date/Lodgement Date
Section 175 Not applicable Not applicable No composition sum payable
Section 197 30 Apr 2019 (FYE + 7 months) 15 May 2019 Late lodgement fee of $300

For FYE ending before 31 Aug 2018

Example 3

ABC Company Private Limited is due to hold its AGM by 25 May 2015 (section 175(1)) to lay its financial statements made up to 31 December 2014 (section 201(1)). The company held its AGM on 14 October 2017 and lodged the AR on 10 November 2017 (section 197(1)). The company has breached sections 175(1) and 201(1).

Requirements Due Date AGM Date/Lodgement Date Amount payable
Section 175  25 May 2015  14 Oct 2017  Composition sum of $300 
Section 197  13 Nov 2017 10 Nov 2017  No late lodgement fee payable 
Section 201  30 Jun 2015  14 Oct 2017  Composition sum of $300
Court Prosecution
ACRA may prosecute the directors in court if:-
  1. they do not accept the offer of composition; or 
  2. when composition is not offered.  

ACRA may also not offer composition after a summons is issued. ACRA will serve the summons to the director at his residential address by registered post. The summons will indicate the date, time and which Court the director has to appear before. If the director fails to attend court, a warrant for his arrest will be issued by the court. The director must attend court even if he has made representations to ACRA.

In court, the director can decide whether to plead guilty or claim trial to the charges. If the director is convicted by the court, he may be fined up to a maximum of $5000 per charge.

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