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FIRST CORPORATE LAW SIMPLIFICATION BILL 1995

Order of the day read for the further consideration of the bill in

committee of the whole.

In the committee

Consideration resumed of the bill--and of the amendment moved by Senator

Vanstone (see entry no. 29, 27 September 1995).

Debate resumed.

Senator Vanstone, by leave, withdrew the amendment.

Senator Vanstone moved the following amendment:

Schedule 4, page 64, item 58, proposed subsection 317B(4), omit the

subsection, substitute the following subsections:

"(4) If:

(a) but for this subsection, subsection (1) would apply to a large

proprietary company for a financial year; and

(b) but for the amendments (other than this subsection) made by

subsection 4(2), and set out in Schedule 4, to the First

Corporate Law Simplification Act 1995, the company would meet

the definition of "exempt proprietary' (as in force at 30 June

1994); and

(c) the company continues to meet that definition; and

(d) within 4 months after the end of the financial year, the company

lodges with the ASC a notice that the company wants this

subsection to apply to it;

the company is to be treated for that financial year as an exempt

proprietary company for the purpose of lodgment of accounts and

financial statements as if:

(e) the amendments (other than this subsection) set out in Schedule

4 to the First Corporate Law Simplification Act 1995, had not

been made; and

(f) the regulations in force at 30 June 1994 in relation to such

lodgment by an exempt proprietary company remain in force.

"(5) The ASC may extend the period referred to in paragraph (3)(e) or

(4)(d).".

Debate ensued.

Question--That the amendment be agreed to--put.

The committee divided--

AYES, 28

Abetz Baume Boswell Brownhill Calvert Campbell Ellison Ferguson Gibson Harradine Herron Hill Knowles MacGibbon McGauran Minchin O'Chee (Teller) Panizza Parer Patterson Short Tambling Teague Tierney Troeth Vanstone Watson Woods

NOES, 31

Bell Bolkus Bourne Burns Carr Chamarette Childs Coates Collins, Bob Collins, Jacinta Colston Cook Cooney Coulter Denman Devereux Evans, Christopher Forshaw Jones (Teller) Kernot Lees McKiernan Margetts Murphy Neal Reynolds Sherry Spindler West Wheelwright Woodley

Question negatived.

Bill further debated.

Question--That the bill be agreed to--divided in respect of clause 7.

Question--That clause 7 stand as printed--put and negatived.

On the motion of the Minister for Immigration and Ethnic Affairs

(Senator Bolkus) the following amendments, taken together by leave, were

agreed to:

Schedule 3, page 39, paragraph 9.3, omit "Large proprietary companies

must prepare accounts, have them audited and send them to shareholders.

They must also lodge the accounts with the ASC unless exempted.".

Schedule 4, page 61, after item 51 insert the following item:

"51A. After subsection 313(11)

Insert:

(11A) In deciding for the purposes of subsection (11) whether the

audit requirements for a large proprietary company, or a class

of large proprietary companies, would impose an unreasonable

burden on the company or companies, the Commission is to have

regard to:

(a) the expected costs of complying with the audit

requirements; and

(b) the expected benefits of having the company or companies

comply with the audit requirements; and

(c) any practical difficulties that the company or companies

face in complying effectively with the audit requirements

(in particular, any difficulties that arise because a

financial year is the first one for which the audit

requirements apply or because the company or companies are

likely to move frequently between the small and large

proprietary company categories from one financial year to

another); and

(d) any unusual aspects of the operation of the company or

companies during the financial year concerned; and

(e) any other matters that the Commission considers relevant.

(11B) In assessing expected benefits under subsection (11A), the

Commission is to take account of:

(a) the number of creditors and potential creditors; and

(b) the position of creditors and potential creditors (in

particular, their ability to independently obtain

financial information about the company or companies); and

(c) the nature and extent of the liabilities of the company or

companies.".

Schedule 4, page 68, item 83, after proposed section 1408 insert the

following sections:

"1409 Application of audit requirements for large proprietary

companies

Despite section 1408, the first financial year for which a large

proprietary company that was an exempt proprietary company

immediately before the commencement of this section must have its

accounts audited under section 296 (as amended by the Amending

Act) is the first financial year that starts after the

commencement of this section.

"1410 First annual return for proprietary companies under new

provisions

(1) To avoid any doubt, the first calendar year for which subsection

335(1A) applies is the one that ends on the first 31 December

after the commencement of this section.

(2) The first calendar year for which subsection 335(1A) applies to a

company that is registered after the commencement of this section

is the calendar year that ends on the first 31 December after its

registration.

Note: Subsection 335(1A) was inserted by item 66 of Schedule 4

to the Amending Act.".

Bill, as amended, agreed to.

Bill to be reported with amendments.

The Acting Deputy President (Senator Watson) resumed the Chair and the

Temporary Chairman of Committees (Senator Colston) reported accordingly.

Senator Bolkus moved--That the report from the committee be adopted.

Order for production of document: Senator Baume moved the following

amendment:

At end of motion, add "and the Senate resolves that not later than two

years and six months after the commencement of the amendments set out

in items 1 to 6 of Schedule 4 of the bill, the Australian Securities

Commission is to cause to be laid on the table a review of the first

two years of the operation of those amendments".

Question--That the amendment be agreed to--put and passed.

Main question, as amended, put and passed.

On the motion of the Minister for Industry, Science and Technology

(Senator Cook) the bill was read a third time.