Small Proprietary Company
A proprietary company is a small proprietary company for a financial year if it satisfies at least 2 of the following tests:
- the consolidated gross operating revenue for the financial year of the company and the entities it controls (if any) is less than $25 million; and/or
- the value of the consolidated gross assets at the end of the financial year of the company and the entities it controls (if any) is less than $12.5 million; and/or
- the company and the entities it controls (if any) has fewer than 50 employees at the end of the financial year.
A small proprietary company is only required to prepare an annual financial report (an annual profit and loss statement, a balance sheet and a statement of cash flows) and a directors' report (about the company's operations, dividends paid or recommended, options issued etc.) if:
- the shareholders with at least 5% of the votes in the company direct it to do so; or
- ASIC directs it to do so.
Although the Corporations Act 2001 (Cth) itself may not require a small proprietary company to prepare a financial report except in the circumstances mentioned above, the company may need to prepare annual financial reports for other purposes (e.g. income tax laws).