EXPLANATORY STATEMENT

 

Select Legislative Instrument 2007 No. 185

 

Issued by the Authority of the Minister for Families, Community Services and Indigenous Affairs

 

Corporations (Aboriginal and Torres Strait Islander) Act 2006

 

Corporations (Aboriginal and Torres Strait Islander) Regulations 2007

 

The Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act) received Royal Assent on 4 November 2006, and will commence on 1 July 2007.

 

Subsection 633-1(1) of the CATSI Act provides that the Governor-General may make regulations, prescribing matters required or permitted by the CATSI Act to be prescribed, or necessary or convenient to be prescribed for the carrying out or giving effect to the CATSI Act.

 

The purpose of the Regulations is to provide for matters necessary to the effective operation of the CATSI Act.  The Regulations contain a range of machinery provisions, as well as provisions dealing with certain substantive matters not dealt with in detail in the Act.  For example, the Regulations set out in detail the manner in which Aboriginal and Torres Strait Islander corporations registered under the CATSI Act (CATSI corporations) would be required to report on their financial position and operations.

 

The Regulations are divided into 12 Chapters, each of which corresponds to a Chapter in the Act.  (For some Chapters of the Act, no regulations are proposed.)  There are also four Schedules to the Regulations.

 

Chapter 1 provides for the name and commencement of the Regulations, and defines certain terms.

 

Chapter 2 prescribes matters necessary to the operation of certain provisions of the Act.  Importantly, this Chapter sets out the thresholds by reference to which a CATSI corporation is registered as a small, medium or large corporation.  The registered size of a corporation has implications for, among other things, the level of financial reporting it is required to undertake.

 

Chapter 3 contains provisions relating to the names that CATSI corporations may have.  These provisions, together with Schedule 1 to the Regulations, prescribe rules relating to allowable names.

 

Chapter 5 prescribes the required number of members necessary for members to request a general meeting, to move a resolution at a general meeting and to request a members’ statement be provided to all members.  It also deals with the exercise of proxies at general meetings of CATSI corporations.

 

Chapter 6 prescribes the required number of members necessary for members to obtain information about directors’ remuneration.

 

Chapter 7 is concerned with annual reporting by CATSI corporations.  This Chapter prescribes certain additional matters that must be included in the annual general report that each CATSI corporation is required to prepare and lodge.  It also specifies which CATSI corporations must prepare and lodge annual financial and directors’ reports, and the content of those reports.  In addition, Chapter 7 contains provisions relating to audits of the financial reports of CATSI corporations.

 

Chapter 9 is concerned with the Register of Aboriginal and Torres Strait Islander Corporations (Corporations Register) which, under the CATSI Act, the Registrar of Aboriginal and Torres Strait Islander Corporations (Registrar) is required to keep.  The provisions in Chapter 9, together with Schedule 2, specify what information and documents the Corporations Register is to include, and what information and documents members of the public may inspect or search that register for.  The provisions in this Chapter, together with Schedule 3, also specify documents that, in addition to those listed in paragraphs 421-1(4)(a)-(e) of the Act, are exempt documents for the purposes of the CATSI legislation.

 

Chapter 10 prescribes the required number of members necessary for members to request the Registrar to call a general meeting.  In addition, it makes provision for the form of identity cards for authorised officers appointed under the CATSI Act.

 

Chapter 11 contains some machinery provisions relating to the external administration of CATSI corporations.

 

Chapter 15 relates to the disclosure of ‘protected information’ about CATSI corporations or certain related bodies.  Disclosure of such information by the Registrar or certain other persons is authorised under the CATSI Act where the disclosure is made to an agency, person or body prescribed by the provisions in this Chapter.  This Chapter also makes the modifications listed in Schedule 4 to the Corporations Act 2001 provisions applied by the CATSI Act.

 

Chapter 16 prescribes that the Registrar has the function of making available certain documents obtained or kept under the Aboriginal Councils and Associations Act 1976, which the CATSI Act replaces.

 

Details of the Regulations are set out in the Attachment.

 

Broad consultation on the content of the regulations has taken place over a number of years and throughout the development of the CATSI Act.  One of the key findings of the independent review of the ACA Act was that reforms should provide maximum flexibility for the design of corporations and the administration of the Act to take account of the diverse circumstances and characteristics of Indigenous corporations.  Consultation conducted during the drafting of the CATSI Act and after its passage through Parliament confirmed the review’s findings.  All corporations registered under the ACA Act and therefore affected by the commencement of the CATSI Act have been advised of the drafting of regulations as have key stakeholders.  Relevant sections of the Commonwealth Attorney-General’s Department, the Australian Securities and Investments Commission, the Department of the Treasury and members of the accounting and insolvency profession have been consulted.

 

The Regulations make provision for the manner in which some CATSI corporations must prepare their financial reports by reference to requirements in accounting standards in force under section 334 of the Corporations Act 2001.  Similarly, the Regulations require audits of financial reports of CATSI corporations to be undertaken in accordance with the auditing standards in force under section 336 of the Corporations Act.  Both the accounting standards and the auditing standards are legislative instruments, for the purposes of the Legislative Instruments Act 2003, and appear in electronic form on the Federal Register of Legislative Instruments.

 

The CATSI Act does not impose any conditions that need to be satisfied before the power to make the Regulations may be exercised.

 

The Regulations would be a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

The Regulations would commence on 1 July 2007, the day on which the CATSI Act is to commence.

 

ATTACHMENT

 

 

Chapter 1 – Introduction

 

Part 1-1 – Preliminary

 

Regulation 1.01 – Name of Regulations

 

1.           This regulation provides that the name of the Regulations is the Corporations (Aboriginal and Torres Strait Islander) Regulations 2007 (the CATSI Regulations).

 

Regulation 1.02 – Commencement

 

2.           This regulation provides that the CATSI Regulations commence on 1 July 2007, the date of commencement of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (the CATSI Act).

 

Regulation 1.03 – Definitions

 

3.           This regulation defines a number of terms used in the CATSI Regulations.

 

4.           The defined terms include ‘CGA’ (the consolidated gross assets of a corporation and the entities it controls) and ‘CGOI’ (the consolidated gross operating income of a corporation and the entities it controls).  These terms are used in the provisions of the CATSI Regulations dealing with financial and other reporting by CATSI corporations (see CATSI Regulations, Part [7-3]).  (Note that control is defined in sections 689-25 and 700-1 of the CATSI Act.)

 

Chapter 2 – Aboriginal and Torres Strait Islander corporations

 

Part 2-3 – Decisions on applications

 

Division 29 – What are the basic requirements for registration?

 

Regulation 29-5.01 – Indigeneity requirement

 

5.           In order to be registered as a CATSI corporation, a body must meet a number of requirements, including the Indigeneity requirement.  Under paragraph 29-5(a) of the CATSI Act, a corporation that has 5 or more members meets the Indigeneity requirement if at least the percentage of the corporation’s members prescribed in the CATSI Regulations are Aboriginal and Torres Strait Islander persons.  The effect of this regulation is that at least 51% of the members of such CATSI corporations must be Aboriginal and Torres Strait Islander persons.  This ensures that Aboriginal and Torres Strait Islander people will always form the majority of the corporation’s members.

 

Regulation 29-18.01 – Creditor notice requirement

 

6.           Under section 23-1 of the CATSI Act, an application can be made for registration of a CATSI corporation (called ‘the amalgamated corporation’) to replace 2 or more existing CATSI corporations (called ‘the amalgamating corporations’).  Subsection 29‑18(1) requires certain steps to be taken to notify any substantial creditors of the amalgamating corporations of the proposed amalgamation.  Under subsection 29‑18(3), a substantial creditor of any of the amalgamating corporations can lodge with the Registrar a written objection to the grant of the application for registration of the amalgamated corporation.

 

7.           Subregulation 29-18.01(1) sets out the information that must be contained in such a written objection.  This includes the name of the person claiming to be a substantial creditor of an amalgamating corporation, and the name of that corporation.  Under subregulation (1), a written objection must also contain a signed statement that the sum of the unsecured debts owed to the person by the amalgamating corporation exceeds the amount mentioned in subregulation (2).

 

8.           Under subsection 29-18(3) of the CATSI Act, the only person who can make an objection to the amalgamation of CATSI corporations is a ‘substantial creditor’.  A person is a ‘substantial creditor’ of an amalgamating corporation – and thus a person who can object to its amalgamation with another corporation – if the sum of the unsecured debts owed to the person by the amalgamating corporation is more than the amount set by the Regulations.  Subregulation 29-18.01(2) sets this amount at $2,000.

 

Part 2-4 – Registration of an Aboriginal and Torres Strait Islander corporation as a small, medium or large corporation

 

Division 37 – Registration of an Aboriginal and Torres Strait Islander corporation as a small, medium or large corporation

 

Regulation 37-10.01 – Small, medium and large corporations

 

9.           Division 37 of the CATSI Act requires CATSI corporations to be registered as small, medium or large according to their income, assets and number of employees, and those of any entities that the corporation controls.  (There is a similar scheme in subsections 45A(2) and (3) of the Corporations Act 2001 for small and large proprietary companies.)

 

10.         Under subsections 37-10(1), (2) and (3) of the CATSI Act, the specific amounts of consolidated gross operating income and value of consolidated gross assets and the number of employees which determine registered size are prescribed by regulations.  This regulation prescribes those amounts of consolidated gross operating income and value of consolidated gross assets and the number of employees.

 

11.         A CATSI corporation registered as small will satisfy at least two of the following criteria:

(a)   the consolidated gross operating income for the financial year of the corporation and the entities it controls (if any) is less than $100,000;

(b)   the value of the consolidated gross assets at the end of the financial year of the corporation and the entities it controls (if any) is less than $100,000;

(c)   the corporation and the entities it controls (if any) have, at the end of the financial year, fewer employees than 5 employees.

 

12.         A CATSI corporation registered as large will satisfy at least two of the following criteria:

(a)   the consolidated gross operating income for the financial year of the corporation and the entities it controls (if any) is equal to or more than $5,000,000;

(b)   the value of the consolidated gross assets at the end of the financial year of the corporation and the entities it controls (if any) is equal to or more than $2,500,000;

(c)   the corporation and the entities it controls (if any) have, at the end of the financial year, a number of employees that is equal to or more than 25 employees.

 

13.         All other CATSI corporations are corporations registered as medium.  The effect of these thresholds is that most corporations previously registered under the Aboriginal Councils and Associations Act 1976 will become medium corporations.  Also, a significant number will be small and have reduced reporting requirements.

 

Regulation 37-20.01 – Counting employees

 

14.         This regulation prescribes a method for calculating the number of employees of CATSI corporations for paragraphs 37-10(1)(c), (2)(c) and (3)(c) of the CATSI Act.  The method is to count each full-time employee and to count each part-time employee on a pro rata basis relative to the weekly hours of work of a full-time employee.  (This method is based on subsection 45A(5) of the Corporations Act 2001.)

 

15.         Note that employee is defined in section 700-1 of the CATSI Act to include a contact person for the corporation (regardless of the basis on which the person is appointed as a contact person).

 

Chapter 3 – Basic features of an Aboriginal and Torres Strait Islander corporation

 

Part 3-4 – Names

 

Division 85 – What names may a corporation have?

 

Regulation 85-5.01 – Availability of names

 

16.         The rules for ascertaining whether a name is identical to another name are the rules set out in Part 1 of Schedule 1 (CATSI Regulations, subregulation 85-5.01(1)).  A name is unacceptable for registration if it is unacceptable under the rules set out in Part 2 of Schedule 1 (CATSI Regulations, subregulation 85-5.01(2)).  This regulation mirrors regulation 2B.6.01 of the Corporations Regulations 2001.

 

Regulation 85-5.02 – Consent required for use of certain letters, words and expressions

 

17.         The written consent of the Minister specified in Part 4 of Schedule 1 to the CATSI Regulations must accompany an application for registration of a CATSI corporation, or an application for a change of name of a corporation, where the proposed corporation name uses or includes a word or phrase listed in Part 4 of Schedule 1.  Written consent is also required where the proposed name uses or includes letters, or another word or expression of like import.  This regulation mirrors subregulations 2B.6.02(1), (2) and (4) of the Corporations Regulations 2001.

 

Chapter 5 – Meetings

 

Part 5-2 – General meetings

 

Division 201 – What are the rules concerning general meetings?

 

Regulation 201-5.01 – Request by members for directors to call general meetings

 

18.         The directors of a CATSI corporation must call and arrange to hold a general meeting on request by at least the required number of members (CATSI Act, section 201-5).  The required number is set out in subsection 201-5(4) of the CATSI Act.

 

19.         The regulations may prescribe a different number of members than that set out in the Act (CATSI Act, subsection 201-5(5)).  This regulation makes particular provision for this number of members for corporations of between 2 and 20 members.  For a CATSI corporation with between 2 and 10 members, the prescribed number of members is 1.  For a CATSI corporation with between 11 and 20 members, the prescribed number of members is 3.

 

Regulation 201-40.01 – Members’ resolutions

 

20.         Members of a CATSI corporation may move a resolution at a general meeting if notice of the resolution is given to the corporation by at least the required number of members (CATSI Act, section 201-40).  The required number is set out in subsection 201-40(4) of the CATSI Act.

 

21.         The regulations may prescribe a different number of members than that set out in the Act (CATSI Act, subsection 201-40(5)).  This regulation makes particular provision for this number of members for CATSI corporations of between 2 and 20 members.  For a CATSI corporation with between 2 and 10 members, the prescribed number of members is 1.  For a CATSI corporation with between 11 and 20 members, the prescribed number of members is 3.

 

Regulation 201-50.01 – Members’ statements to be distributed

 

22.         Members may request a CATSI corporation to give all its members a statement provided by the members making the request if the request is made by the required number of members (CATSI Act, section 201-50).  The statement must relate to a resolution to be moved at a general meeting or any other matter that may be properly considered at a general meeting.  The required number is set out in subsection 201‑50(8) of the CATSI Act.

 

23.         The regulations may prescribe a different number of members than that set out in the Act (CATSI Act, subsection 201-50(9)).  This regulation makes particular provision for this number of members for CATSI corporations of between 2 and 20 members.  For a CATSI corporation with between 2 and 10 members, the prescribed number of members is 1.  For a CATSI corporation with between 11 and 20 members, the prescribed number of members is 3.

 

Regulation 201-95.01 – Rights of proxies — exercise of proxies

 

24.         Section 201-95 of the CATSI Act sets out the rights of proxies appointed to attend and vote for a member at a general meeting.  A person must not exercise proxies for more than the number of members prescribed in the regulations (CATSI Act, subsection 201-95(4)).  This regulation prescribes that number as 3.

 

Part 5-4 – Minutes of meetings

 

Division 220 – Minutes of meetings

 

Regulation 220-10.01 – Members’ access to minutes

 

25.         To protect members’ access to minute books of a CATSI corporation and copy minutes, the amount of any payment a corporation may require for providing copies of the minutes cannot exceed the amount prescribed by regulations (CATSI Act, subsection 220-10(6)).  This regulation prescribes that amount as 50 cents per page.  (Note that inspection of the minutes is free of charge (CATSI Act, subsections 220-10(1) and (2).)

 

Chapter 6 – Officers

 

Part 6-2 – Appointment, remuneration and cessation of appointment of directors

 

Division 252 – Remuneration of directors

 

Regulation 252-5.01 – Members may obtain information about directors’ remuneration

 

26.         Members may direct a CATSI corporation to disclose the remuneration and expenses paid to each director of the corporation, or a subsidiary (if any), by the corporation or by an entity controlled by the corporation, if the direction is made by the required number of members (CATSI Act, subsection 252-5(1)).  The required number is set out in subsection 252-5(7) of the CATSI Act.

 

27.         The regulations may prescribe a different number of members than that set out in the Act (CATSI Act, subsection 252-5(8)).  This regulation makes particular provision for this number of members for corporations of between 2 and 20 members.  For a CATSI corporation with between 2 and 10 members, the prescribed number of members is 1.  For a CATSI corporation with between 11 and 20 members, the prescribed number of members is 3.

 

Chapter 7 – Record keeping, reporting requirements and books

 

Part 7-3 – Reporting requirements

 

Division 330 – General report for each financial year

 

28.         Unless exempted, all CATSI corporations are required to prepare a general report for each financial year (CATSI Act, Division 330), and lodge it with the Registrar (CATSI Act, Division 348).

 

29.         Transitional corporations are not required to prepare a general report in relation to the 2006-07 financial year.

 

30.         Also, transitional corporations which elect, under item 60 of the Corporations (Aboriginal and Torres Strait Islander) Consequential, Transitional and Other Measures Act 2006 (the CATSI Transitional Act), to report under Division 11 of Part 2 of Schedule 3 of the CATSI Transitional Act are not required to prepare a general report in relation to the 2007-08 financial year.

 

31.         Part of the contents of the general report is set out in the Act (CATSI Act, subparagraphs 330-5(1)(a)(i) to (vi)).

 

Regulation 330-5.01 – Contents of general report

 

32.         A general report must also contain any other information required by the regulations (CATSI Act, paragraph 330-5(1)(b)).  This regulation prescribes the other information to be contained in the general report.

 

33.         The general report must contain certain income, asset and employee information.  It must report the corporation’s total CGOI for the financial year, the value of the corporation’s total CGA at the end of the financial year, and the number of employees of the corporation at the end of the financial year (CATSI Regulations, paragraphs 330-5.01(a) to (c)).  This information will help the Registrar determine the registered size of a CATSI corporation.

 

34.         The general report must contain the ABN of the corporation if it has one (CATSI Regulations, paragraph 330-5.01(d)).  This information will allow for data matching between Commonwealth agencies.  Non payment of Goods and Services Tax (GST) is a significant factor leading to failure of Aboriginal and Torres Strait Islander corporations.  Information sharing between Commonwealth agencies, such as the Registrar and the Australian Taxation Office, will provide systemic solutions for improved compliance and support to corporations.  This information will be publicly available and is consistent with information publicly available under the Corporations Act.

 

35.         The general report must indicate whether the corporation is a deductible gift recipient under Division 30 of the Income Tax Assessment Act 1997 (CATSI Regulations, paragraph 330-5.01(e)).  This information will provide the Registrar with information about a corporation’s tax status and also facilitate improved information sharing arrangements.

 

36.         The general report must indicate whether any of the directors, secretary or contact person of the corporation were also employees at the end of the financial year being reported on (CATSI Regulations, paragraphs 330-5.01(f) to (h)).  This information is required for the Registrar to check whether the corporation is complying with the requirement that a majority of the directors not be employees of the corporation (CATSI Act, subsection 246-5(4)).

 

37.         The general report must contain information identifying any trusts that the corporation, or its subsidiaries, is trustee or beneficiary of (CATSI Regulations, paragraphs 330-5.01(i) to (l)).  This information will provide the Registrar with further information about the corporate affairs of the corporation and its subsidiaries as they relate to trusts.  This measure is designed to provide improved transparency about the affairs of corporations.

 

38.         The general report must contain information identifying the Torrens system land and general law land that a corporation owns (CATSI Regulations, paragraphs 330‑5.01(m) to (n)).  This information will assist the Registrar in determining the registered size of corporations and the adequacy of asset reporting in financial reports.  It will also assist in deregistration processes to ensure arrangements are made by the Registrar for the deregistered corporation’s land, and to provide for land to be properly dealt with.

 

39.         The Registrar has capacity by written exemption to provide relief from the general report obligations (CATSI Act, Parts 7.4 and 7.5).

 

Regulation 330-10.01 – General report to be lodged with Registrar

 

40.         This regulation prescribes a longer period of six months, after the end of the financial year, for the general report to be lodged with the Registrar.  This period better aligns with subsection 201-150(1) of the CATSI Act which provides that an Aboriginal and Torres Strait Islander corporation must hold an AGM within 5 months after the end of its financial year.  (See regulation 368-1.01 which modifies the Act and makes similar provision for lodgement of a financial report, a directors’ report or an auditor’s report.)

 

Division 333 – Financial and other reports

 

41.         Financial and other reporting requirements are determined by a corporation’s registered size and CGOI (consolidated gross operating income).

 

42.         CATSI corporations registered as small, and having a CGOI in the financial year of less than $100,000, are not required under the regulations to prepare an annual financial report or directors’ report.  However, these small corporations will report their CGOI and CGA (consolidated gross assets) to the Registrar in their general report.  Also, a corporation which controls one of these small corporations would consolidate the small corporation in its consolidated financial report if required by the accounting standards.

 

43.         Within six months of the end of the financial year, all other CATSI corporations are required by this Division to prepare a financial report and directors’ report, and obtain an audit report.

 

44.         CATSI corporations registered as large, and any other CATSI corporation having a CGOI of $5 million or more, report under Subdivision 333-A.

 

45.         CATSI corporations registered as medium, and having a CGOI of less than $5 million, and CATSI corporations registered as small, and having a CGOI of $100,000 or more but less than $5 million, report under Subdivision 333-B.  For corporations in this category which derive most of their income from public funding and are already reporting the use of those funds, there is a financial reporting option available to them designed to reduce the administrative burden associated with financial reporting.  For corporations using this option, the Registrar will recognise the financial reports prepared for public funding bodies.

 

46.         The Registrar has capacity by written exemption to provide relief from financial, directors’ and audit reporting obligations (CATSI Act, Parts 7.4 and 7.5).

 

47.         There are transitional arrangements in place to assist financial reporting by transitional corporations in the financial years 2006-07 and 2007-08 (CATSI Transitional Act, Divisions 10 and 11, Part 2, Schedule 3).

 

Subdivision 333-A – Small and medium corporations with a CGOI of $5 000 000 or more, and large corporations

 

Regulation 333-5.01 – Financial reports, directors’ reports and other reports

 

48.         CATSI corporations registered as large, and CATSI corporations registered as small or medium and having a CGOI in the financial year of $5 million or more, must prepare a financial report and a directors’ report for the financial year under Subdivision 333-A (CATSI Regulations, subregulations 333-5.01(1) and (3)).

 

49.         Subdivision 333-A does not apply to transitional corporations reporting for the 2006-07 financial year.  In this case, transitional corporations report under Division 10 of Part 2 of Schedule 3 to the CATSI Transitional Act (CATSI Regulations, paragraph 333-5.01(2)(a)).

 

50.         Subdivision 333-A does not apply to transitional corporations reporting for the 2007-08 financial year which have elected, under item 60 of the CATSI Transitional Act, to report under Division 11 of Part 2 of Schedule 3 of the CATSI Transitional Act (CATSI Regulations, paragraph 333-5.01(2)(b)).

 

Regulation 333-10.01 – Financial reports

 

51.         This regulation specifies the content of the annual financial report for CATSI corporations registered as large, and any other CATSI corporation having a CGOI of $5 million or more.

 

52.         The financial statements for the year, the notes to the financial statements, and the directors’ declaration about the statements and the notes are collectively labelled the financial report (CATSI Regulations, subregulation 333-10.01(1)).  This mirrors subsection 295(1) of the Corporations Act 2001.

 

53.         Specific procedures and rules for the preparation of financial statements and consolidated financial statements are not set out in these regulations.  These matters of accounting detail are more appropriately dealt with in the accounting standards.  The expression “accounting standard” is defined in section 700-1 of the CATSI Act to mean a standard in force under section 334 of the Corporations Act 2001, or a provision of such a standard as it so has effect.  The accounting standard is a legislative instrument, for the purposes of the Legislative Instruments Act 2003, and appears in electronic form on the Federal Register of Legislative Instruments.

 

54.         Accordingly, the financial statements for the year are the financial statements for the CATSI corporation that are required by the accounting standards (CATSI Regulations, paragraph 333-10.01(2)(a)).  If compliance with the accounting standards would require the corporation to include other entities in its financial statements, consolidated financial statements for the corporation and those entities are required (CATSI Regulations, paragraph 333-10.01(2)(b)).  This subregulation is based on subsection 295(2) of the Corporations Act 2001.

 

55.         The requirements in subregulation 333-10.01(2) to comply with the accounting standards applies notwithstanding any application provision in the accounting standards themselves which provides that a standard applies in relation to a report prepared under the Corporations Act 2001.  Subregulation 333-15.01(4) further deals with the application of the accounting standards to financial reports of CATSI corporations.

 

56.         The notes to the financial statements of a CATSI corporation are the notes required by the accounting standards, and any other information necessary to give a true and fair view of the financial position and performance of the corporation or consolidated entity (CATSI Regulations, subregulation 333-10.01(3)).  This is based on subsection 295(3) of the Corporations Act 2001.

 

57.         As part of the annual financial report the directors are required to make a declaration about several matters, including the corporation’s solvency.  The directors’ declaration in the financial report of a CATSI corporation is a declaration by the directors of the corporation whether, in the directors’ opinion, there are reasonable grounds to believe that the corporation will be able to pay its debts when they become due and payable, and whether, in the directors’ opinion, the financial statements and notes are in accordance with these regulations, including compliance with the accounting standards, and providing a true and fair view of the financial position and performance of the corporation or consolidated entity (CATSI Regulations, subregulation 333-10.01(4)).  This is based on subsection 295(4) of the Corporations Act 2001.

 

58.         The directors’ declaration must be made in accordance with a resolution of the directors, mention the date when the resolution was made and be signed by a director of the corporation (CATSI Regulations, subregulation 333-10.01(5)).  This mirrors subsection 295(5) of the Corporations Act 2001.

 

59.         The financial statements and notes for a financial year must give a true and fair view of the financial position and performance of the corporation or consolidated entity (CATSI Regulations, subregulation 333-10.01(6)).  This ensures that the financial statements and notes give a true and fair view of the corporation’s whole operations.  It does not affect the primary obligation to comply with the accounting standards.  If compliance with the accounting standards would not produce financial statements which give a ‘true and fair view’, additional information necessary to give the true and fair view must be included in the notes to the financial statements.  This subregulation is based on section 297 of the Corporations Act 2001.

 

60.         Aligning the regulations providing for the preparation of financial reports by CATSI corporations with the provisions of the Corporations Act 2001 and the accounting standards provides a uniform standard of financial reporting that is well understood in Australia.  It also promotes mainstream standards being applied to CATSI corporations. 

 

Regulation 333-10.02 – Directors’ reports

 

61.         This regulation specifies the content of the annual directors’ report for CATSI corporations registered as large, and any other CATSI corporation having a CGOI of $5 million or more.

 

62.         The directors’ report must contain the general information specified in paragraphs 333-10.02(1)(a) to (f) of the CATSI Regulations.  This provides a framework for directors to give a detailed overview of the corporation’s business performance and the factors underlying the corporation’s results and financial position, and benefits members by requiring that they be given information about the corporation’s business that they can understand.  The table below sets out the general information required to be given in the directors’ report and indicates the provision in the Corporations Act on which it is based.

 

Regulation	General information required	Corporations Act
333-10.02 (1)(a)	A review of operations of the Aboriginal and Torres Strait Islander corporation during the year and the results of those operations.	299(1)(a)
333-10.02 (1)(b)	Details of any significant changes in the corporation’s state of affairs during the year.	299(1)(b)
333-10.02 (1)(c)	A statement of the corporation’s principal activities during the year and any significant changes in the nature of those activities during the year.	299(1)(c)
333-10.02 (1)(d)	Details of any matter or circumstance that has arisen since the end of the year that has significantly affected, or may significantly affect: (i)  the corporation’s operations in future financial years; or (ii)  the results of those operations in future financial years; or (iii)  the corporation’s state of affairs in future financial years.	299(1)(d)
333-10.02 (1)(e)	Likely developments in the corporation’s operations in future financial years and the expected results of those operations.	299(1)(e)
333-10.02 (1)(f)	If the corporation’s operations are subject to any particular and significant environmental regulation under a Commonwealth, State or Territory law — details of the corporation’s performance in relation to environmental regulation.	299(1)(f)

 

63.         The directors’ report must also contain the specific information specified in paragraphs 333-10.02(1)(g) to (r) of the CATSI Regulations, including a copy of the auditor’s declaration under section 339-50 of the Act.  The table below sets out the specific information required to be given in the directors’ report and indicates the provision in the Corporations Act on which it is based.

 

Regulation	Specific information required	Corporations Act
333-10.02 (1)(g)	Details of distributions paid to members during the year.	300(1)(a)
333-10.02 (1)(h)	Details of distributions recommended or declared for payment to members, but not paid, during the year.	300(1)(b)
333-10.02 (1)(i)	The name of each person who has been a director of the corporation during the year and the period of the director’s tenure.	300(1)(c)
333-10.02 (1)(j)	Details of each director’s qualifications, experience and special responsibilities.	300(10)(a)
333-10.02 (1)(k)	The number of meetings of the board of directors held during the year and each director’s attendance record at those meetings.	300(10)(b)
333-10.02 (1)(l)	The number of meetings of each board committee held during the year and each director’s attendance record at those meetings.	300(10)(c)
333-10.02 (1)(m)	The name of each person who has been a secretary of the corporation during the year.	300(10)(d)
333-10.02 (1)(n)	Details of each secretary’s qualifications and experience.	300(10)(d)
333-10.02 (1)(o)	The name of each person who: (i)  was an officer of the corporation at any time during the year; and (ii)  was, when an audit firm or audit company that is an auditor of the corporation undertook an audit of the corporation, a partner in the audit firm or a director of the audit company.	300(1)(ca)
333-10.02 (1)(p)	A copy of the auditor’s declaration under section 339-50 of the Act for the audit for the financial year.	298(1)(c)
333-10.02 (1)(q)	For any application for leave made during the year under section 169-5 of the Act: (i)  the applicant’s name; (ii)  a statement whether leave was granted.	300(14)
333-10.02 (1)(r)	For any proceedings that, during the year, a person has brought or intervened in for the corporation with leave under section 169-5 of the Act: (i)  the person’s name; and (ii)  the names of the parties to the proceedings; and (iii)  sufficient information to enable members to understand the nature and status of the proceedings (including the cause of action and orders made by the Court).	300(15)

 

64.         The directors’ report must be prepared for the corporation.  However, if consolidated financial statements are required by the accounting standards, the directors’ report must be prepared for the consolidated entity (CATSI Regulations, subregulation 333-10.02(2)).  This is based on subsection 299A(2) of the Corporations Act 2001.

 

65.         If a financial report for a financial year includes additional information under paragraph 333-10.01(3)(b) of the CATSI Regulations, the directors’ report must also mention the directors’ reasons for forming the opinion that the inclusion of the additional information was necessary to give the true and fair view, and where the additional information can be found in the financial report (CATSI Regulations, subregulation 333-10.02(3)).  This mirrors subsection 298(1A) of the Corporations Act 2001.

 

66.         A directors’ report may omit material that would otherwise be included under paragraph 333-10.02(1)(e) of the CATSI Regulations if it would be likely to result in unreasonable prejudice to the corporation or consolidated entity (CATSI Regulations, subregulation 333-10.02(4)).  This mirrors subsection 299A(3) of the Corporations Act 2001.  If material is omitted, the directors’ report must say so (CATSI Regulations, subregulation 333-10.02(5)).

 

67.         Under subregulations 333-10.02(6) and (7), details do not have to be included in the directors’ report if they are already included in the corporation’s financial report for the financial year.  If this happens, the directors’ report must say so and state where the details may be found in the financial report.  Subregulation 333-10.02(6) mirrors subsection 300(2) of the Corporations Act 2001.

 

68.         A directors’ report must be made in accordance with a resolution of the directors, mention the date when the report is made and be signed by a director (CATSI Regulations, subregulation 333-10.02(8)).  This mirrors subsection 298(2) of the Corporations Act 2001.

 

Regulation 333-15.01 – Other requirements in relation to report

 

69.         The financial report of a CATSI corporation registered as large, or any other CATSI corporation having a CGOI of $5 million or more, must be audited and the corporation must obtain an audit report (CATSI Regulations, subregulation 333‑15.01(1)).

 

70.         The financial report must be audited by a registered company auditor, or an audit firm that has at least one member who is a registered company auditor, or an authorised audit company (CATSI Regulations, subregulation 333-15.01(2)).

 

71.         A registered company auditor is defined in section 700-1 of the CATSI Act as a person registered as an auditor under Part 9.2 (Registration of Auditors and Liquidators) of the Corporations Act 2001.  An authorised audit company is defined in section 700-1 of the CATSI Act as a company registered under Part 9.2A (Authorised Audit Companies) of the Corporations Act 2001.

 

72.         The audit must conducted in accordance with the auditing standards (CATSI Regulations, subregulation 333-15.01(3)).

 

73.         The expression “auditing standard” is defined in section 700-1 of the CATSI Act to mean a standard in force under section 336 of the Corporations Act 2001, or a provision of such a standard as it so has effect.  The auditing standard is a legislative instrument, for the purposes of the Legislative Instruments Act 2003, and appears in electronic form on the Federal Register of Legislative Instruments.

 

74.         Subregulation 333-15.01(4) provides for the application of the accounting standards in preparing a financial report for a CATSI corporation.  The accounting standards apply to the extent that they are capable of applying to an Aboriginal and Torres Strait Islander corporation.  All of the accounting standards apply whether or not the corporation is or would be regarded as a reporting entity within the meaning of that term in the accounting standards.

 

Subdivision 333-B – Small corporations with CGOI of between $100 000 and $5 000 000, and medium corporations with CGOI of less than $5 000 000

 

Regulation 333-16.01 – Financial reports, directors’ reports and other reports

 

75.         CATSI corporations registered as medium, and having a CGOI of less than $5 million, and CATSI corporations registered as small, and having a CGOI of $100,000 or more but less than $5 million, must prepare a financial report and a directors’ report for the financial year under Subdivision 333-B (CATSI Regulations, subregulations 333-16.01(1) and (3)).

 

76.         Subdivision 333-B does not apply to transitional corporations reporting for the 2006-07 financial year.  In this case, transitional corporations report under Division 10 of Part 2 of Schedule 3 of the CATSI Transitional Act (CATSI Regulations, paragraph 333-16.01(2)(a)).

 

77          Subdivision 333-B does not apply to transitional corporations reporting for the 2007-08 financial year which have elected, under item 60 of the CATSI Transitional Act, to report under Division 11 of Part 2 of Schedule 3 of the CATSI Transitional Act (CATSI Regulations, paragraph 333-16.01(2)(b)).

 

Regulation 333-16.02 – Financial reports

 

78.         CATSI corporations reporting under this Subdivision must prepare and lodge financial reports.  The corporation will either prepare and lodge a general purpose financial report under subregulation 333-16.02(2), or, if it is eligible to do so, prepare a financial report under subregulations 333-16.02(6) and (7) based on reports given to public funding bodies (CATSI Regulations, subregulation 333-16.02(1)).

 

General purpose financial report

79.         A general purpose financial report prepared under subregulation 333-16.02(2) must comply with the requirements in regulation 333-10.01 and subregulation 333-15.01(4) (CATSI Regulations, subregulation 333-16.02(2)).

 

80.         A CATSI corporation which prepares a general purpose financial report under subregulation 333-16.02(2) must have the financial report audited.  The corporation must obtain an auditor’s report from a registered company auditor or from a Chartered member or an Affiliate of the Institute of Chartered Accountants in Australia, or from a Certified Practising Accountant or a Fellow of CPA Australia (CATSI Regulations, subregulation 333-16.02(3)).

 

81.         The audit of a general purpose financial report under subregulation 333-16.02(3) must be conducted in accordance with the auditing standards (CATSI Regulations, subregulation 333-16.02(4)).

 

Financial report based on reports given to public funding bodies

82.         Eligibility of a CATSI corporation to prepare, under subregulations 333-16.02(6) and (7), a financial report based on public funders’ reports is based on three conditions being satisfied (CATSI Regulations, subregulation 333-16.02(5)).

 

83.         The first condition is that the accounting standards, if applied to the financial report, would not require the corporation to provide consolidated financial statements (CATSI Regulations, paragraph 333-16.02(5)(a)).  The second condition is that at least 90% of the gross operating income of the corporation in the financial year being reported on consists of funding provided by one or more funding bodies (CATSI Regulations, paragraph 333-16.02(5)(b)).  (The expression “funding body” is defined in regulation 1.03.)  The third condition is that as a condition of the provision of funding, the corporation is required (by legislation or otherwise) to prepare and submit to the funding body or bodies, one or more annual reports accounting for the expenditure of the funding by the corporation over the full financial year (CATSI Regulations, paragraph 333-16.02(5)(c)).

 

84.         The content of a financial report of a CATSI corporation based on public funders’ reports includes the financial reports prepared for the funding bodies along with any auditor’s reports of those reports to funders.  The financial report must also report on the income and expenditure, and assets and liabilities of the CATSI corporation not already covered by the reports to funders.  The financial report also includes a directors’ declaration.  (CATSI Regulations, subregulation 333-16.02(6)).

 

85.         The directors’ declaration in a financial report based on public funders’ reports must be made in accordance with a resolution of the directors, and state whether in the directors’ opinion there are reasonable grounds to believe that the corporation will be able to pay its debts when they become due and payable, and mention the date when the resolution was made, and be signed by a director of the corporation (CATSI Regulations, subregulation 333-16.02(7)).

 

86.         This financial reporting option is designed to reduce duplication of reporting and provide administrative relief to CATSI corporations who fall within this category.

 

Regulation 333-16.03 – Directors’ reports

 

333-16.03 Directors’ reports

87.         CATSI corporations reporting under this Subdivision must prepare and lodge directors’ reports.  These corporations are smaller than the corporations reporting under Subdivision 333-A of the CATSI Regulations and, accordingly, the reporting requirements have been reduced.

 

88.         A CATSI corporation that prepares a general purpose financial report under subregulation 333-16.02(2) must prepare a directors’ report in accordance with regulation 333-10.02.  However, the report need not comply with paragraphs 333‑10.02(1)(i) to (o).  (CATSI Regulations, subregulations 333-16.03(1) and (2)).

 

89.         A CATSI corporation that prepares a financial report based on public funders’ reports under subregulations 333-16.02(6) and (7) must also prepare a directors’ report in accordance with regulation 333-10.02.  However, the report need not comply with paragraphs 333-10.02(1)(i) to (o) or subregulation 333-10.02(3).  (CATSI Regulations, subregulations 333-16.03(3) and (4)).

 

Division 339 – Audit of financial reports

 

Subdivision 333-D – Auditor independence

 

Regulation 339-75.01 – Application of Corporations Act auditor independence provisions

 

90.         The Corporations Act auditor independence provisions apply to certain CATSI corporations (CATSI Act, subsection 339-75(1)).  Regulations may modify these applied Corporations Act auditor independence provisions (CATSI Act, subsection 339-75(2)).  References in those provisions to ASIC are taken to be references to the Registrar, and references to a small proprietary company are taken to be a CATSI corporation registered as a small or medium corporation (CATSI Regulations, regulation 339‑75.01).

 

Regulation 339-80.01 – Alternative independence requirements

 

91.         The regulations may provide for auditor independence requirements to be met in relation to the audit of a financial report of a CATSI corporation where section 339-75 of the CATSI Act does not apply (CATSI Act, subsection 339-80(2)).  Under this regulation, the Corporations Act auditor independence provisions (which are defined in subsection 339-75(4) of the CATSI Act) apply to the audit of a financial report prepared under subregulation 333-16.02(2) (CATSI Regulations, subregulation 339-80.01(1)).

 

92.         The modifications to the Corporations Act auditor independence provisions made by paragraphs 339-75(2)(a) and (b) of the CATSI Act and regulation 339-75.01 also apply to the audit of a financial report under these auditor independence requirements (CATSI Regulations, subregulation 339-80.01(2)).

 

93.         These auditor independence requirements are further modified by removing any references to imprisonment terms in the penalties in applied items 116CA to 116GC in Schedule 3 to the Corporations Act 2001 (CATSI Regulations, subregulation 339‑80.01(3)).

 

Subdivision 339-F – Appointment and removal of auditors

 

Regulation 339-100.01 – Application

 

94.         The provisions in this Subdivision relating to the appointment and removal of auditors do not apply to examiners.  Examiners are persons examining a transitional corporation’s balance sheet and income and expenditure statement under Division 10 or 11 of Part 2 of Schedule 3 to the CATSI Transitional Act for the 2006-07 or 2007‑08 financial years respectively.

 

Regulation 339-100.02 – Appointment

 

95.         CATSI corporations would normally appoint an auditor for the corporation at a general or annual general meeting.  However, if the corporation has not appointed an auditor for the corporation at a general meeting, the directors may do so.  This regulation mirrors section 325 of the Corporations Act 2001.

 

Regulation 339-100.03 – Consent

 

96.         The consent of an individual, firm or company to be appointed as an auditor must be obtained by a CATSI corporation, or its directors, before that individual, firm or company can be appointed as auditor of the corporation.  The appointment cannot proceed if that consent is withdrawn (CATSI Regulations, subregulation 339‑100.03(1)).

 

97.         The consent to be appointed as an auditor, or the withdrawal of that consent, must be given by a written notice to the CATSI corporation (CATSI Regulations, subregulation 339-100.03(2)).

 

98.         The notice of consent to be appointed as an auditor, or withdrawal of consent, given by a firm must be signed by a member of the firm in the firm’s name, and in that member’s own name (CATSI Regulations, subregulation 339-100.03(3)).

 

99.         If a CATSI corporation must use a registered company auditor, the member of the firm who signs the notice of consent to be appointed as an auditor must be a registered company auditor (CATSI Regulations, subregulation 339-100.03(4)).

 

100.       The notice of consent to be appointed as an auditor, or withdrawal of consent, given by a company must be signed by a director or senior manager of the company in the company’s name, and in that director’s or senior manager’s own name (CATSI Regulations, subregulation 339-100.03(5)).

 

101.       An appointment of an auditor to a CATSI corporation that does not comply with subregulations 339-100.03(1), (3), (4) and (5) has no effect (CATSI Regulations, subregulation 339-100.03(6)).

 

102.       This regulation is based on section 328A of the Corporations Act 2001.

 

Regulation 339-100.04 – Nomination

 

103.       A director or member of a CATSI corporation may nominate in writing an individual, firm or company for appointment as auditor of the corporation (CATSI Regulations, subregulation 339-100.04(1)).

 

104.       The corporation must send a copy of the notice of nomination to each individual, firm or company nominated, and each auditor of the corporation, and each person entitled to receive notice of general meetings of the corporation (CATSI Regulations, subregulation 339-100.04(2)).  This subregulation is based on subsection 328B(3) of the Corporations Act 2001.

 

105.       The copy of the notice of nomination must be sent at least 7 days before the general meeting, or when notice is given of the meeting at which the nomination is to be considered (CATSI Regulations, subregulation 339-100.04(3)).  This subregulation is based on subsection 328B(4) of the Corporations Act 2001.

 

106.       An auditor may nevertheless be appointed at a general meeting if subregulations 339-100.04(1) to (3) have not been complied with (CATSI Regulations, subregulation 339-100.04(4)).

 

Regulation 339-100.05 – Resignation

 

107.       An auditor of a CATSI corporation may resign by giving a notice in writing to the corporation (CATSI Regulations, subregulation 339-100.05(1)).  This subregulation is based on subsection 329(5) of the Corporations Act 2001.  The consent of the Registrar is not required to resign as auditor.

 

108.       The resignation of an auditor takes effect on the day specified in the notice of resignation, or, if no day is specified, on the day the notice is received by the corporation (CATSI Regulations, subregulation 339-100.05(2)).  This subregulation is based on subsection 329(9) of the Corporations Act 2001.

 

109.       Within 14 days after receipt of a notice of resignation from an auditor, the corporation must lodge the notice of resignation with the Registrar (CATSI Regulations, subregulation 339-100.05(3)).  This subregulation is based on paragraphs 329(11)(a) and (c) of the Corporations Act 2001.

 

Regulation 339-100.06 – Removal of auditor by resolution at general meeting

 

110.       An auditor of a CATSI corporation may be removed from office only by resolution of the corporation at a general meeting of which certain notice has been given (CATSI Regulations, subregulation 339-100.06(1)).

 

111.       A notice of an intention to move a resolution to remove an auditor must be given to a CATSI corporation at least 2 months before the meeting is to be held (CATSI Regulations, subregulation 339-100.06(2)).

 

112.       If a CATSI corporation calls a meeting after the notice of intention to remove an auditor is given, the meeting may pass the resolution even though the meeting is held less than 2 months after the notice of intention is given (CATSI Regulations, subregulation 339-100.06(3)).  Notwithstanding, there would still need to be at least 21 days notice given of the general meeting at which the resolution, to remove an auditor, will be moved (CATSI Act, subsection 201-20(4)).

 

113.       As soon as possible after the notice is received, a CATSI corporation must send a copy of a notice to remove an auditor to the auditor and lodge a copy of the notice with the Registrar (CATSI Regulations, subregulation 339-100.06(4)).

 

114.       Within 7 days after receiving a copy of the notice to remove an auditor, the auditor may make representations to the corporation (CATSI Regulations, subregulation 339-100.06(5)).  The auditor’s representations must be in writing, and not exceed a reasonable length, and request that, before the general meeting at which the resolution is to be considered, a copy of the auditor’s representations be sent by the corporation at its expense to every member of the corporation to whom notice of the meeting is sent (CATSI Regulations, subregulation 339-100.06(6)).

 

115.       A CATSI corporation may apply to the Registrar seeking a determination that the auditor’s representations not be sent to every member of the corporation.  However, unless the Registrar determines otherwise, the corporation must send a copy of the representations in accordance with the auditor’s request.  (CATSI Regulations, subregulation 339-100.06(7)).

 

116.       An auditor has a right to be heard at the general meetings of a CATSI corporation (CATSI Act, paragraph 201-80(3)(b)).  Further, an auditor may require that the auditor’s representations be read out at the general meeting held to consider the resolution to remove the auditor, without prejudice to his or her right to be heard orally or, if a firm is the auditor, to have a member of the firm heard orally on its behalf.  (CATSI Regulations, subregulation 339-100.06(8)).

 

117.       This regulation is based on subsections 329(1) to (4) of the Corporations Act 2001.

 

Regulation 339-100.07 – Auditor ceasing to hold office by reason of unresolved conflict of interest

 

118.       The auditor conflict of interest provisions in subsections 327B(2A) to (2D) of the Corporations Act 2001 apply to an auditor undertaking an audit of a financial report of a CATSI corporation registered as large, or a CATSI corporation having a CGOI in the financial year being reported on of $5 million or more (CATSI Regulations, subregulations 339-100.07(1) and (2)).

 

119.       References in the applied Corporations Act auditor conflict of interest provisions to the company are taken to be references to the corporation, and references to ASIC are taken to be references to the Registrar (CATSI Regulations, subregulation 339‑100.07(2)).

 

120.       If an audit firm ceases to be an auditor of a CATSI corporation at a particular time because of the applied Corporations Act auditor conflict of interest provisions, each member of the audit firm ceases to be an auditor of the corporation (CATSI Regulations, subregulation 339-100.07(3)).

 

Regulation 339-100.08 – Control by another corporation

 

121.       In the event that a corporation begins to be controlled by another corporation, the auditor of the first corporation must retire at the next AGM.  The auditor is, subject to the Regulations, eligible for re-appointment.  This regulation mirrors section 327H of the Corporations Act 2001.

 

Regulation 339-100.09 – Effect of winding up

 

122.       An auditor of a corporation ceases to hold office if a special resolution is passed for the voluntary winding up of the corporation, or an order is made by the Court for the winding up of the corporation.  This regulation mirrors section 330 of the Corporations Act 2001.

 

Regulation 339-100.10 – Surviving or continuing auditor

 

123.       In the event of a vacancy in the office of auditor of a corporation, any surviving or continuing auditor or auditors may act as auditors of the corporation.  This regulation mirrors section 327I of the Corporations Act 2001.

 

Part 7-7 – Modifications of record keeping and reporting requirements

 

Division 368 – Modifications of record keeping and reporting requirements

 

Regulation 368-1.01 – Modification

 

124.       This regulation modifies the Act and provides for a longer period of six months, after the end of the financial year, for a financial report, a directors’ report or an auditor’s report to be lodged with the Registrar.  This period better aligns with subsection 201-150(1) of the Act which provides that an Aboriginal and Torres Strait Islander corporation must hold an AGM within 5 months after the end of its financial year.  (See regulation 330-10.01 which makes similar provision for lodgement of a general report.)

 

Chapter 9 – Lodgments and Registers

 

Part 9-3 – Registers

 

Division 418 – Registers to be kept

 

Regulation 418-10.01 – Information and documents to be kept on the Register of Aboriginal and Torres Strait Islander Corporations

 

125.       Section 418-10 of the CATSI Act provides that the Corporations Register ‘is to include the information or documents specified in the regulations in relation to each Aboriginal and Torres Strait Islander corporation’.  This regulation has the effect that the information and documents listed in Schedule 2 are to be included in the Corporations Register.

 

126.       Schedule 2 is divided into five parts.  Part 1 of the Schedule lists information and documents mentioned in the CATSI Act.  Part 2 of the Schedule lists information and documents mentioned in provisions of these Regulations.  Part 3 of the Schedule lists information and documents mentioned in provisions of the CATSI Transitional Act.  Part 4 of the Schedule lists information and documents mentioned in provisions of the Corporations Act 2001 that are applied to CATSI corporations by the CATSI Act.  Part 5 of the Schedule lists information and documents mentioned in provisions of the Corporations Regulations 2001 that are applied to CATSI corporations by the CATSI Act.

 

Division 421 – What information may a person obtain from the Registrar?

 

Regulation 421-1.01 – Inspection and production of records

 

127.       The effect of this regulation is that, under paragraph 421-1(1)(b) of the CATSI Act, any person has a right to inspect or search the Corporations Register and the Register of Disqualified Officers for any information or document contained in those registers.

 

Regulation 421-1.02 – Exempt documents

 

128.       Paragraph 421-1(1)(a) of the CATSI Act provides that a person may inspect any document lodged with the Registrar except an exempt document.  Under paragraph 421-1(1)(c) of the CATSI Act, a person may also require a copy of, or extract from, such a document.

 

130.       Exempt documents are those mentioned in paragraphs 421-1(4)(a)-(e) of the Act, and any documents specified in the regulations for the purposes of paragraph 421‑1(4)(f).

 

131.       Regulation 421-1.02 has the effect that the documents listed in Schedule 3 to the CATSI Regulations are exempt documents (which a member of the public will therefore have no right to inspect under paragraph 421-1(1)(a) of the CATSI Act).  Schedule 3 is divided into three Parts.  Part 1 of the Schedule lists documents that are mentioned in the CATSI Act.  Part 2 lists documents mentioned in provisions of the Corporations Act that are applied to CATSI corporations by the CATSI Act.  Part 3 lists documents mentioned in provisions of the Corporations Regulations 2001 that are applied to CATSI corporations by the CATSI Act.

 

Chapter 10 – Regulation and enforcement

 

Part 10-2 – Regulation of Aboriginal and Torres Strait Islander corporations

 

Division 439 – Regulation of Aboriginal and Torres Strait Islander corporations

 

Regulation 439-10.01 – Registrar may call a general meeting (other than an AGM)

 

132.       The Registrar may call and arrange to hold a general meeting (other than an AGM) of a CATSI corporation if requested to do so in writing by at least the required number of members (CATSI Act, paragraph 439-10(1)(b)).  The required number is set out in subsection 439-10(9) of the Act.

 

133.       The regulations may prescribe a different number of members than that set out in the Act (CATSI Act, subsection 439-10(10)).  This regulation makes particular provision for this number of members for CATSI corporations of between 2 and 20 members.  For a CATSI corporation with between 2 and 10 members, the prescribed number of members is 1.  For a CATSI corporation with between 11 and 20 members, the prescribed number of members is 3.

 

Part 10-3 – Enforcement

 

Division 447 – Authorised officers

 

Regulation 447-5.01 – Identity cards

 

134.       The form of an identity card issued by the Registrar to authorised officers is prescribed by the regulations (CATSI Act, subsection 447-5(1)).  This regulation prescribes that the form of the identity card is any form that allows the authorised officer’s name to be displayed, allows a recent photograph of the authorised officer to be displayed, allows the date on which the identity card expires to be displayed and includes a statement that the person is an authorised officer for the purposes of the Act.

 

Chapter 11 – External administration

 

Part 11-2 – Special administration

 

Division 487 – Special administration of Aboriginal and Torres Strait Islander corporation

 

Regulation 487-5.01 – Grounds for special administration

 

135.       It is a ground for determining that a CATSI corporation is to be under special administration if at least the required number of members request the Registrar, in writing, to appoint a special administrator (CATSI Act, paragraph 487-5(1)(i)).  The required number is set out in subsection 487-5(4) of the CATSI Act.

 

136.       The regulations may prescribe a different number of members than that set out in the Act (CATSI Act, subsection 487-5(5)).  This regulation makes particular provision for this number of members for CATSI corporations of between 2 and 20 members.  For a CATSI corporation with between 2 and 10 members, the prescribed number of members is 1.  For a CATSI corporation with between 11 and 20 members, the prescribed number of members is 3.

 

Division 499 – Function, duties and powers of special administrator

 

Regulation 499-1.01 – Applying Corporations Act provisions to Aboriginal and Torres Strait Islander corporations that is under special administration

 

137.       The CATSI Act applies certain provisions of the Corporations Act 2001 to CATSI corporations that are under special administration (CATSI Act, subsection 499-10(1)).  The applied Corporations Act provisions may be modified by the regulations (CATSI Act, paragraph 499-10(3)(b)).

 

138.       These applied Corporations Act provisions apply to a CATSI corporation that is under special administration as if a reference to the Registrar is substituted for a reference to ASIC (CATSI Regulations, regulation 499-10.01).

 

Part 11-5 – Winding up

 

Division 526 – Winding up

 

Regulation 526-5.01 – Grounds for Court ordered winding up

 

139.       One of the grounds on which a CATSI corporation may be wound up is that the corporation has failed, for a prescribed period, to lodge any financial or other reports required to be lodged by Part 7-3 of the Act (CATSI Act, paragraph 526-5(k)).  This regulation prescribes that period as 2 years.

 

Chapter 15 – Administration

 

Part 15-2 – Protection of information

 

Division 604 – Protection of information

 

Regulation 604-25.01 – Authorised use or disclosure

 

140.       The CATSI Act protects information received by the Registrar and other persons under the Act from unauthorised use or disclosure (CATSI Act, Division 604).  The Act authorises particular uses or disclosures of protected information (CATSI Act, section 604-25), including to certain persons or bodies prescribed by the regulations (CATSI Act, paragraphs 604-25(4)(f) to (l)).

 

141.       To assist Commonwealth Departments responsible for general policy on Aboriginal and Torres Strait Islander affairs or the administration of programs that relate specifically to Aboriginal or Torres Strait Islander persons, and to assist the Office of the Director of Public Prosecutions, the Registrar may disclose protected information to these agencies for the purposes of them performing their functions or exercising their powers.  The disclosure of protected information is an authorised disclosure if made to an Agency Head of, or an APS employee in, an Agency (within the meaning of the Public Service Act 1999) that is prescribed by the regulations for the purposes of performing the functions, or exercising the powers, of the Agency (CATSI Act, paragraph 604-25(4)(f)).  These prescribed Agencies are each Department of State that is responsible for general policy on Aboriginal and Torres Strait Islander affairs, each Department of State that is responsible for the administration of a program that relates specifically to Aboriginal or Torres Strait Islander persons and the Office of the Director of Public Prosecutions (CATSI Regulations, subregulation 604-25.01(1)).

 

142.       To assist the Australian Federal Police (AFP), the Registrar may disclose protected information to the AFP for the purposes of the AFP performing its functions or exercising its powers.  The disclosure of protected information is an authorised disclosure if made to a Chief Executive, or an officer or employee, of a prescribed Agency (within the meaning of the Financial Management and Accountability Act 1997) that is prescribed by the regulations for the purposes of performing the functions, or exercising the powers, of the Agency (CATSI Act, paragraph 604‑25(4)(g)).  The Australian Federal Police is prescribed (CATSI Regulations, subregulation 604-25.01(2)).

 

143.       To assist prescribed State Departments responsible for general policy on Aboriginal and Torres Strait Islander affairs, the Registrar may disclose protected information to these Departments for the purposes of the Departments performing their functions.  The disclosure of protected information is an authorised disclosure if made to the head (however described), or an officer or employee, of a Department of State of a State or Territory that is prescribed by the regulations for the purposes of performing the functions, or exercising the powers, of the Department (CATSI Act, paragraph 604-25(4)(i)).  Each Department of State of a State or Territory that is responsible for general policy on Aboriginal and Torres Strait Islander affairs is prescribed (CATSI Regulations, subregulation 604-25.01(3)).

 

144.       To assist prescribed State Departments responsible for the administration of indigenous lands legislation, the Registrar may disclose protected information to these Departments for the purposes of the Departments performing their functions.  The following State Departments are expressly prescribed under paragraph 604-25(4)(i) of the CATSI Act:

·                    the Department of State of New South Wales that is responsible for the administration of the Aboriginal Land Rights Act 1983 (NSW) (CATSI Regulations, paragraph 604-25(4)(a));

·                    each Department of State of Victoria that is responsible for the administration of any of the Aboriginal Land (Manatunga Land) Act 1992, the Aboriginal Land (Northcote Land) Act 1989, the Aboriginal Lands (Aborigines’ Advancement League) (Watt Street, Northcote) Act 1982, the Aboriginal Lands Act 1970, or the Aboriginal Lands Act 1991 (CATSI Regulations, paragraph 604-25(4)(b));

·                    each Department of State of Queensland that is responsible for the administration of either the Aboriginal Land Act 1991 (Qld) or the Torres Strait Islander Land Act 1991 (Qld) (CATSI Regulations, paragraph 604-25(4)(c));

·                    the Department of State of Western Australia that is responsible for the administration of the Aboriginal Affairs Planning Authority Act 1972 (WA) (CATSI Regulations, paragraph 604-25(4)(d));

·                    the Department of State of South Australia that is responsible for the administration of the Aboriginal Lands Trusts  Act 1966 (SA) (CATSI Regulations, paragraph 604-25(4)(e));

·                    the Department of State of Tasmania that is responsible for the administration of the Aboriginal Lands Act 1995 (Tas) (CATSI Regulations, paragraph 604‑25(4)(f)).

 

145.       To assist State and Territory police and prosecutorial agencies, the Registrar may disclose protected information to those agencies for the purposes of the agencies performing their functions.  The disclosure of protected information is an authorised disclosure if made to the head (however described), or an officer or employee, of a body prescribed by the regulations and established for a public purpose by or under a law of a State or Territory (including a local governing body) for the purposes of performing functions conferred on the body by a law of the State or Territory (CATSI Act, paragraph 604-25(4)(j)).  The prescribed agencies are the police force or service of a State, the Northern Territory Police Force and an authority of a State or Territory that has functions and powers similar to those of the Director of Public Prosecutions of the Commonwealth (CATSI Regulations, subregulation 604-25.01(5)).

 

146.       To assist legal and accounting bodies in their disciplinary activities, the Registrar may disclose protected information to assist a prescribed professional legal or accounting body to perform its disciplinary function.  Such disclosure is authorised if made to a professional disciplinary body prescribed by the regulations for the purposes of performing one of its functions or exercising one of its powers (CATSI Act, paragraph 604-25(4)(k)).  The prescribed professional disciplinary bodies are CPA Australia, the Institute of Chartered Accountants in Australia, the National Institute of Accountants, the New South Wales Bar Association, the Law Society of New South Wales, the Victorian Bar Incorporated, the Law Institute of Victoria, the Bar Association of Queensland, the Queensland Law Society, the Legal Practice Board of Western Australia, the Law Society of South Australia, the Law Society of Tasmania, the Law Society of the Australian Capital Territory and the Law Society Northern Territory (CATSI Regulations, subregulation 604-25.01(6)).

 

147.       To assist Indigenous Business Australia (IBA) in its functions of promoting and encouraging Aboriginal and Torres Strait Islander self-management and economic self-sufficiency and creating opportunities for Aboriginal and Torres Strait Islander individuals and communities to build assets and wealth, the Registrar may disclose protected information to IBA for the purpose of performing its functions.  Such disclosure is authorised if made to a prescribed person or body for the prescribed purposes of the person or body (CATSI Act, paragraph 604-25(4)(l)).  IBA is a prescribed body and the purpose of performing the functions of IBA under the Aboriginal and Torres Strait Islander Act 2005 is prescribed (CATSI Regulations, subregulation 604-25.01(7)).

 

148.       To assist the Indigenous Land Corporation (ILC) in its functions of  assisting Indigenous Australians to acquire land and manage Indigenous-held land, the Registrar may disclose protected information to the ILC for the purpose of performing its functions.  Such disclosure is authorised if made to a prescribed person or body for the prescribed purposes of the person or body (CATSI Act, paragraph 604-25(4)(l)).  The ILC is a prescribed body and the purpose of performing the functions of the ILC under the Aboriginal and Torres Strait Islander Act 2005 is prescribed (CATSI Regulations, subregulation 604‑25.01(8)).

 

Part 15-6 – Regulations

 

Division 663 – Regulations

 

Regulation 633-1.01 – General regulation making power

 

149.       The CATSI Act applies certain provisions of the Corporations Act 2001.  A number of provisions of the CATSI Act allow regulations to modify these applied Corporations Act provisions (CATSI Act, paragraphs 45-1(2)(b), 499-10(3)(b), 516‑1(2)(b), 521-1(2)(b) and 526-35(2)(b)).

 

150.       This regulation makes the modifications to the applied Corporations Act provisions that are set out in the items of Schedule 4.

 

Chapter 16 – Registrar and Deputy Registrars of Aboriginal and Torres Strait Islander Corporations

 

Part 16-3 – Registrar’s functions and powers

 

Division 658-1 – Registrar’s functions and powers

 

Regulation 658-1.01 – Functions of the Registrar

 

151.       This regulation prescribes another function of the Registrar.  The Registrar’s functions and powers are set out in Division 658 of the CATSI Act.  Other functions may be prescribed by regulation (CATSI Act, paragraph 658-1(1)(k)).

 

152.       This new function will allow the Registrar to make available, to the public, documents or information in documents that were previously held by the Registrar of Aboriginal Corporations under the ACA Act.  This will preserve public access to these documents after the commencement of the CATSI Act on a similar basis to that which existed under the ACA Act.  The Registrar of Aboriginal Corporations under the ACA Act could permit a person at all reasonable times to inspect all or any of the documents filed or otherwise lodged with the Registrar in respect of an Aboriginal corporation (Aboriginal Councils and Associations Regulations, regulation 14).

 

 

Schedule 1 – Availability of names and consent required

 

Part 1 – Rules for ascertaining whether names are identical

 

153.       For subregulation 85-5.01(1), this Part provides rules for ascertaining whether a name is identical to another name.  This Part is based on item 6101 and table of Part 1 of Schedule 6 of the Corporations Regulations 2001.

 

Item 101

 

154.       This item and table set out rules for ascertaining whether names are identical by providing what matters are to be disregarded in any comparison.

 

Part 2 – Names unacceptable for registration

 

155.       For subregulation 85-5.01(2), this Part provides rules for determining whether a name is unacceptance for registration.  This Part mirrors item 6203 of Part 2 of Schedule 6 of the Corporations Regulations 2001.

 

Item 201

 

156.       Under paragraph 201(a), a name will be unacceptable for registration if it is, in the opinion of the Registrar, undesirable or likely to be offensive to members of the public.

 

157.       Under paragraph 201(b), a name is unacceptable for registration if it contains a word, phrase or abbreviation specified in Part 3 (Restricted words and phrases) of Schedule 1, or contains a word, phrase or abbreviation with a similar meaning.

 

158.       Under paragraph 201(c), a name is unacceptable for registration if it includes the word ‘Commonwealth’ or ‘Federal’, unless the Registrar is satisfied that the word is used in a geographical context.

 

159.       Under paragraph 201(d), a name is unacceptable for registration if the context in which it is proposed to be used suggests a connection with the Crown or government, where that connection does not exist.  In this paragraph, government means the Commonwealth Government, the Government of a State or Territory, a municipal or other local authority, the Government of any other part of the Queen’s dominions, possessions or territories, a department, authority or instrumentality of the Commonwealth Government, a department, authority or instrumentality of the Government of a State or Territory, or the government of a foreign country.

 

160.       Under paragraph 201(e), a name is unacceptable for registration if the context in which it is proposed to be used suggests a connection with a member of the Royal Family, the receipt of Royal patronage, an ex-servicemen’s organisation or Sir Donald Bradman, where that connection does not exist.

 

161.       Under paragraph 201(f), a name is unacceptable for registration if the context in which it is proposed to be used suggests that the members of an organisation are totally or partially incapacitated, if those members are not so affected.

 

Item 202

 

162.       Paragraph 201(b) does not apply where the letters ‘ADI’ are used as part of another word.  This item mirrors subregulation 2B.6.02(2) of the Corporations Regulations 2001.

 

Item 203

 

163.       Paragraph 201(c) does not apply if the Registrar is satisfied that the word ‘Commonwealth’ or ‘Federal’ is used in a proposed name of a CATSI corporation in a geographical context.  This item mirrors item 6205 of Part 2 of Schedule 6 to the Corporations Regulations 2001.

 

Part 3 – Restricted words and phrases

 

164.       Part 3 contains a list of restricted words and phrases which are unacceptable for registration in the name of a CATSI corporation.  It combines the lists in Parts 3 and 5 of Schedule 6 to the Corporations Regulations 2001.

 

Part 4 – Consent required to use restricted words and phrases

 

165.       Part 4 contains a list of words and phrases requiring written Ministerial consent to accompany an application for registration or an application for name change, for the word or phrase to be used or included in the name of a CATSI corporation.  Part 4 also specifies which Minister to obtain that consent from.  This Part mirrors Part 4 of Schedule 6 to the Corporations Regulations 2001.

 

Schedule 2 – Information and documents

 

Part 1 – Information or documents mentioned in the Act

 

166.       For paragraph 418-10.01(a) of the CATSI Regulations, this Part lists information or documents mentioned in the CATSI Act.

 

Part 2 – Information or documents mentioned in these Regulations

 

167.       For paragraph 418-10.01(b) of the CATSI Regulations, this Part lists information or documents mentioned in the Regulations.

 

Part 3 – Information or documents mentioned in Schedule 3 to the Corporations (Aboriginal and Torres Strait Islander) Consequential, Transitional and Other Measures Act 2006

 

168.       For paragraph 418-10.01(c) of the CATSI Regulations, this Part lists information or documents mentioned in Schedule 3 to the CATSI Transitional Act.

 

Part 4 – Information or documents mentioned in the Corporations Act

 

169.       For paragraph 418-10.01(d) of the CATSI Regulations, this Part lists information or documents mentioned in a provision of the Corporations Act 2001, as it applies to a CATSI corporation.

 

Part 5 – Information or documents mentioned in the Corporations Regulations

 

170.       For paragraph 418-10.01(e) of the CATSI Regulations, this Part lists information or documents mentioned in a provision of the Corporations Regulations 2001, as it applies to a CATSI corporation.

 

Schedule 3 – Exempt documents

 

171.       For regulation 421-1.02, this Schedule lists the exempt documents.

 

Schedule 4 – Modification of applied Corporations Act provisions

 

172.       This Schedule lists modifications to particular applied Corporations Act provisions.

 

173.       Item 1 is a technical modification.  It inserts a definition of “CATSI Act” and “CATSI Regulations” in the applied Corporations Act provisions.

 

174.       Item 2 inserts “special administrator” in subsection 425(5) of the applied Corporations Act arrangements and reconstructions provisions.  It gives the special administrator the same right as a liquidator, administrator of a corporation, administrator of a deed of corporation arrangement and the Registrar to apply to a court to make, vary or amend an order concerning a receiver’s remuneration.  Item 10 makes the same modification to the applied Corporations Act receiver provisions.

 

175.       Many provisions in the CATSI Act have corresponding equivalent provisions in the Corporations Act 2001.  In cases where applied Corporations Act provisions refer to Corporations Act provisions which have CATSI Act equivalents, the CATSI provision should apply and be referred to instead.  Items 3, 5, 6, 7, 11, 12, 14, 15, 17, 19, 22, 24, 25, 26, 28, 29, 30, 31, 32, 33, 34, 37, 38, 39 and 43 modify such applied Corporations Act provisions by changing legislative references to point to the equivalent provision in the CATSI Act.

 

176.       Item 4 is a technical modification.  It modifies the reference to “this Act” in paragraph 440J(2)(c) of the applied Corporations Act provisions applying to CATSI corporations under special administration to make it refer to the CATSI Act, the CATSI Regulations and the applied Corporations Act provisions instead.

 

177.       Item 8 in effect omits paragraph 443D(b) of the Corporations Act 2001 from the applied Corporations Act provisions applying to CATSI corporations under special administration.  If paragraph 443D(b) were applied, remuneration would be fixed pursuant to section 449E of the Corporations Act 2001 by resolution of company creditor’s or by the court.  However, the remuneration of special administrators is fixed by the Registrar under section 511-1 of the CATSI Act.

 

178.       Item 9 is a technical modification.  It modifies the reference to “this Act, the regulations or the rules” in subparagraph 423(1)(a)(iv) of the applied Corporations Act receiver provisions to make it refer to the CATSI Act, the CATSI Regulations, any provision of this Act applied by a provision of the CATSI Act or the rules instead.

 

179.       Item 13 is a technical modification.  It modifies the reference to “this Act” in paragraph 440J(2)(c) of the applied Corporations Act administration provisions to make it refer to the CATSI Act, the CATSI Regulations and any provision of this Act applied by a provision of the CATSI Act instead.

 

180.       For the applied Corporations Act winding up provisions, item 16 inserts a definition of “registered liquidator” in section 9 of the applied Corporations Act.  The new definition ensures that liquidation of CATSI corporations will be carried out by liquidators registered by ASIC under Part 9.2 of the Corporations Act 2001.  The Registrar will not conduct a scheme of registering liquidators.

 

181.       Some of the applied Corporations Act provisions (if unmodified) would make reference to provisions in the Corporations Act that were not intended to apply to CATSI corporations.  Items 17, 19, 20, 21, 22, 25 and 26 modify these applied Corporations Act provisions by removing legislative references to provisions in the Corporations Act that do not apply to CATSI corporations.

 

182.       Item 23 modifies paragraph 473(5)(a) of the applied Corporations Act winding up provisions which concerns the right of corporation members to apply to a court to review the remuneration of a liquidator.  This item substitutes a condition based on a percentage of membership of the corporation for a condition based on shareholdings representing a percentage of the issued capital of the company.  CATSI corporations do not have shareholdings.

 

183.       Item 27 modifies paragraph 532(1)(b) of the applied Corporations Act winding up provisions.  The substitution allows the Registrar to approve, in writing, a person to act as a liquidator for a particular CATSI corporation.  This provision could be used where a liquidator registered by ASIC is not available to conduct the liquidation of a CATSI corporation.  (Note item 16, Schedule 4 of the CATSI Regulations.)

 

184.       If applied, some provisions in Part 5.8 of the applied Corporations Act winding up provisions would relate to investigations carried out under the Australian Securities and Investments Commission Act 2001 or Part VII of the Companies Act 1981.  CATSI corporations are not be subject to these investigations.  Items 35, 36, 40 and 42 omit these provisions from the applied Corporations Act winding up provisions.

 

185.       Item 41 modifies paragraph (e) of the definition of “appropriate officer” in subsection 589(5) of the applied Corporations Act winding up provisions by deleting the reference to the National Companies and Securities Commission (NCSC) and some surrounding words.

 

186.       Item 44 omits subsection 589(6) of the Corporations Act 2001 from the applied Corporations Act winding up provisions.  Subsection 589(6) is an application provision for Part 5.8 of the Corporations Act 2001 concerning companies first incorporated other than under the Corporations Act 2001.  It should not be applied to CATSI corporations.

 

187.       Item 45 limits the application of offence provisions in paragraphs 590(1)(c), (g) and (h) of the applied Corporations Act winding up provisions to conduct or representations after the commencement of the CATSI Act.

 

188.       Item 46 omits sections 592 to 594 of the Corporations Act 2001 from the applied Corporations Act winding up provisions.  These sections concern liabilities for debts arising before 23 June 1993 and should not be applied to CATSI corporations.