Footnotes

Chapter 1 - Scope and purpose of the Inquiry

[1]           Parliamentary Joint Committee on Corporations and Securities, Report on the Annual Report of the Australian Securities and Investments Commission and Other Bodies: 1995-96, June 1997, p 7. See also Report on the Draft Second Corporate Law Simplification Bill 1996, November 1996, pp 38-41.

[2]           Hansard, House of Representatives, 12 December 1996, Questions on Notice, p 8648.

[3]           See Parliamentary Joint Statutory Committee on Corporations and Securities, Report on the Corporations Law Amendment (Employee Entitlements) Bill 2000, April 2000, pp 7-13. The Act increased the protection for employee entitlements as well as extending the duty on directors not to engage in insolvent trading.

[4]           See Professor R Baxt, Do directors owe a duty to employees? Implications of amendments to the Corporations Law and other developments, Law Council of Australia, 22 July 2000.

[5]           Parliamentary Joint Committee on Corporations and Securities, Report on the First Corporate Law Simplification Bill 1994, 2 March 1995, p 16.

[6]           Hansard, House of Representatives, 9 March 1995, p 1988.

[7]           The Australian Chamber of Commerce and Industry and the Motor Trades Association of Australia stated that “For a number of companies with shareholding owned by family members and with borrowings mainly confined to financial institutions there appears to be a significant new compliance cost without any corresponding net public benefit” .

[8]           See Parliamentary Joint Committee on Corporations and Securities, Report on Items 1-4, Schedule 4 of the First Corporate Law Simplification Bill 1995, 30 August 1995, pp 13-16.

[9]           See First Corporate Law Simplification Bill 1995, Amendments to be Moved on Behalf of the Government.

Chapter 2 - Operation of the large/small test

[1]           Parliamentary Joint Committee on Corporations and Securities, Report on the First Corporate Law Simplification Bill 1994, 2 March 1995, p 31.

[2]           Explanatory Memorandum, paragraphs 3.15, 6.11.

[3]           Section 45A(6).

[4]           Section 45A(5).

[5]           Section 292(2).

[6]           Section 293(1).

[7]           Section 286(1).

[8]           Australian Securities Commission, Report to the Senate: Review of the First Two years of Operation of Certain Amendments to the Corporations Law by the First Corporate Law Simplification Act 1995, 5 June 1998, p 1.

[9]           Australian Securities and Investments Commission, Submission 6, p 3.

[10]         Australian Securities Commission, Report to the Senate: Review of the First Two years of Operation of Certain Amendments to the Corporations Law by the First Corporate Law Simplification Act 1995, 5 June 1998, p 13.

[11]         Australian Securities and Investments Commission, Submission 6, p 4.

[12]         Correspondence to PJSC, 17 July 2000.

[13]         See Australian Securities Commission, Report to the Senate: Review of the First Two years of Operation of Certain Amendments to the Corporations Law by the First Corporate Law Simplification Act 1995, 5 June 1998, p 15.

Chapter 3 - Issues arising from the large/small test

[1]           Office of Small Business, Department of Employment, Workplace Relations and Small Business, Submission 5, p 3.

[2]           Office of Small Business, Department of Employment, Workplace Relations and Small Business, Submission 5, p 2.

[3]           Motor Trades Association of Australia, Submission 7, p 15.

[4]           Motor Trades Association of Australia, Submission 7, p 8.

[5]           Correspondence to the Chairman of the PJSC, 7 July 2000.

[6]           Office of Small Business, Department of Employment, Workplace Relations and Small Business, Submission 5, p 3.

[7]           National Institute of Accountants, Submission 8, p 8.

[8]           National Institute of Accountants, Submission 8, p 8. See also Mr Gerard Meade, Committee Hansard, 30 June 2000, CS32.

[9]           Mr Stuart Grant, Committee Hansard, 28 June 2000, CS2-3.

[10]         Gram Engineering Pty Ltd, Submission 13, p 2.

[11]         See Price Waterhouse Coopers, Submission 1, pp 5-7.

[12]         Office of Small Business, Department of Employment, Workplace Relations and Small Business, Submission 5, p 3.

[13]         Mr Lance Balcombe, Committee Hansard, 30 June 2000, CS 65.

[14]         AAT No T98/130, 9 September 1999.

[15]         Incat Australia Pty & Anor v Australian Securities and Investments Commission, No T23 of 1999, 4 February 2000.

[16]         AAT No Q1998/296, 25 June 1999, paragraph 27.

[17]         See Atkinson Gibson, Submission 2, p 2.

[18]         Australian Securities Commission, Report to the Senate: Review of the First Two years of Operation of Certain Amendments to the Corporations Law by the First Corporate Law Simplification Act 1995, 5 June 1998, pp 18-19.

[19]         Australian Securities and Investments Commission, Submission 6, pp 5-6.

[20]         See for example CPA Australia and the Institute of Chartered Accountants in Australia, Submission 10, pp 9-10 and Atkinson Gibson, Submission 2, pp 1-2.

[21]         Mr Gerard Meade, Committee Hansard, 30 June 2000, CS 33.

[22]         Australian Securities and Investments Commission, Submission 6, p 7.

[23]         See Mr David Knott, Committee Hansard, 30 June 2000, CS 51.

[24]         Mr Tom Ravlic, Submission 3, p 1.

[25]         National Institute of Accountants, Submission 8, pp11-12. See also Mr Gavan Ord, Committee Hansard, 30 June 2000, CS 44.

[26]         See Mr Gerard Meade, Committee Hansard, 30 June 2000, CS 33.

[27]         CPA Australia and the Institute of Chartered Accountants in Australia, Submission 10, p 6.

[28]         Motor Trades Association of Australia, Submission 7, p 17.

[29]         Office of Small Business, Department of Employment, Workplace Relations and Small Business, Submission 5, p 3.

[30]         Price Waterhouse Coopers, Submission 1, p 2.

[31]         Mr Ian Langfield-Smith, Submission 11, p 5.

[32]         National Institute of Accountants, Submission 8, p 2.

[33]         Price Waterhouse Coopers, Submission 1, p 2.

[34]         Australian Institute of Company Directors, Submission 9, p 2.

[35]         Mr James Service, Committee Hansard, 28 June 2000, CS 4.

Chapter 4 - Conclusions and recommendations

[1]           See Australian Securities and Investments Commission, Submission 6, p 7 and CPA Australia and the Institute of Chartered Accountants in Australia, Submission 10, pp 7-9.

[2]           Ernst & Young, Submission 14, p 2.

[3]           See Australian Securities and Investments Commission, Submission 6, p 7.

[4]           See Australian Securities and Investments Commission, Submission 6, Attachment 4.

[5]           Australian Securities and Investments Commission, Submission 6, p 8. See also Mr David Knott, Committee Hansard, 30 June 2000, CS 51.

[6]           Australian Securities and Investments Commission, Submission 6, Attachment 4, p 4.

[7]           These provisions reflect the recommendations by the PJSC in its 30 August 1995 report.

[8]           See for example Mr Ian Langfield-Smith, Committee Hansard, 28 June 2000, CS 15-17 and Mr Reece Agland, Committee Hansard, 30 June 2000, CS 43.

[9]           Atkinson Gibson, Submission 2, p 2. See also National Institute of Accountants, Submission 8, p 10.

[10]         For example, ASIC Policy Statement 43, Accounts and audit relief, paragraph 27, describes the only circumstance where it will grant relief on the grounds of ‘competitive disadvantage’.

[11]         National Institute of Accountants, Submission 8, p 10.

[12]         See Parliamentary Joint Committee on Corporations and Securities, Report on Items 1-4, Schedule 4 of the First Corporate Law Simplification Bill 1995, 30 August 1995, pp 15-16.

[13]         Australian Securities Commission, Report to the Senate: Review of the First Two years of Operation of Certain Amendments to the Corporations Law by the First Corporate Law Simplification Act 1995, 5 June 1998, p 18.

[14]         Atkinson Gibson, Submission 2, pp 1-2.

[15]         Section 588FB of the Law defines ‘uncommercial transaction’ as a transaction that a reasonable person in the company’s circumstances would not have entered into having regard to the benefits and detriment to the company of entering into a transaction and the respective benefits to other parties to the transaction.

[16]         See Parliamentary Joint Statutory Committee on Corporations and Securities, Report on the Corporations Law Amendment (Employee Entitlements) Bill 2000, April 2000.

[17]         Australian Securities Commission, Report to the Senate: Review of the First Two years of Operation of Certain Amendments to the Corporations Law by the First Corporate Law Simplification Act 1995, 5 June 1998, p 20.

[18]         This issue was considered by the PJSC in its March 1995 report.  In that report the PJSC stated: “The Committee supports the views put to it...that the reporting entity test does not provide a test of sufficient certainty to allow an objective assessment to be made of whether a company falls within the entity test, when compared with the small/large distinction provided in the Bill.” See Parliamentary Joint Committee on Corporations and Securities, Report on the First Corporate Law Simplification Bill 1994, 2 March 1995, p 16.

[19]         National Institute of Accountants, Submission 8, p 8.

Labor Senators' and Members' Minority Report

[1] The Labor members of the Committee note that section 293 of the Corporations Law permits shareholders with at least 5% of the votes in a small proprietary company to direct the company to prepare a financial report.

[2] ASIC, Submission to the Parliamentary Joint Statutory Committee on Corporations and Securities – Review of Aspect of the Regulation of Proprietary Companies, 21 March 2000,  p. 2

[3] Parliamentary Joint Committee on Corporations and Securities, Report on the First Corporate Law Simplification Bill 1994, 2 March 1995, p.16

[4] Hansard, 28 June 2000, pg. CS 3-4

[5] ASIC, Submission to the Parliamentary Joint Statutory Committee on Corporations and Securities – Review of Aspect of the Regulation of Proprietary Companies, 21 March 2000,  p. 3

[6] Ibid., p. 9