Proposed Amendments to the Corporations Act

A discussion paper has been released relating to the test for payment of dividends in the Corporations Act 2001, parent entity reporting requirements and the conditions for changing the financial year of a company.

The dividends test was amended in June 2010 to replace the profits-based test with a net assets test. Stakeholders have raised concerns about various aspects of the new dividends test. The discussion paper provides options for dealing with stakeholder concerns. The other changes canvassed in the paper would allow a parent entity to prepare it own financial statements where such statements are required or considered desirable and correct a technical error in the conditions for changing the financial year of a company.