Foreign interests wishing to carry on business in Australia may do through a number of means, but primarily will choose among:
• a foreign corporation, operating alone or as a joint venture partnership;
• controlling a subsidiary incorporated in Australia as a domestic trading or financial corporation;
• establishing or acquiring a public company on a listed market such as the Australian Stock Exchange.
Different Australian statutory obligations will apply to each scenario, but consistent amongst all of them will be an obligation in most circumstances to disclose the financial standing of the Australian based company on a relatively frequent basis.
Foreign companies wishing to carry on business in Australia do need to register under Part 5B.2 of the Corporations Act.
If a foreign corporation is a disclosing entity, public company, large proprietary company or registered scheme, it must prepare a financial report and directors’ report each financial year.  The annual report must be lodged with ASIC within three months after the end of the financial year. The financial report must comply with accounting standards and give a true and fair view of the company’s financial position and performance. Listed companies must also produce an audited financial report and a directors’ report on a half-yearly basis, to be lodged with ASIC within 75 days after the end of the half-year.
The Australian Stock Exchange (ASX) Listing Rules provide for further financial disclosure. The Rules include the obligation to keep shareholders fully informed of any price-sensitive information of which the company becomes aware, (similar to the notice on significant matters rule in China and Hong Kong,) and the obligation to disclose necessary information to the ASX to correct a false market in its securities.
Listed entities, directors and those who advise them obtained much clearer and more detailed information to help them understand and comply with their continuous disclosure obligations with the release of the ASX’s final revised Guidance Note 8 in May 2013.
Listed companies are also subject to period disclosure obligations: they must report their full-year results to the ASX within two months after the end of the accounting period, and similarly must provide their half-year results within two months after the end of the period.
While the ASX has used its power of suspension and delisting in relation to smaller listed companies failing to lodge half-year and annual reports, the ASX and ASIC usually prefer settlement over litigation. ASIC has previously prosecuted listed companies and their directors for failure to comply with statutory annual reporting provisions.
Listed companies are also subject to some extent to the ASX’s Corporate Governance Principles. All recent Chinese listings have – at least publicly – recognised the importance of good corporate governance and establishing the accountability of the Board and management, and have established a corporate governance structure framework that is consistent with the ASX Corporate Governance Principles and Recommendations.
10 January 2014
Dominique Hogan-Doran is in Hong Kong this week as part of International Financial Week, and will present at the Australasian Financial Forum on the challenges for Chinese investment in Australia.
This blog does not constitute personal legal advice.
 As to the feedback received, see http://www.asx.com.au/documents/about/GN8_Consultation_Response.pdf
 Australian Securities Exchange Listing Rule 4.3B.
 Gill North, Company Disclosure in Australia (Thomson Reuters, Sydney, 2013), 57.
 Listed corporations must include in their annual report a statement disclosing the extent to which it has followed the recommendations and give reasons for those it has not followed:ASX LR 4.10.3.