Companies Act 2015 - Effective 1 January...

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Document Classification: KPMG Confidential

© 2019 KPMG, a Fiji partnership, is part of the KPMG International network. KPMG International Cooperative (“KPMG International”) is a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International").

Companies Act 2015- Effective 1 January 2016Presentation to Nadi Chamber of Commerce

23 February 2019Renu Chand- KPMG

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Companies Act 2015 – effective 1 January 2016

Disclaimer

The information contained herein is of a general nature and is not intended to address thecircumstances of any particular individual or entity. Although we endeavour to provide accurate andtimely information, there can be no guarantee that such information is accurate as of the date it isreceived or that it will continue to be accurate in the future. No one should act on such informationwithout appropriate professional advice after a thorough examination of the particular situation.

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Outline Overview

Incorporation of Companies

Prescribed Registration Fees (Regulations)

Financial Reporting

Transitional Rules

Annual General Meetings (AGM)

Your Checklist

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Overview

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• Companies Act 2015 effective from 1 January 2016

• Companies Act 2015 replaces:

Companies Act 1983

Capital Markets Decree 2009

Unit Trusts Act

Registration of Business Names Act

• Objective is to provide for the regulation of companies “Carrying on Business” in Fiji.

Companies Act 2015 – effective 1 January 2016- Overview

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Incorporation of Companies

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Companies Act 2015 – effective 1 January 2016- Incorporation of Companies

Types of Companies:

i) Private Companies

Small Private Company (consolidated turnover ≤ $5 Million)

Medium Private Company (consolidated turnover > $5 Million to ≤ $20 Million)

Large Private Company (consolidated turnover > $20 Million)

ii) Public Company and Management Investment Schemes

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• Articles of Association as the governing document:

Companies incorporated under the old Act cannot automatically adopt all the provisions under the New Act.

Existing Articles would need to be amended (e.g. Quorum) Private Company Public Company

Members 1 (less than 50)Directors 1 (1 resident) 3 (2 Resident)Secretary • No requirement

• If appointed then 1 (1 resident)• 1 Secretary (resident)

Address • Registered Office• Place of Business

• Registered Office• Place of Business

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• “Ordinarily Reside – being present and living in Fiji for an aggregate period of not less than 6 months out of the 12 months immediately preceding.”

• Company Name

Public – Limited

Private – Pte Limited/Ltd

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Prescribed Registration Fees (Regulations)

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Companies Act 2015 – effective 1 January 2016- Prescribed Registration Fees (Regulations)• Depends on Company’s Date of Incorporation (DOI)

• Payable within 28 days of anniversary DOI, example, DOI on 1 March, fee is payable by 28 March each year.

• Penalty provision applies.

Type of Company Prescribed Annual Registration fees (F$VEP)

Penalty(F$VEP)

Small Private Company $10 $100

Company Limited by Guarantee (Granted a licence under section 31 of the Act)

$10 $500

Foreign Company $1,000 $1,000

Listed Company $1,000 $1,000

Company not listed above $500 $500

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Companies Act 2015 – effective 1 January 2016- Prescribed Registration Fees (Regulations)

• Exemption for Company’s with annual gross turnover ≤ $500K.

Statutory declaration required

• Form R1 needs to be completed and filed at time of making payment.

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Financial Reporting

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Companies Act 2015 – effective 1 January 2016- Financial Reporting

• Financial records

• Types of company

• Consolidated revenue

• Small Private Companies

• Medium Private Companies

• Public company/Large Private Companies/MIS

• Contents of Directors Report

• Contents of Directors Declaration

• Solvency Resolution

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Companies Act 2015 – effective 1 January 2016- Financial Reporting Financial Records:

In English

Correctly explaining all transactions

Enable true and fair financials to be prepared

Retained for 7 years

Kept at registered office

Director access – Direct

• Another person on their behalf by Court Order

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Companies Act 2015 – effective 1 January 2016- Financial Reporting Types of Company

Consolidated Revenue

Public Company No minimum

Large Private Company > $20 million

Managed Investment Scheme No minimum

Medium Private Company > $5 million < and equal to $20 million

Small Private Company < and equal to $5 million

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Companies Act 2015 – effective 1 January 2016- Financial Reporting Consolidated Revenue

Consolidated revenue implies control which is defined in Section 9:

Controls or is in a position to control the composition of the Board

In a position to cast or control the casting of more than one half of maximum number of votes that might cast to a General Meeting, or

Holds or controls more than one-half of the issued share capital

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Companies Act 2015 – effective 1 January 2016- Financial Reporting Small Private Companies

• No preparation/lodgement requirements

•Directed to do so by members with at least 10 % of votes (financial statements not required to be audited)

•Directed to do so by Registrar (pro forma financial statements)

•Controlled by a person or Corporation incorporated outside Fiji (pro forma financial statements)

• Solvency resolution to be passed by directors within 2 months of year end

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Companies Act 2015 – effective 1 January 2016- Financial Reporting Medium Private Companies

• Pro forma financial statements that comply with Accounting Standards (Form A67)

• True and correct

• Solvency resolution to be passed by directors within 2 months of year end

• Lodgement of pro forma financial statements with Registrar within 4 months after the year end (Form A68)

• Registrar can grant a further extension for additional two months

• Penalty provisions

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Companies Act 2015 – effective 1 January 2016- Financial Reporting Public Companies/Large Private Companies/MIS

• Audited Financial Statements that comply with accounting standards

• Directors Report

• Directors Declaration

• Auditor required to provide directors with Auditors Independence Declaration

• Audit Report

• Annual report to members 21 days before AGM or within 4 months after year end (Public Companies)

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Companies Act 2015 – effective 1 January 2016- Financial Reporting Public Companies/Large Private Companies/MIS (cont’d)

• Annual report to members within 4 months of year end (Large Private Companies)

• Lodgement with Registrar within 4 months after end of financial year (Form A68)

• Solvency declaration NOT required if financial statements lodged with the Registrar within the last financial year

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Companies Act 2015 – effective 1 January 2016- Financial Reporting Contents of Director Report

- Sufficiently detailed to allow informed access of:

• Operations

• Financial statements and performance

• Going concern

• Dividends (paid or proposed)

• Details of the consolidated entity (if required)

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Companies Act 2015 – effective 1 January 2016- Financial Reporting Contents of Director Declaration

• Ability to pay debts as and when they are due

• Accounts prepared in accordance with Companies Act 2015

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Companies Act 2015 – effective 1 January 2016- Financial Reporting Solvency Resolution

• Negative Solvency Resolutions must be notified to the Registrar within the 7 days of the Resolution being passed (Form A70)

• Also required to notify Registrar if Directors have not passed a solvency resolution within 2 months of anniversary date of incorporation

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Transitional Rules

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Companies Act 2015 – effective 1 January 2016- Transitional Rules• An existing company will be deemed to have been formed and registered under

the new Act:

Old Act Companies Act 2015

Private company Private Company

Company limited by shares, other than a private company

Public Company

Unlimited Company Unlimited Liability Company

Company Limited by Guarantee Company Limited by Guarantee

Company Limited by having Share Capital

Company Limited by Shares and Guarantee

Foreign Company Foreign Company

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Companies Act 2015 – effective 1 January 2016- Transitional Rules• Existing companies would require a review of their Articles Of Association and

necessary amendments to comply with the provisions of this Act.

E.g. use of common seal /single shareholder and Director, appointments and quorum .

• Existing private companies have 3 years (by December 2018) to change its stationery, letterheads, signage to reflect company name “Pte”.

- No requirement for any filings with Companies Office

• No authorized capital or par value of shares in existing company.

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Companies Act 2015 – effective 1 January 2016- Transitional Rules• Financial Reporting

•Existing Company’s financial year end within one year of 1 January 2016, a financial report prepared in accordance with the old Act is taken to comply with this Act.

•Reports for subsequent years must comply with this Act

•Auditor appointed before 1 January 2016 continues to hold that appointment.

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Companies Act 2015 – effective 1 January 2016- Transitional RulesFinancial statements (relating to Foreign Companies)

- Where a registered Foreign Company is required to prepare financial statements under the law of its place of incorporation or formation, the Foreign Company must at least once in every calendar year and at intervals of not more than 15 months, lodge a copy of those Financial Statements together with a statement in writing in the Prescribed Form, verifying that the copies are true copies of the documents so required.

- The Registrar may extend the period of lodgement of the Financial Statements.

- Irrespective of the requirements in the home country, the Company must prepare and lodge Financial Statements if required to do so by the Registrar, in the form and time required by the Registrar

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Companies Act 2015 – effective 1 January 2016- Transitional RulesLate lodgement fees

- Below are the late lodgement fees for the late lodgement of Financial Statements with the Registrar:

Entity Within 1 month after due date

Within 3 months after due date

> 6 months after due date

Small Private Company $5 $10 $50Foreign Company $100 $200 $1,000Listed Company $10 $200 $1,000Company not listed above $50 $100 $500

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Annual General Meetings(AGM)

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Companies Act 2015 – effective 1 January 2016- Annual General Meetings(AGM)

• Single member company not required to hold an AGM.

• First AGM within 18 months of registration.

• Subsequent AGMs must be held once in every calendar year and within 6 months after end of its financial year.

• Registrar of Companies may grant an extension of time to hold an AGM provided a request is made before it should have held its AGM.

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Companies Act 2015 – effective 1 January 2016- Your Checklist

Check Date of Incorporation/Registration

Consolidated Revenue to determine type of company

Payment of Annual Prescribed Registration fee

Financial reporting obligations

Directors need to pass a Solvency resolution - May be overdue!

Company name changes

Seek professional advice – opportunity may exist to incorporate

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Questions


The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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© 2019 KPMG, a Fiji partnership, is part of the KPMG International network. KPMG International Cooperative (“KPMG International”) is a Swiss entity. All rights reserved.

The KPMG name and logo are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International").

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