Notifying of company solvency

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Every year, ASIC send an annual statement to registered companies just after their annual review date (usually the anniversary of the company's incorporate date).

One of the obligations is to review the company's 'solvency'. Company directors will "pass" a "resolution" to determine, in their opinion, whether the company will or won't be able pay debts as they fall due. This occurs within two months following the annual review date.

Depending on the outcome of the resolution, you may need to lodge a form 485 - Statement in relation to company solvency.

When do I need to lodge this form?

If the resolution is...

Positive

The directors of a company believe that the company will be able to pay it's debts as they're due.

You don't need to lodge this form.

The directors should still retain a copy of the resolution for their own records.

Negative

The directors of a company believe that the company won't be able to pay it's debts as they're due.

You'll need a lodge form 485 - Statement in relation to company solvency.

To avoid a fine, lodge this document within 7 days of the date of resolution.

No resolution passed

The directors have not passed a resolution within two months of the review date.

You'll need a lodge form 485 - Statement in relation to company solvency.

This needs to be lodged within the 7 days after the end of the 2 month period following the review date.

For example, if the review date is 12 March 2019 and the directors have not passed a resolution as of 12 May 2019 (i.e. two months after the review date), the company has until 19 May 2019 to lodge this form.

To notify of solvency status

Select your client from My List and click Corporate admin on the top-menu bar.
Click Company forms on the top-right of the screen and choose Notify of company solvency. The Notification of company solvency - Form 485 page appears.

Select the solvency status:

Solvency status
Negative solvency resolution passed	The directors of the company have passed a solvency resolution under section 347A that, in their opinion, there are reasonable grounds to believe that the company WILL NOT be able to pay its debts as and when they become due and payable.
Solvency resolution not passed	The directors of the company have not passed a solvency resolution under section 347A within the statutory two month period after the review date.

Enter the Date of resolution where the negative solvency resolution was passed or, the Company review date if the solvency resolution was not passed.
Under Signatory details, click on the drop-down arrow and select the signing officer. The officer name appears in the Select a signatory field.
Click Send for signing. A new task is created and assigned to the client for signing.

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