Key issues
- Technical Review of CATSI Act
- Brief summary of proposed changes published by ORIC - this does not address any specific changes for PBCs
- ORIC is now consulting on the proposed changes
The Office of the Registrar of Indigenous Corporations (ORIC) has recently released an update on the proposed changes to the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act).
In 2017, ORIC held a technical review into the CATSI Act to look at how to strengthen and improve it to benefit Aboriginal and Torres Strait Islander corporations by reducing red tape, especially for small corporations, and increasing transparency for members.
ORIC is now consulting on proposed changes to be made to the CATSI Act.
These include:
- Simplifying the size classification system for corporations: It is proposed that corporations with revenue under $250,000 will be classified as “small corporations” and will have reduced reporting requirements and the opportunity for less frequent meetings.
- Use of “Aboriginal Corporation” or “Indigenous Corporation”: Prohibiting companies using names like “Aboriginal Corporation” or “Indigenous Corporation” if they are not incorporated under the CATSI Act.
- Rule books: It is proposed to provide simple and easy to implement model rule books, with all the “replaceable rules” in the rule book. The Registrar may refuse to register rule books that are not fit for purpose.
- Processes for closing corporations: Increased flexibility and simplicity for corporations which want to voluntarily deregister or appoint a special administrator.
- Businesses: It is proposed to make it easier for corporations to create subsidiaries and set up business structures. Corporations will also be allowed to make some low-value transactions to related third parties.
- Membership: It is proposed that members will be able to provide alternative member contact details, and allow directors to decide to redact member personal information to keep people safe.
- Senior executives: Medium and large size corporations will be required to report details regarding management personnel, including salaries and work history.
- Compliance: ORIC will have increased investigation and compliance powers to address low-level compliance problems, including powers for fines and enforceable undertakings.
More information is needed about what these proposed changes will look like. ORIC is currently preparing a consultation paper on these reforms. It is proposed that the changes will take effect from 1 July 2019.
The information released from ORIC does not address other changes which have been proposed for prescribed body corporates (PBCs) which hold native title rights and interests. The Commonwealth Attorney-General’s Options Paper for reforms to the Native Title Act 1993 proposes options to strengthen corporate governance and assist PBCs with dispute resolution. We will need to wait for the Government’s response on this.
ORIC is holding consultation sessions throughout Australia on the proposed reforms. More information is available from the ORIC website. The due date for written submissions to ORIC is 16 September 2018.
For more information or discussion, please contact our Native title and cultural heritage team.