Code to Exclude Small Code Companies
The Regulatory Systems (Economic Development) Amendment Act (No 2) 2018 (the Act) received Royal assent on 13 November 2019. The Act amends the Takeovers Code and the Takeovers Act 1993, the key change being to raise the threshold at which the Code applies to unlisted companies.
Currently, an unlisted company is a Code company if it has 50 or more shareholders and 50 or more share parcels. The Act introduces an additional income or asset threshold – the company and its subsidiaries must have total assets of at least $30 million, or total revenue of at least $15 million, at the end of the company’s most recent accounting period. If neither of those two financial thresholds are met, then the Code does not apply to that company, even if it has 50 or more shareholders and share parcels. The Panel recommended this change to remove the disproportionate compliance costs for small unlisted companies.
The Act will take effect from 13 January 2020, at which time the Takeovers Code (Small Code Companies) Exemption Notice 2016 will be revoked.