The ASIC annual statement and solvency resolution: what directors must do each year

Once a year, on the company's review date, ASIC issues an annual statement showing what it holds about your company. You have 28 days to correct anything that is wrong. Within two months of the review date, the directors must also pass a solvency resolution saying whether the company can pay its debts as they fall due. The only exception is a company that lodged a financial report with ASIC in the previous 12 months.

The statement and the resolution are easy to treat as paperwork. For a foreign-owned company with directors spread across time zones, they are the two annual moments when the board formally looks at the company's position, and the record of that look matters if anything goes wrong later.

The annual cycle at a glance

The fee itself, the late fees and the 10-year prepayment option are covered in our annual review fee guide. This page deals with the checking and the resolution.

What's on the annual statement

The statement includes an invoice and a list of the details ASIC holds about the company. ASIC's company annual review page describes these as the company's addresses, share structure, officeholders and members. ASIC publishes an example statement if you want to see the layout before yours arrives.

Read it line by line against the company's own registers, not from memory. Errors that commonly creep in on foreign-owned companies:

• Registered office. The company moved accountants or providers and never updated the address, so ASIC mail is going to someone who no longer acts.
• Principal place of business. It is still shown as an address the company has left, or as the registered office when the business actually operates elsewhere.
• Officeholders. A director who left the group is still listed, or a director's residential address is years out of date. This one matters, because ASIC sends some letters to directors at home.
• Share structure. A capital injection from the parent was issued as new shares but never notified, so the issued capital is wrong.
• Members. The parent company's name has changed after a group restructure, but the members register still shows the old name.
• Group details. If the statement shows an ultimate holding company, check it still matches the group after any restructure.

If a detail is wrong, update it through the company's ASIC portal. Address changes go through Form 484 (change to company details), as ASIC explains on its change a company address page.

The 28-day trap

There are two 28-day rules, and people mix them up.

1. Any change must be notified within 28 days of the change. ASIC is explicit that you should not wait for the annual review to fix details. If your registered office moved in February and the statement arrives in August, the change is already months late.
2. Errors on the statement itself must be corrected within 28 days of its issue. Miss that and ASIC's late fee rules apply: $102 if up to a month late, $428 if more.

The practical rule: someone in Australia reviews the statement within a week of issue, not at the end of the month.

The solvency resolution

A solvency resolution states whether, in the opinion of a majority of the directors, the company can pay its debts as and when they fall due. ASIC says the directors' opinion must be based on good evidence. It is required by section 347A of the Corporations Act.

When it is required

Directors must pass it within two months of the review date, unless the company has lodged a financial report with ASIC in the past 12 months. A large proprietary company or a foreign-controlled small company that lodges annual accounts may therefore be outside the requirement in a given year. Whether your company has to lodge accounts at all is a separate question, covered in our guide to financial reporting for foreign-controlled companies.

Positive resolution: keep it, don't lodge it

If the directors resolve that the company is solvent, you don't notify ASIC. You keep the resolution with the company's minutes. Because nobody checks it at the time, it is often skipped, and the gap only shows up later, typically when a liquidator, auditor or bank asks to see the last three years of resolutions.

Negative or missed resolution: Form 485 within 7 days

If the directors resolve that there are not reasonable grounds to believe the company can pay its debts, or if no resolution is passed within the two months, the company must lodge Form 485 within 7 days. There is no lodgement fee, but late fees apply if it arrives late. A negative resolution is also a strong signal that the directors need advice on their insolvent trading exposure straight away. Our guide to insolvent trading and safe harbour explains what comes next.

What "good evidence" looks like

ASIC doesn't publish a checklist for the annual solvency resolution. Its Regulatory Guide 22, on the related solvency declaration in financial reports, is a useful benchmark. It points directors to cash balances, the timing of payment obligations and access to credit, and to testing the assumptions behind the numbers. Optimism is not a reasonable ground.

For a typical foreign-owned subsidiary, a sensible pack before the vote includes:

• Current management accounts, no more than a month or two old.
• A cash-flow forecast for at least the next 12 months, showing when the big payments fall: payroll, rent, GST, PAYG and intercompany charges.
• Aged creditors, so the board can see whether bills are already being paid late.
• ATO position. Confirm activity statements are lodged and there are no unpaid amounts, because unpaid PAYG withholding, GST and super can become personal director liabilities.
• Parent support. If the subsidiary depends on group funding, a current letter of support from the parent, signed by someone with authority to commit the group.
• Intercompany debt. Whether the parent could demand repayment of loans and, if so, whether the subsidiary could pay.

A resident director who is asked to sign a solvency resolution with none of this is being asked to take a personal risk for the group's convenience. A professional director should decline to sign it blind.

Running the resolution across time zones

Directors don't need to be in Australia to vote. Most foreign-owned boards pass the annual solvency resolution as a signed written resolution or at a short video meeting. A few practical points:

• Start the evidence pack early. If the review date is 14 March, have the management accounts ready by early April. The two-month deadline is 14 May, and overseas finance teams have their own year-end pressures.
• Record the date the resolution was passed, and file the signed copy in the company's minute book, not someone's inbox.
• Make the wording match reality. If one director thinks the company is solvent only because of the parent letter, the minutes should say so.

How we handle it

On our Resident Director + Compliance and Governance Partner packages, the annual statement check and the solvency resolution are part of the managed calendar. Our director reviews current financial information before signing the resolution, as set out in the decision protocol agreed at onboarding. The compliance calendar tool maps every date from your review date. More on the wider obligations is on our compliance page. We don't provide accounting or insolvency advice; if the numbers raise a solvency question, the board should get that advice from a qualified adviser.

General information only, current at 27 October 2026. Not legal, tax or financial advice for your company.

General information about Australian law and practice, not legal or tax advice for your circumstances. Check the official sources, or ask your adviser, before you act.