ASIC’s latest enforcement action
ASIC has fined three Australian companies in the Mainfreight group $198,000 each for allegedly missing the deadline to lodge their financial reports for the year ended 31 March 2025. Together, the notices total $594,000.
The number is unremarkable only because we have seen it before. Recent notices against Mecca, Canva, GFG Alliance and other large proprietary companies show this is now a repeat enforcement pattern. By May 2026, ASIC reported it had issued and been paid 21 infringement notices worth over $4 million for alleged FY24 reporting breaches alone.
ASIC framed the Mainfreight action as a warning to 30 June 2026 reporters. Those companies have until 31 October 2026; disclosing entities and registered schemes had until 30 September 2026.
For years, non-lodgement looked like housekeeping: a late fee, an ASIC letter, perhaps a modest prosecution. That era is over. The exposure now sits where many boards are not looking: group structures, relief assumptions, transaction changes and stale threshold testing.
Why has this issue become more prevalent?
Enforcement made easier
Section 319(1) of the Corporations Act 2001 (Cth) has always imposed the lodgement obligation, and contravention has always been a strict liability offence. What has changed is enforcement. Criminal prosecution was slow, costly and often produced modest penalties. The infringement notice regime introduced by the 2019 corporate penalties reforms lets ASIC issue a notice administratively at half the maximum a court could impose, without a hearing, without proving fault and without a conviction.
The maximum penalty per contravention for a body corporate is now $396,000, producing a $198,000 notice. Always check the penalty unit value at the date of the alleged contravention rather than assuming the current figure.
The obligation in s 319 attaches to each reporting entity, so group exposure multiplies quickly. This is the single most important feature of the current enforcement pattern and the one most likely to be underestimated at board level: exposure scales with the number of non-compliant entities in the group and the number of years, not with the seriousness of the failure.
A cohort of companies was newly captured and did not notice
The Treasury Laws Amendment (2022 Measures No. 1) Act 2022 removed the lodgement relief that “grandfathered” exempt proprietary companies had enjoyed since 1995, effective for financial years ending on or after 10 August 2022. ASIC’s 2025 review found that more than half of that cohort, 755 of 1,166 companies, had not lodged for FY23 or FY24.
ASIC now finds these companies with data rather than complaints
The surveillance behind the 2025 notices worked backwards from revenue, asset and employee data to identify entities that looked large but had lodged nothing. ASIC engaged 217 companies and alleges 151 of them, 70% were non-compliant for FY23, FY24 or both. That hit rate explains why the program will continue.
Large proprietary company status is often not reassessed
Section 45A(3) is applied each financial year, on a consolidated basis, against thresholds of $50 million revenue, $25 million gross assets and 100 employees. Those thresholds have not moved since 2019. Inflation and growth mean entities that were once comfortably small may now be large without anyone having re-tested the position.
Relief depends on strict compliance
Much of what ASIC characterises as non-lodgement is a company assuming it was relieved from filing when it was not. Relief under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 depends on timely deeds of cross guarantee being filed, notices, eligibility conditions and consolidated accounts. Miss one condition and relief is unavailable retrospectively for the whole year and entity. ASIC cannot waive the defect.
How transactions create reporting issues
Common transaction triggers include:
- An entity leaves a closed group: On a carve-out or divestment, the target exits the vendor’s deed of cross-guarantee arrangements. From that point it must lodge in its own right, and the vendor must attend to opt-out mechanics.
- An entity joins a closed group: On acquisition, the buyer may intend to bring the target within its cross-guarantee. That requires the correct assumption deed and Form 389 within time. These steps are often absent from integration plans, but relief either exists or it does not.
- Control passes offshore: Where an Australian target is acquired by a foreign parent and ceases to be consolidated into financial statements lodged with ASIC, the small proprietary company reporting and lodgement obligations in s 292(2)(b) can engage even though nothing about the target’s size changed.
- Balance dates move: Aligning the target’s financial year with the acquirer under s 323D produces a transitional period and a recalculated lodgement deadline. Get the arithmetic wrong and the entity is late without anyone realising the clock had been reset.
- A bolt-on flips status: As s 45A is tested on a consolidated basis, a single acquisition can convert a compliant small proprietary company into a large proprietary company with a full preparation, audit and lodgement obligation for the year of acquisition.
Practical steps to take if lodgement may be overdue
Diagnose before conceding
Do not accept the premise of the breach. Is the entity actually large under s 45A(3) for the relevant year, tested consolidated? Is it a disclosing entity or registered scheme (three months) or another entity (four months)? Was there a transitional year or valid relief? These questions can be decisive.
Ask whether the defect is curable
If the failure is a lodgement failure, the answer is preparing, auditing and lodging late with applicable fees. If the failure is a condition failure like a late Form 389, late deed or trustee condition issue then s 1322(4) may validate the step out of time and restore relief retrospectively. Canon Australia Pty Ltd, in the matter of Canon Australia Pty Ltd [2023] FCA 281 is a working example, and Flight Centre Technology Pty Ltd [2022] NSWSC 367 identifies relevant factors the Court will consider before granting relief, including whether the applicant substantially achieved the object of the relief, and whether public policy would be undermined if the relief were granted. For multiple entities and years, court relief may be faster and cheaper than reconstructing and auditing standalone accounts.
Engage before ASIC does
ASIC’s own numbers make the case: of the companies it queried, 103 lodged and 41 were in the process of lodging; the infringement notices went to the residue. Proactive engagement plainly influences the exercise of discretion. It also matters that ASIC has stated its investigations remain open where a company has paid a notice, but reports are still outstanding – payment closes the notice, not the file.
Model the exposure entity-by-entity and year-by-year
For each entity and year, identify whether the infringement window remains open, whether the obligation is contested and what remediation is available. Exposure scales by entity and year, not by how serious the oversight feels.
Address the directors separately
Section 344 imposes a distinct obligation on directors to take reasonable steps to secure compliance with Part 2M.3, and it is a civil penalty provision; s 188 does similar work in relation to secretaries for proprietary companies. Company remediation does not resolve individual exposure. Notify D&O insurers, minute board steps and manage privilege from the outset.
Coordinate with the auditor
Auditors carry notification obligations, and ASIC has noted it did not receive auditor notifications in most cases it identified. Do not let the auditor’s notification be the first ASIC hears of the issue.
Check the contractual perimeter
Financing documents may contain reporting covenants and compliance representations. Recent transaction documents may contain warranties about statutory compliance and accounts that have become inaccurate. Listed parents may also need to consider continuous disclosure if the aggregate exposure is material.
It is also worth noting that ASIC’s Infringement Notices Register is public and searchable, and each of these actions carries a named media release. Non-lodgement is no longer a quiet item discovered in a company search – it is a discoverable, indexed regulatory record.
What companies should expect from ASIC
ASIC is using company data to identify likely non-lodgers, then contacting those companies and taking enforcement action where the issue is not addressed. Its warning to companies with 30 June 2026 year ends suggests this approach will continue.
Many affected companies are otherwise well advised and have established reporting processes. Problems often arise after a change in circumstances, such as an acquisition, a change in balance date, the loss of relief or crossing a reporting threshold. Reporting obligations should therefore be reviewed when those changes occur, rather than left to the annual finance timetable. Please reach out to our Corporate Advisory and Governance team for further guidance.