04 Dec 2019
Words
DAVID APOLPHE Informer Issue 96
The Key To Your Castle
Directors operating their business through a company will likely be familiar with regular contact with the Australian Securities and Investment Commission (ASIC) to update details and information about the company and its arrangements.
For example, they need to give notice to ASIC when they change the company’s registered office, principle place of business, directors or other important information about the company. This is done through the directors’ online access to ASIC known as “ASIC Connect”.
To use ASIC Connect the directors set up an ASIC Connect account and are issued with an “ASIC Key”. The ASIC Key is a unique number used in ASIC Connect that allows ASIC to establish and verify the identity of the online user who will be the company directors or their legal or financial advisors. As ASIC notes on its website, the ASIC Key “protects your information and make sure that only authorised people can change it”.
In this way the ASIC Key really is the key to the castle when it comes to the details and information regarding the company. The ASIC Key should only ever be given to those people entrusted with the confidential information of the Company and who are acting in official capacities on behalf of the company such as directors and legal and financial representatives. The ASIC Key should be kept secure at all times in the same way that any other PIN numbers or passwords are secured.
“The ASIC Key should only ever be given to those people entrusted with the confidential information of the company … it should be kept secure at all times in the same way that any other PIN numbers or passwords are secured.”
Confusion sometimes arises with respect to the ASIC Key and the transfer of the business name from a Vendor to a Purchaser on the sale of a business. The business name is transferred in a two-step process:
1. The Vendor must log in to their ASIC Connect Account using their ASIC Key.
The Vendor must select that the option that they would like to transfer the business name in the Lodgements and Notifications Tab. After completing this process for the relevant business name the Vendor will receive a 13 character transfer number (“Business Name Transfer Number”) within 24 hours.
The Vendor’s solicitor will give the Business Name Transfer Number to the Purchaser’s solicitor at completion.
2. After completion of the sale, the Purchaser will log into their own ASIC Connect Account using their ASIC Key. Importantly, the Purchaser will not be using the Vendor’s ASIC Key at this stage.
The Purchaser will use the Business Name Transfer Number to complete the transfer of the Business Name to the Purchaser.
The Vendor’s registration will be cancelled within 28 days from the transfer so that creditors and other parties can still check the Vendor’s details for a period of time following completion of the sale.
Neither the Vendor nor the Purchaser should provide their ASIC Keys to the other in this process or at any time. This is because the ASIC Key enables access and control to all of the company details and information, not just the business name. Only the Business Name Transfer Number should be provided by the Vendor to the Purchaser.
The Vendor and Purchaser should receive legal advice on the transfer of the business name and other assets as part of the overall advice on the sale and purchase of an accommodation business to ensure their interests are protected.
David Adolphe is an Accredited Specialist in Business Law with the Queensland Law Society and Special Counsel with Hillhouse Legal Partners. David specialises in business law within the accommodation industry in the buying and selling of freehold and leasehold motels, industry franchises, hotels, and caravan parks.
For more information from Hillhouse please visit:
https://www.hillhouse.com.au/solutions/sectors/hotels-accommodation-resorts
