Designated private companies 043-04010060

This assessment is made by a Complex Assessment Officer (CAO), based on information provided in the Module PC - Private Company (MOD PC) and accompanying documents.

From 1 January 2002, new rules were implemented for the way private companies are treated under the Income and Assets Tests. If the company is not a designated private company then the customer's involvement in the company is not assessed in accordance with Part 3.18 of the Social Security Act 1991, that is, attribution does not apply. Pre 1 January 2002 rules are used for the assessment of a non-designated private company.

The customer will be required to provide the consolidated accounts for the group of companies related to the company that is being assessed.

Prior to July 2019

A company is a 'designated private company' at a particular time if:

(a) the company satisfies at least 2 of the following conditions in relation to the financial year ending immediately before the assessment period:

• the consolidated gross operating revenue for the financial year of the company and its subsidiaries is less than $25 million
• the value of the consolidated gross assets at the end of the financial year of the company and its subsidiaries is less than $12.5 million
• the company and its subsidiaries have fewer than 50 employees at the end of the financial year

or

(b) the company came into existence after the end of the last financial year that ended before that time. For example, if the company came into existence after 30 June of the last financial year prior to the date of the assessment, it is a designated private company.

or

(c) the company is a declared private company.

A designated private company would not be an excluded company and would include those incorporated in any overseas country.

From 1 July 2019

From 1 July 2019 the thresholds for financial reporting for large proprietary companies under The Corporations Act 2001 have changed. The designated private company thresholds have increased in accordance with those changes.

A company is a 'designated private company' at a particular time if:

(a) the company satisfies at least 2 of the following conditions in relation to the financial year ending immediately before the assessment period:

• the consolidated gross operating revenue for the financial year of the company and its subsidiaries is less than $50 million
• the value of the consolidated gross assets at the end of the financial year of the company and its subsidiaries is less than $25 million
• the company and its subsidiaries have fewer than 100 employees at the end of the financial year

or

(b) the company came into existence after the end of the last financial year that ended before that time. For example, if the company came into existence after 30 June of the last financial year prior to the date of the assessment, it is a designated private company.

or

(c) the company is a declared private company.

A designated private company would not be an excluded company and would include those incorporated in any overseas country.

The Secretary of the Department of Social Services (DSS) may, by writing, declare that a company or class of companies is or is not a declared private company. This delegation remains with DSS and has not been delegated to Services Australia.

This means in effect that a company or class of companies can, at the DSS Secretary's discretion, be declared to be a private company for the purposes of the Social Security Act 1991 even though they may not meet the other criteria for a 'designated private company'.

A company can be a designated private company in one financial year, and another year may not meet the conditions to be considered a designated private company. It is necessary to check that the conditions are met each financial year that the company is being reviewed, to determine how the company will be assessed.