Guide
Is your corporation small, medium or large?
Three things decide it: income, assets and employees. Your corporation is a given size if it meets at least two of the three for that size. Income alone does not settle it, which is where most boards go wrong.
The three criteria
| Size | Income | Assets | Employees |
|---|---|---|---|
| Small | under $100,000 | under $100,000 | fewer than 5 |
| Medium | $100,000 to $5 million | $100,000 to $2.5 million | 5 to 24 |
| Large | $5 million or more | $2.5 million or more | more than 24 |
At least two of the three must be met for a corporation to be that size.
Checked against ORIC — Corporation size, .
Why two-of-three catches people out
Boards tend to think of size as a revenue question. It is not, and the difference is a practical one.
Take a corporation with $60,000 of income, $400,000 of assets and eight employees. On income alone it looks small. But it fails the small test on both assets and employees, so it is medium, and medium corporations must lodge a financial report and an audit report whatever their income. A corporation holding land or buildings, or running a modest operation with a real staff, is very often in this position without realising it.
Consolidated gross operating income
Three words in that phrase each do work, and each is a place people slip:
- Consolidated — the corporation and any entities it controls, not the corporation alone.
- Gross — total income, not what is left after costs.
- Operating income — including grant income, which for most corporations is the largest part of it.
That last point connects to something worth knowing: how unspent grant money is treated in the accounts can move the income figure the thresholds are tested against. If your corporation sits close to $100,000 or $5 million, that treatment is worth getting right well before year end.
Registered size is what counts
This is the part boards most often overlook. Your obligations follow the size ORIC holds on the register, not the size this year’s figures imply.
Usually the two agree. Where they do not, it is normally a corporation that has grown and not told the Registrar, and the consequence is real: it may be lodging the wrong set of reports in good faith. The reverse also happens, with a corporation registered larger than it now is doing more work and paying for more assurance than it needs.
So the first step is to check what the register says, then see whether the tables agree with it.
What size changes
Every corporation lodges a general report every year, whatever its size. Size decides the rest:
- Financial report — small corporations from $100,000 of income, and all medium and large corporations.
- Audit report — small corporations above $100,000, and all medium and large corporations.
- Directors’ report — large corporations, and any corporation from $5 million of income.
The reporting checker will run your figures through all of that in about thirty seconds.
Frequently asked questions
How is corporation size decided?
By three criteria — consolidated gross operating income, consolidated gross assets, and number of employees. A corporation is a given size if it meets at least two of the three for that size in a financial year. Income alone does not decide it.
What is consolidated gross operating income?
The gross income of the corporation and any entities it controls. Gross, not profit, and it includes grant income. If your corporation controls another entity, that entity’s income counts too.
Our size on the register looks wrong. Does that matter?
Yes, quite a lot. Your reporting obligations follow your registered size, not the size your current figures suggest. A corporation that has grown but not told the Registrar can end up lodging the wrong reports — and one registered larger than it is may be doing more work than it needs to.
Can our size change from year to year?
Yes. Size is assessed against a financial year, so a corporation whose income or staffing shifts can move between categories. That is exactly why it is worth checking rather than assuming last year’s answer still holds.
Does being small mean we do not have to report?
No. Every corporation lodges a general report every year regardless of size. What size changes is whether a financial report, an audit report and a directors’ report are also required.