C2017c00328vol01rec01 PDF
C2017c00328vol01rec01 PDF
Compilation No. 81
Part 1.1—Preliminary 1
1 Short title ........................................................................... 1
2 Commencement ................................................................. 1
3 Constitutional basis for this Act ........................................ 1
4 Referring States ................................................................. 2
5 General territorial application of Act ................................. 5
5A Application to the Crown .................................................. 7
5B ASIC has general administration of this Act ..................... 8
5C Application of the Acts Interpretation Act 1901 ................ 8
Part 1.2—Interpretation 23
Division 1—General 23
6 Effect of this Part............................................................. 23
7 Location of other interpretation provisions ..................... 23
9 Dictionary........................................................................ 24
9AA Certain family relationships ............................................ 97
9A Meaning of rights issue ................................................... 98
9B Meaning of remuneration recommendation .................. 100
Section 1
Chapter 1—Introductory
Part 1.1—Preliminary
1 Short title
This Act may be cited as the Corporations Act 2001.
2 Commencement
This Act commences on a day to be fixed by Proclamation.
(2) The operation of this Act in the Northern Territory and the Capital
Territory is based on:
Section 4
4 Referring States
Section 4
(a) if and to the extent that the matters are not otherwise
included in the legislative powers of the Parliament of the
Commonwealth (otherwise than by a reference under
paragraph 51(xxxvii) of the Constitution); and
(b) if and to the extent to which the matters are included in the
legislative powers of the Parliament of the State.
This subsection has effect subject to subsections (6) and (7).
(2) A State is a referring State even if the State reference Act includes
a provision to the effect that nothing in the State reference Act is
intended to enable the making of laws pursuant to the amendment
reference with the sole or main underlying purpose or object of
regulating industrial relations matters even if, but for that provision
in the State reference Act, the law would be a law with respect to a
matter referred to the Parliament of the Commonwealth by the
amendment reference.
(3) A State is a referring State even if a law of the State provides that
the reference to the Commonwealth Parliament of either or both of
the matters covered by subsections (4) and (5) is to terminate in
particular circumstances.
Section 4
Definitions
(9) In this section:
amendment reference of a State means the reference by the
Parliament of the State to the Parliament of the Commonwealth of
the matters covered by subsection (5).
express amendment of this Act or the ASIC Act means the direct
amendment of the text of this Act or the ASIC Act (whether by the
insertion, omission, repeal, substitution or relocation of words or
matter) by Commonwealth Acts, but does not include the
enactment by a Commonwealth Act of a provision that has, or will
have, substantive effect otherwise than as part of the text of this
Act or the ASIC Act.
initial ASIC Act means the ASIC Act as originally enacted.
initial Corporations Act means this Act as originally enacted.
Section 5
Section 5
Section 5A
Section 5B
(2) Chapter 5 (except Part 5.8) binds the Crown in right of the
Commonwealth, of each of the States, of the Capital Territory, of
the Northern Territory and of Norfolk Island.
(3) Chapters 6, 6A, 6B, 6C and 6D:
(a) bind the Crown in right of the Commonwealth; and
(b) do not bind the Crown in right of any State, of the Capital
Territory, of the Northern Territory or of Norfolk Island.
(4) A provision of Chapter 5D, 6CA or 7 only binds the Crown in a
particular capacity in circumstances (if any) specified in the
regulations.
(5) Nothing in this Act makes the Crown in any right liable to a
pecuniary penalty or to be prosecuted for an offence.
Section 5D
5D Coverage of Part
(1) This Part applies only to laws of a State or Territory that is in this
jurisdiction.
(2) This Part applies only to the following Corporations legislation:
(a) this Act (including the regulations made under this Act); and
(b) Part 3 of the ASIC Act; and
(c) regulations made under the ASIC Act for the purposes of
Part 3 of that Act.
Note: This Part does not apply in relation to the trustee company provisions:
see section 601RAE.
(3) This Part does not apply to Part 3 of the ASIC Act, or regulations
made under that Act for the purposes of Part 3 of that Act, to the
extent to which they operate in relation to a contravention of
Division 2 of Part 2 of that Act.
Section 5E
(5) If:
(a) an act or omission of a person is both an offence against the
Corporations legislation and an offence under the law of a
State or Territory; and
(b) the person is convicted of either of those offences;
the person is not liable to be convicted of the other of those
offences.
Section 5F
Section 5G
Section 5G
Section 5G
Section 5G
Section 5G
Section 5G
Other cases
(11) A provision of the Corporations legislation does not operate in a
State or Territory to the extent necessary to ensure that no
inconsistency arises between:
(a) the provision of the Corporations legislation; and
(b) a provision of a law of the State or Territory that would, but
for this subsection, be inconsistent with the provision of the
Corporations legislation.
Note 1: A provision of the State or Territory law is not covered by this
subsection if one of the earlier subsections in this section applies to
the provision: if one of those subsections applies there would be no
potential inconsistency to be dealt with by this subsection.
Note 2: The operation of the provision of the State or Territory law will be
supported by section 5E to the extent to which it can operate
concurrently with the provision of the Corporations legislation.
Section 5G
Post-commencement provision
(14) A provision of a law of a State or Territory is a
post-commencement provision if it:
(a) is enacted, and comes into force, on or after the
commencement of this Act; and
(b) is not a provision that has been materially amended after
commencement (see subsections (15) to (17)).
Section 5H
Section 5H
(2) A notice setting out the following details must be lodged before the
registration day:
(a) the name and address of each person who is to be a member
on registration;
(b) the present given and family name, all former given and
family names and the date and place of birth of each person
who is to be a director on registration;
(c) the present given and family name, all former given and
family names and the date and place of birth of each person
who consents in writing to become a company secretary;
(d) the address of each person who is to be a director or company
secretary on registration;
(e) the address of the company’s proposed registered office;
(f) for a public company—the proposed opening hours of its
registered office (if they are not the standard opening hours);
(g) the address of the company’s proposed principal place of
business (if it is not the address of the proposed registered
office);
(h) for a company limited by shares or an unlimited company—
the following:
(i) the number and class of shares each member agrees in
writing to take up;
(ii) the amount (if any) each member agrees in writing to
pay for each share;
(iii) if that amount is not to be paid in full on registration—
the amount (if any) each member agrees in writing to be
unpaid on each share;
(i) for a public company that is limited by shares or is an
unlimited company, if shares will be issued for non-cash
consideration—the prescribed particulars about the issue of
the shares, unless the shares will be issued under a written
contract and a copy of the contract is lodged with the
application;
(j) for a company limited by guarantee—the proposed amount of
the guarantee that each member agrees to in writing.
Section 5I
Section 5I
Section 6
Part 1.2—Interpretation
Division 1—General
Section 9
9 Dictionary
Unless the contrary intention appears:
2-part simple corporate bonds prospectus has the meaning given
by section 713B.
AASB means the Australian Accounting Standards Board.
ABN (short for “Australian Business Number”) has the meaning
given by section 41 of the A New Tax System (Australian Business
Number) Act 1999.
Aboriginal and Torres Strait Islander corporation means a
corporation registered under the Corporations (Aboriginal and
Torres Strait Islander) Act 2006.
accounting standard means:
(a) an instrument in force under section 334; or
(b) a provision of such an instrument as it so has effect.
ACN (short for “Australian Company Number”) is the number
given by ASIC to a company on registration (see sections 118 and
601BD).
acquire, in relation to financial products, when used in a provision
outside Chapter 7, has the same meaning as it has in Chapter 7.
act includes thing.
administration, in relation to a company, has the meaning given by
section 435C.
administrator:
(a) in relation to a body corporate but not in relation to a deed of
company arrangement:
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
bidder for a takeover bid means the person who makes or proposes
to make, or each of the people who make or propose to make, the
offers under the bid (whether personally or by an agent or
nominee).
Note: A person who announces a bid on behalf of another person is not
making the bid, the other person is making the bid.
Section 9
books includes:
(a) a register; and
(b) any other record of information; and
(c) financial reports or financial records, however compiled,
recorded or stored; and
(d) a document;
but does not include an index or recording made under Subdivision
D of Division 5 of Part 6.5.
borrower, in relation to a debenture, means the body that is or will
be liable to repay money under the debenture.
business affairs, in relation to an entity, has a meaning affected by
sections 53AA, 53AB, 53AC and 53AD.
business day means a day that is not a Saturday, a Sunday or a
public holiday or bank holiday in the place concerned.
Business Names Register means the Register established and
maintained under section 22 of the Business Names Registration
Act 2011.
buy-back by a company means the acquisition by the company of
shares in itself.
buy-back agreement by a company means an agreement by the
company to buy back its own shares (whether the agreement is
conditional or not).
Capital Territory means the Australian Capital Territory and the
Jervis Bay Territory.
carry on has a meaning affected by Division 3.
cash management trust interest means an interest that:
(a) is an interest in a registered scheme; and
(b) relates to an undertaking of the kind commonly known as a
cash management trust.
cause includes procure.
Section 9
certified means:
(a) in relation to a copy of, or extract from, a document—
certified by a statement in writing to be a true copy of, or
extract from, the document; or
(b) in relation to a translation of a document—certified by a
statement in writing to be a correct translation of the
document into English.
Chapter 5 body corporate means a body corporate:
(a) that is being wound up; or
(b) in respect of property of which a receiver, or a receiver and
manager, has been appointed (whether or not by a court) and
is acting; or
(c) that is under administration; or
(d) that has executed a deed of company arrangement that has
not yet terminated; or
(e) that has entered into a compromise or arrangement with
another person the administration of which has not been
concluded.
charge means a charge created in any way and includes a mortgage
and an agreement to give or execute a charge or mortgage, whether
on demand or otherwise.
chargeable matter has the same meaning as in the Corporations
(Fees) Act 2001.
chargee means the holder of a charge and includes a person in
whose favour a charge is to be given or executed, whether on
demand or otherwise, under an agreement.
child: without limiting who is a child of a person for the purposes
of this Act, someone is the child of a person if he or she is a child
of the person within the meaning of the Family Law Act 1975.
circulating security interest has the meaning given by section 51C.
civil matter means a matter other than a criminal matter.
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
(d) an individual;
(e) for a trust that has only 1 trustee—the trustee;
(f) for a trust that has more than 1 trustee—the trustees together.
Otherwise, entity has the meaning given by section 64A.
equal access scheme has the meaning given by
subsections 257B(2) and (3).
equity interest has the same meaning as in the Income Tax
Assessment Act 1997.
ESS interest has the same meaning as in the Income Tax
Assessment Act 1997.
event includes any happening, circumstance or state of affairs.
examinable affairs, in relation to a corporation means:
(a) the promotion, formation, management, administration or
winding up of the corporation; or
(b) any other affairs of the corporation (including anything that
is included in the corporation’s affairs because of section 53);
or
(c) the business affairs of a connected entity of the corporation,
in so far as they are, or appear to be, relevant to the
corporation or to anything that is included in the
corporation’s examinable affairs because of paragraph (a) or
(b).
examinable assets and liabilities, in relation to an entity, means all
of the following:
(a) the entity’s property and assets:
(i) whether present or future; and
(ii) whether held alone or jointly with any other person or
persons; and
(iii) whether or not held as agent, bailee or trustee;
(b) the entity’s liabilities:
(i) whether present or future; and
(ii) whether actual or contingent; and
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
place of origin:
(a) in relation to a body corporate at a particular time, means:
(i) in the case of a body incorporated at that time in a State
or Territory—that State or Territory; or
(ii) otherwise—the place of the body’s incorporation at that
time; or
(b) in relation to an unincorporated body—the State or Territory,
or other place, in which the body is formed.
platform includes a website or other electronic facility.
play a significant role: a person plays a significant role in the
audit of a company or a registered scheme for a financial year if:
(a) the person is appointed as an individual auditor of the
company or scheme for that financial year and:
(i) acts as an auditor for the company or scheme for that
financial year; or
(ii) prepares an audit report for the company or the scheme
in relation to a financial report of the company or
scheme for that financial year or for a half-year falling
within that financial year; or
(b) a firm or company is appointed as an auditor of the company
or scheme for that financial year and the person:
(i) is a registered company auditor; and
(ii) acts, on behalf of the firm or company, as a lead auditor,
or review auditor, in relation to an audit of the company
or scheme for that financial year or for a half-year
falling within that financial year.
pooling determination means a determination under
subsection 571(1).
pooling order means an order under subsection 579E(1).
positive solvency resolution means a resolution by the directors of
a company that, in their opinion, there are reasonable grounds to
believe that the company will be able to pay its debts as and when
they become due and payable.
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
superior court matter means a civil matter that this Act clearly
intends (for example, by use of the expression the Court) to be
dealt with only by a superior court.
Supplementary Product Disclosure Statement, when used in a
provision outside Chapter 7, has the same meaning as it has in
Chapter 7.
suspended, in relation to a CSF offer, has the meaning given by
subsection 738N(6).
takeover bid means an off-market bid or market bid made under
Chapter 6.
takeover contract means a contract that results from the acceptance
of an offer made under a takeover bid.
target for a takeover bid means the company, listed body or
managed investment scheme whose securities are to be acquired
under the bid.
target’s statement means a target’s statement under sections 638 to
640 as supplemented.
territorial sea has the same meaning as in the Seas and Submerged
Lands Act 1973.
Territory means:
(a) the Capital Territory; or
(b) the Northern Territory; or
(c) an external Territory;
and, when used in a geographical sense, includes the coastal sea of
the Territory.
this Act includes the regulations and the Insolvency Practice Rules.
this jurisdiction means the geographical area that consists of:
(a) each referring State (including its coastal sea); and
(b) the Capital Territory (including the coastal sea of the Jervis
Bay Territory); and
Section 9
Section 9
Section 9
Section 9
Section 9AA
Section 9A
Section 9A
Section 9B
Section 10
Division 2—Associates
10 Effect of Division
(1) This Division has effect for the purposes of interpreting a reference
(in this Division called the associate reference), in relation to a
person (in this Division called the primary person), to an associate.
(2) A person is not an associate of the primary person except as
provided in this Division.
(3) Nothing in this Division limits the generality of anything else in it.
Section 12
Section 13
13 References in Chapter 7
If the associate reference occurs in Chapter 7, it includes a
reference to:
(a) a person in partnership with whom the primary person carries
on a financial services business; and
(b) subject to subsection 16(2), a person who is a partner of the
primary person otherwise than because of carrying on a
financial services business in partnership with the primary
person; and
(c) a trustee of a trust in relation to which the primary person
benefits, or is capable of benefiting, otherwise than because
of transactions entered into in the ordinary course of business
in connection with the lending of money; and
(d) a director of a body corporate of which the primary person is
also a director and that carries on a financial services
business; and
(e) subject to subsection 16(2), a director of a body corporate of
which the primary person is also a director and that does not
carry on a financial services business.
Section 15
15 General
(1) The associate reference includes a reference to:
(a) a person in concert with whom the primary person is acting,
or proposes to act; and
(b) a person who, under the regulations, is, for the purposes of
the provision in which the associate reference occurs, an
associate of the primary person; and
(c) a person with whom the primary person is, or proposes to
become, associated, whether formally or informally, in any
other way;
in respect of the matter to which the associate reference relates.
(2) If the primary person has entered, or proposes to enter, into a
transaction, or has done, or proposes to do, any act or thing, in
order to become associated with another person as mentioned in an
applicable provision of this Division, the associate reference
includes a reference to that other person.
16 Exclusions
(1) A person is not an associate of another person by virtue of
section 12 or subsection 15(1), or by virtue of subsection 15(2) as
it applies in relation to section 12 or subsection 15(1), merely
because of one or more of the following:
(a) one gives advice to the other, or acts on the other’s behalf, in
the proper performance of the functions attaching to a
professional capacity or a business relationship;
(b) one, a client, gives specific instructions to the other, whose
ordinary business includes dealing in financial products, to
acquire financial products on the client’s behalf in the
ordinary course of that business;
(c) one had sent, or proposes to send, to the other an offer under
a takeover bid for shares held by the other;
(d) one has appointed the other, otherwise than for valuable
consideration given by the other or by an associate of the
Section 17
Section 18
Section 21
Section 45A
Section 45A
Counting employees
(5) In counting employees for the purposes of subsections (2) and (3),
take part-time employees into account as an appropriate fraction of
a full-time equivalent.
Accounting standards
(6) Consolidated revenue and the value of consolidated gross assets
are to be calculated for the purposes of this section in accordance
with accounting standards in force at the relevant time (even if the
standard does not otherwise apply to the financial year of some or
all of the companies concerned).
Section 45B
Section 45B
Section 46
46 What is a subsidiary
A body corporate (in this section called the first body) is a
subsidiary of another body corporate if, and only if:
(a) the other body:
(i) controls the composition of the first body’s board; or
(ii) is in a position to cast, or control the casting of, more
than one-half of the maximum number of votes that
might be cast at a general meeting of the first body; or
(iii) holds more than one-half of the issued share capital of
the first body (excluding any part of that issued share
capital that carries no right to participate beyond a
specified amount in a distribution of either profits or
capital); or
(b) the first body is a subsidiary of a subsidiary of the other
body.
Section 48
48 Matters to be disregarded
(1) This section applies for the purposes of determining whether a
body corporate (in this section called the first body) is a subsidiary
of another body corporate.
(2) Any shares held, or power exercisable, by the other body in a
fiduciary capacity are treated as not held or exercisable by it.
(3) Subject to subsections (4) and (5), any shares held, or power
exercisable:
(a) by a person as a nominee for the other body (except where
the other body is concerned only in a fiduciary capacity); or
(b) by, or by a nominee for, a subsidiary of the other body (not
being a subsidiary that is concerned only in a fiduciary
capacity);
are treated as held or exercisable by the other body.
(4) Any shares held, or power exercisable, by a person by virtue of the
provisions of debentures of the first body, or of a trust deed for
securing an issue of such debentures, are to be disregarded.
(5) Any shares held, or power exercisable, otherwise than as
mentioned in subsection (4), by, or by a nominee for, the other
body or a subsidiary of it are to be treated as not held or
exercisable by the other body if:
(a) the ordinary business of the other body or that subsidiary, as
the case may be, includes lending money; and
(b) the shares are held, or the power is exercisable, only by way
of security given for the purposes of a transaction entered
into in the ordinary course of business in connection with
lending money, not being a transaction entered into with an
associate of the other body, or of that subsidiary, as the case
may be.
Section 50
Section 50AA
50AA Control
(1) For the purposes of this Act, an entity controls a second entity if
the first entity has the capacity to determine the outcome of
decisions about the second entity’s financial and operating policies.
(2) In determining whether the first entity has this capacity:
(a) the practical influence the first entity can exert (rather than
the rights it can enforce) is the issue to be considered; and
(b) any practice or pattern of behaviour affecting the second
entity’s financial or operating policies is to be taken into
account (even if it involves a breach of an agreement or a
breach of trust).
(3) The first entity does not control the second entity merely because
the first entity and a third entity jointly have the capacity to
determine the outcome of decisions about the second entity’s
financial and operating policies.
(4) If the first entity:
(a) has the capacity to influence decisions about the second
entity’s financial and operating policies; and
Section 50AA
Section 51
Section 51C
Section 51F
Definition
(1) Property is PPSA retention of title property (short for Personal
Property Securities Act retention of title property) of a corporation
if:
(a) the property is personal property; and
(b) the property is used or occupied by, or is in the possession of,
the corporation; and
(c) the corporation does not have title to the property; and
(d) a PPSA security interest is attached to the property, within
the meaning of the Personal Property Securities Act 2009;
and
(e) the corporation is the grantor in relation to the PPSA security
interest, within the meaning of that Act.
Examples: The following personal property is PPSA retention of title property if
a PPSA security interest attaches to the property by virtue of the
transaction concerned, and the grantor is a corporation:
(a) property that is the subject of an agreement to sell subject to
retention of title, or a hire purchase agreement, that secures the
payment or performance of an obligation (see subsection 12(2) of
the Personal Property Securities Act 2009);
(b) property that is the subject of a lease, or a consignment
agreement, that secures the payment or performance of an
obligation (see subsection 12(2) of the Personal Property
Securities Act 2009);
(c) goods that are the subject of a commercial consignment (see
subsection 12(3) of the Personal Property Securities Act 2009);
(d) goods that are leased or bailed under a PPS lease (see
subsection 12(3) of the Personal Property Securities Act 2009).
Section 51F
Section 52
52 Doing acts
A reference to doing an act or thing includes a reference to causing
or authorising the act or thing to be done.
52A Signing
Without affecting the law on agency, if this Act requires that
something be signed, it can be signed by an individual using a
power of attorney from the person required to sign.
Section 53
Section 53AA
Section 53AC
Section 57
Section 58AA
Section 59
Administrator
(1) In this Act, a declaration of relevant relationships, in relation to
an administrator of a company under administration, means a
written declaration:
(a) stating whether any of the following:
(i) the administrator;
(ii) if the administrator’s firm (if any) is a partnership—a
partner in that partnership;
(iii) if the administrator’s firm (if any) is a body corporate—
that body corporate or an associate of that body
corporate;
has, or has had within the preceding 24 months, a
relationship with:
(iv) the company; or
(v) an associate of the company; or
(vi) a former liquidator, or former provisional liquidator, of
the company; or
Section 64
Liquidator
(2) In this Act, a declaration of relevant relationships, in relation to a
liquidator of a company, means a written declaration:
(a) stating whether any of the following:
(i) the liquidator;
(ii) if the liquidator’s firm (if any) is a partnership—a
partner in that partnership;
(iii) if the liquidator’s firm (if any) is a body corporate—that
body corporate or an associate of that body corporate;
has, or has had within the preceding 24 months, a
relationship with:
(iv) the company; or
(v) an associate of the company; or
(vi) a former liquidator, or former provisional liquidator, of
the company; or
(vii) a former administrator of the company; or
(viii) a former administrator of a deed of company
arrangement executed by the company; and
(b) if so, stating the liquidator’s reasons for believing that none
of the relevant relationships result in the liquidator having a
conflict of interest or duty.
Section 64A
64A Entities
Except in Chapter 2E, a reference to an entity:
(a) is a reference to a natural person, a body corporate (other
than an exempt public authority), a partnership or a trust; and
(b) includes, in the case of a trust, a reference to the trustee of the
trust.
Body corporate
(1) A body corporate is connected with a corporation if, and only if,
the corporation:
(a) can control, or influence materially, the body’s activities or
internal affairs; or
(b) is a member of the body; or
(c) is in a position to cast, or to control the casting of, a vote at a
general meeting of the body; or
(d) has power to dispose of, or to exercise control over the
disposal of, a share in the body; or
(e) is financially interested in the body’s success or failure or
apparent success or failure; or
(f) is owed a debt by the body; or
(g) is engaged by the body under a contract for services; or
(h) acts as agent for the body in any transaction or dealing.
Natural person
(2) A natural person is connected with a corporation if, and only if, the
corporation:
(a) is a trustee of a trust under which the person is capable of
benefiting; or
Section 64B
Partnership
(3) A partnership is connected with a corporation if, and only if, the
corporation:
(a) is a partner in the partnership; or
(b) can control, or influence materially, the partnership’s
activities or internal affairs; or
(c) is financially interested in the partnership’s success or failure
or apparent success or failure; or
(d) is a creditor of the partnership; or
(e) is engaged by the partnership under a contract for services; or
(f) acts as agent for the partnership in any transaction or dealing.
Trust
(4) A trust is connected with a corporation if, and only if, the
corporation:
(a) is the settlor, or one of the settlors, of the trust; or
(b) has power under the terms of the trust to appoint or remove a
trustee of the trust or to vary, or cause to be varied, any of the
terms of the trust; or
(c) is a trustee of the trust; or
(d) can control, or influence materially, the activities of the trust;
or
(e) is capable of benefiting under the trust; or
(f) is a creditor of the trustee of the trust; or
Section 65
Section 79
79 Involvement in contraventions
A person is involved in a contravention if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention;
or
(b) has induced, whether by threats or promises or otherwise, the
contravention; or
(c) has been in any way, by act or omission, directly or
indirectly, knowingly concerned in, or party to, the
contravention; or
(d) has conspired with others to effect the contravention.
Section 83
86 Possession
A thing that is in a person’s custody or under a person’s control is
in the person’s possession.
Section 88B
Section 89
89 Qualified privilege
(1) Where this Act provides that a person has qualified privilege in
respect of an act, matter or thing, the person:
(a) has qualified privilege in proceedings for defamation; or
(b) is not, in the absence of malice on the person’s part, liable to
an action for defamation at the suit of a person;
as the case requires, in respect of that act, matter or thing.
(2) In subsection (1):
malice includes ill will to the person concerned or any other
improper motive.
(3) Neither this section nor a provision of this Act that provides as
mentioned in subsection (1) limits or affects any right, privilege or
immunity that a person has, apart from this section or such a
provision, as defendant in proceedings, or an action, for
defamation.
91 Relation-back day
For the purposes of this Act, the following table sets out the
meaning of relation-back day in relation to a winding up of a
company or Part 5.7 body.
Section 91
Relation-back day
Item If: the relation-back day is:
1 in the case of a company: the section 513C day in relation to
(a) the Court orders under the administration.
section 233, 459A, 459B or 461
that the company be wound up;
and
(b) immediately before the order
was made, the company was
under administration; and
(c) the order was made in response
to an application filed at or after
the beginning of the
administration;
2 in the case of a company: the day on which that application
(a) the Court orders under was filed.
section 233, 459A, 459B or 461
that the company be wound up;
and
(b) immediately before the order
was made, the company was
under administration; and
(c) the order was made in response
to an application filed before the
beginning of the administration;
3 in the case of a company: the section 513C day in relation to
(a) the Court orders under that administration.
section 233, 459A, 459B or 461
that the company be wound up;
and
(b) immediately before the order
was made, a deed of company
arrangement had been executed
by the company and had not yet
terminated; and
(c) the order was made in response
to an application filed at or after
Section 91
Relation-back day
Item If: the relation-back day is:
the beginning of the
administration that ended when
the deed was executed;
4 in the case of a company: the day on which that application
(a) the Court orders under was filed.
section 233, 459A, 459B or 461
that the company be wound up;
and
(b) immediately before the order
was made, a deed of company
arrangement had been executed
by the company and had not yet
terminated; and
(c) the order was made in response
to an application filed before the
beginning of the administration
that ended when the deed was
executed;
5 in the case of a company: the section 513C day in relation to
(a) the company resolves by special the administration.
resolution that it be wound up
voluntarily; and
(b) immediately before the
resolution was passed, the
company was under
administration; and
(c) no application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration;
6 in the case of a company: the section 513C day in relation to
(a) the company resolves by special the administration.
resolution that it be wound up
voluntarily; and
(b) immediately before the
Section 91
Relation-back day
Item If: the relation-back day is:
resolution was passed, the
company was under
administration; and
(c) an application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration, but that
application was dismissed or
withdrawn before the
administration commenced;
7 in the case of a company: the day on which that application
(a) the company resolves by special was filed.
resolution that it be wound up
voluntarily; and
(b) immediately before the
resolution was passed, the
company was under
administration; and
(c) an application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration; and
(d) that application had not been
dismissed or withdrawn before
the administration commenced;
8 in the case of a company, the the section 513C day in relation to
company is taken to have passed a the administration that ended when
special resolution that it be wound the deed was executed.
up voluntarily because, at a meeting
convened by the administrator of a
deed of company arrangement
executed by the company, the
company’s creditors:
(a) passed a resolution terminating
Section 91
Relation-back day
Item If: the relation-back day is:
the deed of company
arrangement; and
(b) also resolved under section 445E
that the company be wound up;
and either:
(c) no application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed; or
(d) an application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed, but
that application was dismissed or
withdrawn before the
administration commenced;
9 in the case of a company, the the day on which that application
company is taken to have passed a was filed.
special resolution that it be wound
up voluntarily because, at a meeting
convened by the administrator of a
deed of company arrangement
executed by the company, the
company’s creditors:
(a) passed a resolution terminating
the deed of company
arrangement; and
(b) also resolved under section 445E
that the company be wound up;
and both:
(c) an application for an order under
section 233, 459A, 459B or 461
Section 91
Relation-back day
Item If: the relation-back day is:
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed; and
(d) that application has not been
dismissed or withdrawn before
the first-mentioned resolution is
taken to have been passed;
10 in the case of a company, the the section 513C day in relation to
company is taken to have passed a the administration that ended when
special resolution that it be wound the deed was executed.
up voluntarily because the Court
made an order under section 445D
terminating a deed of company
arrangement executed by the
company, and either:
(a) no application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed; or
(b) an application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed, but
that application was dismissed or
withdrawn before the
administration commenced;
11 in the case of a company: the day on which that application
(a) the company is taken to have was filed.
passed a special resolution that it
be wound up voluntarily because
the Court made an order under
section 445D terminating a deed
Section 91
Relation-back day
Item If: the relation-back day is:
of company arrangement
executed by the company; and
(b) an application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed; and
(c) that application has not been
dismissed or withdrawn before
the resolution is taken to have
been passed;
12 in the case of a company, the the section 513C day in relation to
company is taken to have passed a the administration that ended when
special resolution that it be wound the deed was executed.
up voluntarily because:
(a) a deed of company arrangement
executed by the company
specifies particular
circumstances in which the deed
is to terminate and the company
is to be wound up; and
(b) those circumstances exist at a
particular time;
and either:
(c) no application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed; or
(d) an application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed, but
Section 91
Relation-back day
Item If: the relation-back day is:
that application was dismissed or
withdrawn before the
administration commenced;
13 in the case of a company, the the day on which that application
company is taken to have passed a was filed.
special resolution that it be wound
up voluntarily because:
(a) a deed of company arrangement
executed by the company
specifies particular
circumstances in which the deed
is to terminate and the company
is to be wound up; and
(b) those circumstances exist at a
particular time;
and both:
(c) an application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed; and
(d) that application had not been
dismissed or withdrawn before
the resolution is taken to have
been passed;
14 because of Division 1A of Part 5.6, the day on which the application for
the winding up is taken to have the order was filed.
begun on the day when an order that
the company or body be wound up
was made;
15 any other case applies; the day on which the winding up is
taken, because of Division 1A of
Part 5.6, to have begun.
Section 92
92 Securities
(1) Subject to this section, securities means:
(a) debentures, stocks or bonds issued or proposed to be issued
by a government; or
(b) shares in, or debentures of, a body; or
(c) interests in a managed investment scheme; or
(d) units of such shares;
but does not include:
(f) a derivative (as defined in Chapter 7), other than an option to
acquire by way of transfer a security covered by
paragraph (a), (b), (c) or (d); or
(g) an excluded security.
Note: A derivative does not include an option to acquire a security by way
of issue (see the combined effect of paragraph 761D(3)(c),
paragraph 764A(1)(a) and paragraph (d) of the definition of security
in section 761A).
Section 95A
(4) In Chapter 6D securities has the meaning given by section 700 and
in Chapter 7 security has the meaning given by section 761A.
Section 100
Section 101
102C In Australia
In Australia means in Australia (whether in this jurisdiction or
not).
Note: This definition is needed if there is a State that is not a referring State.
If all the States are referring States, every place in Australia will also
be in this jurisdiction.
Section 104
Section 107
Section 109X
Section 111AA
Section 111AB
Division 2—Definitions
111AD ED securities
(1) Securities of a body are ED securities (short for “enhanced
disclosure securities”) for the purposes of this Act if, and only if:
(a) they are ED securities under section 111AE, 111AF,
111AFA, 111AG or 111AI; and
(b) they are not declared under section 111AJ not to be ED
securities.
(2) For the purposes of sections 111AE, 111AF, 111AG and 111AI, a
class of shares or debentures is taken to include units of shares or
debentures in that class.
Section 111AE
Section 111AF
(3) Subsections (1) and (1A) do not apply to securities of a body that
is:
(a) a public authority of a State or Territory; or
(b) an instrumentality or agency of the Crown in right of a State
or Territory.
Section 111AG
Section 111AH
111AI Debentures
Debentures of a borrower are ED securities if:
(a) section 283AA requires the borrower to appoint a trustee; or
(b) section 283AA does not apply to the borrower only because
the offer of the debentures to which section 283AA would
otherwise have applied is a recognised offer.
Section 111AL
Section 111AN
Section 111AQA
Section 111AR
Section 111AU
Section 111J
Section 1
Section 1
Section 1
Section 1
1.8 Directors
The directors of a company are responsible for managing the
company’s business. It is a replaceable rule (see 1.6) that generally
the directors may exercise all the powers of the company except a
power that the Corporations Act, a replaceable rule or a provision
of the company’s constitution (if any) requires the company to
exercise in general meeting.
The only director of a company who is also the only shareholder is
responsible for managing the company’s business and may
exercise all of the company’s powers.
The Corporations Act sets out rules dealing with the calling and
conduct of directors’ meetings. Directors must keep a written
record (minutes) of their resolutions and meetings.
There are 2 ways that directors may pass resolutions:
• at a meeting; or
Section 1
1.9 Shareholders
The shareholders of a company own the company, but the
company has a separate legal existence and the company’s assets
belong to the company.
Shareholders can make decisions about the company by passing a
resolution, usually at a meeting. A “special resolution” usually
involves more important questions affecting the company as a
whole or the rights of some or all of its shareholders.
There are 2 ways that shareholders may pass a resolution:
• at a meeting; or
Section 2
Section 3
Section 3
[sections 131—133]
Section 3
Section 4
Section 4
Notification requirements
If... the company must see section...
notify ASIC of the
change...
1 a company issues shares within 28 days after the 254X
issue
2 a company changes the location within 7 days after the 172
of a register change
3 a company changes the address of within 28 days after the 142, 146
its registered office or principal change
place of business
Section 5
Notification requirements
If... the company must see section...
notify ASIC of the
change...
4 a company changes its directors within 28 days after the 205B
or company secretary change (unless the
director or company
secretary has notified
ASIC of the change)
5 there is a change in the name or within 28 days after the 205B
address of the company’s change
directors or secretary
7 a company has a new ultimate within 28 days after the 349A
holding company, or details about change happens
the ultimate holding company
change
8 any of the changes in items 1 to 7 within the time 178A
means that: determined under the 178C
(a) the company must add or alter table in section 178D
particulars in its member
register kept under
section 169; or
(b) the company must add or alter
particulars in its member
register kept under
section 169, and as a result,
details about the number and
class of shares on issue, or the
amount paid and unpaid on
the shares, alter.
Section 5
Section 5
• to act honestly
Section 5
Section 6
• the person sells all of their shares in the company and the
company registers the transfer of the shares
Section 6
Section 7
Section 9
9 Returns to shareholders
Shareholders can take money out of the company in a number of
ways, but only if the company complies with its constitution (if
any), the Corporations Act and all other relevant laws. If a
company pays out money in a way that results in the company
being unable to pay its debts as they fall due, its directors may be
liable:
9.1 Dividends
Dividends are payments to shareholders. They can only be paid if:
Section 10
Section 10
Section 11
Section 12
12.2 Receivers
A receiver, or receiver and manager, may be appointed by order of
a Court or under an agreement with a secured creditor to take over
some or all of the assets of a company. Generally this would occur
if the company is in financial difficulty. A receiver may be
appointed, for example, because an amount owed to a secured
creditor is overdue.
[Part 5.2]
Section 12
12.4 Liquidators
A liquidator is appointed to administer the winding up of a
company. The liquidator’s main functions are:
Section 111K
Provisions of this Act that do not apply to bodies corporate registered under the
ACNC Act
Item Column 1 Column 2
Provision(s) Topic
1 subsection 136(5) Public company must lodge with
ASIC a copy of a special resolution
adopting, modifying or repealing its
constitution
Section 111L
Provisions of this Act that do not apply to bodies corporate registered under the
ACNC Act
Item Column 1 Column 2
Provision(s) Topic
2 section 138 ASIC may direct company to lodge
consolidated constitution
3 section 139 Company must send copy of
constitution to member
4 subsection 142(2), section 146 and Company must notify ASIC of
subsection 146A(2) changes of address
5 (a) sections 180 to 183; and Duties of directors etc.
(b) section 185, to the extent that it
relates to sections 180 to 183
6 section 188, to the extent it relates to Responsibility of secretaries and
a provision mentioned in another directors for certain contraventions
item of this table
7 sections 191 to 194 Interests of directors
8 (a) sections 201L and 205A to 205C; Public information about directors
and etc.
(b) section 205D, to the extent it
relates to section 205B; and
(c) section 205E
9 (a) Part 2G.2 (other than Meetings of members
sections 250PAA and 250PAB);
and
(b) Part 2G.3, to the extent that it
relates to meetings of the body
corporate’s members
10 (a) Parts 2M.1 and 2M.2; and Financial reports and audit
(b) Part 2M.3
11 Chapter 2N Updating ASIC information about
companies and registered schemes
12 sections 601CDA, 601CK and Foreign companies
601CTA
13 subsection 601CT(3), Registered body must notify ASIC
Section 111M
Provisions of this Act that do not apply to bodies corporate registered under the
ACNC Act
Item Column 1 Column 2
Provision(s) Topic
section 601CV and of certain changes
subsections 601DH(1) and (1A)
Prescribed provisions
(4) A provision of this Act prescribed by the regulations for the
purposes of this subsection does not apply to the body corporate.
(5) Regulations made for the purposes of subsection (4) may:
(a) be expressed to be subject to conditions; and
(b) be indefinite or limited to a specified period; and
(c) specify a provision even if the provision is mentioned in
another section of this Part.
Section 111N
2012) provide that one or more conditions must be satisfied
for there to be such member approval.
(2) Paragraph (1)(a) does not apply to a condition that a person give to
another person particular information that relates to the matter that
is the subject of the member approval.
Example: Paragraph 218(1)(b).
111N Notices
Section 111P
111P Annual general meetings
(1) An order made under section 250PAA applies to a requirement in
the governance standards (within the meaning of the Australian
Charities and Not-for-profits Commission Act 2012) for the
holding of an annual general meeting in the same way as the order
applies to the requirement in section 250N.
(2) An exemption under section 250PAB applies to a provision of the
governance standards (within the meaning of the Australian
Charities and Not-for-profits Commission Act 2012) that requires
the holding of an annual general meeting in the same way as the
exemption applies to section 250N.
Section 112
Types of companies
(1) The following types of companies can be registered under this Act:
No liability companies
(2) A company may be registered as a no liability company only if:
(a) the company has a share capital; and
(b) the company’s constitution states that its sole objects are
mining purposes; and
(c) the company has no contractual right under its constitution to
recover calls made on its shares from a shareholder who fails
to pay them.
Note 1: Section 9 defines mining purposes and minerals.
Note 2: Special provisions on no liability companies are found in the
provisions referred to in the following table:
Section 113
Section 114
Section 116
(2) The regulations may specify a higher number that is higher than
the number specified in paragraph (1)(b) for the purposes of the
application of that paragraph to a particular kind of partnership or
association.
(3) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 117
Lodging application
(1) To register a company, a person must lodge an application with
ASIC.
Note: For the types of companies that can be registered, see section 112.
Section 117
Section 118
Registration
(1) If an application is lodged under section 117, ASIC may:
(a) give the company an ACN; and
(b) register the company; and
(c) issue a certificate that states:
(i) the company’s name; and
Section 119
Jurisdiction of registration
(2) A company is taken to be registered in:
(a) the State or Territory specified:
(i) in the application for the company’s registration under
paragraph 117(2)(n) (registration of company under this
Part); or
Section 119A
Section 120
Section 123
Note 1: A company may make contracts and execute documents without using
a seal (see sections 126 and 127).
Note 2: For abbreviations that can be used on a seal, see section 149.
Section 124
Section 125
Section 127
Section 128
Section 129
Officer or agent
(3) A person may assume that anyone who is held out by the company
to be an officer or agent of the company:
(a) has been duly appointed; and
(b) has authority to exercise the powers and perform the duties
customarily exercised or performed by that kind of officer or
agent of a similar company.
Section 130
Section 131
Section 132
Section 134
Section 136
Section 137
(3) The company’s constitution may provide that the special resolution
does not have any effect unless a further requirement specified in
the constitution relating to that modification or repeal has been
complied with.
(4) Unless the constitution provides otherwise, the company may
modify or repeal a further requirement described in subsection (3)
only if the further requirement is itself complied with.
(5) A public company must lodge with ASIC a copy of a special
resolution adopting, modifying or repealing its constitution within
14 days after it is passed. The company must also lodge with ASIC
within that period:
(a) if the company adopts a constitution—a copy of that
constitution; or
(b) if the company modifies its constitution—a copy of that
modification.
This also applies to a proprietary company that has applied under
Part 2B.7 to change to a public company, while its application has
not yet been determined.
(6) An offence based on subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 138
Section 141
Section 141
Section 141
Section 142
(3) A notice of change of address takes effect from the later of:
(a) the seventh day after the notice was lodged; or
(b) a later day specified in the notice as the date from which the
change is to take effect.
Section 144
Section 146
Section 146A
Section 147
Part 2B.6—Names
Division 1—Selecting and using a name
Section 148
Limited companies
(2) A limited public company must have the word “Limited” at the end
of its name unless section 150 or 151 applies. A limited proprietary
company must have the words “Proprietary Limited” at the end of
its name.
Section 149
No liability companies
(4) A no liability company must have the words “No Liability” at the
end of its name.
Section 150
Name
(1) A company is not required to have the word “Limited” at the end
of its name if:
(a) the company is registered under the Australian Charities and
Not-for-profits Commission Act 2012 as the type of entity
mentioned in column 1 of item 1 of the table in
subsection 25-5(5) of that Act (charity); and
(b) the company’s constitution:
(i) prohibits the company paying fees to its directors; and
(ii) requires the directors to approve all other payments the
company makes to directors.
(2) A company that, in accordance with subsection (1), does not have
“Limited” at the end of its name must notify ASIC as soon as
practicable if:
(a) the company ceases to be registered as mentioned in
paragraph (1)(a); or
(b) any of the prohibitions or requirements mentioned in
paragraph (1)(b) are not complied with or the company’s
constitution is modified to remove any of those prohibitions
or requirements.
(3) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 151
Section 152
(2) The reservation lasts for 2 months from the date when the
application was lodged. An applicant may ask ASIC in writing for
an extension of the reservation during a period that the name is
reserved, and ASIC may extend the reservation for 2 months.
(3) ASIC must cancel a reservation if the applicant asks ASIC in
writing to do so.
Section 153
Section 155
(3) Subsection (1) does not apply to the extent that the person is
allowed or required to carry on business in this jurisdiction under
the name or title under a law of the Commonwealth or a law of a
State or Territory in this jurisdiction.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (3), see subsection 13.3(3) of the Criminal Code.
Section 157
(2) The company must lodge a copy of the special resolution with
ASIC within 14 days after it is passed.
(2A) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Application by liquidator
(1) The liquidator of a company that is being wound up may lodge an
application with ASIC to change the name of the company if the
liquidator is satisfied that the proposed change of name is in the
interests of the creditors of the company as a whole.
(2) Subsection (1) does not apply to a members’ voluntary winding up.
Application by administrator
(3) The administrator of a company under administration may lodge an
application with ASIC to change the name of the company if the
Section 157A
Application by receiver
(6) If:
(a) a person is a receiver of property of a company; and
(b) the property subject to the receivership consists of, or
includes, goodwill in relation to the name of the company;
the person may lodge an application with ASIC to change the name
of the company if the person is satisfied that the proposed change
of name is in the interests of the creditors of the company as a
whole.
Change of name
(7) If:
(a) an application is lodged under subsection (1), (3), (4), (5) or
(6); and
Section 158
(3) If the company does not comply with subsection (2), ASIC may
change the company’s name to its ACN and any other words that
section 148 requires, by altering the details of the company’s
registration to reflect the change.
(4) A change of name under subsection (3) takes effect when ASIC
alters the details of the company’s registration.
Section 159
Section 161A
Section 161A
(2) If subparagraph (1)(b)(i) applies, the company must set out its
former name on all its public documents and negotiable
instruments.
(3) If subparagraph (1)(b)(ii), (iii), (iv), (v) or (vi) applies, then, except
with the leave of the Court, the company must set out its former
name on all its public documents and negotiable instruments.
(4) An offence based on subsection (2) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 162
Section 162
Section 163
(3) The company must lodge a copy of the special resolution with
ASIC within 14 days after it is passed.
(3A) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Lodging application
(1) To change its type, a company must lodge an application with
ASIC.
Section 163
Section 163
(iv) the amount (if any) that will be unpaid on the shares;
and
(b) the number and class of shares those persons will take up;
and
(c) the amount (if any) those persons will pay for the shares; and
(ca) the amount (if any) that will be unpaid on the shares; and
(d) if the shares will be issued for non-cash consideration—the
prescribed particulars about the issue of the shares, unless the
shares will be issued under a written contract and a copy of
the contract is lodged with the application; and
(e) that each of those persons who is not a member of the
company when the application is made consents in writing to
the inclusion in the list of the details about them that are
referred to in paragraph (a).
The shares may be issued to existing members only, to new
members only or to existing and new members.
Note: An offer of shares associated with a proposed change of type may
need disclosure to investors under Part 6D.2 (see sections 706, 707,
708, 708AA and 708A).
Section 164
Section 164
Section 165
Section 167
Section 167AA
(2) If shares are issued according to this section, a court is not to make
an order reversing the issue of the shares.
Section 167A
Chapter 2C—Registers
Part 2C.1—Registers generally
Section 169
(b), (e) and (f) of the definition of debenture in section 9 must also
be entered into the register of debenture holders.
General requirements
(1) The register of members must contain the following information
about each member:
(a) the member’s name and address;
(b) the date on which the entry of the member’s name in the
register is made.
Index to register
(2) If the company or scheme has more than 50 members, the company
or scheme must include in the register an up-to-date index of
members’ names. The index must be convenient to use and allow a
member’s entry in the register to be readily found. A separate
index need not be included if the register itself is kept in a form
that operates effectively as an index.
Section 169
(4) The register does not have to show the amount unpaid on the
shares (see paragraph (1)(f)) if:
(a) all of the company’s shares were issued before 1 July 1998;
and
(b) the register continues to show the par values of the shares as
they were immediately before 1 July 1998.
(5) The register does not have to show the amount unpaid on the
shares (see paragraph (1)(f)) if:
(a) all of the company’s shares were issued before 1 July 1998;
and
(b) the company is not a listed company.
Registered schemes
(6A) The register of a registered scheme must also show:
(a) the date on which every issue of interests takes place; and
(b) the number of interests in each issue; and
(c) the interests held by each member; and
(d) the class of interests; and
Section 170
Former members
(7) A register of members must also show:
(a) the name and details of each person who stopped being a
member of the company or scheme within the last 7 years;
and
(b) the date on which the person stopped being a member.
The company or scheme may keep these entries separately from
the rest of the register.
Joint holders
(8) For the purposes of this section:
(a) 2 or more persons who jointly hold shares in the company or
interests in the scheme are taken to be a single member of the
company or scheme in relation to those shares or interests;
and
(b) 2 or more persons who have given a guarantee jointly are
taken to be a single member of the company.
They may also be members of the company or scheme because of
shares or interests that they hold, or a guarantee that they have
given, in their own right or jointly with others.
Section 170
(e) either:
(i) the period during which the options may be exercised;
or
(ii) the time at which the options may be exercised;
(f) any event that must happen before the options can be
exercised;
(g) any consideration for the grant of the options;
(h) any consideration for the exercise of the options or the
method by which that consideration is to be determined.
Because it is a register of the holders of options that are still
exercisable, the register must be updated whenever options are
exercised or expire.
(2) Information about the grant of an option must be entered in the
register within 14 days after the grant of the option.
(3B) Subsection (3) does not apply if the option is listed for quotation on
a prescribed financial market.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (3B), see subsection 13.3(3) of the Criminal Code.
(4) The company or scheme must change the register to reflect the
transfer of an option only if the person transferring the option gives
the company or scheme written notice of the transfer.
(5) A failure to comply with this section in relation to an option does
not affect the option itself.
Section 171
Section 173
Notice to ASIC
(2) The company or scheme must lodge with ASIC a notice of the
address at which the register is kept within 7 days after the register
is:
(a) established at an office that:
(i) is not the registered office of the company or
responsible entity; and
(ii) is not at the principal place of business of the company
or responsible entity in this jurisdiction; or
(b) moved from one place to another.
Notice is not required for moving the register between the
registered office and the principal place of business in this
jurisdiction.
(3) An offence based on subsection (1), (1A) or (2) is an offence of
strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Right to inspect
(1) A company or registered scheme must allow anyone to inspect a
register kept under this Chapter. If the register is not kept on a
computer, the person inspects the register itself. If the register is
kept on a computer, the person inspects the register by computer.
Note: Other provisions that are relevant to the inspection of registers are:
section 1300 (place and times for inspection)
section 1301 (the location of documents that are kept on
computers)
section 1306 (form and evidentiary value).
Inspection fees
(2) A member of a company or a registered scheme, a registered
option holder or a registered debenture holder may inspect a
Section 173
register kept under this Chapter without charge. Other people may
inspect the register only on payment of any fee (up to the
prescribed amount) required by the company or scheme.
(4) A person has the same rights to inspect, and obtain copies of, the
documents kept under subsection 170(3) as the person has in
respect of the register of option holders itself.
(5) The company is not required under subsection (1) or (3) to allow a
person to see, or to give a person a copy that contains, share
certificate numbers.
Section 174
Section 176
Section 178
(1A) Subsection (1) does not apply if the use or disclosure of the
information is:
(a) relevant to the holding of the interests recorded in the register
or the exercise of the rights attaching to them; or
(b) approved by the company or scheme.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (1A), see subsection 13.3(3) of the Criminal Code.
Section 178
(c) the company must distinguish shares that are registered in the
branch register from the shares registered in the principal
register.
Section 178A
Section 178B
Section 178D
Section 179
Section 180
Section 181
Section 183
Section 185
Section 187
Section 189
Section 190
Section 190A
Section 191
(2) The director does not need to give notice of an interest under
subsection (1) if:
(a) the interest:
(i) arises because the director is a member of the company
and is held in common with the other members of the
company; or
(ii) arises in relation to the director’s remuneration as a
director of the company; or
(iii) relates to a contract the company is proposing to enter
into that is subject to approval by the members and will
not impose any obligation on the company if it is not
approved by the members; or
(iv) arises merely because the director is a guarantor or has
given an indemnity or security for all or part of a loan
(or proposed loan) to the company; or
(v) arises merely because the director has a right of
subrogation in relation to a guarantee or indemnity
referred to in subparagraph (iv); or
Section 191
Section 192
Section 192
Section 193
193 Interaction of sections 191 and 192 with other laws etc.
Sections 191 and 192 have effect in addition to, and not in
derogation of:
(a) any general law rule about conflicts of interest; and
(b) any provision in a company’s constitution (if any) that
restricts a director from:
(i) having a material personal interest in a matter; or
(ii) holding an office or possessing property;
involving duties or interests that conflict with their duties or
interests as a director.
Section 195
Section 196
Section 196
Section 197
(2) The person is not liable under subsection (1) if the person would be
entitled to have been fully indemnified by 1 of the other directors
against the liability had all the directors of the corporation been
trustees when the liability was incurred.
(3) This section does not apply to a liability incurred outside Australia
by a foreign company.
(4) This section does not apply to a liability incurred by a registrable
Australian body outside its place of origin.
(5) This section does not apply to a corporation that is an Aboriginal
and Torres Strait Islander corporation.
Section 197
Section 198A
Division 4—Powers
198A Powers of directors (replaceable rule—see section 135)
(1) The business of a company is to be managed by or under the
direction of the directors.
Note: See section 198E for special rules about the powers of directors who
are the single director/shareholder of proprietary companies.
(2) The directors may exercise all the powers of the company except
any powers that this Act or the company’s constitution (if any)
requires the company to exercise in general meeting.
Note: For example, the directors may issue shares, borrow money and issue
debentures.
198D Delegation
(1) Unless the company’s constitution provides otherwise, the
directors of a company may delegate any of their powers to:
Section 198E
Powers of director
(1) The director of a proprietary company who is its only director and
only shareholder may exercise all the powers of the company
except any powers that this Act or the company’s constitution (if
any) requires the company to exercise in general meeting. The
business of the company is to be managed by or under the direction
of the director.
Note: For example, the director may issue shares, borrow money and issue
debentures.
Negotiable instruments
(2) The director of a proprietary company who is its only director and
only shareholder may sign, draw, accept, endorse or otherwise
execute a negotiable instrument. The director may determine that a
negotiable instrument may be signed, drawn, accepted, endorsed or
otherwise executed in a different way.
Section 198F
Section 198F
Section 198G
Offence
(2) A person commits an offence if:
(a) the person is an officer of a company; and
(b) the company is under external administration; and
(c) the person purports to perform or exercise a function or
power of that office.
Penalty: 25 penalty units.
Exceptions
(3) Subsections (1) and (2) do not apply to the extent that the officer of
the company is acting:
(a) as the external administrator of the company; or
(b) with the written approval of the external administrator of the
company or the Court; or
(c) in circumstances in which, despite the fact that the company
is under external administration, the officer is permitted by
this Act to act.
Note: In proceedings to determine whether a person has committed an
offence under subsection (2), a defendant bears an evidential burden
in relation to the matters in subsection (3), see subsection 13.3(3) of
the Criminal Code.
Section 198G
(4) Subsections (1) and (2) do not apply if the company has executed a
deed of company arrangement and the deed has not yet terminated.
Note 1: Section 444G deals with the effect of a deed of company arrangement
on various persons.
Note 2: In proceedings to determine whether a person has committed an
offence under subsection (2), a defendant bears an evidential burden
in relation to the matters in subsection (4), see subsection 13.3(3) of
the Criminal Code.
Effect of section
(6) This section does not remove an officer of a company from office.
(7) For the purposes of this section, a person is not an officer of a
company merely because he or she is a managing controller,
appointed under a power contained in an instrument, of property of
the company.
(8) Nothing in this section affects a secured creditor’s right to realise
or otherwise deal with the security interest.
Definitions
(9) In this section:
external administration of a company has the same meaning as in
Schedule 2.
external administrator of a company has the same meaning as in
Schedule 2.
Section 199A
When indemnity for liability (other than for legal costs) not
allowed
(2) A company or a related body corporate must not indemnify a
person (whether by agreement or by making a payment and
whether directly or through an interposed entity) against any of the
following liabilities incurred as an officer or auditor of the
company:
(a) a liability owed to the company or a related body corporate;
(b) a liability for a pecuniary penalty order under section 1317G
or a compensation order under section 961M, 1317H,
1317HA or 1317HB;
(c) a liability that is owed to someone other than the company or
a related body corporate and did not arise out of conduct in
good faith.
This subsection does not apply to a liability for legal costs.
Section 199B
Section 199C
Section 200
(2) The person is taken to hold the managerial or executive office for
the whole of the current financial year unless and until the person
retires from an office or position in the company before the end of
that year.
Note: Retires has an extended meaning (see section 200A).
Otherwise
(3) For a body corporate not covered by subsection (1), a managerial
or executive office for the body corporate is:
(a) an office of director of the body corporate; or
Section 200AB
(2) However, for the purposes of this Division, a benefit does not
include a thing specified in regulations made for the purposes of
this subsection.
Note: For specification by class, see subsection 13(3) of the Legislative
Instruments Act 2003.
General rules
(1) For the purposes of this Division:
(a) a benefit is given in connection with a person’s retirement
from an office or position if the benefit is given:
(i) by way of compensation for, or otherwise in connection
with, the loss by the person of the office or position; or
(ii) in connection with the person’s retirement from the
office or position; and
Section 200A
Rules in regulations
(1A) Without limiting subsection (1), a benefit is given in connection
with a person’s retirement from an office or position if the benefit
is given in circumstances specified in regulations made for the
purposes of this subsection.
Note: For specification by class, see subsection 13(3) of the Legislative
Instruments Act 2003.
Related benefits
(2) For the purposes of this Division, if:
(a) a person (person A) gives another person a benefit (benefit
A); and
Section 200B
Section 200B
(1A) For an offence based on subsection (1), strict liability applies to the
circumstance, that the benefit is in connection with the retiree’s, or
someone else’s, retirement.
Note: For strict liability, see section 6.1 of the Criminal Code.
Prescribed circumstances
(3) For the purposes of this section, if:
(a) a company, or an associate of a company, gives a benefit to a
superannuation fund solely for the purpose of enabling or
assisting the superannuation fund to give to a person a benefit
in connection with the retiree’s retirement from an office or
position in the company or a related body corporate; or
(b) a superannuation fund gives a benefit to another
superannuation fund solely for the purpose of enabling or
assisting the other superannuation fund to give to a person a
benefit in connection with the retiree’s retirement from an
office or position in a company or a related body corporate;
the benefit first referred to in paragraph (a) or (b) is taken to be
given in prescribed circumstances.
(4) In this section:
superannuation fund means a provident, benefit, superannuation
or retirement fund.
Section 200C
(3) Subsection (1) does not apply to the extent that there is member
approval under section 200E.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (3), see subsection 13.3(3) of the Criminal Code.
Section 200E
First condition
(1B) The first condition is that the giving of the benefit be approved by
a resolution passed at a general meeting of:
(a) the company; and
(b) if the company is a subsidiary of a listed domestic
corporation—the listed corporation; and
(c) if the company has a holding company that:
(i) is a domestic corporation that is not listed; and
(ii) is not itself a subsidiary of a domestic corporation;
the holding company.
Second condition
(2) The second condition is that details of the benefit must be set out
in, or accompany, the notice of the general meeting that is to
consider the resolution. The details must include:
(a) if the proposed benefit is a payment:
(i) the amount of the payment; or
Section 200E
Section 200F
(b) the amount or money value of the benefit is less than the
amount or money value of the proposed benefit.
Section 200F
(3) This subsection applies if the relevant period for the person is less
than 1 year. The amount worked out under this subsection is:
Estimated Number of days in
annual base salary relevant period
365
where:
estimated annual base salary is a reasonable estimate of the base
salary that the person would have received from the company and
related bodies corporate during the relevant period if the relevant
period had been 1 year.
Note: The relevant period for the person is defined in subsection (5).
(4) This subsection applies in every other case. The amount worked
out under this subsection is:
(a) if the relevant period is 1 year—the base salary that the
person received from the company and related bodies
corporate during the relevant period; or
(b) if the relevant period is more than 1 year but less than 2
years—the average annual base salary that the person
received from the company and related bodies corporate
during the relevant period, worked out as if:
(i) the relevant period were 2 years; and
(ii) the person’s annual base salary for the second year were
a reasonable estimate of what the person would have
received as base salary after the first year of the relevant
period had the relevant period been 2 years; or
(c) if the relevant period is 2 years—the average annual base
salary that the person received from the company and related
bodies corporate during the relevant period; or
(d) if the relevant period is more than 2 years but less than 3
years—the average annual base salary that the person
received from the company and related bodies corporate
during the relevant period, worked out as if:
(i) the relevant period were 3 years; and
Section 200G
(ii) the person’s annual base salary for the third year were a
reasonable estimate of what the person would have
received as base salary after the second year of the
relevant period had the relevant period been 3 years; or
(e) if the relevant period is 3 years or more—the average annual
base salary that the person received from the company and
related bodies corporate during the last 3 years of the relevant
period.
(5) For the purposes of this section, if a person has held a managerial
or executive office in relation to a company:
(a) throughout a period; or
(b) throughout a number of periods;
the relevant period for that person is that period or the period
consisting of those periods.
Section 200G
(2) This subsection applies if the relevant period for the person is less
than 1 year. The amount worked out under this subsection is:
Estimated Number of days in
annual base salary relevant period
365
where:
estimated annual base salary is a reasonable estimate of the base
salary that the person would have received from the company and
related bodies corporate during the relevant period if the relevant
period had been 1 year.
Note: The relevant period for the person is defined in subsection (6).
(3) This subsection applies in every other case. The amount worked
out under this subsection is:
(a) if the relevant period is 1 year—the base salary that the
person received from the company and related bodies
corporate during the relevant period; or
(b) if the relevant period is more than 1 year but less than 2
years—the average annual base salary that the person
received from the company and related bodies corporate
during the relevant period, worked out as if:
(i) the relevant period were 2 years; and
(ii) the person’s annual base salary for the second year were
a reasonable estimate of what the person would have
received as base salary after the first year of the relevant
period had the relevant period been 2 years; or
(c) if the relevant period is 2 years—the average annual base
salary that the person received from the company and related
bodies corporate during the relevant period; or
(d) if the relevant period is more than 2 years but less than 3
years—the average annual base salary that the person
received from the company and related bodies corporate
during the relevant period, worked out as if:
(i) the relevant period were 3 years; and
Section 200G
(ii) the person’s annual base salary for the third year were a
reasonable estimate of what the person would have
received as base salary after the second year of the
relevant period had the relevant period been 3 years; or
(e) if the relevant period is 3 years or more—the average annual
base salary that the person received from the company and
related bodies corporate during the last 3 years of the relevant
period.
(4) In determining for the purposes of paragraph (1)(c) the value of a
pension or lump sum payment, disregard any part of the pension or
lump sum payment that is attributable to:
(a) a contribution made by the person; or
(b) a contribution made by a person other than:
(i) the company; or
(ii) a body corporate (a relevant body corporate) that is a
related body corporate of the company, or that was,
when the contribution was made, such a related body
corporate; or
(iii) an associate of the company, or of a relevant body
corporate, in respect of:
(A) the payment of the pension, or the making of
the lump sum payment, as the case may be; or
(B) the making of the contribution.
(6) In this section:
payment means a payment by way of pension or lump sum and
includes a superannuation, retiring allowance, superannuation
gratuity or similar payment.
relevant period: if a person has held a managerial or executive
office in the company or a related body corporate:
(a) throughout a period; or
(b) throughout a number of periods;
the relevant period for that person is that period or the period
consisting of those periods.
Section 200H
Section 201A
Proprietary companies
(1) A proprietary company must have at least 1 director. That director
must ordinarily reside in Australia.
Public companies
(2) A public company must have at least 3 directors (not counting
alternate directors). At least 2 directors must ordinarily reside in
Australia.
Section 201E
Section 201G
Section 201J
Section 201L
Section 201P
201P Directors must not set board limit unless proposed limit has
been approved by general meeting
(1) The directors must not set a board limit unless:
(a) a resolution (a board limit resolution) approving the proposal
to set the limit specified in the resolution has been passed by
a general meeting of the company; and
(b) the notice of the meeting set out an intention to propose the
board limit resolution and stated the resolution; and
(c) the notice was accompanied by a statement explaining the
resolution and meeting the requirements in section 201Q.
Note 1: Subsection 249L(3) requires information in the notice of meeting to be
presented clearly, concisely and effectively.
Note 2: Section 201U specifies the consequences of a contravention of
subsection (1) of this section. Also, section 1324 provides for
injunctions to enforce subsection (1) of this section.
(2) A board limit resolution has effect until immediately before the
start of the first AGM of the company after the general meeting by
which the resolution was passed.
(3) A board limit resolution does not prevent the appointment of a
person as a director of the company by the other directors of the
company between general meetings of the company.
Section 201Q
Section 201S
(3) For each member of the company who votes on the poll by proxy,
or by a representative authorised under section 250D, the company
must record in writing:
(a) the member’s name; and
(b) in relation to each person who votes as proxy, or as such a
representative, for the member:
(i) the person’s name; and
(ii) how many votes the person casts on the resolution as
proxy, or as such a representative, for the member; and
(iii) how many of those votes the person casts for the
resolution and how many against.
Note: Failure to comply with this subsection is an offence: see
subsection 1311(1).
Application
(1) This section applies if the directors of the company set a board
limit in contravention of subsection 201P(1).
Section 201U
(3) If:
(a) one or more directors are appointed by one or more
resolutions passed at a particular general meeting of the
company; and
(b) because of the board limit, the general meeting was not given
the opportunity to pass one or more resolutions appointing a
number of directors such that the number of directors of the
company would (if those resolutions had been passed) have
exceeded the board limit;
every appointment of director made by a resolution passed at the
general meeting is invalid.
Note: This subsection does not apply if a shortage of persons consenting to
be appointed director was the reason the general meeting was not
given the opportunity to pass one or more resolutions appointing a
number of directors such that the number of directors of the company
would (if those resolutions had been passed) have exceeded the board
limit.
(4) Subsections (2) and (3) have effect despite anything else in the
company’s constitution or in this Act, except sections 128, 129 and
201M.
Note: Sections 128 and 129 deal with assumptions a person dealing with the
company may make, including assumptions about the due
appointment of directors. Section 201M deals with effectiveness of
acts by a director in circumstances where the director’s appointment is
invalid for certain reasons.
Section 201U
Section 202A
(2) The company may also pay the directors’ travelling and other
expenses that they properly incur:
(a) in attending directors’ meetings or any meetings of
committees of directors; and
(b) in attending any general meetings of the company; and
(c) in connection with the company’s business.
Section 202C
Section 203A
Section 203D
Director to be informed
(3) The company must give the director a copy of the notice as soon as
practicable after it is received.
Section 203E
Time of retirement
(7) If a person is appointed to replace a director removed under this
section, the time at which:
(a) the replacement director; or
(b) any other director;
is to retire is to be worked out as if the replacement director had
become director on the day on which the replaced director was last
appointed a director.
Section 204A
Proprietary companies
(1) A proprietary company is not required to have a secretary but, if it
does have 1 or more secretaries, at least 1 of them must ordinarily
reside in Australia.
Public companies
(2) A public company must have at least 1 secretary. At least 1 of them
must ordinarily reside in Australia.
Section 204D
Section 204G
Section 205A
Section 205B
Personal details
(3) The personal details of a director, alternate director, or secretary
are:
(a) their given and family names; and
(b) all of their former given and family names; and
(c) their date and place of birth; and
(d) their address.
Note: For address see section 205D.
Changes in details
(4) The company must lodge with ASIC notice of any change in the
personal details of a director, alternate director or secretary within
28 days after the change. The notice must be in the prescribed
form.
Section 205C
Section 205E
Section 205F
(2) The person must give the information to ASIC in writing by the
date specified in the request.
(3) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Notifiable interests
(1) A director of a listed public company must notify the relevant
market operator under subsections (3) and (4) of the following
interests of the director:
(a) relevant interests in securities of the company or a related
body corporate;
(b) contracts:
(i) to which the director is a party or under which the
director is entitled to a benefit; and
(ii) that confer a right to call for or deliver shares in,
debentures of, or interests in a managed investment
scheme made available by, the company or a related
body corporate.
Section 205G
Note: Under section 353, ASIC may determine conditions that must be
complied with when lodging documents electronically under this
subsection.
Updating notices
(4) The director must notify the relevant market operator within 14
days after any change in the director’s interests.
Note: Under section 353, ASIC may determine conditions that must be
complied with when lodging documents electronically under this
subsection.
(5) The director need not give the information to the relevant market
operator under this section if the director has already given the
information to the relevant market operator.
Section 205G
Section 206A
(1A) For an offence based on subsection (1), strict liability applies to the
circumstance, that the person is disqualified from managing
corporations under this Part.
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 206B
Convictions
(1) A person becomes disqualified from managing corporations if the
person:
(a) is convicted on indictment of an offence that:
(i) concerns the making, or participation in making, of
decisions that affect the whole or a substantial part of
the business of the corporation; or
(ii) concerns an act that has the capacity to affect
significantly the corporation’s financial standing; or
(b) is convicted of an offence that:
(i) is a contravention of this Act and is punishable by
imprisonment for a period greater than 12 months; or
(ii) involves dishonesty and is punishable by imprisonment
for at least 3 months; or
(c) is convicted of an offence against the law of a foreign
country that is punishable by imprisonment for a period
greater than 12 months.
The offences covered by paragraph (a) and subparagraph (b)(ii)
include offences against the law of a foreign country.
(2) The period of disqualification under subsection (1) starts on the
day the person is convicted and lasts for:
Section 206B
Definitions
(7) In this section:
Section 206BA
Section 206D
Section 206D
Section 206E
Section 206EAA
Section 206EA
Power to disqualify
(1) ASIC may disqualify a person from managing corporations for up
to 5 years if:
(a) within 7 years immediately before ASIC gives a notice under
paragraph (b)(i):
(i) the person has been an officer of 2 or more
corporations; and
(ii) while the person was an officer, or within 12 months
after the person ceased to be an officer of those
corporations, each of the corporations was wound up
and a liquidator lodged a report under subsection 533(1)
(including that subsection as applied by section 526-35
of the Corporations (Aboriginal and Torres Strait
Islander) Act 2006) about the corporation’s inability to
pay its debts; and
Section 206F
Notice of disqualification
(3) If ASIC disqualifies a person from managing corporations under
this section, ASIC must serve a notice on the person advising them
of the disqualification. The notice must be in the prescribed form.
Start of disqualification
(4) The disqualification takes effect from the time when a notice
referred to in subsection (3) is served on the person.
Section 206G
(4) The person must lodge with ASIC a copy of any order granting
leave within 14 days after the order is made.
(5) On application by ASIC, the Court may revoke the leave. The
order revoking leave does not take effect until it is served on the
person.
Section 206GA
Scope of section
(1) This section applies in relation to a person who is disqualified from
managing corporations under section 206EA.
Leave orders
(3) If the person lodges a copy of an order with ASIC under
subsection 206G(4), ASIC must give the ACCC a copy of the
order.
Revoking leave
(4) If ASIC decides to apply for an order under subsection 206G(5) in
relation to the person, it must consult the ACCC before making the
application.
Definition
(5) In this section:
ACCC means the Australian Competition and Consumer
Commission.
Section 206HA
206HB Part does not apply to Aboriginal and Torres Strait Islander
corporations
This Part does not apply, of its own force, to disqualify a person
from managing a corporation that is an Aboriginal and Torres
Strait Islander corporation.
Note 1: Subsection 279-5(5) of the Corporations (Aboriginal and Torres
Strait Islander) Act 2006 provides that a person who is disqualified
from managing corporations under this Part will be automatically
disqualified under Part 6-5 of that Act from managing Aboriginal and
Torres Strait Islander corporations.
Note 2: Similarly, subsection 206B(5) of this Act provides that a person who
is disqualified from managing Aboriginal and Torres Strait Islander
corporations under Part 6-5 of the Corporations (Aboriginal and
Torres Strait Islander) Act 2006 will be automatically disqualified
under this Part from managing corporations.
Section 206J
Section 206J
Section 206K
Section 206L
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) This section does not prevent someone other than the remuneration
consultant from providing the recommendation to a person who is
neither a director of the company nor a member of the
remuneration committee.
Section 206M
of the key management personnel for a company that is a
disclosing entity.
(2) The remuneration consultant must include with the
recommendation a declaration about whether the consultant’s
recommendation is made free from undue influence by the member
or members of the key management personnel to whom the
recommendation relates.
Note: Failure to comply with this subsection is an offence: see
subsection 1311(1).
Section 207
207 Purpose
The rules in this Chapter are designed to protect the interests of a
public company’s members as a whole, by requiring member
approval for giving financial benefits to related parties that could
endanger those interests.
Section 208
(2) If:
(a) the giving of the benefit is required by a contract; and
(b) the making of the contract was approved in accordance with
subparagraph (1)(a)(i) as a financial benefit given to the
related party; and
(c) the contract was made:
(i) within 15 months after that approval; or
(ii) before that approval, if the contract was conditional on
the approval being obtained;
member approval for the giving of the benefit is taken to have been
given and the benefit need not be given within the 15 months.
Section 209
Section 210
Section 212
Section 212
Section 213
Section 215
Section 217
218 Company must lodge material that will be put to members with
ASIC
(1) At least 14 days before the notice convening the relevant meeting
is given, the public company must lodge:
(a) a proposed notice of meeting setting out the text of the
proposed resolution; and
(b) a proposed explanatory statement satisfying section 219; and
(c) any other document that is proposed to accompany the notice
convening the meeting and that relates to the proposed
resolution; and
(d) any other document that any of the following proposes to
give to members of the public company before or at the
meeting:
(i) the company;
(ii) a related party of the company to whom the proposed
resolution would permit a financial benefit to be given;
(iii) an associate of the company or of such a related party;
and can reasonably be expected to be material to a member in
deciding how to vote on the proposed resolution.
(2) If, when the notice convening the meeting is given, ASIC:
(a) has approved in writing a period of less than 14 days for the
purposes of subsection (1); and
(b) has not revoked the approval by written notice to the public
company;
subsection (1) applies as if the reference to 14 days were a
reference to the approved period.
Section 219
(3) ASIC may give and revoke approvals for the purposes of
subsection (2).
Section 220
Section 222
Section 224
Section 225
Section 226
(5) For 7 years after the day when a resolution under this Division is
passed, the public company must retain the records it made under
this section in relation to the resolution.
(6) An offence based on subsection (3), (4) or (5) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 228
Controlling entities
(1) An entity that controls a public company is a related party of the
public company.
Section 229
Section 229
(c) giving a financial benefit that does not involve paying money
(for example by conferring a financial advantage).
(3) The following are examples of giving a financial benefit to a
related party:
(a) giving or providing the related party finance or property;
(b) buying an asset from or selling an asset to the related party;
(c) leasing an asset from or to the related party;
(d) supplying services to or receiving services from the related
party;
(e) issuing securities or granting an option to the related party;
(f) taking up or releasing an obligation of the related party.
Section 230
Section 231
Section 232
Section 234
Section 235
Section 236
Section 237
(a) it is probable that the company will not itself bring the
proceedings, or properly take responsibility for them, or for
the steps in them; and
(b) the applicant is acting in good faith; and
(c) it is in the best interests of the company that the applicant be
granted leave; and
(d) if the applicant is applying for leave to bring proceedings—
there is a serious question to be tried; and
(e) either:
(i) at least 14 days before making the application, the
applicant gave written notice to the company of the
intention to apply for leave and of the reasons for
applying; or
(ii) it is appropriate to grant leave even though
subparagraph (i) is not satisfied.
(3) A rebuttable presumption that granting leave is not in the best
interests of the company arises if it is established that:
(a) the proceedings are:
(i) by the company against a third party; or
(ii) by a third party against the company; and
(b) the company has decided:
(i) not to bring the proceedings; or
(ii) not to defend the proceedings; or
(iii) to discontinue, settle or compromise the proceedings;
and
(c) all of the directors who participated in that decision:
(i) acted in good faith for a proper purpose; and
(ii) did not have a material personal interest in the decision;
and
(iii) informed themselves about the subject matter of the
decision to the extent they reasonably believed to be
appropriate; and
(iv) rationally believed that the decision was in the best
interests of the company.
Section 238
The director’s belief that the decision was in the best interests of
the company is a rational one unless the belief is one that no
reasonable person in their position would hold.
(4) For the purposes of subsection (3):
(a) a person is a third party if:
(i) the company is a public company and the person is not a
related party of the company; or
(ii) the company is not a public company and the person
would not be a related party of the company if the
company were a public company; and
(b) proceedings by or against the company include any appeal
from a decision made in proceedings by or against the
company.
Note: Related party is defined in section 228.
Section 239
Section 242
Section 242
Section 246B
Section 246C
(d) with the written consent of members with at least 75% of the
votes in the class.
(3) The company must give written notice of the variation or
cancellation to the members of the class within 7 days after the
variation or cancellation is made.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 246D
(b) members who have the same rights after the division form a
separate class.
(4) If the rights of some of the members in a class of members in a
company without a share capital are varied:
(a) the variation is taken to vary the rights of every other
member who was in the class existing before the variation;
and
(b) members who have the same rights after the variation form a
separate class.
Section 246E
Section 246F
(2) The notice must be lodged within 14 days after the division or
conversion.
(3) A public company must lodge with ASIC a copy of each document
(including an agreement or consent) or resolution that:
(a) does any of the following:
(i) attaches rights to issued or unissued shares;
(ii) varies or cancels rights attaching to issued or unissued
shares;
(iii) varies or cancels rights of members in a class of
members of a company that does not have a share
capital;
(iv) binds a class of members; and
(b) is not already lodged with ASIC.
This also applies to a proprietary company that has applied under
Part 2B.7 to change to a public company, while its application has
not yet been determined.
(3A) An offence based on subsection (1) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 246G
(4) The document must be lodged within 14 days after it is made. The
resolution must be lodged within 14 days after it is passed.
(2) If the company requires the member to pay for the copy, the
company must send it:
(a) within 7 days after the company receives the payment; or
(b) within any longer period approved by ASIC.
(3) The amount of any payment the company requires cannot exceed
the prescribed amount.
(4) If the company does not require payment for the copy, the
company must send it:
(a) within 7 days after the member asks for it; or
(b) within any longer period approved by ASIC.
Section 247A
Section 247B
Section 247E
Section 248A
Chapter 2G—Meetings
Part 2G.1—Directors’ meetings
Division 1—Resolutions and declarations without meetings
Resolutions
(1) The directors of a company may pass a resolution without a
directors’ meeting being held if all the directors entitled to vote on
the resolution sign a document containing a statement that they are
in favour of the resolution set out in the document.
Copies
(2) Separate copies of a document may be used for signing by
directors if the wording of the resolution and statement is identical
in each copy.
Resolutions
(1) The director of a proprietary company that has only 1 director may
pass a resolution by recording it and signing the record.
Section 248B
Declarations
(2) The director of a proprietary company that has only 1 director may
make a declaration by recording it and signing the record.
Recording and signing the declaration satisfies any requirement in
this Act that the declaration be made at a directors’ meeting.
Note 1: For directors’ declarations, see sections 295 and 494.
Note 2: Passage of a resolution or the making of a declaration under this
section must be recorded in the company’s minute books (see
section 251A).
Section 248C
Section 248G
Section 249A
Section 249B
(6) The passage of the resolution satisfies any requirement in this Act,
or a company’s constitution (if any), that the resolution be passed
at a general meeting.
(7) This section does not affect any rule of law relating to the assent of
members not given at a general meeting.
Note 1: A body corporate representative may sign a circulating resolution (see
section 250D).
Note 2: Passage of a resolution under this section must be recorded in the
company’s minute books (see section 251A).
Section 249C
Section 249E
(5) The directors must call the meeting within 21 days after the request
is given to the company. The meeting is to be held not later than 2
months after the request is given to the company.
(5) The company may recover the amount of the expenses from the
directors. However, a director is not liable for the amount if they
prove that they took all reasonable steps to cause the directors to
comply with section 249D. The directors who are liable are jointly
and individually liable for the amount. If a director who is liable
for the amount does not reimburse the company, the company must
deduct the amount from any sum payable as fees to, or
remuneration of, the director.
Section 249F
Section 249H
General rule
(1) Subject to subsection (2), at least 21 days notice must be given of a
meeting of a company’s members. However, if a company has a
constitution, it may specify a longer minimum period of notice.
Section 249HA
Section 249K
Note: A defect in the notice given may not invalidate a meeting (see
section 1322).
Section 249L
Section 249LA
Section 249N
Section 249P
(2) The company must give all its members notice of the resolution at
the same time, or as soon as practicable afterwards, and in the same
way, as it gives notice of a meeting.
(3) The company is responsible for the cost of giving members notice
of the resolution if the company receives the notice in time to send
it out to members with the notice of meeting.
(4) The members requesting the meeting are jointly and individually
liable for the expenses reasonably incurred by the company in
giving members notice of the resolution if the company does not
receive the members’ notice in time to send it out with the notice
of meeting. At a general meeting, the company may resolve to
meet the expenses itself.
(5) The company need not give notice of the resolution:
(a) if it is more than 1,000 words long or defamatory; or
(b) if the members making the request are to bear the expenses of
sending the notice out—unless the members give the
company a sum reasonably sufficient to meet the expenses
that it will reasonably incur in giving the notice.
Section 249P
Section 249Q
249Q Purpose
A meeting of a company’s members must be held for a proper
purpose.
249S Technology
A company may hold a meeting of its members at 2 or more
venues using any technology that gives the members as a whole a
reasonable opportunity to participate.
Note: See section 1322 for the consequences of a member not being given a
reasonable opportunity to participate.
(3) A meeting of the company’s members that does not have a quorum
present within 30 minutes after the time for the meeting set out in
the notice of meeting is adjourned to the date, time and place the
Section 249U
Section 249W
(2) The auditor is entitled to be heard at the meeting on any part of the
business of the meeting that concerns the auditor in their capacity
as auditor.
(3) The auditor is entitled to be heard even if:
(a) the auditor retires at the meeting; or
(b) the meeting passes a resolution to remove the auditor from
office.
(4) The auditor may authorise a person in writing as their
representative for the purpose of attending and speaking at any
general meeting.
Note 1: At an AGM, members may ask the auditor questions (see
section 250T).
Note 2: For when a company must have an auditor, see Part 2M.3.
Section 249X
Rights of proxies
(1) A proxy appointed to attend and vote for a member has the same
rights as the member:
(a) to speak at the meeting; and
(b) to vote (but only to the extent allowed by the appointment);
and
(c) join in a demand for a poll.
Section 249Z
Section 250B
Section 250BA
Receipt of documents
(3) A company receives a document referred to in subsection (1):
(a) when the document is received at any of the following:
(i) the company’s registered office;
(ii) a fax number at the company’s registered office;
(iii) a place, fax number or electronic address specified for
the purpose in the notice of meeting; and
(b) if the notice of meeting specifies other electronic means by
which a member may give the document—when the
document given by those means is received by the company
as prescribed by the regulations.
Section 250BB
Section 250BC
Section 250BD
Section 250BD
Section 250C
Section 250D
Section 250E
Section 250G
Section 250L
Section 250N
(4) A public company that has only 1 member is not required to hold
an AGM under this section.
(5) A company need not comply with subsection (1) if it is covered
under section 738ZI at the end of the most recent financial year
ending earlier than 18 months after its registration.
(6) A company need not comply with subsection (2) if it is covered
under section 738ZI at the end of the financial year mentioned in
subsection (2).
Section 250P
Section 250PAB
Section 250PA
(2) Despite the question being one that is addressed to the auditor, the
listed company may:
(a) examine the contents of the question; and
(b) make a copy of the question.
Section 250R
Section 250R
(3) The vote on the resolution is advisory only and does not bind the
directors or the company.
Section 250R
but may do so only if satisfied that the declaration will not cause
unfair prejudice to the interests of any member of the listed
company. The declaration has effect accordingly. The declaration
is not a legislative instrument.
(7) A person described in subsection (4) contravenes this subsection if
a vote on the resolution is cast by or on behalf of the person in
contravention of that subsection (whether or not the resolution is
passed).
Note: A contravention of this subsection is an offence: see
subsection 1311(1).
(9) For the purposes of this section, a vote is cast on behalf of a person
if, and only if, it is cast:
(a) as proxy for the person; or
(b) otherwise on behalf of the person; or
(c) in respect of a share in respect of which the person has:
(i) power to vote; or
(ii) power to exercise, or control the exercise of, a right to
vote.
(10) Subject to Part 1.1A, subsections (4), (5), (6), (7), (8) and (9) have
effect despite:
(a) anything else in:
(i) this Act; or
(ii) any other law (including the general law) of a State or
Territory; and
(b) anything in the company’s constitution.
Section 250RA
Section 250S
Section 250T
(3) If :
(a) the company’s auditor or their representative is at the
meeting; and
(b) the auditor has prepared a written answer to a written
question submitted to the auditor under section 250PA;
the Chair of the AGM may permit the auditor or their
representative to table the written answer to the written question.
(4) The listed company must make the written answer tabled under
subsection (3) reasonably available to members as soon as
practicable after the AGM.
Section 250U
250U Application
This Division applies in relation to a listed company if:
(a) at an AGM (the later AGM) of the company, at least 25% of
the votes cast on a resolution that the remuneration report be
adopted were against adoption of the report; and
(b) at the immediately preceding AGM (the earlier AGM) of the
company, at least 25% of the votes cast on a resolution that
the remuneration report be adopted were against adoption of
the report; and
(c) a resolution was not put to the vote at the earlier AGM under
an earlier application of section 250V.
Note: Subsection 250R(2) requires a resolution to adopt a remuneration
report for a listed company to be put to the vote at the company’s
AGM.
Section 250W
Section 250W
(7) Subsection (5) does not apply if the company need not hold the
spill meeting because of subsection (4).
Note: A defendant bears an evidential burden in relation to the matter in
subsection (7): see subsection 13.3(3) of the Criminal Code.
(8) Subsection (5) does not apply to a person who was not a director of
the company at any time during the period:
(a) starting when the spill resolution was passed; and
(b) ending at the last time notice of the spill meeting could have
been given to hold the spill meeting within 90 days after the
spill resolution was passed and comply with section 249HA
(Amount of notice of meetings of listed company).
Note: A defendant bears an evidential burden in relation to the matter in
subsection (8): see subsection 13.3(3) of the Criminal Code.
Section 250X
(3) The persons taken to have been appointed are those with the
highest percentages of votes favouring their appointment cast at the
spill meeting on the resolution for their appointment (even if less
than half the votes cast on the resolution were in favour of their
appointment).
Example: Suppose that, under subsection (2), 2 directors are taken to have been
appointed, and the percentages of votes favouring appointment were
50% for Jean, 40% for Karl and 30% for Lionel. Jean and Karl would
both be taken to have been appointed directors, but Lionel would not.
(4) For the purposes of this section, if 2 or more persons have the same
percentage of votes favouring their appointment, the one of those
persons chosen by the director or directors who hold office apart
from this subsection is taken to have a higher percentage than the
rest of those persons.
Note: A director who holds office apart from subsection (4) could make a
series of choices if 3 or more persons all have the same percentage of
Section 250Y
Section 251A
251A Minutes
(1) A company must keep minute books in which it records within 1
month:
(a) proceedings and resolutions of meetings of the company’s
members; and
(b) proceedings and resolutions of directors’ meetings (including
meetings of a committee of directors); and
(c) resolutions passed by members without a meeting; and
(d) resolutions passed by directors without a meeting; and
(e) if the company is a proprietary company with only 1
director—the making of declarations by the director.
Note: For resolutions and declarations without meetings, see sections 248A,
248B, 249A and 249B.
(2) The company must ensure that minutes of a meeting are signed
within a reasonable time after the meeting by 1 of the following:
(a) the chair of the meeting;
(b) the chair of the next meeting.
(3) The company must ensure that minutes of the passing of a
resolution without a meeting are signed by a director within a
reasonable time after the resolution is passed.
(4) The director of a proprietary company with only 1 director must
sign the minutes of the making of a declaration by the director
within a reasonable time after the declaration is made.
(5) A company must keep its minute books at:
(a) its registered office; or
(b) its principal place of business in this jurisdiction; or
(c) another place in this jurisdiction approved by ASIC.
Section 251AA
(5A) An offence based on subsection (1), (2), (3), (4) or (5) is an offence
of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 251B
Section 252A
Section 252C
(4) Separate copies of a document setting out the request and statement
(if any) may be used for signing by members if the wording of the
request and statement (if any) is identical in each copy.
(5) The percentage of the votes that members have is to be worked out
as at the midnight before the request is given to the responsible
entity.
(6) The responsible entity must call the meeting within 21 days after
the request is given to it. The meeting is to be held not later than 2
months after the request is given to the responsible entity.
(7) The responsible entity must give to each of the members a copy of
the proposed resolution and statement (if any) at the same time, or
as soon as practicable afterwards, as it gives notice of the meeting.
The responsible entity must distribute the copies in the same way
in which it gives notice of the meeting.
(8) The responsible entity does not have to distribute a copy of the
resolution or statement if either is more than 1,000 words long or
defamatory.
(9) The responsible entity is responsible for the expenses of calling
and holding the meeting and making the distribution. The
responsible entity may meet those expenses from the scheme’s
assets.
Section 252D
Section 252E
Section 252F
Section 252H
Section 252K
Section 252L
Section 252M
(4) The percentage of the votes that members have is to be worked out
as at the midnight before the members give the notice.
Section 252N
Section 252N
(8) The members making the request are jointly and individually liable
for the expenses reasonably incurred by the responsible entity in
making the distribution if the responsible entity does not receive
the statement in time to send it out with the notice of meeting. A
resolution may be passed at a meeting of the scheme’s members
that the responsible entity is to meet the expenses out of the
scheme’s assets.
(9) The responsible entity need not comply with the request:
(a) if the statement is more than 1,000 words long or
defamatory; or
(b) if the members making the request are responsible for the
expenses of the distribution—unless the members give the
company a sum reasonably sufficient to meet the expenses
that it will reasonably incur in making the distribution.
Section 252P
252Q Technology
A responsible entity of a registered scheme may hold a meeting of
the scheme’s members at 2 or more venues using any technology
that gives the members as a whole a reasonable opportunity to
participate.
Note: See section 1322 for the consequences of members not being given a
reasonable opportunity to participate.
252R Quorum
(1) This section applies to a registered scheme subject to the
provisions of the scheme’s constitution.
(2) The quorum for a meeting of a registered scheme’s members is 2
members and the quorum must be present at all times during the
meeting.
(3) In determining whether a quorum is present, count individuals
attending as proxies or body corporate representatives. However, if
a member has appointed more than 1 proxy or representative, count
only 1 of them. If an individual is attending both as a member and
as a proxy or body corporate representative, count them only once.
Note 1: For rights to appoint proxies, see section 252V.
Note 2: For body corporate representatives, see section 253B.
(4) A meeting of the scheme’s members that does not have a quorum
present within 30 minutes after the time for the start of the meeting
set out in the notice of meeting is adjourned to the date, time and
Section 252S
Section 252U
Section 252V
Rights of proxies
(1) A proxy appointed to attend and vote for a member has the same
rights as the member:
(a) to speak at the meeting; and
(b) to vote (but only to the extent allowed by the appointment).
Section 252X
Section 252Y
Section 252Z
Receipt of documents
(3A) A responsible entity receives an appointment authority when it is
received at any of the following:
(a) the responsible entity’s registered office;
(b) a fax number at the responsible entity’s registered office;
(c) a place, fax number or electronic address specified for the
purpose in the notice of meeting.
Section 253A
Section 253B
Section 253C
Section 253F
Section 253K
(2) Any other resolution put to the vote at a meeting of the scheme’s
members must be decided on a show of hands unless a poll is
demanded. The resolution is passed on a poll if it has been passed
by at least 50% of the votes cast by members entitled to vote on the
resolution.
(3) On a show of hands, a declaration by the chair is conclusive
evidence of the result. Neither the chair nor the minutes need to
state the number or proportion of the votes recorded in favour or
against.
Note: Even though the chair’s declaration is conclusive of the voting results,
the members present may demand a poll (see paragraph 253L(3)(c)).
Section 253L
Section 253M
253M Minutes
(1) A responsible entity of a registered scheme must keep minute
books in which it records within 1 month:
(a) proceedings of meetings of the scheme’s members; and
(b) resolutions of meetings of the scheme’s members.
(2) The responsible entity must ensure that minutes of a meeting are
signed within a reasonable time after the meeting by the chair of
the meeting or the chair of the next meeting.
(3) The responsible entity must keep the minute books at:
(a) its registered office; or
(b) its principal place of business in this jurisdiction; or
(c) another place in this jurisdiction approved by ASIC.
(3A) An offence based on subsection (1), (2) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 253N
Section 254A
Chapter 2H—Shares
Part 2H.1—Issuing and converting shares
(2) A company can issue preference shares only if the rights attached
to the preference shares with respect to the following matters are
set out in the company’s constitution (if any) or have been
otherwise approved by special resolution of the company:
(a) repayment of capital;
(b) participation in surplus assets and profits;
(c) cumulative and non-cumulative dividends;
(d) voting;
(e) priority of payment of capital and dividends in relation to
other shares or classes of preference shares.
(3) Redeemable preference shares are preference shares that are issued
on the terms that they are liable to be redeemed. They may be
redeemable:
Section 254B
Section 254C
Section 254E
Section 254G
(2) A company can convert ordinary shares into preference shares only
if the holders’ rights with respect to the following matters are set
out in the company’s constitution (if any) or have been otherwise
approved by special resolution of the company:
(a) repayment of capital;
(b) participation in surplus assets and profits;
(c) cumulative and non-cumulative dividends;
(d) voting;
(e) priority of payment of capital and dividends in relation to
other shares or classes of preference shares.
(3) A share that is not a redeemable preference share when issued
cannot afterwards be converted into a redeemable preference share.
Section 254H
(4) The company must lodge a copy of the resolution with ASIC
within 1 month after it is passed.
(5) An offence based on subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 254J
(2) This section does not affect the terms on which redeemable
preference shares may be cancelled under a reduction of capital or
a share buy-back under Part 2J.1.
Section 254L
Section 254M
No liability companies
(2) The acceptance by a person of a share in a no liability company,
whether by issue or transfer, does not constitute a contract by the
person to pay:
(a) calls in respect of the share; or
(b) any contribution to the debts and liabilities of the company.
Section 254P
Making calls
(1) A call on a share in a no liability company is not effective unless it
is made payable at least 14 days after the call is made.
Notice of call
(2) At least 7 days before a call on shares in a no liability company
becomes payable, the company must give the holders of the shares
notice of:
(a) the amount of the call; and
(b) the day when it is payable; and
(c) the place for payment.
The notice must be sent by post. If the notice is not given, the call
is not payable.
(3) A call does not have any effect on a forfeited share that is held by
or in trust for the company under subsection 254Q(6). However,
when the share is re-issued or sold by the company, the share may
be credited as paid up to the amount determined by the company in
accordance with its constitution or by resolution.
(2) The forfeited share must then be offered for sale by public auction
within 6 weeks after the call became payable.
Section 254Q
Advertisement of sale
(3) At least 14 days, and not more than 21 days, before the day of the
sale, the sale must be advertised in a daily newspaper circulating
generally throughout Australia. The specific number of shares to be
offered need not be specified in the advertisement and it is
sufficient to give notice of the sale by advertising to the effect that
all shares on which a call remains unpaid will be sold.
Postponement of sale
(4) An intended sale of forfeited shares that has been duly advertised
may be postponed for not more than 21 days from the advertised
date of sale. The date to which the sale is postponed must be
advertised in a daily newspaper circulating generally in Australia.
(5) There may be more than 1 postponement but the sale cannot be
postponed to a date more than 90 days from the first date fixed for
the intended sale.
Reserve price
(7) The directors may fix a reserve price for the share that does not
exceed the sum of:
(a) the amount of the call due and unpaid on the share at the time
of forfeiture; and
(b) the amount of any other calls that become payable on or
before the date of the sale.
Section 254Q
Section 254R
Validity of sale
(12) If a sale is not held in time because of error or inadvertence, a late
sale is not invalid if it is held as soon as practicable after the
discovery of the error or inadvertence.
Section 254S
Section 254SA
Part 2H.5—Dividends
(2) Assets and liabilities are to be calculated for the purposes of this
section in accordance with accounting standards in force at the
relevant time (even if the standard does not otherwise apply to the
financial year of some or all of the companies concerned).
Section 254V
No liability companies
(3) A person is not entitled to a dividend on a share in a no liability
company if a call:
(a) has been made on the share; and
(b) is due and unpaid.
Section 254W
Section 254X
(3) The company does not have to lodge a subsection (1) notice about
the issue of shares to a person on the registration of the company or
Section 254Y
Section 256A
256A Purpose
This Part states the rules to be followed by a company for
reductions in share capital and for share buy-backs. The rules are
designed to protect the interests of shareholders and creditors by:
(a) addressing the risk of these transactions leading to the
company’s insolvency
(b) seeking to ensure fairness between the company’s
shareholders
(c) requiring the company to disclose all material information.
Section 256B
Section 256C
(c) the terms of the reduction are the same for each holder of
ordinary shares.
Otherwise, the reduction is a selective reduction.
(3) In applying subsection (2), ignore differences in the terms of the
reduction that are:
(a) attributable to the fact that shares have different accrued
dividend entitlements; or
(b) attributable to the fact that shares have different amounts
unpaid on them; or
(c) introduced solely to ensure that each shareholder is left with
a whole number of shares.
Section 256D
Section 256E
Section 257A
Section 257B
Note: Subsections (2) and (3) of this section explain what an equal access
scheme is. The 10/12 limit is the 10% in 12 months limit laid down in
subsections (4) and (5). Subsections (6) and (7) of this section explain
what an on-market buy-back is. See section 9 for definitions of minimum
holding buy-back, employee share scheme buy-back and selective
buy-back.
Section 257B
10/12 limit
(4) The 10/12 limit for a company proposing to make a buy-back is
10% of the smallest number, at any time during the last 12 months,
of votes attaching to voting shares of the company.
On-market buy-backs
(6) A buy-back is an on-market buy-back if it results from an offer
made by a listed corporation on a prescribed financial market in the
ordinary course of trading on that market.
(7) A buy-back by a company (whether listed or not) is also an
on-market buy-back if it results from an offer made in the ordinary
course of trading in a financial market outside Australia which
ASIC declares in writing to be an approved overseas financial
market for the purposes of this subsection. A buy-back by a listed
company is an on-market buy-back under this subsection only if an
offer to buy-back those shares is also made on a prescribed
financial market at the same time.
Section 257C
Section 257D
Section 257E
Section 257G
Section 257J
Section 257J
Section 258A
Section 258E
Section 259A
Section 259C
Section 259D
Section 259D
(e) the entity must cease to hold the shares (or units); or
(f) the company must cease to control the entity.
ASIC may extend this period of 12 months if the company applies
for the extension before the end of the period.
(2) If this section applies to shares (or units of shares), it also applies
to bonus shares issued in respect of those shares (or units of
shares). Within the same period that applies to the shares
themselves under subsection (1), either:
(a) the entity must cease to hold the bonus shares; or
(b) the company must cease to control the entity.
(3) Any voting rights attached to the shares (or units of shares) cannot
be exercised while the company continues to control the entity.
(4) If, at the end of the 12 months (or extended period), the company
still controls the entity and the entity still holds the shares (or units
of shares), the company commits an offence for each day while
that situation continues.
(4A) An offence based on subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) This section does not apply to shares (or units of shares) if:
(a) they are held by the entity as a personal representative; or
(b) they are held by the entity as trustee and neither the company
nor any entity it controls has a beneficial interest in the trust,
other than a beneficial interest that satisfies these conditions:
(i) the interest arises from a security given for the purposes
of a transaction entered into in the ordinary course of
business in connection with providing finance; and
(ii) that transaction was not entered into with an associate of
the company or an entity it controls.
(6) A contravention of this section does not affect the validity of any
transaction.
Section 259E
Section 259F
Section 260A
Section 260B
Section 260C
Section 260C
Section 260D
Other exemptions
(5) The following types of financial assistance are exempted from
section 260A:
(a) a reduction of share capital in accordance with Division 1 of
Part 2J.1;
(b) a share buy-back in accordance with Division 2 of Part 2J.1;
(c) assistance given under a court order;
(d) a discharge on ordinary commercial terms of a liability that
the company incurred as a result of a transaction entered into
on ordinary commercial terms.
Section 260E