Professional Documents
Culture Documents
Corporations Act 2001 Australia
Corporations Act 2001 Australia
Part 1.1—Preliminary 1
1 Short title [see Note 1] ...................................................................1
2 Commencement [see Note 1]..........................................................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....................................7
5C Application of the Acts Interpretation Act 1901...............................7
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
Division 2—Associates 85
10 Effect of Division.........................................................................85
11 Associates of bodies corporate......................................................85
12 References in Chapters 6 to 6C, and other references relating
to voting power and takeovers etc. ................................................85
13 References in Chapter 7................................................................87
15 General........................................................................................87
16 Exclusions ...................................................................................88
17 Associates of composite person that carries on a financial
services business..........................................................................89
Chapter 1—Introductory
Part 1.1—Preliminary
(1) The operation of this Act in the referring States is based on:
(a) the legislative powers that the Commonwealth Parliament
has under section 51 of the Constitution (other than
paragraph 51(xxxvii)); and
(b) the legislative powers that the Commonwealth Parliament
has in respect of matters to which this Act relates because
those matters are referred to it by the Parliaments of the
referring States under paragraph 51(xxxvii) of the
Constitution.
Note: The State referrals fully supplement the Commonwealth Parliament’s
other powers by referring the matters to the Commonwealth
Parliament to the extent to which they are not otherwise included in
the legislative powers of the Commonwealth Parliament.
(2) The operation of this Act in the Northern Territory and the Capital
Territory is based on:
(a) the legislative powers that the Commonwealth Parliament
has under section 122 of the Constitution to make laws for
the government of those Territories; and
Section 4
4 Referring States
Section 4
(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
Section 5
Section 5
(8) This Act does not apply to an act or omission in a State that is not a
referring State to the extent to which that application would be
beyond the legislative powers of the Parliament (including powers
it has under paragraphs 51(xxxvii) and (xxxix) of the Constitution).
Section 5A
(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.
Section 5C
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.
(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 5F
(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
the regulations provide that that subsection does not apply to the
matter.
(6) In this section:
matter includes act, omission, body, person or thing.
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
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 5G
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:
Section 5H
Section 5I
Section 5I
Section 6
Part 1.2—Interpretation
Division 1—General
(1) The provisions of this Part have effect for the purposes of this Act,
except so far as the contrary intention appears in this Act.
(2) This Part applies for the purposes of:
(a) Part 5.7; and
(b) Chapter 5 as applying by virtue of Part 5.7; and
(c) Part 9.2;
as if a reference in this Part to a person or to a body corporate
included a reference to a Part 5.7 body.
(4) Where, because of Part 11.2, provisions of this Act, as in force at a
particular time, continue to apply:
(a) in relation to someone or something; or
(b) for particular purposes;
then, for the purposes of those provisions as so applying:
(c) this Part as in force at that time continues to have effect; and
(d) this Part as in force at a later time does not have effect.
(1) Most of the interpretation provisions for this Act are in this Part.
(2) However, interpretation provisions relevant only to Chapter 7 are
to be found at the beginning of that Chapter.
(3) Also, interpretation provisions relevant to a particular Part,
Division or Subdivision may be found at the beginning of that Part,
Division or Subdivision.
(4) Occasionally, an individual section contains its own interpretation
provisions, not necessarily at the beginning.
Section 9
9 Dictionary
administrator:
(a) in relation to a body corporate but not in relation to a deed of
company arrangement:
(i) means an administrator of the body or entity appointed
under Part 5.3A; and
(iii) if 2 or more persons are appointed under that Part as
administrators of the body or entity—has a meaning
affected by paragraph 451A(2)(b); or
(b) in relation to a deed of company arrangement:
(i) means an administrator of the deed appointed under
Part 5.3A; and
(ii) if 2 or more persons are appointed under that Part as
administrators of the deed—has a meaning affected by
paragraph 451B(2)(b).
Section 9
Section 9
audit means an audit conducted for the purposes of this Act and
includes a review of a financial report for a half-year conducted for
the purposes of this Act.
audit activity: see the definition of engage in audit activity.
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.
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.
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.
civil matter means a matter other than a criminal matter.
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
deal:
(a) in relation to a futures contract—has the meaning given by
Division 4; and
(b) in relation to securities—subject to subsection 93(4), means
(whether as principal or agent) acquire, dispose of, subscribe
for or underwrite the securities, or make or offer to make, or
induce or attempt to induce a person to make or to offer to
make, an agreement:
(i) for or with respect to acquiring, disposing of,
subscribing for or underwriting the securities; or
(ii) the purpose or purported purpose of which is to secure a
profit or gain to a person who acquires, disposes of,
subscribes for or underwrites the securities or to any of
the parties to the agreement in relation to the securities.
dealing, in relation to financial products, when used in a provision
outside Chapter 7, has the same meaning as it has in Chapter 7.
Section 9
Section 9
deregistered means:
(a) in relation to a company—deregistered under Chapter 5A;
and
(b) in relation to any other body corporate—deregistered in a
way that results in the body corporate ceasing to exist.
derivative, when used in a provision outside Chapter 7, has the
same meaning as it has in Chapter 7.
Section 9
Section 9
(a) ASIC; or
(b) a liquidator or provisional liquidator of the corporation; or
(c) an administrator of the corporation; or
(d) an administrator of a deed of company arrangement executed
by the corporation; or
(e) a person authorised in writing by ASIC to make:
(i) applications under the Division of Part 5.9 in which the
expression occurs; or
(ii) such an application in relation to the corporation.
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
incorporation:
(a) of a company—means the company’s first registration under
this Act; and
(b) of any other incorporated body—means the body’s
incorporation by or under a law (other than this Act).
individual auditor means an individual who consents to be
appointed, or is appointed, as auditor of a company or registered
scheme.
industrial instrument means:
(a) a contract of employment; or
(b) a law, award, determination or agreement relating to terms or
conditions of employment.
information includes complaint.
infringement notice has the meaning given by section 1317DAA.
Section 9
Section 9
issue includes:
(a) in relation to interests in a managed investment scheme—
make available; and
(b) otherwise—circulate, distribute and disseminate.
Note: When issue is used in Chapter 7 in relation to a financial product it
has a meaning affected by section 761E.
Section 9
law of a State or Territory means a law of, or in force in, the State
or Territory.
Note: This definition does not affect the meaning of law when used
otherwise than in a phrase such as “law of a State or Territory”.
Examples of such a use is in the phrase “any provision of any law” in
section 100A and the phrase “law of the Commonwealth” in
section 156.
Section 9
Section 9
(c) a partnership that has more than 20 members but does not
need to be incorporated or formed under an Australian law
because of regulations made for the purposes of subsection
115(2);
(d) a body corporate (other than a body corporate that operates as
a time sharing scheme);
(e) a scheme in which all the members are bodies corporate that
are related to each other and to the body corporate that
promotes the scheme;
(f) a franchise;
(g) a statutory fund maintained under the Life Insurance Act
1995;
(h) a regulated superannuation fund, an approved deposit fund, a
pooled superannuation trust, or a public sector
superannuation scheme, within the meaning of the
Superannuation Industry (Supervision) Act 1993;
(i) a scheme operated by an Australian ADI in the ordinary
course of its banking business;
(j) the issue of debentures or convertible notes by a body
corporate;
(k) a barter scheme under which each participant may obtain
goods or services from another participant for consideration
that is wholly or substantially in kind rather than in cash;
(l) a retirement village scheme operating within or outside
Australia:
(i) under which the participants, or a majority of them, are
provided, or are to be provided, with residential
accommodation within a retirement village (whether or
not the entitlement of a participant to be provided with
accommodation derives from a proprietary interest held
by the participant in the premises where the
accommodation is, or is to be, provided); and
(ii) which is not a time-sharing scheme;
(m) a scheme that is operated by a co-operative company
registered under Part VI of the Companies (Co-operative) Act
1943 of Western Australia or under a previous law of
Western Australia that corresponds to that Part;
(n) a scheme of a kind declared by the regulations not to be a
managed investment scheme.
Section 9
Note: Paragraph (c)—A partnership with less than 20 members will usually
not require registration because of paragraph 601ED(1)(a) and under
section 115 a partnership with more than 20 members can only
operate if covered by regulations made for the purposes of subsection
115(2).
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
premises includes:
(a) a structure, building, aircraft, vehicle or vessel; and
(b) any land or place (whether enclosed or built on or not); and
(c) a part of a structure, building, aircraft, vehicle or vessel or of
such a place.
prescribed financial market means a financial market that is
prescribed by regulations made for the purposes of this definition.
printed includes type-written, lithographed or reproduced by any
mechanical means.
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
Section 9
senior manager:
(a) in relation to a corporation—means a person (other than a
director or secretary of the corporation) who:
(i) makes, or participates in making, decisions that affect
the whole, or a substantial part, of the business of the
corporation; or
(ii) has the capacity to affect significantly the corporation’s
financial standing; and
(b) in relation to a partnership—means a person (other than a
partner) who:
(i) makes, or participates in making, decisions that affect
the whole, or a substantial part, of the business of the
partnership; or
(ii) has the capacity to affect significantly the partnership’s
financial standing; and
(c) in relation to a trust—means a person (other than a trustee)
who:
(i) makes, or participates in making, decisions that affect
the whole, or a substantial part, of the business or affairs
of the trust; or
(ii) has the capacity to affect significantly the financial
standing of the trust; and
(d) in relation to a joint venture—means a person (other than a
director or secretary of a corporation participating in the joint
venture) who:
(i) makes, or participates in making, decisions that affect
the whole, or a substantial part, of the business of the
joint venture; or
(ii) has the capacity to affect significantly the financial
standing of the joint venture.
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.
Section 9
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.
Section 9
Section 9
Section 9
Section 9
Section 9
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.
(1) Subject to subsection 16(1), but despite anything else in this Part,
this section applies for the purposes of interpreting a reference to
an associate (the associate reference), in relation to a designated
body, if:
(a) the reference occurs in a provision of Chapter 6, 6A, 6B or
6C; or
(b) the reference occurs in a provision outside those Chapters
that relates to any of the following matters:
(i) the extent, or restriction, of a power to exercise, or to
control the exercise of, the votes attached to voting
shares in the designated body;
(ii) the primary person’s voting power in the designated
body;
(iii) relevant interests in securities in the designated body;
Section 12
Section 13
13 References in Chapter 7
15 General
Section 16
16 Exclusions
Section 17
Section 18
Section 21
Section 45A
Section 45A
(b) the value of the consolidated gross assets at the end of the
financial year of the company and the entities it controls (if
any) is $5 million or more;
(c) the company and the entities it controls (if any) have 50 or
more employees at the end of the financial year.
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 gross operating 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 46
46 What is a subsidiary
Section 48
48 Matters to be disregarded
Section 50
Section 50AA
(a) an entity (the third entity) controls both the principal and the
associate; and
(b) the operations, resources or affairs of the principal and the
associate are both material to the third entity.
(8) For the purposes of this section, one entity (the first entity) has a
qualifying investment in another entity (the second entity) if the
first entity:
(a) has an asset that is an investment in the second entity; or
(b) has an asset that is the beneficial interest in an investment in
the second entity and has control over that asset.
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
(b) is under a legal obligation to exercise that capacity for the
benefit of someone other than the first entity’s members;
the first entity is taken not to control the second entity.
Section 52
52 Doing acts
52A Signing
Section 53
Section 53AA
Section 53AC
Section 57
Section 58B
(2) Subject to subsection (3), an act required to be done under this Act
may, for the purposes of this Act, be done anywhere in Australia,
whether in or outside this jurisdiction.
(3) Nothing in subsection (2) affects the operation of any provision of
this Act that:
(a) expressly requires a particular act to be done in this
jurisdiction; or
(b) expressly or by implication permits a particular act to be
done outside Australia.
Section 64A
64A Entities
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
(b) is engaged by the person under a contract for services; or
(c) acts as agent for the person in any transaction or dealing; or
(d) is an attorney of the person under a power of attorney; 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
(g) is engaged by the trustee of the trust under a contract for
services; or
(h) acts as agent for the trustee of the trust in any transaction or
dealing.
Section 65
Where this Act confers power to extend the period for doing an act,
an application for the exercise of the power may be made, and the
power may be exercised, even if the period, or the period as last
extended, as the case requires, has ended.
Section 79
79 Involvement in contraventions
Section 83
86 Possession
Section 88B
(i) to goods; or
(ii) to a package, label, reel or thing in or with which goods
are, or are to be, supplied; and
(b) is so applied, or is intended or required to be so applied, for a
purpose connected with the supply of the goods.
(3) In subsection (2):
apply to includes print on, weave in, impress on, work into, or
annex, affix or attach to.
label includes a band or ticket.
package includes:
(a) a covering, stopper, glass, bottle, vessel, box, capsule, case,
frame or wrapper; or
(b) any other container or thing in which goods are, or are to be,
packed.
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.
Section 90
92 Securities
Section 95A
securities means:
(a) shares in a body; or
(b) debentures of a body; or
(c) interests in a registered managed investment scheme; or
(d) legal or equitable rights or interests in:
(i) shares; or
(ii) debentures; or
(iii) interests in a registered managed investment scheme;
(e) options to acquire (whether by way of issue or transfer) a
security covered by paragraph (a), (b), (c) or (d).
It does not cover:
(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) a market traded option.
Note: A derivative does not include an option to acquire a security by way
of issue (see the note to subsection (1)).
Note: Section 9 defines body.
(4) In Chapter 6D securities has the meaning given by section 700 and
in Chapter 7 security has the meaning given by section 761A.
(1) A person is solvent if, and only if, the person is able to pay all the
person’s debts, as and when they become due and payable.
(2) A person who is not solvent is insolvent.
Section 100
Section 101
102C In Australia
(1) This section has effect except so far as this Act otherwise provides.
Section 104
(5) Nothing in this section limits the generality of anything else in it.
Section 107
Section 109X
Section 111AA
Section 111AB
Division 2—Definitions
111AD ED securities
Section 111AE
(1) If:
(a) a body corporate is, with its agreement, consent or
acquiescence, included in the official list of a prescribed
financial market; and
(b) the market’s listing rules (according to their terms) apply to
the body in relation to a class (which may be some or all) of
securities issued by the body;
securities issued by the body in that class are ED securities, and
that market is a listing market in relation to that body.
(1A) If:
(a) an undertaking to which interests in a registered scheme
relates is, with the agreement, consent or acquiescence of the
responsible entity, included in the official list of a prescribed
financial market; and
(b) the market’s listing rules (according to their terms) apply to
the undertaking in relation to a class (which may be some or
all) of managed investment products that relate to the
scheme;
managed investment products in that class that relate to the scheme
are ED securities, and that market is a listing market in relation to
the undertaking.
(2) Subsections (1) and (1A) do not apply to securities of a body if:
(a) the body is a public authority of the Commonwealth or an
instrumentality or agency of the Crown in right of the
Commonwealth; and
(b) the only securities issued by the body that would otherwise
be ED securities because of subsection (1) or (1A) are
debentures; and
(c) both the repayment of principal, and the payment of interest,
in respect of those debentures is guaranteed by the
Commonwealth.
(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
Section 111AF
Section 111AH
(c) securities in that class have been held by 100 or more persons
at all times since the issue of securities referred to in
paragraph (b).
(2) Securities in a class of securities of a body are ED securities if:
(a) securities in that class have been issued as consideration for
the acquisition or cancellation of securities of another body
pursuant to a compromise or arrangement under Part 5.1; and
(b) securities in that class, or those or any other securities of the
other body, were ED securities immediately before securities
in that class were first issued pursuant to the compromise or
arrangement; and
(c) after an issue of securities in that class pursuant to the
compromise or arrangement, 100 or more persons held
securities in that class; and
(d) securities in that class have been held by 100 or more persons
at all times since the issue of securities referred to in
paragraph (c).
(1) For the purposes of sections 111AF, 111AFA and 111AG, a person
holds securities if, and only if:
(a) the person is registered as the holder of the securities in a
register under section 169, 170, 171 or 601CZB; or
(b) the person is entitled to be so registered.
(2) For the purposes of sections 111AF, 111AFA and 111AG, joint
holders of securities count as one person.
Section 111AK
(2) Regulations in force for the purposes of subsection (1) have effect
accordingly, despite anything else in this Division.
Section 111AN
Section 111AR
(1) For the purposes of this Division, the disclosing entity provisions
are the provisions of the following:
(a) Chapter 2M as it applies to disclosing entities;
(d) sections 674 and 675.
(1) The regulations may exempt specified persons from all or specified
disclosing entity provisions:
(a) either generally or as otherwise specified; and
(b) either unconditionally or subject to specified conditions.
Section 111AU
Section 111J
Section 1
This guide summarises the main rules in the Corporations Act (the
Corporations Act 2001) that apply to proprietary companies
limited by shares—the most common type of company used by
small business. The guide gives a general overview of the
Corporations Act as it applies to those companies and directs
readers to the operative provisions in the Corporations Act.
The notes in square brackets at the end of paragraphs in the guide
indicate the main provisions of the Corporations Act, the
regulations made under the Corporations Act, and ASIC Practice
Notes that are relevant to the information in the paragraphs.
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
If a company has only 1 director, the sole director may also pass a
resolution by recording and signing their decision.
[sections 198A, 198E, 202C, subsection 202F(1), sections 248A-248G, 251A]
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
Section 1
• at a meeting; or
Section 2
Section 3
Section 3
Section 4
Section 4
the public. The company’s name and its ACN or ABN (if the last 9
digits are the same, and in the same order, as the last 9 digits of its
ACN) must appear:
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, 1302
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
4 a company changes its directors within 28 days after the 205B
or company secretary 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
6 a company creates certain kinds within 45 days after the 263
of charges charge is created
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
Section 5
Notification requirements
If... the company must see section...
notify ASIC of the
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 201G]
• to act honestly
Section 5
Section 6
Section 6
• the person sells all of their shares in the company and the
company registers the transfer of the shares
Section 7
[sections 249A—251B]
Section 8
9 Returns to shareholders
9.1 Dividends
Dividends are payments to shareholders out of the company’s after
tax profits. It is a replaceable rule (see 1.6) that the directors decide
whether the company should pay a dividend.
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]
A liquidator is appointed:
12.4 Liquidators
Section 12
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
(2) The regulations may specify a higher number that is higher than
the number specified in paragraph (1)(b) for the purposes of the
Section 116
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
(ii) the company’s ACN; and
(iii) the company’s type; and
(iv) that the company is registered as a company under this
Act; and
(v) the State or Territory in this jurisdiction in which the
company is taken to be registered; and
(vi) the date of registration.
Note: For the evidentiary value of a certificate of registration, see subsection
1274(7A).
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
(ii) in the application for the company’s registration under
paragraph 601BC(2)(o) (registration of registrable body
as company under Part 5B.1); or
(b) the State or Territory in which the company is taken to be
registered under paragraph 5H(4)(b) (registration of body as
company on basis of State or Territory law).
This subsection has effect subject to subsection (3).
Note 1: ASIC must specify the State or Territory in which the company is
taken to be registered in the company’s certificate of registration (see
paragraph 118(1)(c)(v) and 601BD(1)(c)(v)).
Note 2: The company’s legal capacity and powers do not depend in any way
on the particular State or Territory it is taken to be registered in (see
section 124).
Note 3: A law of a State or Territory may impose obligations, or confer rights
or powers, on a person by reference to the State or Territory in which
a company is taken to be registered for the purposes of this Act. For
example, a State or Territory law dealing with stamp duty on share
transfers might impose duty on transfers of shares in companies that
are taken to be registered in that State or Territory for the purposes of
this Act.
Section 120
Section 123
Section 124
(1) A company has the legal capacity and powers of an individual both
in and outside this jurisdiction. A company also has all the powers
of a body corporate, including the power to:
(a) issue and cancel shares in the company;
(b) issue debentures (despite any rule of law or equity to the
contrary, this power includes a power to issue debentures that
are irredeemable, redeemable only if a contingency, however
remote, occurs, or redeemable only at the end of a period,
however long);
(c) grant options over unissued shares in the company;
(d) distribute any of the company’s property among the
members, in kind or otherwise;
(e) give security by charging uncalled capital;
(f) grant a floating charge over the company’s property;
(g) arrange for the company to be registered or recognised as a
body corporate in any place outside this jurisdiction;
(h) do anything that it is authorised to do by any other law
(including a law of a foreign country).
A company limited by guarantee does not have the power to issue
shares.
Note: For a company’s power to issue bonus, partly—paid, preference and
redeemable preference shares, see section 254A.
Section 125
(2) This section does not affect the operation of a law that requires a
particular procedure to be complied with in relation to the contract.
Section 127
Section 128
Section 129
(b) has authority to exercise the powers and perform the duties
customarily exercised or performed by a director or company
secretary of a similar company.
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
(2) Subsection (1) does not apply in relation to a document that has
been lodged with ASIC to the extent that the document relates to a
charge that is registrable under this Act.
Section 131
Section 132
Section 134
Section 136
Section 137
Note: The company may need leave of the Court to modify or repeal its
constitution if it was adopted as the result of a Court order (see
subsection 233(3)).
(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
(1) A company’s constitution (if any) and any replaceable rules that
apply to the company have effect as a contract:
(a) between the company and each member; and
(b) between the company and each director and company
secretary; and
(c) between a member and each other member;
under which each person agrees to observe and perform the
constitution and rules so far as they apply to that person.
Section 141
The following table sets out the provisions of this Act that apply as
replaceable rules.
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.
(1) A company that does not occupy the premises at the address of its
registered office must be able to show to ASIC the occupier’s
written consent to the company’s use of those premises as its
registered office.
Note: ASIC can require the company to produce the consent (see
section 100).
Section 144
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 146
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.
(5) A public company must not include the word “Proprietary” (or an
abbreviation of it) in its name unless:
(a) it was a public company before 1 July 1998; and
(b) the word “Proprietary” (or an abbreviation of it) was
included in its name before 1 July 1998.
(1) The abbreviations set out in the following table may be used:
(a) instead of words that this Act requires to be part of a
company’s name or to be included in a document or on a
company’s common seal; and
(b) instead of words that are part of a company’s name; and
(c) with or without full stops.
Section 150
Section 152
(3) ASIC may revoke the company’s licence if the company does
anything set out in paragraphs (2)(a) to (e).
(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.
(1) A company must set out its name on all its public documents and
negotiable instruments.
(2) Subject to sections 154 and 155, if the company’s ACN is not used
in its name, the company must also set out with its name, or with 1
of the references to its name, either:
(a) the expression “Australian Company Number” followed by
the company’s ACN; or
(b) if the last 9 digits of the company’s ABN are the same, and in
the same order, as the last 9 digits of its ACN—the words
“Australian Business Number” followed by the company’s
ABN.
Section 154
Section 156
(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.
(1) ASIC may direct a company in writing to change its name within 2
months if:
(a) the name should not have been registered; or
(b) the company has breached a condition under subsection
147(3) on the availability of the name; or
(c) a consent given under subsection 147(4) to use or assume the
name has been withdrawn; or
(d) the company has breached a condition on a consent given
under subsection 147(4); or
(e) the company ceases to be permitted to use or assume the
name (as referred to in paragraph 147(4)(b)).
(2) The company must comply with the direction within 2 months after
being given it by doing everything necessary to change its name
under section 157.
Section 159
(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.
(1) ASIC may change a company’s name so that it includes the word
“Limited” by altering the details of the company’s registration to
reflect the change if:
(a) the company contravenes any of the requirements or
prohibitions in its constitution referred to in subsection
150(1); or
(b) the company modifies its constitution to remove any of those
requirements or prohibitions; or
(c) ASIC revokes a licence referred to in section 151 that applies
to the company.
(2) The change of name takes effect when ASIC alters the details of
the company’s registration.
Section 161
Section 162
Section 162
(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.
Section 163
Lodging application
(1) To change its type, a company must lodge an application with
ASIC.
Section 163
Section 163
(3B) If the company has more than 20 members, the company is only
required to set out the different particulars under subsection (3A)
that relate to a person who is a top 20 member of a class of the
company.
Note: See also section 107.
Section 164
(1) ASIC must give notice under subsection (3) that it intends to alter
the details of the company’s registration if:
(a) ASIC is satisfied that:
(i) the application complies with section 163; and
(ii) for an application by a company limited by guarantee to
change to a company limited by shares—the company’s
creditors are not likely to be materially prejudiced by
the change; and
(b) for an application by a company limited by guarantee to
change to a company limited by shares that is accompanied
by a copy of a special resolution dealing with an issue of
shares according to section 167—ASIC is not of the opinion
that the obligations that would attach to the shares are
unreasonable compared with the obligations that attach to
membership of the company limited by guarantee.
(2) To make a decision under subparagraph (1)(a)(ii), ASIC may direct
the company in writing to:
(a) notify some or all of its creditors of the proposed change in
the way ASIC specifies; and
(b) invite those creditors to make submissions to ASIC.
(3) The notice that ASIC intends to alter the details of the company’s
registration must be:
(a) included on ASIC database; and
(b) published in the Gazette.
The notice must also state that ASIC will alter the details of the
company’s registration 1 month after the notice has been published
in the Gazette unless an order by a court or the Administrative
Appeals Tribunal prevents it from doing so.
Section 165
connection with the change of type also takes effect when ASIC
alters the details of the company’s registration.
(6) ASIC must give the company a new certificate of registration after
it alters the details of the company’s registration. The company’s
name is the name specified in the certificate of registration issued
under this section.
Note: For the evidentiary value of a certificate of registration, see subsection
1274(7A).
(4) A change of type under this section takes effect when ASIC alters
the details of the company’s registration.
(5) ASIC must give the company a new certificate of registration after
it alters the details of the company’s registration under
Section 166
(1) If:
(a) a company limited by guarantee changes type under this Part
to a company limited by shares; and
(b) that company, or another company that beneficially owns all
the shares in that company, issues shares to a person who was
Section 167AA
(2) This Part applies to the change with any modifications that are
necessary.
Section 167A
Chapter 2C—Registers
Part 2C.1—Registers generally
Section 169
General requirements
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.
(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
Section 169
(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
(e) the amount paid, or agreed to be considered as paid, on the
interests.
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
Section 170
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 171
(3) The company or scheme must keep with the register a copy of
every document that grants an option over unissued shares or
interests.
(3B) Subsection (3) does not apply if the option has been granted
official quotation by a securities exchange.
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 172
(1) A register kept under this Chapter that relates to a company must
be kept at:
(a) the company’s registered office; or
(b) the company’s principal place of business in this jurisdiction;
or
(c) a place in this jurisdiction (whether of the company or of
someone else) where the work involved in maintaining the
register is done; or
(d) another place in this jurisdiction approved by ASIC.
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.
Section 173
Right to inspect
Inspection fees
(2) A member of a company or a registered scheme, a registered
option holder or a registered debenture holder may inspect a
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.
Section 174
person on floppy disk. The data must be readable but the floppy
disk need not be formatted for the person’s preferred operating
system.
(4) A person has the same rights to inspect, and obtain copies of,
thedocuments 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 175
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
(1) This Part sets out some of the most significant duties of directors,
secretaries, other officers and employees of corporations. Other
duties are imposed by other provisions of this Act and other laws
(including the general law).
(2) Section 9 defines both director and officer. Officer includes, as
well as directors and secretaries, some other people who manage
the corporation or its property (such as receivers and liquidators).
Section 180
Section 181
Section 183
(1) A person who obtains information because they are, or have been,
a director or other officer or employee of a corporation must not
improperly use the information to:
(a) gain an advantage for themselves or someone else; or
(b) cause detriment to the corporation.
Note 1: This duty continues after the person stops being an officer or
employee of the corporation.
Note 2: This subsection is a civil penalty provision (see section 1317E).
Section 185
Section 187
Secretary’s functions
Section 189
Note: See section 204A for the circumstances in which a company must
have a secretary.
Defence
(3) A person does not contravene subsection (1) or (2) if they show
that they took all reasonable steps to ensure that the company
complied with the section.
Note: A defendant bears a legal burden in relation to a matter mentioned in
subsection (3), see section 13.4 of the Criminal Code.
If:
(a) a director relies on information, or professional or expert
advice, given or prepared by:
(i) an employee of the corporation whom the director
believes on reasonable grounds to be reliable and
competent in relation to the matters concerned; or
(ii) a professional adviser or expert in relation to matters
that the director believes on reasonable grounds to be
within the person’s professional or expert competence;
or
(iii) another director or officer in relation to matters within
the director’s or officer’s authority; or
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
(vi) relates to a contract that insures, or would insure, the
director against liabilities the director incurs as an
Section 191
Section 192
Section 193
(4) The director must ensure that the nature and extent of the interest
disclosed in the standing notice is recorded in the minutes of the
meeting at which the standing notice is given or tabled.
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;
Section 194
Section 195
(2) The director may be present and vote if directors who do not have
a material personal interest in the matter have passed a resolution
that:
(a) identifies the director, the nature and extent of the director’s
interest in the matter and its relation to the affairs of the
company; and
(b) states that those directors are satisfied that the interest should
not disqualify the director from voting or being present.
Section 196
Section 197
Section 198A
Division 4—Powers
(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
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
(c) that the person has reason to believe will be brought against
them.
Note: Section 290 gives the director a right of access to financial records.
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 1317H or 1317HA;
(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
(1) Sections 199A and 199B do not authorise anything that would
otherwise be unlawful.
(2) Anything that purports to indemnify or insure a person against a
liability, or exempt them from a liability, is void to the extent that
it contravenes section 199A or 199B.
Section 200A
Section 200B
(1A) For an offence based on subsection (1), strict liability applies to the
circumstance, that the benefit is in connection with the person’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:
Section 200C
(2) For an offence based on subsection (1), strict liability applies to the
circumstance, that the transfer is in connection with the transfer of
the whole or any part of the undertaking or property of the
company.
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 200D
(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 200F
(3) The approval extends to the giving of another benefit to the person
if:
(a) the other benefit is given to the person instead of the
proposed benefit; and
(b) the amount or money value of the benefit is less than the
amount or money value of the proposed benefit.
(4) The approval does not relieve a director of a body corporate from
any duty to the body corporate (whether under section 180, 181,
182, 183 or 184 or otherwise and whether of a fiduciary nature or
not) in connection with the giving of the benefit.
Section 200F
where:
relevant period is the number of years in the relevant period or 7,
whichever is the lesser number.
total remuneration is the amount of the total remuneration of the
person from the company and related bodies corporate during the
last 3 years of the relevant period.
Note: Relevant period is defined in subsection (5).
Section 200G
(5) For the purposes of this section, if a person has held an 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
(3) The amount worked out under this subsection is the amount
worked out using the formula:
Total remuneration × Relevant period
3
where:
relevant period is the number of years in the relevant period or 7,
whichever is the lesser number.
total remuneration is the amount of the total remuneration of the
person 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.
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
(1) The director of a proprietary company who is its only director and
only shareholder may appoint another director by recording the
appointment and signing the record.
Section 201G
Section 201J
Section 201M
(2) Subsection (1) does not deal with the question whether an effective
act by a director:
(a) binds the company in its dealings with other people; or
(b) makes the company liable to another person.
Note: The kinds of acts that this section validates are those that are only
legally effective if the person doing them is a director (for example,
calling a meeting of the company’s members or signing a document to
be lodged with ASIC or minutes of a meeting). Sections 128-130
contain rules about the assumptions people are entitled to make when
dealing with a company and its officers.
Section 202A
(1) The directors of a company are to be paid the remuneration that the
company determines by resolution.
Note: Chapter 2E makes special provision for the payment of remuneration
to the directors of public companies.
(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
A proprietary company:
(a) may by resolution remove a director from office; and
(b) may by resolution appoint another person as a director
instead.
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
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
Section 204D
Section 204G
Section 205A
Section 205C
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 205D
Section 205E
Section 205G
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.
Note: Under section 353, ASIC may determine conditions that must be
complied with when lodging documents electronically under this
subsection.
Section 205G
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 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:
(a) if the person does not serve a term of imprisonment—5 years
after the day on which they are convicted; or
(b) if the person serves a term of imprisonment—5 years after
the day on which they are released from prison.
Section 206BA
Section 206D
Section 206E
Section 206F
Power to disqualify
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.
Section 206G
Start of disqualification
(4) The disqualification takes effect from the time when a notice
referred to in subsection (3) is served on the person.
(5) ASIC may give a person who it has disqualified from managing
corporations under this Part written permission to manage a
particular corporation or corporations. The permission may be
expressed to be subject to conditions and exceptions determined by
ASIC.
(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 206H
Section 207
207 Purpose
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 213
(3) In working out for the purposes of subsection (1) or (2) whether
giving the benefit is reasonable in the circumstances:
(a) assess whether it would be reasonable on the basis of the
circumstances existing:
(i) if the benefit is given under an agreement—at the time
when the agreement is or was made; or
(ii) if the benefit is not given under an agreement—at the
time when the benefit is or was given; and
(b) disregard any other financial benefit given or payable to the
officer by the public company or entity.
Section 214
(3) For the purposes of subsection (2), disregard shares that are not
voting shares.
Section 216
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.
(3) ASIC may give and revoke approvals for the purposes of
subsection (2).
Section 219
(1) The proposed explanatory statement lodged under section 218 must
be in writing and set out:
(a) the related parties to whom the proposed resolution would
permit financial benefits to be given; and
(b) the nature of the financial benefits; and
(c) in relation to each director of the company:
(i) if the director wanted to make a recommendation to
members about the proposed resolution—the
recommendation and his or her reasons for it; or
(ii) if not—why not; or
(iii) if the director was not available to consider the
proposed resolution—why not; and
(d) in relation to each such director:
(i) whether the director had an interest in the outcome of
the proposed resolution; and
(ii) if so—what it was; and
(e) all other information that:
(i) is reasonably required by members in order to decide
whether or not it is in the company’s interests to pass
the proposed resolution; and
(ii) is known to the company or to any of its directors.
(2) An example of the kind of information referred to in
paragraph (1)(e) is information about what, from an economic and
commercial point of view, are the true potential costs and
detriments of, or resulting from, giving financial benefits as
permitted by the proposed resolution, including (without
limitation):
(a) opportunity costs; and
(b) taxation consequences (such as liability to fringe benefits
tax); and
(c) benefits forgone by whoever would give the benefits.
Note: Sections 180 and 181 require an officer of a corporation to act
honestly and to exercise care and diligence. These duties extend to
preparing an explanatory statement under this section. Section 1309
creates offences where false and misleading material relating to a
corporation’s affairs is made available or furnished to members.
Section 220
(2) If the company is listed, ASIC may consult with the relevant
market operator for the purposes of giving comments to the
company.
(3) Subsection (2) does not limit the persons with whom ASIC may
consult.
(4) ASIC must keep a copy of the written comments it gives to a
company under subsection (1), and subsections 1274(2) and (5)
apply to the copy as if it were a document lodged with ASIC.
(5) The fact that ASIC has given particular comments, or has declined
to give comments, under subsection (1) does not in any way affect
the performance or exercise of any of ASIC’s functions and
powers.
Section 222
The resolution must be the same as the proposed resolution set out
in the proposed notice lodged under section 218.
(2) Subsection (1) does not prevent the casting of a vote if:
(a) it is cast by a person as a proxy appointed by writing that
specifies how the proxy is to vote on the proposed resolution;
and
(b) it is not cast on behalf of a related party or associate of a kind
referred to in subsection (1).
(3) The regulations may prescribe cases where subsection (1) does not
apply.
Section 225
(7) For the purposes of this section, a vote is cast on behalf of an entity
if, and only if, it is cast:
(a) as proxy for the entity; or
(b) otherwise on behalf of the entity; or
(c) in respect of a share in respect of which the entity has:
(i) power to vote; or
(ii) power to exercise, or control the exercise of, a right to
vote.
(8) Subject to subsection 225(1), a contravention of this section does
not affect the validity of a resolution.
(9) Subject to Part 1.1A, this section has effect despite:
(a) anything else in:
(i) this Act; or
(ii) any other law (including the general law) of a State or
Territory; or
(b) anything in a body corporate’s constitution.
Section 226
(2) If a poll was duly demanded on the question that the resolution be
passed, subsections (3) and (4) apply in relation to voting on the
poll.
(3) In relation to each member of the public company who voted on
the resolution in person, the public company must record in
writing:
(a) the member’s name; and
(b) how many votes the member cast for the resolution and how
many against.
(4) In relation to each member of the public company who voted on
the resolution by proxy, or by a representative authorised under
section 250D, the public company must record in writing:
(a) the member’s name; and
(b) in relation to each person who voted as proxy, or as such a
representative, for the member:
(i) the person’s name; and
(ii) how many votes the person cast on the resolution as
proxy, or as such a representative, for the member; and
(iii) how many of those votes the person cast for the
resolution and how many against.
(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.
The public company must lodge a notice setting out the text of the
resolution within 14 days after the resolution is passed.
(1) The Court may declare that the conditions prescribed by this
Division have been satisfied if it finds that they have been
substantially satisfied.
Section 227
Section 228
Controlling entities
(1) An entity that controls a public company is a related party of the
public company.
Section 229
referred to in subsection (1), (2), (3) or (4) at any time within the
previous 6 months.
Section 229
Section 230
A director is not relieved from any of their duties under this Act
(including sections 180 and 184), or their fiduciary duties, in
connection with a transaction merely because the transaction is
authorised by a provision of this Chapter or is approved by a
resolution of members under a provision of this Chapter.
Section 231
Section 232
(1) The Court can make any order under this section that it considers
appropriate in relation to the company, including an order:
(a) that the company be wound up;
(b) that the company’s existing constitution be modified or
repealed;
(c) regulating the conduct of the company’s affairs in the future;
(d) for the purchase of any shares by any member or person to
whom a share in the company has been transmitted by will or
by operation of law;
(e) for the purchase of shares with an appropriate reduction of
the company’s share capital;
(f) for the company to institute, prosecute, defend or discontinue
specified proceedings;
Section 234
Section 235
(1) If an order is made under section 233, the applicant must lodge a
copy of the order with ASIC within 14 days after it is made.
(2) 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 236
Section 237
Section 238
(1) Any of the following persons may apply to the Court for an order
that they be substituted for a person to whom leave has been
granted under section 237:
(a) a member, former member, or a person entitled to be
registered as a member, of the company or of a related body
corporate;
(b) an officer, or former officer, of the company.
Section 240
(1) The Court may make any orders, and give any directions, that it
considers appropriate in relation to proceedings brought or
intervened in with leave, or an application for leave, including:
(a) interim orders; and
(b) directions about the conduct of the proceedings, including
requiring mediation; and
(c) an order directing the company, or an officer of the company,
to do, or not to do, any act; and
(d) an order appointing an independent person to investigate, and
report to the Court on:
(i) the financial affairs of the company; or
(ii) the facts or circumstances which gave rise to the cause
of action the subject of the proceedings; or
(iii) the costs incurred in the proceedings by the parties to
the proceedings and the person granted leave.
Section 242
Section 246B
(1) If a company has a constitution that sets out the procedure for
varying or cancelling:
(a) for a company with a share capital—rights attached to shares
in a class of shares; or
(b) for a company without a share capital—rights of members in
a class of members;
those rights may be varied or cancelled only in accordance with the
procedure. The procedure may be changed only if the procedure
itself is complied with.
Section 246C
Section 246D
Section 246E
(1) A company must lodge with ASIC a notice in the prescribed form
setting out particulars of any of the following:
(a) a division of shares in the company into classes if the shares
were not previously so divided;
(b) a conversion of shares in a class of shares in the company
into shares in another class.
Section 246G
(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.
(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.
Section 246G
(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
If the Court makes an order under section 247A, the Court may
make any other orders it considers appropriate, including either or
both of the following:
(a) an order limiting the use that a person who inspects books
may make of information obtained during the inspection;
(b) an order limiting the right of a person who inspects books to
make copies in accordance with subsection 247A(2).
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
(1) The directors may elect a director to chair their meetings. The
directors may determine the period for which the director is to be
the chair.
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).
(1) A company that has only 1 member may pass a resolution by the
member recording it and signing the record.
(2) If this Act requires information or a document relating to the
resolution to be lodged with ASIC, that requirement is satisfied by
lodging the information or document with the resolution that is
passed.
Note 1: A body corporate representative may sign such a 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
(1) The directors of a company must call and arrange to hold a general
meeting on the request of:
(a) members with at least 5% of the votes that may be cast at the
general meeting; or
(b) at least 100 members who are entitled to vote at the general
meeting.
(1A) The regulations may prescribe a different number of members for
the purposes of the application of paragraph (1)(b) to:
(a) a particular company; or
(b) a particular class of company.
Without limiting this, the regulations may specify the number as a
percentage of the total number of members of the company.
Section 249E
(3) Separate copies of a document setting out the request may be used
for signing by members if the wording of the request is identical in
each copy.
(4) The percentage of votes that members have is to be worked out as
at the midnight before the request is given to the company.
(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.
(1) Members with more than 50% of the votes of all of the members
who make a request under section 249D may call and arrange to
hold a general meeting if the directors do not do so within 21 days
after the request is given to the company.
(2) The meeting must be called in the same way—so far as is
possible—in which general meetings of the company may be
called. The meeting must be held not later than 3 months after the
request is given to the company.
(3) To call the meeting the members requesting the meeting may ask
the company under section 173 for a copy of the register of
members. Despite paragraph 173(3)(b), the company must give the
members the copy of the register without charge.
(4) The company must pay the reasonable expenses the members
incurred because the directors failed to call and arrange to hold the
meeting.
(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
Section 249F
(1) Members with at least 5% of the votes that may be cast at a general
meeting of the company may call, and arrange to hold, a general
meeting. The members calling the meeting must pay the expenses
of calling and holding the meeting.
(2) The meeting must be called in the same way—so far as is
possible—in which general meetings of the company may be
called.
(3) The percentage of votes that members have is to be worked out as
at the midnight before the meeting is called.
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 249J
Section 249K
Section 249LA
(a) set out the place, date and time for the meeting (and, if the
meeting is to be held in 2 or more places, the technology that
will be used to facilitate this); and
(b) state the general nature of the meeting’s business; and
(c) if a special resolution is to be proposed at the meeting—set
out an intention to propose the special resolution and state the
resolution; and
(d) if a member is entitled to appoint a proxy—contain a
statement setting out the following information:
(i) that the member has a right to appoint a proxy;
(ii) whether or not the proxy needs to be a member of the
company;
(iii) that a member who is entitled to cast 2 or more votes
may appoint 2 proxies and may specify the proportion
or number of votes each proxy is appointed to exercise.
Note: There may be other requirements for disclosure to members.
(2) The notice of the AGM of a listed company must also inform
members that the resolution referred to in subsection 250R(2)
(resolution on remuneration report) will be put at the AGM.
Section 249M
Section 249N
(3) Separate copies of a document setting out the notice may be used
for signing by members if the wording of the notice is identical in
each copy.
(4) The percentage of votes that members have is to be worked out as
at the midnight before the members give the notice.
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
(4) Separate copies of a document setting out the request may be used
for signing by members if the wording of the request is identical in
each copy.
(5) The percentage of votes that members have is to be worked out as
at the midnight before the request is given to the company.
(6) After receiving the request, the company must distribute to all its
members a copy of the statement at the same time, or as soon as
practicable afterwards, and in the same way, as it gives notice of a
general meeting.
(7) The company is responsible for the cost of making the distribution
if the company receives the statement in time to send it out to
members with the notice of meeting.
(8) The members making the request are jointly and individually liable
for the expenses reasonably incurred by the company in making the
distribution if the company does not receive the statement in time
to send it out with the notice of meeting. At a general meeting, the
company may resolve to meet the expenses itself.
(9) The company 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 249Q
249Q Purpose
249S Technology
(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
directors specify. If the directors do not specify 1 or more of those
things, the meeting is adjourned to:
Section 249U
(a) if the date is not specified—the same day in the next week;
and
(b) if the time is not specified—the same time; and
(c) if the place is not specified—the same place.
(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.
Section 249W
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
(3) A company’s constitution (if any) may provide for the effect that a
member’s presence at a meeting has on the authority of a proxy
appointed to attend and vote for the member. However, if the
constitution does not deal with this, a proxy’s authority to speak
and vote for a member at a meeting is suspended while the member
is present at the meeting.
Section 250A
Section 250B
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 250BA
Section 250D
votes, a vote cast by the proxy will be valid even if, before the
proxy votes:
(a) the appointing member dies; or
(b) the member is mentally incapacitated; or
(c) the member revokes the proxy’s appointment; or
(d) the member revokes the authority under which the proxy was
appointed by a third party; or
(e) the member transfers the share in respect of which the proxy
was given.
Note: A proxy’s authority to vote is suspended while the member is present
at the meeting (see subsection 249Y(3)).
Section 250E
Section 250H
Section 250L
Section 250N
(4) A public company that has only 1 member is not required to hold
an AGM under this section.
Section 250PA
(4) ASIC may impose conditions on the extension and the company
must comply with those conditions.
(5) An offence based on subsection (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(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.
(3) The listed company must, as soon as practicable after the question
is received by the company, pass the question on to the auditor.
The company must pass the question on to the auditor even if the
company believes the question is not relevant to the matters
specified in paragraph (1)(a) and (b).
Section 250PA
company, a document (the question list) that sets out the questions
that:
(a) the listed company has passed on to the auditor; and
(b) the auditor considers to be relevant to the matters specified in
paragraphs (1)(a) and (b);
as soon as practicable after the end of the time for submitting
questions under subsection (1) and a reasonable time before the
AGM.
(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 250R
(9) The listed company must, at or before the start of the AGM, make
copies of the question list reasonably available to the members
attending the AGM.
(1) The business of an AGM may include any of the following, even if
not referred to in the notice of meeting:
(a) the consideration of the annual financial report, directors’
report and auditor’s report;
(b) the election of directors;
(c) the appointment of the auditor;
(d) the fixing of the auditor’s remuneration.
(3) The vote on the resolution is advisory only and does not bind the
directors or the company.
Section 250S
(1) The chair of an AGM must allow a reasonable opportunity for the
members as a whole at the meeting to ask questions about or make
comments on the management of the company.
(2) 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 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 251A
251A Minutes
(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.
(5A) An offence based on subsection (1), (2), (3), (4) or (5) is an offence
of strict liability.
Section 251AA
Note: For strict liability, see section 6.1 of the Criminal Code.
(1) A company must ensure that the minute books for the meetings of
its members and for resolutions of members passed without
meetings are open for inspection by members free of charge.
Section 251B
(4) If the company requires payment for the copy, the company must
send it:
(a) within 14 days after the company receives the payment; or
(b) within any longer period that ASIC approves.
The amount of any payment the company requires cannot exceed
the prescribed amount.
(5) An offence based on subsection (1), (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 252A
(1) The responsible entity of a registered scheme must call and arrange
to hold a meeting of the scheme’s members to consider and vote on
a proposed special or extraordinary resolution on the request of:
(a) members with at least 5% of the votes that may be cast on the
resolution; or
(b) at least 100 members who are entitled to vote on the
resolution.
(1A) The regulations may prescribe a different number of members for
the purposes of the application of paragraph (1)(b) to:
(a) a particular scheme; or
(b) a particular class of scheme.
Without limiting this, the regulations may specify the number as a
percentage of the total number of members of the scheme.
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.
(1) Members with more than 50% of the votes carried by interests held
by the members who make a request under section 252B may call
and arrange to hold a meeting of the scheme’s members and
distribute the statement (if any) if the responsible entity does not
do so within 21 days after the request is given to the responsible
entity.
(2) The meeting must be called and the statement is to be distributed in
the same way—so far as is possible—in which meetings of the
scheme’s members may be called by the responsible entity and
information is distributed to members by the responsible entity.
The meeting must be held not later than 3 months after the request
is given to the responsible entity.
Section 252D
(3) To call the meeting the members requesting the meeting may ask
the responsible entity under section 173 for a copy of the register
of members. Despite paragraph 173(3)(b), the responsible entity
must give the members requesting the meeting the copy of the
register without charge.
(4) The responsible entity must pay the reasonable expenses the
members incurred because the responsible entity failed to call and
arrange to hold the meeting and to make the distribution (if any).
The responsible entity must not pay those expenses from the
scheme’s assets.
Section 252E
Section 252F
Section 252H
Note: A defect in the notice given may not invalidate a meeting (see
section 1322).
(1) The responsible entity of a registered scheme must give the auditor
of the scheme and the auditor of the scheme compliance plan any
other communications relating to the meeting that a member of the
scheme is entitled to receive.
(2) 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 252K
Section 252L
Section 252M
(2) The responsible entity must give all the members of the scheme
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.
Section 252N
(a) members with at least 5% of the votes that may be cast on the
resolution; or
(b) at least 100 members who are entitled to vote at the meeting.
(2A) The regulations may prescribe a different number of members for
the purposes of the application of paragraph (2)(b) to:
(a) a particular scheme; or
(b) a particular class of scheme.
Without limiting this, the regulations may specify the number as a
percentage of the total number of members of the scheme.
(3) The request must be:
(a) in writing; and
(b) signed by the members making the request; and
(c) given to the responsible entity.
(4) Separate copies of a document setting out the request may be used
for signing by members if the wording of the request 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) After receiving the request, the responsible entity must distribute to
all the members of the scheme a copy of the statement at the same
time, or as soon as practicable afterwards, and in the same way, as
it gives notice of a meeting.
(7) The responsible entity is responsible for the cost of making the
distribution if the responsible entity receives the statement in time
to send it out to members with the notice of meeting.
(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:
Section 252N
Section 252P
252Q Technology
252R Quorum
(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
place the responsible entity specifies. If the responsible entity does
not specify 1 or more of those things, the meeting is adjourned to:
Section 252S
(a) if the date is not specified—the same day in the next week;
and
(b) if the time is not specified—the same time; and
(c) if the place is not specified—the same place.
(1) The auditor of a registered scheme and the auditor of the scheme
compliance plan are entitled to attend any meeting of the scheme’s
members.
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 252Z
Section 252Z
Receipt of documents
Section 253A
Section 253B
Section 253C
Section 253G
(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.
Section 253K
Section 253M
253M Minutes
(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.
(1) The responsible entity of a registered scheme must ensure that the
minute books for the meetings of the scheme’s members are open
for inspection by members free of charge.
(2) A member of a registered scheme may ask the responsible entity in
writing for a copy of any minutes of a meeting of the scheme’s
members or an extract of the minutes.
(3) If the responsible entity does not require the member to pay for the
copy, the responsible entity must send it:
(a) within 14 days after the member asks for it; or
(b) within any longer period that ASIC approves.
Section 253N
(4) If the responsible entity requires payment for the copy, the
responsible entity must send it:
(a) within 14 days after the responsible entity receives the
payment; or
(b) within any longer period that ASIC approves.
The amount of any payment the responsible entity requires cannot
exceed the prescribed amount.
Section 254A
Chapter 2H—Shares
Part 2H.1—Issuing and converting shares
(1) A company’s power under section 124 to issue shares includes the
power to issue:
(a) bonus shares (shares for whose issue no consideration is
payable to the issuing company); and
(b) preference shares (including redeemable preference shares);
and
(c) partly-paid shares (whether or not on the same terms for the
amount of calls to be paid or the time for paying calls).
Note 1: Subsections 246C(5) and (6) provide that in certain circumstances the
issue of preference shares is taken to be a variation of class rights.
Note 2: Partly-paid shares are dealt with in sections 254M-254N.
Note 3: On the issue of a bonus share there need not be any increase in the
company’s share capital.
(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:
(a) at a fixed time or on the happening of a particular event; or
Section 254B
Section 254C
(2) To make the offer, the directors must give the shareholders a
statement setting out the terms of the offer, including:
(a) the number of shares offered; and
(b) the period for which it will remain open.
Section 254E
(3) The directors may issue any shares not taken up under the offer
under subsection (1) as they see fit.
(4) The company may by resolution passed at a general meeting
authorise the directors to make a particular issue of shares without
complying with subsection (1).
(2) On lodgment of a copy of the order with ASIC, the order has effect
from the time of the purported issue.
Section 254H
(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.
(1) A company may convert all or any of its shares into a larger or
smaller number of shares by resolution passed at a general
meeting.
Note: The variation of class rights provisions (sections 246B-246G) may
apply to the conversion.
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
Section 254P
Making calls
Notice of call
(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.
(6) The share may be sold credited as paid up to the sum of:
(a) the amount paid upon the share at the time of forfeiture; and
(b) the amount of the call; and
(c) the amount of any other calls becoming payable on or before
the day of the sale;
if the company in accordance with its constitution or by ordinary
resolution so determines.
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
(8) The share may be withdrawn from sale if no bid at least equal to
the reserve price is made at the sale.
(9) If:
(a) no bid for the share is received at the sale; or
(b) the share is withdrawn from sale;
the share must be held by the directors in trust for the company. It
must be then disposed of in the manner determined by the
company in accordance with its constitution or by resolution.
Unless otherwise specifically provided by resolution, the share
must first be offered to shareholders for a period of 14 days before
being disposed of in any other manner.
Validity of sale
Section 254R
(13) If there is failure to comply with subsection (2) or (3), the company
and any officer of the company who is involved in the
contravention are each guilty of an offence.
(1) Despite section 254Q, if a person’s share has been forfeited, the
person may redeem the share, at any time up to or on the last
business day before the proposed sale, by paying the company:
(a) all calls due on the share; and
(b) if the company so requires:
(i) a portion, calculated on a pro rata basis, of all expenses
incurred by the company in respect of the forfeiture; and
(ii) a portion, calculated on a pro rata basis, of all costs and
expenses of any proceeding that has been taken in
respect of the forfeiture.
On payment, the person is entitled to the share as if the forfeiture
had not occurred.
(2) On the last business day before the proposed sale, the registered
office of the company must be open during the hours for which it is
by this Act required to be open and accessible to the public.
Section 254S
Section 254T
Part 2H.5—Dividends
(1) The directors may determine that a dividend is payable and fix:
(a) the amount; and
(b) the time for payment; and
(c) the method of payment.
The methods of payment may include the payment of cash, the
issue of shares, the grant of options and the transfer of assets.
(2) Interest is not payable on a dividend.
(1) A company does not incur a debt merely by fixing the amount or
time for payment of a dividend. The debt arises only when the time
fixed for payment arrives and the decision to pay the dividend may
be revoked at any time before then.
(2) However, if the company has a constitution and it provides for the
declaration of dividends, the company incurs a debt when the
dividend is declared.
Section 254W
(a) the company has a constitution and it provides for the shares
to have different dividend rights; or
(b) different dividend rights are provided for by special
resolution of the company.
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 254X
(1) Within 28 days after issuing shares, a company must lodge with
ASIC a notice in the prescribed form that sets out:
(a) the number of shares that were issued; and
(b) if the company has different classes of shares—the class to
which each of those shares belongs; and
(c) the amount (if any) paid, or agreed to be considered as paid,
on each of those shares; and
(d) the amount unpaid (if any) on each of those shares; and
(e) if the company is a public company and the shares were
issued for non-cash consideration—the prescribed particulars
about the issue of the shares, unless the shares were issued
under a written contract and a copy of the contract is lodged
with the notice.
Note 1: The company must lodge information when rights attached to the
shares change, or when the shares are divided or converted into new
classes (see section 246F).
Note 2: A proprietary company may also have to notify certain particulars
under Part 2C.2.
(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
on the company changing its type from a company limited by
guarantee to a company limited by shares.
Section 254Y
Note: Information about shares issued in these situations will come to ASIC
under subsections 5H(2), 117(2), 163(3) and 601BC(2).
(1) Within 1 month after shares are cancelled, the company must lodge
with ASIC a notice in the prescribed form that sets out:
(a) the number of shares cancelled; and
(b) any amount paid by the company (in cash or otherwise) on
the cancellation of the shares; and
(c) if the shares are cancelled following a share buy-back—the
amount paid by the company (in cash or otherwise) on the
buy-back; and
(d) if the company has different classes of shares—the class to
which each cancelled share belonged.
Note: Provisions under which shares are cancelled include section 254J
(redeemable preference shares), section 256B (capital reductions),
subsection 257H(3) (shares a company has bought back),
section 258D (forfeited shares), and subsections 258E(2) and (3)
(shares returned to a company).
Section 256A
256A Purpose
Section 256B
(1) A company may reduce its share capital in a way that is not
otherwise authorised by law if the reduction:
(a) is fair and reasonable to the company’s shareholders as a
whole; and
(b) does not materially prejudice the company’s ability to pay its
creditors; and
(c) is approved by shareholders under section 256C.
A cancellation of a share for no consideration is a reduction of
share capital, but paragraph (b) does not apply to this kind of
reduction.
Note 1: One of the ways in which a company might reduce its share capital is
cancelling uncalled capital.
Note 2: Sections 258A-258F deal with some of the other situations in which
reductions of share capital are authorised. Subsection 254K(2)
authorises capital reductions involved in the redemption of
redeemable preference shares and subsection 257A(2) authorises
reductions involved in share buy-backs.
Note 3: For a director’s duty to prevent insolvent trading on reductions of
share capital, see section 588G.
Section 256C
(4) The company must include with the notice of the meeting a
statement setting out all information known to the company that is
material to the decision on how to vote on the resolution. However,
the company does not have to disclose information if it would be
unreasonable to require the company to do so because the company
had previously disclosed the information to its shareholders.
Section 256D
(1) The company must not make the reduction unless it complies with
subsection 256B(1).
(2) If the company contravenes subsection (1):
(a) the contravention does not affect the validity of the reduction
or of any contract or transaction connected with it; and
(b) the company is not guilty of an offence.
The following table lists other provisions of this Act that are
relevant to reductions in share capital.
Section 256E
Section 257A
(1) The following table specifies the steps required for, and the
sections that apply to, the different types of buy-back.
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 257C
10/12 limit
On-market buy-backs
Section 257D
(1) If section 257B applies this section to a buy-back, the terms of the
buy-back agreement must be approved before it is entered into by
either:
(a) a special resolution passed at a general meeting of the
company, with no votes being cast in favour of the resolution
by any person whose shares are proposed to be bought back
or by their associates; or
(b) a resolution agreed to, at a general meeting, by all ordinary
shareholders;
or the agreement must be conditional on such an approval.
Section 257E
Section 257G
Section 257J
The following table sets out other provisions of this Act that are
relevant to buy-backs.
Section 257J
Section 258A
Section 258F
Section 259A
(1) A company must not take security over shares (or units of shares)
in itself or in a company that controls it, except as permitted by
subsection (2) or (3).
(2) A company may take security over shares in itself under an
employee share scheme that has been approved by:
(a) a resolution passed at a general meeting of the company; and
(b) if the company is a subsidiary of a listed domestic
corporation—a resolution passed at a general meeting of the
listed domestic corporation; and
(c) if paragraph (b) does not apply but the company has a
holding company that is a domestic corporation and that is
not itself a subsidiary of a domestic corporation—a
resolution passed at a general meeting of that holding
company.
Section 259C
Section 259D
(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.
Section 259E
(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.
(1) For the purposes of this Part, a company controls an entity if the
company has the capacity to determine the outcome of decisions
about the entity’s financial and operating policies.
(2) In determining whether a company has this capacity:
(a) the practical influence the company can exert (rather than the
rights it can enforce) is the issue to be addressed; and
(b) any practice or pattern of behaviour affecting the 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) Merely because the company and an unrelated entity jointly have
the capacity to determine the outcome of decisions about another
entity’s financial and operating policies, the company does not
control the other entity.
Section 259F
Section 260A
Section 260B
Section 260C
(6) The company must lodge with ASIC, at least 14 days before giving
the financial assistance, a notice in the prescribed form stating that
the assistance has been approved under this section.
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 260D
Section 260E
A director is not relieved from any of their duties under this Act
(including sections 180, 181, 182, 183 and 184), or their fiduciary
duties, in connection with a transaction merely because the
transaction is authorised by a provision of this Chapter or is
approved by a resolution of members under a provision of this
Chapter.
Section 261
Chapter 2K—Charges
Part 2K.1—Preliminary
Section 261
Section 262
Part 2K.2—Registration
(1) Subject to this section, the provisions of this Chapter relating to the
giving of notice in relation to, the registration of, and the priorities
of, charges apply in relation to the following charges (whether
legal or equitable) on property of a company and do not apply in
relation to any other charges:
(a) a floating charge on the whole or a part of the property,
business or undertaking of the company;
(b) a charge on uncalled share capital;
(c) a charge on a call on shares made but not paid;
(d) a charge on a personal chattel, including a personal chattel
that is unascertained or is to be acquired in the future, but not
including a ship registered in an official register kept under
an Australian law relating to title to ships;
(e) a charge on goodwill, on a patent or licence under a patent,
on a trade mark or service mark or a licence to use a trade
mark or service mark, on a copyright or a licence under a
copyright or on a registered design or a licence to use a
registered design;
(f) a charge on a book debt;
(g) a charge on a marketable security, not being:
(i) a charge created in whole or in part by the deposit of a
document of title to the marketable security; or
(ii) a mortgage under which the marketable security is
registered in the name of the chargee or a person
nominated by the chargee; or
(iii) a charge where there is an agreement in force under
which the chargee (or a person who has agreed to act on
the instructions of the chargee) controls the sending of
some or all electronic messages or other electronic
communications by which the marketable security could
be transferred;
(h) a lien or charge on a crop, a lien or charge on wool or a stock
mortgage;
Section 262
Section 262
Section 263
(1) Where a company creates a charge, the company must ensure that
there is lodged, within 45 days after the creation of the charge:
(a) a notice in the prescribed form setting out the following
particulars:
(i) the name of the company and the date of the creation of
the charge;
(ii) whether the charge is a fixed charge, a floating charge
or both a fixed and floating charge;
(iii) if the charge is a floating charge—whether there is any
provision in the resolution or instrument creating or
evidencing the charge that prohibits or restricts the
creation of subsequent charges;
(iv) a short description of the liability (whether present or
prospective) secured by the charge;
(v) a short description of the property charged;
(vi) whether the charge is created or evidenced by a
resolution, by an instrument or by a deposit or other
conduct;
(vii) if the charge is constituted by the issue of a debenture or
debentures—the name of the trustee (if any) for
debenture holders;
(viii) if the charge is not constituted by the issue of a
debenture or debentures or there is no trustee for
debenture holders—the name of the chargee;
(ix) such other information as is prescribed; and
(b) if, pursuant to a resolution or resolutions passed by the
company, the company issues a series of debentures
constituting a charge to the benefit of which all the holders of
debentures in the series are entitled in equal priority, and the
charge is evidenced only by the resolution or resolutions and
the debentures—a copy of the resolution or of each of the
resolutions verified by a statement in writing to be a true
copy, and a copy of the first debenture issued in the series
and a statement in writing verifying the execution of that first
debenture; and
(c) if, in a case to which paragraph (b) does not apply, the charge
was created or evidenced by an instrument or instruments:
Section 263
Section 263
Section 264
Section 265
Section 265
Section 265
Section 265
Section 265A
(1) Where:
(a) an order is made, or a resolution is passed, for the winding up
of a company; or
(b) an administrator of a company is appointed under
section 436A, 436B or 436C; or
(ba) a company executes a deed of company arrangement;
a registrable charge on property of the company is void as a
security on that property as against the liquidator, the administrator
of the company, or the deed’s administrator, as the case may be,
unless:
(c) a notice in respect of the charge was lodged under
section 263 or 264, as the case requires:
(i) within the relevant period; or
(ii) at least 6 months before the critical day; or
(d) in relation to a charge other than a charge to which
subsection 263(3) applies—the period within which a notice
in respect of the charge (other than a notice under
section 268) is required to be lodged, being the period
specified in the relevant section or that period as extended by
the Court under subsection (4), has not ended at the start of
the critical day and the notice is lodged before the end of that
period; or
(e) in relation to a charge to which subsection 263(3) applies—
the period of 45 days after the chargee becomes aware that
the registrable body has been registered as a company under
Part 5B.1, or registered under Part 5B.2, has not ended at the
Section 266
start of the critical day and the notice is lodged before the end
of that period; or
(f) in relation to a charge to which section 264 applies—the
period of 45 days after the chargee becomes aware that the
property charged has been acquired by a company has not
ended at the start of the critical day and the notice is lodged
before the end of that period.
(2) The reference in paragraph (1)(c) to the relevant period is to be
construed as a reference to:
(a) in relation to a charge to which subsection 263(1) applies—
the period of 45 days specified in that subsection, or that
period as extended by the Court under subsection (4) of this
section; or
(b) in relation to a charge to which subsection 263(3) applies—
the period of 45 days after the chargee becomes aware that
the registrable body has been registered as a company under
Part 5B.1 or registered under Part 5B.2; or
(c) in relation to a charge to which section 264 applies—the
period of 45 days after the chargee becomes aware that the
property has been acquired by a company.
(3) Where, after there has been a variation in the terms of a registrable
charge on property of a company having the effect of increasing
the amount of the debt or increasing the liabilities (whether present
or prospective) secured by the charge:
(a) an order is made, or a resolution is passed, for the winding up
of the company; or
(b) an administrator of a company is appointed under
section 436A, 436B or 436C; or
(ba) a company executes a deed of company arrangement;
the registrable charge is void as a security on that property to the
extent that it secures the amount of the increase in that debt or
liability unless:
(c) a notice in respect of the variation was lodged under
section 268:
(i) within the period of 45 days specified in subsection
268(2) or that period as extended by the Court under
subsection (4) of this section; or
(ii) not later than 6 months before the critical day; or
Section 266
(5) Where:
(a) a registrable charge (in this subsection referred to as the later
charge) is created before the end of 45 days after the creation
of an unregistered registrable charge (in this subsection
referred to as the earlier charge); and
(b) the later charge relates to all or any of the property to which
the earlier charge related; and
(c) the later charge is given as a security for the same liability as
is secured by the earlier charge or any part of that liability;
the later charge, to the extent to which it is a security for the same
liability or part thereof, and so far as it relates to the property
comprised in the earlier charge, is void as a security on that
property as against a liquidator or administrator of the company, or
an administrator of a deed of company arrangement executed by
the company, even if a notice in respect of the later charge was
lodged under section 263 within a period mentioned in
paragraph (1)(c) or (d) of this section, unless it is proved to the
satisfaction of the Court that the later charge was given in good
faith for the purpose of correcting some material error in the earlier
charge or under other proper circumstances and not for the
purposes of avoiding or evading the provisions of this Part.
Section 267
(7) The onus of proving that a person purchased property in good faith
and without notice of any of the matters referred to in
paragraphs (6)(a), (b), (c) and (d) is on the person asserting that the
property was so purchased.
(8) In this section:
(1) Where:
(a) a company creates a charge on property of the company in
favour of a person who is, or in favour of persons at least one
of whom is, a relevant person in relation to the charge; and
Section 267
(b) within 6 months after the creation of the charge, the chargee
purports to take a step in the enforcement of the charge
without the Court having, under subsection (3), given leave
for the charge to be enforced;
the charge, and any powers purported to be conferred by an
instrument creating or evidencing the charge, are, and are taken
always to have been, void.
(2) Without limiting the generality of subsection (1), a person who:
(a) appoints a receiver of property of a company under powers
conferred by an instrument creating or evidencing a charge
created by the company; or
(b) whether directly or by an agent, enters into possession or
assumes control of property of a company for the purposes of
enforcing a charge created by the company;
is taken, for the purposes of subsection (1), to take a step in the
enforcement of the charge.
(3) On application by the chargee under a charge, the Court may, if it
is satisfied that:
(a) immediately after the creation of the charge, the company
that created the charge was solvent; and
(b) in all the circumstances of the case, it is just and equitable for
the Court to do so;
give leave for the charge to be enforced.
Section 268
(6) The onus of proving that a person purchased property in good faith
and without notice that a charge was created as mentioned in
subsection (5) is on the person asserting that the property was so
purchased.
(7) In this section:
Section 269
Section 270
Section 271
(1) A company must keep, at the place where the register referred to in
subsection (2) is kept, a copy of:
(a) every document relating to a charge on property of the
company that was or is lodged under this Part; and
(b) a copy of every document given to the company under this
Part.
(2) A company must keep a register and must, upon the creation of a
charge (whether registrable or not) on property of the company, or
upon the acquisition of property subject to a charge (whether
registrable or not), as soon as practicable enter in the register
particulars of the charge, giving in each case:
(a) if the charge is a charge created by the company, the date of
its creation or, if the charge was a charge existing on property
acquired by the company, the date on which the property was
so acquired; and
(b) a short description of the liability (whether present or
prospective) secured by the charge; and
(c) a short description of the property charged; and
(d) the name of the trustee for debenture holders or, if there is no
such trustee, the name of the chargee; and
(e) the name of the person whom the company believes to be the
holder of the charge.
(3) A register kept by a company pursuant to subsection (2) must be
open for inspection:
(a) by any creditor or member of the company—without charge;
and
(b) by any other person—on payment for each inspection of such
amount, not exceeding the prescribed amount, as the
company requires or, where the company does not require the
payment of an amount, without charge.
(4) A person may request a company to furnish the person with a copy
of the register or any part of the register and, where such a request
is made, the company must send the copy to that person:
Section 272
272 Certificates
Section 273A
(1) This section deals with how particular State or Territory laws apply
to a charge if notice of the charge must be lodged under this Part
(whether before or after the prescribed time). The laws are called
specified laws and are identified in subsections (4) and (5).
Note: Section 273D provides that this section does not apply to certain joint
charges.
(2) A failure to register the charge under a specified law does not
affect the validity, or limit the effect, of the charge.
(3) The priority of the charge is to be determined under this Chapter
and not under a specified law.
(4) The specified laws are the State or Territory laws that are:
(a) specified in the following table; or
(b) specified by the regulations for the purposes of this section.
Section 273B
(5) The regulations may provide that a law specified in the table in
subsection (4) is not a specified law for the purposes of this
section.
(1) This section deals with how particular State and Territory laws
apply to a transfer, assignment or giving of a security by a
company that is registrable under those laws if:
(a) notice in relation to the transfer, assignment or giving of
security must be lodged under this Part; and
(b) the transfer, assignment or giving of security is registered
under this Part.
The laws are called specified laws and are identified in
subsections (3) and (4). The particular specified law under which
the transfer, assignment or giving of security is registrable is called
the applicable registration law.
Note: Section 273D provides that this section does not apply to certain joint
charges.
Section 273C
(4) The regulations may provide that a law specified in the table in
subsection (3) is not a specified law for the purposes of this
section.
(1) This section deals with how particular State and Territory laws
apply to a crop lien, wool lien or stock mortgage given by a
company that is registrable under those laws if:
(a) notice in relation to the lien or stock mortgage is required to
be lodged under this Part; and
(b) the lien or mortgage is registered under this Part.
The laws are called specified laws and are identified in
subsections (3) and (4). The particular specified law under which
the lien or mortgage is registrable is called the applicable
registration law.
Note: Section 273D provides that this section does not apply to certain joint
charges.
Section 273D
(4) The regulations may provide that a law specified in the table in
subsection (3) is not a specified law for the purposes of this
section.
Section 274
Section 277
Section 278
278 Definitions
Section 279
(1) Subject to this section, sections 280 to 282, inclusive, have effect
with respect to the priorities, in relation to each other, of registrable
charges on the property of a company.
(2) The application, in relation to particular registrable charges, of the
order of priorities of charges set out in sections 280 to 282,
inclusive, is subject to:
(a) any consent (express or implied) that varies the priorities in
relation to each other of those charges, being a consent given
by the holder of one of those charges, being a charge that
would otherwise be entitled to priority over the other charge;
and
(b) any agreement between those chargees that affects the
priorities in relation to each other of the charges in relation to
which those persons are the chargees.
(3) The holder of a registered charge, being a floating charge, on
property of a company is taken, for the purposes of subsection (2),
to have consented to that charge being postponed to a subsequent
registered charge, being a fixed charge that is created before the
floating charge becomes fixed, on any of that property unless:
(a) the creation of the subsequent registered charge contravened
a provision of the instrument or resolution creating or
evidencing the floating charge; and
(b) a notice in respect of the floating charge indicating the
existence of the provision referred to in paragraph (a) was
lodged with ASIC under section 263, 264 or 268 before the
creation of the subsequent registered charge.
(4) Where a charge relates to property of a kind or kinds to which a
particular paragraph or paragraphs of subsection 262(1) applies or
Section 280
Section 281
Section 282
Section 282