Corporations Act 2001: Act No. 50 of 2001 As Amended
Corporations Act 2001: Act No. 50 of 2001 As Amended
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.................................................4
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
9AA Certain family relationships............................................................86
9A Meaning of rights issue...................................................................86
Division 2—Associates 89
10 Effect of Division............................................................................89
11 Associates of bodies corporate........................................................89
12 References in Chapters 6 to 6C, and other references relating
to voting power and takeovers etc...................................................89
13 References in Chapter 7..................................................................91
15 General............................................................................................91
16 Exclusions.......................................................................................92
Part 2B.6—Names 183
Division 1—Selecting and using a name 183
147 When a name is available..............................................................183
148 A company’s name........................................................................184
149 Acceptable abbreviations..............................................................185
150 Exception to requirement for using “Limited” in name.................186
151 Exception to requirement for using “Limited” in name—
pre-existing licences......................................................................186
152 Reserving a name..........................................................................187
153 Using a name and ACN on documents..........................................188
154 Exception to requirement to have ACN on receipts.......................188
155 Regulations may exempt from requirement to set out
information on documents.............................................................189
156 Carrying on business using “Limited”, “No Liability” or
“Proprietary” in name....................................................................189
Division 2—Changing a company’s name 190
157 Company changing its name.........................................................190
157A Change of name of company under external administration..........190
158 ASIC’s power to direct company to change its name....................192
159 ASIC’s power to include “Limited” in company’s name...............192
160 ASIC must issue new certificate if company’s name changes.......193
161 Effect of name change...................................................................193
161A Company under external administration—former name to be
used on documents........................................................................193
Chapter 2C—Registers 205
Chapter 2H—Shares 384
Part 2H.5—Dividends 397
254SA Companies limited by guarantee not to pay dividends...................397
254T Circumstances in which a dividend may be paid...........................397
254U Other provisions about paying dividends (replaceable rule—
see section 135).............................................................................397
254V When does the company incur a debt?..........................................398
254W Dividend rights..............................................................................398
Chapter 2K—Charges 427
Part 2K.1—Preliminary 427
261 Interpretation and application........................................................427
Part 2K.2—Registration 429
262 Charges required to be registered..................................................429
263 Lodgment of notice of charge and copy of instrument...................432
264 Acquisition of property subject to charge......................................435
265 Registration of documents relating to charges...............................436
265A Standard time for the purposes of section 265...............................439
266 Certain charges void against liquidator or administrator...............440
267 Charges in favour of certain persons void in certain cases.............443
268 Assignment and variation of charges.............................................445
Chapter 1—Introductory
Part 1.1—Preliminary
(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
(b) the legislative powers that the Commonwealth Parliament
has under section 51 of the Constitution.
4 Referring States
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(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.
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(b) the day fixed is no earlier than the first day after the end of
the period of 6 months beginning on the day on which the
proclamation is published; and
(c) that State’s amendment reference, and the amendment
reference of every other State, terminates on the same day.
Definitions
(9) In this section:
amendment reference of a State means the reference by the
Parliament of the State to the Parliament of the Commonwealth of
the matters covered by subsection (5).
express amendment of this Act or the ASIC Act means the direct
amendment of the text of this Act or the ASIC Act (whether by the
insertion, omission, repeal, substitution or relocation of words or
matter) by Commonwealth Acts, but does not include the
enactment by a Commonwealth Act of a provision that has, or will
have, substantive effect otherwise than as part of the text of this
Act or the ASIC Act.
initial ASIC Act means the ASIC Act as originally enacted.
initial Corporations Act means this Act as originally enacted.
initial reference of a State means the reference by the Parliament
of the State to the Parliament of the Commonwealth of the matters
covered by subsection (4).
referred provisions means:
(a) the initial Corporations Act; and
(b) the initial ASIC Act;
to the extent to which they deal with matters that are included in
the legislative powers of the Parliaments of the States.
State reference Act for a State is the law under which the initial
reference and the amendment reference are given.
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5D Coverage of Part
(1) This Part applies only to laws of a State or Territory that is in this
jurisdiction.
(2) This Part applies only to the following Corporations legislation:
(a) this Act (including the regulations made under this Act); and
(b) Part 3 of the ASIC Act; and
(c) regulations made under the ASIC Act for the purposes of
Part 3 of that Act.
Note: This Part does not apply in relation to the trustee company provisions:
see section 601RAE.
(3) This Part does not apply to Part 3 of the ASIC Act, or regulations
made under that Act for the purposes of Part 3 of that Act, to the
extent to which they operate in relation to a contravention of
Division 2 of Part 2 of that Act.
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(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.
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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
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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)).
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Part 1.2—Interpretation
Division 1—General
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9 Dictionary
Unless the contrary intention appears:
AASB means the Australian Accounting Standards Board.
ABN (short for “Australian Business Number”) has the meaning
given by section 41 of the A New Tax System (Australian Business
Number) Act 1999.
Aboriginal and Torres Strait Islander corporation means a
corporation registered under the Corporations (Aboriginal and
Torres Strait Islander) Act 2006.
accounting standard means:
(a) an instrument in force under section 334; or
(b) a provision of such an instrument as it so has effect.
ACN (short for “Australian Company Number”) is the number
given by ASIC to a company on registration (see sections 118 and
601BD).
acquire, in relation to financial products, when used in a provision
outside Chapter 7, has the same meaning as it has in Chapter 7.
act includes thing.
administration, in relation to a company, has the meaning given by
section 435C.
administrator:
(a) in relation to a body corporate but not in relation to a deed of
company arrangement:
(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
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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.
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(c) before acquiring the financial products under the scheme, the
deductions are held on trust in an account with an Australian
ADI that is kept solely for that purpose;
(d) the contributor may elect to discontinue the deductions at any
time;
(e) if the contributor so elects, the amount of the deductions
standing, at that time, to the credit of the account for the
contributor, and any interest on that amount, is repaid to the
contributor;
(f) the scheme does not involve the offer to the contributor of a
loan or similar financial assistance for the purpose of, or in
connection with, the acquisition of the financial products that
are offered under the scheme.
contributory means:
(a) in relation to a company (other than a no liability company):
(i) a person liable as a member or past member to
contribute to the property of the company if it is wound
up; and
(ii) for a company with share capital—a holder of fully paid
shares in the company; and
(iii) before the final determination of the persons who are
contributories because of subparagraphs (i) and (ii)—a
person alleged to be such a contributory; and
(b) in relation to a Part 5.7 body:
(i) a person who is a contributory by virtue of section 586;
and
(ii) before the final determination of the persons who are
contributories by virtue of that section—a person
alleged to be such a contributory; and
(c) in relation to a no liability company—subject to section 385,
a member of the company.
control has the meaning given by section 50AA.
control day, in relation to a controller of property of a corporation,
means:
(a) unless paragraph (b) applies:
(i) in the case of a receiver, or receiver and manager, of
that property—the day when the receiver, or receiver
and manager, was appointed; or
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(ii) each of the other rights, and each interest (if any),
attached to the share or debenture is a right or interest
that is merely incidental to the right referred to in
subparagraph (i);
the share or debenture or a unit in the share or debenture; or
(b) an interest in a managed investment scheme constituted by a
right to participate in a retirement village scheme.
exempt body has the meaning given by section 66A.
exempt foreign company means a foreign company of a kind
referred to in subsection 601CK(8), whether or not Division 2 of
Part 5B.2 applies to it.
exempt public authority means a body corporate that is
incorporated within Australia or an external Territory and is:
(a) a public authority; or
(b) an instrumentality or agency of the Crown in right of the
Commonwealth, in right of a State or in right of a Territory.
expert, in relation to a matter, means a person whose profession or
reputation gives authority to a statement made by him or her in
relation to that matter.
extend, in relation to a period:
(a) includes further extend; and
(b) has a meaning affected by section 70.
externally-administered body corporate means a body corporate:
(a) that is being wound up; or
(b) in respect of property of which a receiver, or a receiver and
manager, has been appointed (whether or not by a court) and
is acting; or
(c) that is under administration; or
(ca) that has executed a deed of company arrangement that has
not yet terminated; or
(d) that has entered into a compromise or arrangement with
another person the administration of which has not been
concluded.
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general law means the principles and rules of the common law and
equity.
group executives for a consolidated entity means:
(a) the directors of the companies or bodies within the
consolidated entity; and
(b) the secretaries of the companies or bodies within the
consolidated entity; and
(c) the senior managers of any corporation within the
consolidated entity; and
(d) the partners, and senior managers, of any partnership within
the consolidated entity; and
(e) the trustees, and senior managers, of any trusts within the
consolidated entity; and
(f) the senior managers of any joint venture within the
consolidated entity.
guarantor, in relation to a debenture, means a body that has
guaranteed, or has agreed to guarantee, the repayment of any
money deposited or lent to the borrower under the debenture.
guilty, in the case of a reference to a court finding a person guilty
of an offence, has a meaning affected by section 73A.
half-year has the meaning given by subsection 323D(5).
have, in relation to information, includes be in possession of the
information.
highest outside purchase price for a takeover bid is the highest
amount paid or payable by the bidder for a security in the bid class
under a purchase made outside the bid and during the bid period.
hold, in relation to a person, in relation to a document that is, or
purports to be, a copy of a licence, means have in the person’s
possession.
holding company, in relation to a body corporate, means a body
corporate of which the first body corporate is a subsidiary.
immediate family member for a person means:
(a) the person’s spouse; or
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liquidator:
(a) has a meaning affected by paragraph 530(b) (which deals
with 2 or more persons appointed as liquidators); and
(b) in Chapter 7, includes a provisional liquidator.
listed: a company, managed investment scheme or other body is
listed if it is included in the official list of a prescribed financial
market operated in this jurisdiction.
listed corporation means a body corporate that is included in an
official list of a prescribed financial market.
listed disclosing entity has the meaning given by subsection
111AL(1).
listing market, in relation to a listed disclosing entity, has the
meaning given by subsection 111AE(1) or (1A).
listing rules of a financial market, when used in a provision
outside Chapter 7, has the same meaning as it has in Chapter 7.
local agent, in relation to a foreign company, means a person who
is a local agent of the foreign company by virtue of subsection
601CG(5).
lodge means lodge with ASIC in this jurisdiction.
lodging entity has the meaning given by subsection 323EA(2).
lower court means a court of a State or Territory that is not a
superior court.
machine-copy, in relation to a document, means a copy made of
the document by any machine in which, or process by which, an
image of the contents of the document is reproduced.
managed investment product, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
managed investment scheme means:
(a) a scheme that has the following features:
(i) people contribute money or money’s worth as
consideration to acquire rights (interests) to benefits
produced by the scheme (whether the rights are actual,
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superior court matter means a civil matter that this Act clearly
intends (for example, by use of the expression the Court) to be
dealt with only by a superior court.
Supplementary Product Disclosure Statement, when used in a
provision outside Chapter 7, has the same meaning as it has in
Chapter 7.
takeover bid means an off-market bid or market bid made under
Chapter 6.
takeover contract means a contract that results from the acceptance
of an offer made under a takeover bid.
target for a takeover bid means the company, listed body or
managed investment scheme whose securities are to be acquired
under the bid.
target’s statement means a target’s statement under sections 638 to
640 as supplemented.
territorial sea has the same meaning as in the Seas and Submerged
Lands Act 1973.
Territory means:
(a) the Capital Territory; or
(b) the Northern Territory; or
(c) an external Territory;
and, when used in a geographical sense, includes the coastal sea of
the Territory.
this Act includes the regulations.
this jurisdiction means the geographical area that consists of:
(a) each referring State (including its coastal sea); and
(b) the Capital Territory (including the coastal sea of the Jervis
Bay Territory); and
(c) the Northern Territory (including its coastal sea); and
(d) also, for the purposes of the application of a provision of
Chapter 7 or an associated provision (as defined in section 5)
—any external Territory in which the provision applies
because of subsection 5(9) (but only to the extent provided
for in that subsection).
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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.
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13 References in Chapter 7
If the associate reference occurs in Chapter 7, it includes a
reference to:
(a) a person in partnership with whom the primary person carries
on a financial services business; and
(b) subject to subsection 16(2), a person who is a partner of the
primary person otherwise than because of carrying on a
financial services business in partnership with the primary
person; and
(c) a trustee of a trust in relation to which the primary person
benefits, or is capable of benefiting, otherwise than because
of transactions entered into in the ordinary course of business
in connection with the lending of money; and
(d) a director of a body corporate of which the primary person is
also a director and that carries on a financial services
business; and
(e) subject to subsection 16(2), a director of a body corporate of
which the primary person is also a director and that does not
carry on a financial services business.
15 General
(1) The associate reference includes a reference to:
(a) a person in concert with whom the primary person is acting,
or proposes to act; and
(b) a person who, under the regulations, is, for the purposes of
the provision in which the associate reference occurs, an
associate of the primary person; and
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16 Exclusions
(1) A person is not an associate of another person by virtue of
section 12 or subsection 15(1), or by virtue of subsection 15(2) as
it applies in relation to section 12 or subsection 15(1), merely
because of one or more of the following:
(a) one gives advice to the other, or acts on the other’s behalf, in
the proper performance of the functions attaching to a
professional capacity or a business relationship;
(b) one, a client, gives specific instructions to the other, whose
ordinary business includes dealing in financial products, to
acquire financial products on the client’s behalf in the
ordinary course of that business;
(c) one had sent, or proposes to send, to the other an offer under
a takeover bid for shares held by the other;
(d) one has appointed the other, otherwise than for valuable
consideration given by the other or by an associate of the
other, to vote as a proxy or representative at a meeting of
members, or of a class of members, of a body corporate.
(2) For the purposes of proceedings under this Act in which it is
alleged that a person was an associate of another person by virtue
of paragraph 13(b) or (e), the first-mentioned person is not taken to
have been an associate of the other person in relation to a matter by
virtue of that paragraph unless it is proved that the first-mentioned
person knew, or ought to have known, at that time, the material
particulars of that matter.
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Division 3—Carrying on business
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Division 5A—Types of company
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Counting employees
(5) In counting employees for the purposes of subsections (2) and (3),
take part-time employees into account as an appropriate fraction of
a full-time equivalent.
Accounting standards
(6) Consolidated revenue and the value of consolidated gross assets
are to be calculated for the purposes of this section in accordance
with accounting standards in force at the relevant time (even if the
standard does not otherwise apply to the financial year of some or
all of the companies concerned).
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46 What is a subsidiary
A body corporate (in this section called the first body) is a
subsidiary of another body corporate if, and only if:
(a) the other body:
(i) controls the composition of the first body’s board; or
(ii) is in a position to cast, or control the casting of, more
than one-half of the maximum number of votes that
might be cast at a general meeting of the first body; or
(iii) holds more than one-half of the issued share capital of
the first body (excluding any part of that issued share
capital that carries no right to participate beyond a
specified amount in a distribution of either profits or
capital); or
(b) the first body is a subsidiary of a subsidiary of the other
body.
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48 Matters to be disregarded
(1) This section applies for the purposes of determining whether a
body corporate (in this section called the first body) is a subsidiary
of another body corporate.
(2) Any shares held, or power exercisable, by the other body in a
fiduciary capacity are treated as not held or exercisable by it.
(3) Subject to subsections (4) and (5), any shares held, or power
exercisable:
(a) by a person as a nominee for the other body (except where
the other body is concerned only in a fiduciary capacity); or
(b) by, or by a nominee for, a subsidiary of the other body (not
being a subsidiary that is concerned only in a fiduciary
capacity);
are treated as held or exercisable by the other body.
(4) Any shares held, or power exercisable, by a person by virtue of the
provisions of debentures of the first body, or of a trust deed for
securing an issue of such debentures, are to be disregarded.
(5) Any shares held, or power exercisable, otherwise than as
mentioned in subsection (4), by, or by a nominee for, the other
body or a subsidiary of it are to be treated as not held or
exercisable by the other body if:
(a) the ordinary business of the other body or that subsidiary, as
the case may be, includes lending money; and
(b) the shares are held, or the power is exercisable, only by way
of security given for the purposes of a transaction entered
into in the ordinary course of business in connection with
lending money, not being a transaction entered into with an
associate of the other body, or of that subsidiary, as the case
may be.
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(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.
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52 Doing acts
A reference to doing an act or thing includes a reference to causing
or authorising the act or thing to be done.
52A Signing
Without affecting the law on agency, if this Act requires that
something be signed, it can be signed by an individual using a
power of attorney from the person required to sign.
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Administrator
(1) In this Act, a declaration of relevant relationships, in relation to
an administrator of a company under administration, means a
written declaration:
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Liquidator
(2) In this Act, a declaration of relevant relationships, in relation to a
liquidator of a company, means a written declaration:
(a) stating whether any of the following:
(i) the liquidator;
(ii) if the liquidator’s firm (if any) is a partnership—a
partner in that partnership;
(iii) if the liquidator’s firm (if any) is a body corporate—that
body corporate or an associate of that body corporate;
has, or has had within the preceding 24 months, a
relationship with:
(iv) the company; or
(v) an associate of the company; or
(vi) a former liquidator, or former provisional liquidator, of
the company; or
(vii) a former administrator of the company; or
(viii) a former administrator of a deed of company
arrangement executed by the company; and
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(b) if so, stating the liquidator’s reasons for believing that none
of the relevant relationships result in the liquidator having a
conflict of interest or duty.
64A Entities
Except in Chapter 2E, a reference to an entity:
(a) is a reference to a natural person, a body corporate (other
than an exempt public authority), a partnership or a trust; and
(b) includes, in the case of a trust, a reference to the trustee of
the trust.
Body corporate
(1) A body corporate is connected with a corporation if, and only if,
the corporation:
(a) can control, or influence materially, the body’s activities or
internal affairs; or
(b) is a member of the body; or
(c) is in a position to cast, or to control the casting of, a vote at a
general meeting of the body; or
(d) has power to dispose of, or to exercise control over the
disposal of, a share in the body; or
(e) is financially interested in the body’s success or failure or
apparent success or failure; or
(f) is owed a debt by the body; or
(g) is engaged by the body under a contract for services; or
(h) acts as agent for the body in any transaction or dealing.
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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
(e) has appointed the person as the corporation’s attorney under
a power of attorney; or
(f) is given financial, business or legal advice by the person in
the performance of the functions attaching to the person’s
professional capacity.
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
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79 Involvement in contraventions
A person is involved in a contravention if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention;
or
(b) has induced, whether by threats or promises or otherwise, the
contravention; or
(c) has been in any way, by act or omission, directly or
indirectly, knowingly concerned in, or party to, the
contravention; or
(d) has conspired with others to effect the contravention.
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86 Possession
A thing that is in a person’s custody or under a person’s control is
in the person’s possession.
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89 Qualified privilege
(1) Where this Act provides that a person has qualified privilege in
respect of an act, matter or thing, the person:
(a) has qualified privilege in proceedings for defamation; or
(b) is not, in the absence of malice on the person’s part, liable to
an action for defamation at the suit of a person;
as the case requires, in respect of that act, matter or thing.
(2) In subsection (1):
malice includes ill will to the person concerned or any other
improper motive.
(3) Neither this section nor a provision of this Act that provides as
mentioned in subsection (1) limits or affects any right, privilege or
immunity that a person has, apart from this section or such a
provision, as defendant in proceedings, or an action, for
defamation.
92 Securities
(1) Subject to this section, securities means:
(a) debentures, stocks or bonds issued or proposed to be issued
by a government; or
(b) shares in, or debentures of, a body; or
(c) interests in a managed investment scheme; or
(d) units of such shares;
but does not include:
(f) a derivative (as defined in Chapter 7), other than an option to
acquire by way of transfer a security covered by
paragraph (a), (b), (c) or (d); or
(g) an excluded security.
Note: A derivative does not include an option to acquire a security by way
of issue (see the combined effect of paragraph 761D(3)(c), paragraph
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102C In Australia
In Australia means in Australia (whether in this jurisdiction or
not).
Note: This definition is needed if there is a State that is not a referring State.
If all the States are referring States, every place in Australia will also
be in this jurisdiction.
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Part 1.2A—Disclosing entities
Division 1—Object of Part
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Division 2—Definitions
111AD ED securities
(1) Securities of a body are ED securities (short for “enhanced
disclosure securities”) for the purposes of this Act if, and only if:
(a) they are ED securities under section 111AE, 111AF,
111AFA, 111AG or 111AI; and
(b) they are not declared under section 111AJ not to be ED
securities.
(2) For the purposes of sections 111AE, 111AF, 111AG and 111AI, a
class of shares or debentures is taken to include units of shares or
debentures in that class.
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111AI Debentures
Debentures of a borrower are ED securities if:
(a) section 283AA requires the borrower to appoint a trustee; or
(b) section 283AA does not apply to the borrower only because
the offer of the debentures to which section 283AA would
otherwise have applied is a recognised offer.
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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
1.9 Shareholders
The shareholders of a company own the company, but the
company has a separate legal existence and the company’s assets
belong to the company.
Shareholders can make decisions about the company by passing a
resolution, usually at a meeting. A “special resolution” usually
involves more important questions affecting the company as a
whole or the rights of some or all of its shareholders.
There are 2 ways that shareholders may pass a resolution:
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• at a meeting; or
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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 (unless the
director or company
secretary has notified
ASIC of the change)
5 there is a change in the name or within 28 days after the 205B
address of the company’s change
directors or secretary
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
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.
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• to act honestly
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• the person sells all of their shares in the company and the
company registers the transfer of the shares
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9 Returns to shareholders
Shareholders can take money out of the company in a number of
ways, but only if the company complies with its constitution (if
any), the Corporations Act and all other relevant laws. If a
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9.1 Dividends
Dividends are payments to shareholders. They can only be paid if:
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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]
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A liquidator is appointed:
12.4 Liquidators
A liquidator is appointed to administer the winding up of a
company. The liquidator’s main functions are:
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Chapter 2A—Registering a company
Part 2A.1—What companies can be registered
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:
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(2) The regulations may specify a higher number that is higher than
the number specified in paragraph (1)(b) for the purposes of the
application of that paragraph to a particular kind of partnership or
association.
(3) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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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.
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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).
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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.
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(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.
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(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.
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(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.
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Part 2B.6—Names
Division 1—Selecting and using a name
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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.
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No liability companies
(4) A no liability company must have the words “No Liability” at the
end of its name.
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(2) The reservation lasts for 2 months from the date when the
application was lodged. An applicant may ask ASIC in writing for
an extension of the reservation during a period that the name is
reserved, and ASIC may extend the reservation for 2 months.
(3) ASIC must cancel a reservation if the applicant asks ASIC in
writing to do so.
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(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.
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(2) The company must lodge a copy of the special resolution with
ASIC within 14 days after it is passed.
(2A) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Application by liquidator
(1) The liquidator of a company that is being wound up may lodge an
application with ASIC to change the name of the company if the
liquidator is satisfied that the proposed change of name is in the
interests of the creditors of the company as a whole.
(2) Subsection (1) does not apply to a members’ voluntary winding up.
Application by administrator
(3) The administrator of a company under administration may lodge an
application with ASIC to change the name of the company if the
administrator is satisfied that the proposed change of name is in the
interests of the creditors of the company as a whole.
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Application by receiver
(6) If:
(a) a person is a receiver of property of a company; and
(b) the property subject to the receivership consists of, or
includes, goodwill in relation to the name of the company;
the person may lodge an application with ASIC to change the name
of the company if the person is satisfied that the proposed change
of name is in the interests of the creditors of the company as a
whole.
Change of name
(7) If:
(a) an application is lodged under subsection (1), (3), (4), (5) or
(6); and
(b) the proposed name is available;
ASIC must change the company’s name by altering the details of
the company’s registration to reflect the change. The change of
name takes effect when ASIC alters the details of the company’s
registration.
Note: For available names, see section 147.
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(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.
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(2) The change of name takes effect when ASIC alters the details of
the company’s registration.
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(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.
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Lodging application
(1) To change its type, a company must lodge an application with
ASIC.
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(5) A change of type under this section takes effect when ASIC alters
the details of the company’s registration. Despite subsection
246D(3) and section 246E, a special resolution passed in
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).
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(5) ASIC must give the company a new certificate of registration after
it alters the details of the company’s registration under
subsection (3). 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).
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Chapter 2C—Registers
Part 2C.1—Registers generally
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General requirements
(1) The register of members must contain the following information
about each member:
(a) the member’s name and address;
(b) the date on which the entry of the member’s name in the
register is made.
Index to register
(2) If the company or scheme has more than 50 members, the company
or scheme must include in the register an up-to-date index of
members’ names. The index must be convenient to use and allow a
member’s entry in the register to be readily found. A separate
index need not be included if the register itself is kept in a form
that operates effectively as an index.
(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
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(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
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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.
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(3B) Subsection (3) does not apply if the option is listed for quotation
on a prescribed financial market.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (3B), see subsection 13.3(3) of the Criminal Code.
(4) The company or scheme must change the register to reflect the
transfer of an option only if the person transferring the option gives
the company or scheme written notice of the transfer.
(5) A failure to comply with this section in relation to an option does
not affect the option itself.
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Notice to ASIC
(2) The company or scheme must lodge with ASIC a notice of the
address at which the register is kept within 7 days after the register
is:
(a) established at an office that:
(i) is not the registered office of the company or
responsible entity; and
(ii) is not at the principal place of business of the company
or responsible entity in this jurisdiction; or
(b) moved from one place to another.
Notice is not required for moving the register between the
registered office and the principal place of business in this
jurisdiction.
(3) An offence based on subsection (1), (1A) or (2) is an offence of
strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Right to inspect
(1) A company or registered scheme must allow anyone to inspect a
register kept under this Chapter. If the register is not kept on a
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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.
(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.
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(b) the company must enter in the principal register the details
contained in the branch register; and
(c) the company must distinguish shares that are registered in the
branch register from the shares registered in the principal
register.
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Division 1—General duties
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Secretary’s functions
(1) A secretary of a company contravenes this subsection if the
company contravenes:
(a) section 142 (requirement for companies to have registered
office); or
(b) section 145 (requirement for registered office of public
company to be open to public); or
(c) section 346C (requirement to respond to extract of
particulars); or
(ca) section 348D (requirement to respond to return of
particulars); or
(d) section 205B (lodgment of notices with ASIC); or
(e) section 146 (notice of change of principal place of business);
or
(f) section 178A (notice of change to member register
(proprietary companies only)); or
(g) section 178C (notice of change to share structure (proprietary
companies only)); or
(h) section 254X (notice of issue of shares); or
(i) subsection 319(1) (lodgment of financial reports); or
(j) section 349A (notice of changes to ultimate holding company
(proprietary companies only)).
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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.
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(b) an act that the body does or proposed to do outside its place
of origin; or
(c) a decision by the body whether or not to do or refrain from
doing outside its place of origin.
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(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
officer of the company (but only if the contract does not
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(2) The person is not liable under subsection (1) if the person would be
entitled to have been fully indemnified by 1 of the other directors
against the liability had all the directors of the corporation been
trustees when the liability was incurred.
(3) This section does not apply to a liability incurred outside Australia
by a foreign company.
(4) This section does not apply to a liability incurred by a registrable
Australian body outside its place of origin.
(5) This section does not apply to a corporation that is an Aboriginal
and Torres Strait Islander corporation.
Note: Section 271-1 of the Corporations (Aboriginal and Torres Strait
Islander) Act 2006 deals with the liability of directors of Aboriginal
and Torres Strait Islander corporations for debts and other liabilities
incurred by those corporations as trustee.
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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
(1) Unless the company’s constitution provides otherwise, the
directors of a company may delegate any of their powers to:
(a) a committee of directors; or
(b) a director; or
(c) an employee of the company; or
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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.
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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, 1317HA or
1317HB;
(c) a liability that is owed to someone other than the company or
a related body corporate and did not arise out of conduct in
good faith.
This subsection does not apply to a liability for legal costs.
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Division 2—Termination payments
(2) The person is taken to hold the managerial or executive office for
the whole of the current financial year unless and until the person
retires from an office or position in the company before the end of
that year.
Note: Retires has an extended meaning (see section 200A).
Otherwise
(3) For a body corporate not covered by subsection (1), a managerial
or executive office for the body corporate is:
(a) an office of director of the body corporate; or
(b) any other office or position in connection with the
management of the body corporate’s affairs that is held by a
person who also holds an office of director of the body
corporate or a related body corporate.
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(2) However, for the purposes of this Division, a benefit does not
include a thing specified in regulations made for the purposes of
this subsection.
Note: For specification by class, see subsection 13(3) of the Legislative
Instruments Act 2003.
General rules
(1) For the purposes of this Division:
(a) a benefit is given in connection with a person’s retirement
from an office or position if the benefit is given:
(i) by way of compensation for, or otherwise in connection
with, the loss by the person of the office or position; or
(ii) in connection with the person’s retirement from the
office or position; and
(b) giving a benefit includes:
(i) if the benefit is a payment—making the payment; and
(ii) if the benefit is an interest in property—transferring the
interest; and
(c) a person gives a benefit even if the person is obliged to give
the benefit under a contract; and
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Rules in regulations
(1A) Without limiting subsection (1), a benefit is given in connection
with a person’s retirement from an office or position if the benefit
is given in circumstances specified in regulations made for the
purposes of this subsection.
Note: For specification by class, see subsection 13(3) of the Legislative
Instruments Act 2003.
Related benefits
(2) For the purposes of this Division, if:
(a) a person (person A) gives another person a benefit (benefit
A); and
(b) person A gives benefit A for the purpose, or for purposes
including the purpose, of enabling or assisting someone to
give a person a benefit in connection with the retirement of a
person (person B) from an office or position;
person A is taken to give benefit A in connection with the person
B’s retirement from that office or position.
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Prescribed circumstances
(3) For the purposes of this section, if:
(a) a company, or an associate of a company, gives a benefit to a
superannuation fund solely for the purpose of enabling or
assisting the superannuation fund to give to a person a benefit
in connection with the retiree’s retirement from an office or
position in the company or a related body corporate; or
(b) a superannuation fund gives a benefit to another
superannuation fund solely for the purpose of enabling or
assisting the other superannuation fund to give to a person a
benefit in connection with the retiree’s retirement from an
office or position in a company or a related body corporate;
the benefit first referred to in paragraph (a) or (b) is taken to be
given in prescribed circumstances.
(4) In this section:
superannuation fund means a provident, benefit, superannuation
or retirement fund.
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(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.
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First condition
(1B) The first condition is that the giving of the benefit be approved by
a resolution passed at a general meeting of:
(a) the company; and
(b) if the company is a subsidiary of a listed domestic
corporation—the listed corporation; and
(c) if the company has a holding company that:
(i) is a domestic corporation that is not listed; and
(ii) is not itself a subsidiary of a domestic corporation;
the holding company.
Second condition
(2) The second condition is that details of the benefit must be set out
in, or accompany, the notice of the general meeting that is to
consider the resolution. The details must include:
(a) if the proposed benefit is a payment:
(i) the amount of the payment; or
(ii) if that amount cannot be ascertained at the time of the
disclosure—the manner in which that amount is to be
calculated and any matter, event or circumstance that
will, or is likely to, affect the calculation of that amount;
and
(b) otherwise:
(i) the money value of the proposed benefit; or
(ii) if that value cannot be ascertained at the time of the
disclosure—the manner in which that value is to be
calculated and any matter, event or circumstance that
will, or is likely to, affect the calculation of that value.
These requirements are in addition to, and not in derogation of, any
other law that requires disclosure to be made with respect to giving
or receiving a benefit.
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where:
estimated annual base salary is a reasonable estimate of the base
salary that the person would have received from the company and
related bodies corporate during the relevant period if the relevant
period had been 1 year.
Note: The relevant period for the person is defined in subsection (5).
(4) This subsection applies in every other case. The amount worked
out under this subsection is:
(a) if the relevant period is 1 year—the base salary that the
person received from the company and related bodies
corporate during the relevant period; or
(b) if the relevant period is more than 1 year but less than 2 years
—the average annual base salary that the person received
from the company and related bodies corporate during the
relevant period, worked out as if:
(i) the relevant period were 2 years; and
(ii) the person’s annual base salary for the second year were
a reasonable estimate of what the person would have
received as base salary after the first year of the relevant
period had the relevant period been 2 years; or
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where:
estimated annual base salary is a reasonable estimate of the base
salary that the person would have received from the company and
related bodies corporate during the relevant period if the relevant
period had been 1 year.
Note: The relevant period for the person is defined in subsection (6).
(3) This subsection applies in every other case. The amount worked
out under this subsection is:
(a) if the relevant period is 1 year—the base salary that the
person received from the company and related bodies
corporate during the relevant period; or
(b) if the relevant period is more than 1 year but less than 2 years
—the average annual base salary that the person received
from the company and related bodies corporate during the
relevant period, worked out as if:
(i) the relevant period were 2 years; and
(ii) the person’s annual base salary for the second year were
a reasonable estimate of what the person would have
received as base salary after the first year of the relevant
period had the relevant period been 2 years; or
(c) if the relevant period is 2 years—the average annual base
salary that the person received from the company and related
bodies corporate during the relevant period; or
(d) if the relevant period is more than 2 years but less than 3
years—the average annual base salary that the person
received from the company and related bodies corporate
during the relevant period, worked out as if:
(i) the relevant period were 3 years; and
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(ii) the person’s annual base salary for the third year were a
reasonable estimate of what the person would have
received as base salary after the second year of the
relevant period had the relevant period been 3 years; or
(e) if the relevant period is 3 years or more—the average annual
base salary that the person received from the company and
related bodies corporate during the last 3 years of the relevant
period.
(4) In determining for the purposes of paragraph (1)(c) the value of a
pension or lump sum payment, disregard any part of the pension or
lump sum payment that is attributable to:
(a) a contribution made by the person; or
(b) a contribution made by a person other than:
(i) the company; or
(ii) a body corporate (a relevant body corporate) that is a
related body corporate of the company, or that was,
when the contribution was made, such a related body
corporate; or
(iii) an associate of the company, or of a relevant body
corporate, in respect of:
(A) the payment of the pension, or the making of
the lump sum payment, as the case may be; or
(B) the making of the contribution.
(6) In this section:
payment means a payment by way of pension or lump sum and
includes a superannuation, retiring allowance, superannuation
gratuity or similar payment.
relevant period: if a person has held a managerial or executive
office in the company or a related body corporate:
(a) throughout a period; or
(b) throughout a number of periods;
the relevant period for that person is that period or the period
consisting of those periods.
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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.
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(3) If:
(a) the office of the director of a proprietary company is vacated
under subsection 206B(3) or (4) because of the bankruptcy of
the director; and
(b) the person is the only director and the only shareholder of the
company; and
(c) a trustee in bankruptcy is appointed to the person’s property;
the trustee may appoint a person as the director of the company.
(4) A person who has a power of appointment under subsection (2) or
(3) may appoint themselves as director.
(5) A person appointed as a director of a company under
subsection (2), (3) or (4) holds office as if they had been appointed
in the usual way.
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Division 2—Remuneration of directors
(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.
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Note: See sections 249C to 249G for the rules on who may call meetings,
sections 249H to 249M on how to call meetings and sections 249N to
249Q for rules on members’ resolutions.
Director to be informed
(3) The company must give the director a copy of the notice as soon as
practicable after it is received.
Time of retirement
(7) If a person is appointed to replace a director removed under this
section, the time at which:
(a) the replacement director; or
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Part 2D.4—Appointment of secretaries
Proprietary companies
(1) A proprietary company is not required to have a secretary but, if it
does have 1 or more secretaries, at least 1 of them must ordinarily
reside in Australia.
Public companies
(2) A public company must have at least 1 secretary. At least 1 of them
must ordinarily reside in Australia.
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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.
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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.
Updating notices
(4) The director must notify the relevant market operator within 14
days after any change in the director’s interests.
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(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.
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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.
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Definitions
(7) In this section:
foreign jurisdiction means a foreign country, or part of a foreign
country, prescribed by the regulations as a foreign jurisdiction for
the purposes of this section.
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Power to disqualify
(1) ASIC may disqualify a person from managing corporations for up
to 5 years if:
(a) within 7 years immediately before ASIC gives a notice under
paragraph (b)(i):
(i) the person has been an officer of 2 or more
corporations; and
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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.
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Start of disqualification
(4) The disqualification takes effect from the time when a notice
referred to in subsection (3) is served on the person.
(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.
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Scope of section
(1) This section applies in relation to a person who is disqualified from
managing corporations under section 206EA.
Leave orders
(3) If the person lodges a copy of an order with ASIC under subsection
206G(4), ASIC must give the ACCC a copy of the order.
Revoking leave
(4) If ASIC decides to apply for an order under subsection 206G(5) in
relation to the person, it must consult the ACCC before making the
application.
Definition
(5) In this section:
ACCC means the Australian Competition and Consumer
Commission.
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206HB Part does not apply to Aboriginal and Torres Strait Islander
corporations
This Part does not apply, of its own force, to disqualify a person
from managing a corporation that is an Aboriginal and Torres
Strait Islander corporation.
Note 1: Subsection 279-5(5) of the Corporations (Aboriginal and Torres
Strait Islander) Act 2006 provides that a person who is disqualified
from managing corporations under this Part will be automatically
disqualified under Part 6-5 of that Act from managing Aboriginal and
Torres Strait Islander corporations.
Note 2: Similarly, subsection 206B(5) of this Act provides that a person who
is disqualified from managing Aboriginal and Torres Strait Islander
corporations under Part 6-5 of the Corporations (Aboriginal and
Torres Strait Islander) Act 2006 will be automatically disqualified
under this Part from managing corporations.
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207 Purpose
The rules in this Chapter are designed to protect the interests of a
public company’s members as a whole, by requiring member
approval for giving financial benefits to related parties that could
endanger those interests.
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(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.
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Note: A Court may order an injunction to stop the company or entity giving
the benefit to the related party (see section 1324).
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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).
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Controlling entities
(1) An entity that controls a public company is a related party of the
public company.
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Part 2F.2—Class rights
Note: This Part does not apply to the adoption or amendment of benefit fund rules or to
consequential amendments to the rest of the company’s constitution made under the
Life Insurance Act 1995, see Subdivision 2 of Division 4 of Part 2A of that Act.
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(b) members who have the same rights after the variation form a
separate class.
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(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.
(3) The amount of any payment the company requires cannot exceed
the prescribed amount.
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(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.
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Part 2F.3—Inspection of books
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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.
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.
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Division 2—Directors’ meetings
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(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).
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(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.
(5) The company may recover the amount of the expenses from the
directors. However, a director is not liable for the amount if they
prove that they took all reasonable steps to cause the directors to
comply with section 249D. The directors who are liable are jointly
and individually liable for the amount. If a director who is liable
for the amount does not reimburse the company, the company must
deduct the amount from any sum payable as fees to, or
remuneration of, the director.
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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.
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(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.
(3) The information included in the notice of meeting must be worded
and presented in a clear, concise and effective manner.
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(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.
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249Q Purpose
A meeting of a company’s members must be held for a proper
purpose.
249S Technology
A company may hold a meeting of its members at 2 or more
venues using any technology that gives the members as a whole a
reasonable opportunity to participate.
Note: See section 1322 for the consequences of a member not being given a
reasonable opportunity to participate.
(3) A meeting of the company’s members that does not have a quorum
present within 30 minutes after the time for the meeting set out in
the notice of meeting is adjourned to the date, time and place the
directors specify. If the directors do not specify 1 or more of those
things, the meeting is adjourned to:
(a) if the date is not specified—the same day in the next week;
and
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(2) The auditor is entitled to be heard at the meeting on any part of the
business of the meeting that concerns the auditor in their capacity
as auditor.
(3) The auditor is entitled to be heard even if:
(a) the auditor retires at the meeting; or
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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.
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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.
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(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)).
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(4) A public company that has only 1 member is not required to hold
an AGM under this section.
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(3) The vote on the resolution is advisory only and does not bind the
directors or the company.
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(c) the person is not represented, at the AGM at which the audit
report for that financial year is considered, by a person who:
(i) is a suitably qualified member of the audit team that
conducted the audit; and
(ii) is in a position to answer questions about the audit.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Section 9AA
(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.
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251A Minutes
(1) A company must keep minute books in which it records within 1
month:
(a) proceedings and resolutions of meetings of the company’s
members; and
(b) proceedings and resolutions of directors’ meetings (including
meetings of a committee of directors); and
(c) resolutions passed by members without a meeting; and
(d) resolutions passed by directors without a meeting; and
(e) if the company is a proprietary company with only 1 director
—the making of declarations by the director.
Note: For resolutions and declarations without meetings, see sections 248A,
248B, 249A and 249B.
(2) The company must ensure that minutes of a meeting are signed
within a reasonable time after the meeting by 1 of the following:
(a) the chair of the meeting;
(b) the chair of the next meeting.
(3) The company must ensure that minutes of the passing of a
resolution without a meeting are signed by a director within a
reasonable time after the resolution is passed.
(4) The director of a proprietary company with only 1 director must
sign the minutes of the making of a declaration by the director
within a reasonable time after the declaration is made.
(5) A company must keep its minute books at:
(a) its registered office; or
(b) its principal place of business in this jurisdiction; or
(c) another place in this jurisdiction approved by ASIC.
(5A) An offence based on subsection (1), (2), (3), (4) or (5) is an offence
of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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(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.
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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.
(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.
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Note: A defect in the notice given may not invalidate a meeting (see
section 1322).
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(9) The responsible entity need not comply with the request:
(a) if the statement is more than 1,000 words long or
defamatory; or
(b) if the members making the request are responsible for the
expenses of the distribution—unless the members give the
company a sum reasonably sufficient to meet the expenses
that it will reasonably incur in making the distribution.
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252Q Technology
A responsible entity of a registered scheme may hold a meeting of
the scheme’s members at 2 or more venues using any technology
that gives the members as a whole a reasonable opportunity to
participate.
Note: See section 1322 for the consequences of members not being given a
reasonable opportunity to participate.
252R Quorum
(1) This section applies to a registered scheme subject to the
provisions of the scheme’s constitution.
(2) The quorum for a meeting of a registered scheme’s members is 2
members and the quorum must be present at all times during the
meeting.
(3) In determining whether a quorum is present, count individuals
attending as proxies or body corporate representatives. However, if
a member has appointed more than 1 proxy or representative, count
only 1 of them. If an individual is attending both as a member and
as a proxy or body corporate representative, count them only once.
Note 1: For rights to appoint proxies, see section 252V.
Note 2: For body corporate representatives, see section 253B.
(4) A meeting of the scheme’s members that does not have a quorum
present within 30 minutes after the time for the start of the meeting
set out in the notice of meeting is adjourned to the date, time and
place the responsible entity specifies. If the responsible entity does
not specify 1 or more of those things, the meeting is adjourned to:
(a) if the date is not specified—the same day in the next week;
and
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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).
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Receipt of documents
(3A) A responsible entity receives an appointment authority when it is
received at any of the following:
(a) the responsible entity’s registered office;
(b) a fax number at the responsible entity’s registered office;
(c) a place, fax number or electronic address specified for the
purpose in the notice of meeting.
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Note: Even though the chair’s declaration is conclusive of the voting results,
the members present may demand a poll (see paragraph 253L(3)(c)).
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253M Minutes
(1) A responsible entity of a registered scheme must keep minute
books in which it records within 1 month:
(a) proceedings of meetings of the scheme’s members; and
(b) resolutions of meetings of the scheme’s members.
(2) The responsible entity must ensure that minutes of a meeting are
signed within a reasonable time after the meeting by the chair of
the meeting or the chair of the next meeting.
(3) The responsible entity must keep the minute books at:
(a) its registered office; or
(b) its principal place of business in this jurisdiction; or
(c) another place in this jurisdiction approved by ASIC.
(3A) An offence based on subsection (1), (2) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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(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.
(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.
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Chapter 2H—Shares
Part 2H.1—Issuing and converting shares
(2) A company can issue preference shares only if the rights attached
to the preference shares with respect to the following matters are
set out in the company’s constitution (if any) or have been
otherwise approved by special resolution of the company:
(a) repayment of capital;
(b) participation in surplus assets and profits;
(c) cumulative and non-cumulative dividends;
(d) voting;
(e) priority of payment of capital and dividends in relation to
other shares or classes of preference shares.
(3) Redeemable preference shares are preference shares that are issued
on the terms that they are liable to be redeemed. They may be
redeemable:
(a) at a fixed time or on the happening of a particular event; or
(b) at the company’s option; or
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(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;
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Section 9
(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.
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Section 9
Part 2H.3—Partly-paid shares
No liability companies
(2) The acceptance by a person of a share in a no liability company,
whether by issue or transfer, does not constitute a contract by the
person to pay:
(a) calls in respect of the share; or
(b) any contribution to the debts and liabilities of the company.
Making calls
(1) A call on a share in a no liability company is not effective unless it
is made payable at least 14 days after the call is made.
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Notice of call
(2) At least 7 days before a call on shares in a no liability company
becomes payable, the company must give the holders of the shares
notice of:
(a) the amount of the call; and
(b) the day when it is payable; and
(c) the place for payment.
The notice must be sent by post. If the notice is not given, the call
is not payable.
(3) A call does not have any effect on a forfeited share that is held by
or in trust for the company under subsection 254Q(6). However,
when the share is re-issued or sold by the company, the share may
be credited as paid up to the amount determined by the company in
accordance with its constitution or by resolution.
(2) The forfeited share must then be offered for sale by public auction
within 6 weeks after the call became payable.
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.
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Postponement of sale
(4) An intended sale of forfeited shares that has been duly advertised
may be postponed for not more than 21 days from the advertised
date of sale. The date to which the sale is postponed must be
advertised in a daily newspaper circulating generally in Australia.
(5) There may be more than 1 postponement but the sale cannot be
postponed to a date more than 90 days from the first date fixed for
the intended sale.
Reserve price
(7) The directors may fix a reserve price for the share that does not
exceed the sum of:
(a) the amount of the call due and unpaid on the share at the time
of forfeiture; and
(b) the amount of any other calls that become payable on or
before the date of the sale.
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Validity of sale
(12) If a sale is not held in time because of error or inadvertence, a late
sale is not invalid if it is held as soon as practicable after the
discovery of the error or inadvertence.
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Part 2H.4—Capitalisation of profits
Section 9
Part 2H.5—Dividends
(2) Assets and liabilities are to be calculated for the purposes of this
section in accordance with accounting standards in force at the
relevant time (even if the standard does not otherwise apply to the
financial year of some or all of the companies concerned).
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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.
(4) Dividends are payable to the shareholders in a no liability company
in proportion to the number of shares held by them, irrespective of
the amount paid up, or credited as paid up, on the shares. This
subsection has effect subject to any provisions in the company’s
constitution relating to shares that are not ordinary shares.
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Part 2H.6—Notice requirements
(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.
Note: Information about shares issued in these situations will come to ASIC
under subsections 5H(2), 117(2), 163(3) and 601BC(2).
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256A Purpose
This Part states the rules to be followed by a company for
reductions in share capital and for share buy-backs. The rules are
designed to protect the interests of shareholders and creditors by:
(a) addressing the risk of these transactions leading to the
company’s insolvency
(b) seeking to ensure fairness between the company’s
shareholders
(c) requiring the company to disclose all material information.
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Division 2—Share buy-backs
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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.
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10/12 limit
(4) The 10/12 limit for a company proposing to make a buy-back is
10% of the smallest number, at any time during the last 12 months,
of votes attaching to voting shares of the company.
On-market buy-backs
(6) A buy-back is an on-market buy-back if it results from an offer
made by a listed corporation on a prescribed financial market in the
ordinary course of trading on that market.
(7) A buy-back by a company (whether listed or not) is also an
on-market buy-back if it results from an offer made in the ordinary
course of trading in a financial market outside Australia which
ASIC declares in writing to be an approved overseas financial
market for the purposes of this subsection. A buy-back by a listed
company is an on-market buy-back under this subsection only if an
offer to buy-back those shares is also made on a prescribed
financial market at the same time.
(8) A declaration under paragraph (7)(b) may be subject to conditions.
Notice of the making of the declaration must be published in the
Gazette.
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(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.
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Note: This situation could arise, for example, if the company holds shares as
a trustee or is performing duties as a liquidator.
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Part 2J.3—Financial assistance
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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.
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Chapter 2K—Charges
Part 2K.1—Preliminary
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Part 2K.2—Registration
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(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:
critical day, in relation to a company, means:
(a) if the company is being wound up—the day when the
winding up began; or
(b) if the company is under administration—the section 513C
day in relation to the administration; or
(c) if the company has executed a deed of company arrangement
—the section 513C day in relation to the administration that
ended when the deed was executed.
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272 Certificates
(1) Where particulars of a charge are entered in the Register in
accordance with this Part, ASIC must, on request by any person,
issue to that person a certificate setting out those particulars and
stating the time and day when a notice in respect of the charge
containing those particulars was lodged with ASIC and, if the word
“provisional” appears in the Register in relation to the reference to
that time and day, stating that fact.
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(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.
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(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.
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(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.
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Note: Section 273D provides that this section does not apply to certain joint
charges.
(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.
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Part 2K.3—Order of priority
278 Definitions
(1) In this Part:
priority time, in relation to a registered charge, means:
(a) except as provided by paragraph (b) or (c)—the time and date
appearing in the Register in relation to the charge, being a
time and day entered in the Register pursuant to section 265;
and
(b) where a notice has been lodged under section 264 in relation
to a charge on property, being a charge that, at the time when
the notice was lodged, was already registered under
Part 2K.2—the earlier or earliest time and day appearing in
the Register in relation to the charge, being a time and day
entered in the Register pursuant to section 264; and
(c) to the extent that the charge has effect as varied by a
variation notice of which was required to be lodged under
subsection 268(2)—the time and day entered in the Register
in relation to the charge pursuant to subsection 265(14).
prior registered charge, in relation to another registered charge,
means a charge the priority time of which is earlier than the
priority time of the other charge.
registered charge means a charge that is registered under Part K.2.
subsequent registered charge, in relation to another registered
charge, means a charge the priority time of which is later than the
priority time of the other registered charge.
unregistered charge means a charge that is not registered under
Part 2K.2 but does not include a charge that is not a registrable
charge.
(2) A reference in this Part to a person having notice of a charge
includes a reference to a person having constructive notice of the
charge.
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