Commonwealth Consolidated ActsAct No. 50 of 2001 as amended
This compilation was prepared on 3 July 2008
taking into account amendments up to Act No. 54 of 2008
Volume 1 includes: Table of Contents
Chapters 1--2K (ss. 1 -- 282)
The text of any of those amendments not in force
on that date is appended in the Notes section
The operation of amendments that
have been incorporated may be
affected by application provisions that are set out in the Notes section
Volume
2
includes: Table of Contents
Chapters 2L--5B (ss. 283AA -- 601DJ)
Volume
3
includes: Table of Contents
Chapters 5C--6D (ss. 601EA -- 742)
Volume
4
includes: Table of Contents
Chapters 7 and 8 (ss. 760A --
1200U)
Volume
5
includes: Table of Contents
Chapters 9 and 10 (ss. 1274 -- 1483)
Schedules 3 and 4
Note 1
Table
of Acts
Act Notes
Table of Amendments
Notes 2 and 3
Table A
Prepared by the Office of
Legislative Drafting and Publishing,
Attorney‑General's Department, Canberra
Contents
Chapter 1--Introductory 1
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 1.1A--Interaction between Corporations legislation and State and Territory laws 9
5D......... Coverage of Part ................................................................................. 9
5E.......... Concurrent operation intended ........................................................... 9
5F.......... Corporations legislation does not apply to matters declared by State or Territory law to be an excluded matter 10
5G......... Avoiding direct inconsistency arising between the Corporations legislation and State and Territory laws 12
5H......... Registration of body as company on basis of State or Territory law 19
5I........... Regulations may modify operation of the Corporations legislation to deal with interaction between that legislation and State and Territory laws ................................................................... 20
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
9A......... Meaning of rights issue .................................................................... 86
Division 2--Associates 88
10.......... Effect of Division ............................................................................. 88
11.......... Associates of bodies corporate ......................................................... 88
12.......... References in Chapters 6 to 6C, and other references relating to voting power and takeovers etc. 88
13.......... References in Chapter 7 .................................................................... 90
15.......... General .............................................................................................. 90
16.......... Exclusions ......................................................................................... 91
17.......... Associates of composite person that carries on a financial services business 92
Division 3--Carrying on business 93
18.......... Carrying on business: otherwise than for profit ............................... 93
19.......... Businesses of a particular kind ......................................................... 93
20.......... Carrying on a business: alone or together with others ...................... 93
21.......... Carrying on business in Australia or a State or Territory ................ 93
Division 5A--Types of company 95
45A....... Proprietary companies ..................................................................... 95
Division 6--Subsidiaries and related bodies corporate 97
46.......... What is a subsidiary ......................................................................... 97
47.......... Control of a body corporate's board ................................................ 97
48.......... Matters to be disregarded ................................................................. 98
49.......... References in this Division to a subsidiary ...................................... 98
50.......... Related bodies corporate .................................................................. 99
50AAA. Associated entities ............................................................................ 99
50AA.... Control ............................................................................................ 100
Division 7--Interpretation of other expressions 101
52.......... Doing acts ....................................................................................... 101
52A....... Signing ............................................................................................. 101
53.......... Affairs of a body corporate ............................................................ 101
53AA.... Business affairs of a body corporate .............................................. 103
53AB.... Business affairs of a natural person ................................................ 103
53AC.... Business affairs of a partnership .................................................... 104
53AD.... Business affairs of a trust ............................................................... 104
57.......... Classes of shares or interests in managed investment schemes ...... 105
57A....... Meaning of corporation .................................................................. 105
58AA.... Meaning of court and Court ........................................................... 105
58B....... Discharge of obligations under this Act .......................................... 106
59.......... Debentures as consideration for acquisition of shares .................... 106
60.......... Declaration of relevant relationships .............................................. 106
64.......... Entering into a transaction in relation to shares or securities ......... 108
64A....... Entities ............................................................................................ 108
64B....... Entities connected with a corporation ............................................ 108
65.......... Eligible money market dealer .......................................................... 110
66A....... Exempt bodies ................................................................................ 110
70.......... Extension of period for doing an act ............................................... 110
73A....... When a court is taken to find a person guilty of an offence ........... 110
75.......... Inclusion in official list ................................................................... 110
79.......... Involvement in contraventions ....................................................... 111
80.......... Jervis Bay Territory taken to be part of the Australian Capital Territory 111
82.......... Offers and invitations to the public ................................................ 111
83.......... Officers, and other persons, in default ........................................... 112
86.......... Possession ...................................................................................... 112
88A....... Public document of a body corporate ............................................. 112
88B....... Qualified accountants ..................................................................... 113
89.......... Qualified privilege ........................................................................... 113
90.......... Receivers and managers .................................................................. 114
92.......... Securities ......................................................................................... 114
95A....... Solvency and insolvency ................................................................ 115
Division 8--Miscellaneous interpretation rules 117
5>100........ Address of registered office etc. ..................................................... 117
100A..... Operation of certain laws relating to instruments on which stamp duty has not been paid 117
101........ Amount of stock representing a number of shares ......................... 118
102........ Applications to be in writing .......................................................... 118
102B..... In Australia or elsewhere, in this jurisdiction or elsewhere etc. ..... 118
102C..... In Australia ..................................................................................... 118
103........ Effect of certain contraventions of this Act ................................... 118
104........ Effect of provisions empowering a person to require or prohibit conduct 119
105........ Calculation of time .......................................................................... 119
106........ Performance of functions by Commission delegate ........................ 119
107........ Notice in relation to top 20 members of a class ............................. 119
108........ Parts of dollar to be disregarded in determining majority in value of creditors etc. 120
109........ References to persons, things and matters ..................................... 120
109X..... Service of documents ...................................................................... 120
Part 1.2A--Disclosing entities 122
Division 1--Object of Part 122
111AA.. Object of Part ................................................................................. 122
Division 2--Definitions 123
111AB.. Terms defined in Division .............................................................. 123
111AC.. Disclosing entity ............................................................................. 123
111AD.. ED securities ................................................................................... 123
111AE... Securities of body or undertaking that is included in a licensed market's official list 124
111AF... Securities (except debentures and managed investment products) held by 100 or more persons 125
111AFA Managed investment products held by 100 or more persons ........ 125
111AG.. Securities issued as consideration for an acquisition under an off‑market takeover bid or Part 5.1 compromise or arrangement ..................................................................................... 126
111AH.. When a person holds securities for the purposes of sections 111AF, 111AFA and 111AG 126
5>111AI.... Debentures ...................................................................................... 127
111AJ... Regulations may declare securities not to be ED securities ............ 127
111AK.. ED securities of a disclosing entity ................................................ 127
111AL... Listed or unlisted disclosing entity ................................................. 127
111AM. Quoted ED securities ...................................................................... 127
Division 3--Significance of being a disclosing entity 128
111AN.. Division contains outline of significance of being a disclosing entity 128
111AO.. Accounting requirements ................................................................ 128
111AP... Continuous disclosure requirements ............................................... 128
111AQ.. Prospectus relief ............................................................................. 128
111AQA..................................................... Product Disclosure Statement relief 128
Division 4--Exemptions and modifications 129
111AR.. Meaning of disclosing entity provisions ......................................... 129
111AS... Exemptions by regulations ............................................................. 129
111AT.. Exemptions by ASIC ...................................................................... 129
111AU.. Enforcing conditions of exemptions ............................................... 129
111AV.. Modifications by regulations .......................................................... 130
111AW. Exemptions and modifications have effect ..................................... 130
111AX.. Effect of Division ........................................................................... 130
Part 1.4--Technical provisions about aids for readers 131
111J...... Small business guide ....................................................................... 131
Part 1.5--Small business guide 132
1............ What registration means ................................................................. 132
2............ The company structure for small business ..................................... 137
3............ Setting up a new company ............................................................. 137
4............ Continuing obligations after the company is set up ....................... 140
5............ Company directors and company secretaries ................................. 143
6............ Shares and shareholders .................................................................. 146
7............ Signing company documents .......................................................... 147
8............ Funding the company's operations ................................................ 148
9............ Returns to shareholders .................................................................. 148
10.......... Annual financial reports and audit .................................................. 149
11.......... Disagreements within the company ............................................... 151
12.......... Companies in financial trouble ....................................................... 152
Chapter 2A--Registering a company 154
Part 2A.1--What companies can be registered 154
112........ Types of companies ....................................................................... 154
113........ Proprietary companies ................................................................... 155
114........ Minimum of 1 member ................................................................... 156
115........ Restrictions on size of partnerships and associations .................... 156
116........ Trade unions cannot be registered .................................................. 157
Part 2A.2--How a company is registered 158
117........ Applying for registration ................................................................ 158
118........ ASIC gives company ACN, registers company and issues certificate 160
119........ Company comes into existence on registration .............................. 161
119A..... Jurisdiction of incorporation and jurisdiction of registration ......... 161
120........ Members, directors and company secretary of a company ........... 162
121........ Registered office ............................................................................. 162
122........ Expenses incurred in promoting and setting up company .............. 162
123........ Company may have common seal .................................................. 163
Chapter 2B--Basic features of a company 164
Part 2B.1--Company powers and how they are exercised 164
124........ Legal capacity and powers of a company ...................................... 164
125........ Constitution may limit powers and set out objects ....................... 165
126........ Agent exercising a company's power to make contracts ................ 165
127........ Execution of documents (including deeds) by the company itself . 165
Part 2B.2--Assumptions people dealing with companies are entitled to make 167
128........ Entitlement to make assumptions .................................................. 167
129........ Assumptions that can be made under section 128 ......................... 167
130........ Information available to the public from ASIC does not constitute constructive notice 169
Part 2B.3--Contracts before registration 170
131........ Contracts before registration .......................................................... 170
132........ Person may be released from liability but is not entitled to indemnity 171
133........ This Part replaces other rights and liabilities .................................. 171
Part 2B.4--Replaceable rules and constitution 172
134........ Internal management of companies ................................................. 172
135........ Replaceable rules ............................................................................ 172
136........ Constitution of a company ............................................................. 173
137........ Date of effect of adoption, modification or repeal of constitution . 174
138........ ASIC may direct company to lodge consolidated constitution ...... 175
139........ Company must send copy of constitution to member ................... 175
140........ Effect of constitution and replaceable rules .................................... 175
141........ Table of replaceable rules ............................................................... 176
Part 2B.5--Registered office and places of business 178
142........ Registered office ............................................................................. 178
143........ ASIC may change address of registered office to a director's address 178
144........ Company's name must be displayed at registered office etc. ........ 179
145........ Opening hours of registered office of public company .................. 179
146........ Change of address of principal place of business ........................... 180
146A..... Contact address .............................................................................. 180
Part 2B.6--Names 181
Division 1--Selecting and using a name 181
147........ When a name is available ................................................................ 181
148........ A company's name ......................................................................... 182
149........ Acceptable abbreviations ................................................................ 183
150........ Exception to requirement for using "Limited" in name .................. 184
151........ Exception to requirement for using "Limited" in name--pre‑existing licences 184
152........ Reserving a name ............................................................................ 185
153........ Using a name and ACN on documents ........................................... 186
154........ Exception to requirement to have ACN on receipts ....................... 186
155........ Regulations may exempt from requirement to set out information on documents 187
156........ Carrying on business using "Limited", "No Liability" or "Proprietary" in name 187
Division 2--Changing a company's name 188
157........ Company changing its name ........................................................... 188
157A..... Change of name of company under external administration ........... 188
158........ ASIC's power to direct company to change its name .................... 190
159........ ASIC's power to include "Limited" in company's name ............... 190
160........ ASIC must issue new certificate if company's name changes ........ 191
161........ Effect of name change ..................................................................... 191
161A..... Company under external administration--former name to be used on documents 191
Part 2B.7--Changing company type 194
162........ Changing company type ................................................................. 194
163........ Applying for change of type .......................................................... 196
164........ ASIC changes type of company ..................................................... 198
165........ ASIC may direct a proprietary company to change to a public company in certain circumstances 200
166........ Effect of change of type ................................................................. 200
167........ Issue of shares by company or holding company--company limited by guarantee changing to company limited by shares .............................................................................................. 201
167AA.. Application of Part to company limited both by shares and by guarantee 202
Chapter 2C--Registers 203
Part 2C.1--Registers generally 203
167A..... Who is covered by this Chapter ..................................................... 203
168........ Registers to be maintained .............................................................. 203
169........ Register of members ....................................................................... 204
170........ Register of option holders and copies of options documents ........ 206
171........ Register of debenture holders ......................................................... 207
172........ Location of registers ....................................................................... 207
173........ Right to inspect and get copies ....................................................... 208
174........ Agent's obligations ......................................................................... 210
175........ Correction of registers .................................................................... 211
176........ Evidentiary value of registers ......................................................... 211
177........ Use of information on registers ...................................................... 211
178........ Overseas branch registers ............................................................... 212
Part 2C.2--Notice by proprietary companies of changes to member register 213
178A..... Notice of change to member register ............................................... 213
178B..... Top 20 only .................................................................................... 214
178C..... Notice of change to share structure ................................................ 214
178D..... Time within which ASIC must be notified ..................................... 214
Chapter 2D--Officers and employees 216
Part 2D.1--Duties and powers 216
179........ Background to duties of directors, other officers and employees .. 216
Division 1--General duties 217
180........ Care and diligence--civil obligation only ........................................ 217
181........ Good faith--civil obligations .......................................................... 218
182........ Use of position--civil obligations .................................................. 218
183........ Use of information--civil obligations ............................................. 219
184........ Good faith, use of position and use of information--criminal offences 219
185........ Interaction of sections 180 to 184 with other laws etc. ................. 220
186........ Territorial application of sections 180 to 184 ................................ 220
187........ Directors of wholly‑owned subsidiaries ......................................... 221
188........ Responsibility of secretaries and directors for certain contraventions 221
189........ Reliance on information or advice provided by others ................... 222
190........ Responsibility for actions of delegate ............................................ 223
190A..... Limited application of Division to registrable Australian bodies ... 223
190B..... Division does not apply to Aboriginal and Torres Strait Islander corporations 224
Division 2--Disclosure of, and voting on matters involving, material personal interests 225
191........ Material personal interest--director's duty to disclose ................. 225
192........ Director may give other directors standing notice about an interest 227
193........ Interaction of sections 191 and 192 with other laws etc. ............... 228
194........ Voting and completion of transactions--directors of proprietary companies (replaceable rule--see section 135) ........................................................................................................ 229
195........ Restrictions on voting--directors of public companies only ......... 229
196........ ASIC power to make declarations and class orders ........................ 231
Division 3--Duty to discharge certain trust liabilities 232
197........ Directors liable for debts and other obligations incurred by corporation as trustee 232
Division 4--Powers 233
198A..... Powers of directors (replaceable rule--see section 135) ................ 233
198B..... Negotiable instruments (replaceable rule--see section 135) .......... 233
198C..... Managing director (replaceable rule--see section 135) .................. 233
198D..... Delegation ....................................................................................... 233
198E...... Single director/shareholder proprietary companies ........................ 234
198F...... Right of access to company books ................................................. 234
Part 2D.2--Restrictions on indemnities, insurance and termination payments 236
Division 1--Indemnities and insurance for officers and auditors 236
199A..... Indemnification and exemption of officer or auditor ...................... 236
199B..... Insurance premiums for certain liabilities of director, secretary, other officer or auditor 237
199C..... Certain indemnities, exemptions, payments and agreements not authorised and certain documents void 238
Division 2--Termination payments 239
200A..... When benefit given in connection with retirement from office ....... 239
200B..... Retirement benefits generally need membership approval ............. 240
200C..... Benefits on transfer of undertaking or property need membership approval 241
200D..... Contravention to receive benefit without member approval .......... 242
200E...... Approval by members .................................................................... 242
200F...... Exempt benefits and benefits given in certain circumstances ......... 243
200G..... Genuine payments of pension and lump sum ................................ 245
200H..... Benefits required by law ................................................................. 247
200J...... Benefits to be held in trust for company ........................................ 247
Part 2D.3--Appointment, remuneration and cessation of appointment of directors 248
Division 1--Appointment of directors 248
201A..... Minimum number of directors ........................................................ 248
201B..... Who can be a director ..................................................................... 248
201D..... Consent to act as director ............................................................... 248
201E...... Special rules for the appointment of public company directors .... 249
201F...... Special rules for the appointment of directors for single director/single shareholder proprietary companies 249
201G..... Company may appoint a director (replaceable rule--see section 135) .. 250
201H..... Directors may appoint other directors (replaceable rule--see section 135) 250
5>201J...... Appointment of managing directors (replaceable rule--see section 135) 251
5>201K..... Alternate directors (replaceable rule--see section 135) ................. 251
201L...... Signpost--ASIC to be notified of appointment ............................. 251
201M.... Effectiveness of acts by directors ................................................... 252
Division 2--Remuneration of directors 253
202A..... Remuneration of directors (replaceable rule--see section 135) ..... 253
202B..... Members may obtain information about directors' remuneration .. 253
202C..... Special rule for single director/single shareholder proprietary companies 254
Division 3--Resignation, retirement or removal of directors 255
203A..... Director may resign by giving written notice to company (replaceable rule--see section 135) 255
5>203B..... Signpost to consequences of disqualification from managing corporations 255
203C..... Removal by members--proprietary companies (replaceable rule--see section 135) 255
5>203D..... Removal by members--public companies ..................................... 255
203E...... Director cannot be removed by other directors--public companies 257
203F...... Termination of appointment of managing director (replaceable rule--see section 135) 257
Part 2D.4--Appointment of secretaries 258
204A..... Minimum number of secretaries ..................................................... 258
204B..... Who can be a secretary ................................................................... 258
204C..... Consent to act as secretary ............................................................. 258
204D..... How a secretary is appointed ......................................................... 259
204E...... Effectiveness of acts by secretaries ................................................ 259
204F...... Terms and conditions of office for secretaries (replaceable rule--see section 135) 259
204G..... Signpost to consequences of disqualification from managing corporations 259
Part 2D.5--Public information about directors and secretaries 260
205A..... Director, secretary or alternate director may notify ASIC of resignation or retirement 260
205B..... Notice of name and address of directors and secretaries to ASIC .. 260
205C..... Director and secretary must give information to company ............ 262
205D..... Address for officers ........................................................................ 262
205E...... ASIC's power to ask for information about person's position as director or secretary 263
205F...... Director must give information to company .................................. 263
205G..... Listed company--director to notify market operator of shareholdings etc. 264
Part 2D.6--Disqualification from managing corporations 266
206A..... Disqualified person not to manage corporations ............................ 266
206B..... Automatic disqualification .............................................................. 267
206BA.. Extension of period of automatic disqualification .......................... 268
206C..... Court power of disqualification--contravention of civil penalty provision 269
206D..... Court power of disqualification--insolvency and non‑payment of debts 269
206E...... Court power of disqualification--repeated contraventions of Act 271
206EA... Disqualification under the Trade Practices Act 1974 ..................... 272
206F...... ASIC's power of disqualification ................................................... 272
206G..... Court power to grant leave ............................................................. 273
206GA.. Involvement of ACCC--leave orders under section 206G ............ 274
206H..... Territorial application of this Part .................................................. 275
206HA.. Limited application of Part to registrable Australian bodies .......... 275
206HB.. Part does not apply to Aboriginal and Torres Strait Islander corporations 275
Chapter 2E--Related party transactions 277
207........ Purpose ........................................................................................... 277
Part 2E.1--Member approval needed for related party benefit 278
Division 1--Need for member approval 278
208........ Need for member approval for financial benefit ............................. 278
209........ Consequences of breach .................................................................. 278
Division 2--Exceptions to the requirement for member approval 280
210........ Arm's length terms ......................................................................... 280
211........ Remuneration and reimbursement for officer or employee ............ 280
212........ Indemnities, exemptions, insurance premiums and payment for legal costs for officers 281
213........ Small amounts given to related entity ............................................. 282
214........ Benefit to or by closely‑held subsidiary ........................................ 283
215........ Benefits to members that do not discriminate unfairly .................. 283
216........ Court order ..................................................................................... 284
Division 3--Procedure for obtaining member approval 285
217........ Resolution may specify matters by class or kind .......................... 285
218........ Company must lodge material that will be put to members with ASIC 285
219........ Requirements for explanatory statement to members .................... 286
220........ ASIC may comment on proposed resolution ................................. 287
221........ Requirements for notice of meeting ................................................ 287
222........ Other material put to members ....................................................... 287
223........ Proposed resolution cannot be varied ............................................. 288
224........ Voting by or on behalf of related party interested in proposed resolution 288
225........ Voting on the resolution ................................................................. 289
226........ Notice of resolution to be lodged .................................................... 290
227........ Declaration by court of substantial compliance ............................. 290
Part 2E.2--Related parties and financial benefits 291
228........ Related parties ................................................................................ 291
229........ Giving a financial benefit ................................................................ 292
Part 2E.3--Interaction with other rules 294
5>230........ General duties still apply ............................................................... 294
Chapter 2F--Members' rights and remedies 295
231........ Membership of a company ............................................................ 295
Part 2F.1--Oppressive conduct of affairs 296
232........ Grounds for Court order ................................................................. 296
233........ Orders the Court can make ............................................................. 296
234........ Who can apply for order ................................................................ 297
235........ Requirement for person to lodge order ........................................... 298
Part 2F.1A--Proceedings on behalf of a company by members and others 299
236........ Bringing, or intervening in, proceedings on behalf of a company ... 299
237........ Applying for and granting leave ..................................................... 299
238........ Substitution of another person for the person granted leave .......... 301
239........ Effect of ratification by members ................................................... 301
240........ Leave to discontinue, compromise or settle proceedings brought, or intervened in, with leave 302
241........ General powers of the Court .......................................................... 302
242........ Power of the Court to make costs orders ....................................... 303
Part 2F.2--Class rights 304
246B..... Varying and cancelling class rights .................................................. 304
246C..... Certain actions taken to vary rights etc. ......................................... 305
246D..... Variation, cancellation or modification without unanimous support of class 306
246E...... Variation, cancellation or modification with unanimous support of class 307
246F...... Company must lodge documents and resolutions with ASIC ........ 307
246G..... Member's copies of documents and resolutions ............................ 308
Part 2F.3--Inspection of books 310
247A..... Order for inspection of books of company or registered managed investment scheme 310
247B..... Ancillary orders .............................................................................. 311
247C..... Disclosure of information acquired in inspection ........................... 311
247D..... Company or directors may allow member to inspect books (replaceable rule see section 135) 3