Corporations Act 2001
No. 50, 2001
An Act to make provision in relation to corporations, securities, the futures industry and financial products and services, and for other purposes
[Assented to 28 June 2001]
The Parliament of Australia enacts:
This Act may be cited as the Corporations Act 2001.
This Act commences on a day to be fixed by Proclamation.
(1) The operation of this Act in the referring States is based on:
(a) the legislative powers that the Commonwealth Parliament has under section 51 of the Constitution (other than paragraph 51(xxxvii)); and
(b) the legislative powers that the Commonwealth Parliament has in respect of matters to which this Act relates because those matters are referred to it by the Parliaments of the referring States under paragraph 51(xxxvii) of the Constitution.
Note: The State referrals fully supplement the Commonwealth Parliament’s other powers by referring the matters to the Commonwealth Parliament to the extent to which they are not otherwise included in the legislative powers of the Commonwealth Parliament.
(2) The operation of this Act in the Northern Territory and the Capital Territory is based on:
(a) the legislative powers that the Commonwealth Parliament has under section 122 of the Constitution to make laws for the government of those Territories; and
(b) the legislative powers that the Commonwealth Parliament has under section 51 of the Constitution.
Despite subsection 22(3) of the Acts Interpretation Act 1901, this Act as applying in those territories is a law of the Commonwealth.
(3) The operation of this Act outside Australia is based on:
(a) the legislative power the Commonwealth Parliament has under paragraph 51(xxix) of the Constitution; and
(b) the other legislative powers that the Commonwealth Parliament has under section 51 of the Constitution; and
(c) the legislative powers that the Commonwealth Parliament has under section 122 of the Constitution to make laws for the government of those Territories.
(4) The operation of this Act in a State that is not a referring State is based on:
(a) the legislative powers that the Commonwealth Parliament has under section 51 (other than paragraph 51(xxxvii)) and section 122 of the Constitution; and
(b) the legislative powers that the Commonwealth Parliament has in respect of matters to which this Act relates because those matters are referred to it by the Parliaments of the referring States under paragraph 51(xxxvii) of the Constitution.
Reference of matters by State Parliament to Commonwealth Parliament
(1) A State is a referring State if the Parliament of the State has referred the matters covered by subsections (4) and (5) to the Parliament of the Commonwealth for the purposes of paragraph 51(xxxvii) of the Constitution:
(a) if and to the extent that the matters are not otherwise included in the legislative powers of the Parliament of the Commonwealth (otherwise than by a reference under paragraph 51(xxxvii) of the Constitution); and
(b) if and to the extent to which the matters are included in the legislative powers of the Parliament of the State.
This subsection has effect subject to subsections (6) and (7).
(2) A State is a referring State even if the State reference Act includes a provision to the effect that nothing in the State reference Act is intended to enable the making of laws pursuant to the amendment reference with the sole or main underlying purpose or object of regulating industrial relations matters even if, but for that provision in the State reference Act, the law would be a law with respect to a matter referred to the Parliament of the Commonwealth by the amendment reference.
(3) A State is a referring State even if a law of the State provides that the reference to the Commonwealth Parliament of either or both of the matters covered by subsections (4) and (5) is to terminate in particular circumstances.
Reference covering initial Corporations Act and ASIC Act
(4) This subsection covers the matters to which the referred provisions relate to the extent of making laws with respect to those matters by including the referred provisions in the initial Corporations Act and the initial ASIC Act.
Reference covering amendments of this Act and ASIC Act
(5) This subsection covers the matters of the formation of corporations, corporate regulation and the regulation of financial products and services to the extent of the making of laws with respect to those matters by making express amendments of this Act or the ASIC Act.
Effect of termination of reference
(6) A State ceases to be a referring State if the State’s initial reference terminates.
(7) A State ceases to be a referring State if:
(a) the State’s amendment reference terminates; and
(b) subsection (8) does not apply to the termination.
(8) A State does not cease to be a referring State because of the termination of its amendment reference if:
(a) the termination is effected by the Governor of that State fixing a day by proclamation as the day on which the reference terminates; and
(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.
Geographical coverage of “this jurisdiction”
(1) Section 9 defines this jurisdiction as the area that includes:
(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).
(2) This jurisdiction therefore consists of:
(a) the whole of Australia if all the States are referring States; or
(b) Australia (other than any State that is not a referring State) if one or more States are not referring States.
Chapters 1 to 6C, Chapter 9 and Chapter 10
(3) Chapters 1 to 6C, inclusive, Chapter 9 and Chapter 10, apply in this jurisdiction.
(4) Subject to subsection (8), Chapters 1 to 6C, inclusive, Chapter 9 and Chapter 10, also apply, according to their tenor, in relation to acts and omissions outside this jurisdiction.
Chapters 6D, 7 and 8
(5) Chapter 6D (fundraising), Chapter 7 (securities) and Chapter 8 (futures) apply in this jurisdiction.
(6) Subject to subsection (8), some provisions of Chapters 6D, 7 and 8 also apply in relation to acts and omissions outside this jurisdiction.
Note: The following provisions provide for such extended operation:
(a) section 766I;
(b) subsection 775(1A);
(c) sections 819 and 820;
(d) subsection 855(1);
(e) section 865A;
(f) subsections 920(3) and (5);
(g) subsection 962(2);
(h) section 1002;
(i) section 1112A;
(j) subsection 1184(1);
(k) subsection 1185(1);
(l) subsections 1209(3) and (4);
(m) subsection 1212(1);
(n) sections 1259, 1260, 1261 and 1263.
Residence, place of formation etc.
(7) This Act applies according to its tenor to:
(a) natural persons whether:
(i) resident in this jurisdiction or not; and
(ii) resident in Australia or not; and
(iii) Australian citizens or not; and
(b) all bodies corporate and unincorporated bodies whether:
(i) formed or carrying on business in this jurisdiction or not; and
(ii) formed or carrying on business in Australia or not.
Note: Paragraph (b)—many of the provisions in this Act apply only in relation to companies (that is, to companies that are registered under this Act).
Operation in non‑referring States
(8) This Act does not apply to an act or omission in a State that is not a referring State to the extent to which that application would be beyond the legislative powers of the Parliament (including powers it has under paragraphs 51(xxxvii) and (xxxix) of the Constitution).
(1) To avoid doubt, a reference in this section to the Crown in a particular right includes a reference to an instrumentality or agency (whether a body corporate or not) of the Crown in that right.
(2) Chapter 5 (except Part 5.8) binds the Crown in right of the Commonwealth, of each of the States, of the Capital Territory, of the Northern Territory and of Norfolk Island.
(3) Chapters 6, 6A, 6B, 6C and 6D:
(a) bind the Crown in right of the Commonwealth; and
(b) do not bind the Crown in right of any State, of the Capital Territory, of the Northern Territory or of Norfolk Island.
(4) To avoid doubt, Chapter 7 does not bind the Crown in right of the Commonwealth, of any State, of the Capital Territory, of the Northern Territory or of Norfolk Island.
(5) Nothing in this Act renders the Crown in any right liable to be prosecuted for an offence.
Subject to the ASIC Act, ASIC has the general administration of this Act.
(1) The Acts Interpretation Act 1901 as in force on 1 November 2000 applies to this Act.
(2) Amendments of the Acts Interpretation Act 1901 made after 1 November 2000 do not apply to this Act.
(1) This Part applies only to laws of a State or Territory that is in this jurisdiction.
(2) This Part applies only to the following Corporations legislation:
(a) this Act (including the regulations made under this Act); and
(b) Part 3 of the ASIC Act; and
(c) regulations made under the ASIC Act for the purposes of Part 3 of that Act.
(3) This Part does not apply to Part 3 of the ASIC Act, or regulations made under that Act for the purposes of Part 3 of that Act, to the extent to which they operate in relation to a contravention of Division 2 of Part 2 of that Act.
(1) The Corporations legislation is not intended to exclude or limit the concurrent operation of any law of a State or Territory.
(2) Without limiting subsection (1), the Corporations legislation is not intended to exclude or limit the concurrent operation of a law of a State or Territory that:
(a) imposes additional obligations or liabilities (whether criminal or civil) on:
(i) a director or other officer of a company or other corporation; or
(ii) a company or other body; or
(b) confers additional powers on:
(i) a director or other officer of a company or other corporation; or
(ii) a company or other body; or
(c) provides for the formation of a body corporate; or
(d) imposes additional limits on the interests a person may hold or acquire in a company or other body; or
(e) prevents a person from:
(i) being a director of; or
(ii) being involved in the management or control of;
a company or other body; or
(f) requires a company:
(i) to have a constitution; or
(ii) to have particular rules in its constitution.
Note: Paragraph (a)—this includes imposing additional reporting obligations on a company or other body.
(3) Without limiting subsection (2), a reference in that subsection to a law of a State or Territory imposing obligations or liabilities, or conferring powers, includes a reference to a law of a State or Territory imposing obligations or liabilities, or conferring powers, by reference to the State or Territory in which a company is taken to be registered.
(4) This section does not apply to the law of the State or Territory if there is a direct inconsistency between the Corporations legislation and that law.
Note: Section 5G prevents direct inconsistencies arising in some cases by limiting the operation of the Corporations legislation.
(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.
(1) Subsection (2) applies if a provision of a law of a State or Territory declares a matter to be an excluded matter for the purposes of this section in relation to:
(a) the whole of the Corporations legislation; or
(b) a specified provision of the Corporations legislation; or
(c) the Corporations legislation other than a specified provision; or
(d) the Corporations legislation otherwise than to a specified extent.
(2) By force of this subsection:
(a) none of the provisions of the Corporations legislation (other than this section) applies in the State or Territory in relation to the matter if the declaration is one to which paragraph (1)(a) applies; and
(b) the specified provision of the Corporations legislation does not apply in the State or Territory in relation to the matter if the declaration is one to which paragraph (1)(b) applies; and
(c) the provisions of the Corporations legislation (other than this section and the specified provisions) do not apply in the State or Territory in relation to the matter if the declaration is one to which paragraph (1)(c) applies; and
(d) the provisions of the Corporations legislation (other than this section and otherwise than to the specified extent) do not apply in the State or Territory in relation to the matter if the declaration is one to which paragraph (1)(d) applies.
(3) Subsection (2) does not apply to the declaration to the extent to which the regulations provide that that subsection does not apply to that declaration.
(4) By force of this subsection, if:
(a) the Corporations Law, ASC Law or ASIC Law of a State or Territory; or
(b) a provision of that Law;
did not apply to a matter immediately before this Act commenced because a provision of a law of the State or Territory provided that that Law, or that provision, did not apply to the matter, the Corporations legislation, or the provision of the Corporations legislation that corresponds to that provision of that Law, does not apply in the State or Territory to the matter until that law of the State or Territory is omitted or repealed.
(5) Subsection (4) does not apply to the application of the provisions of the Corporations legislation to the matter to the extent to which the regulations provide that that subsection does not apply to the matter.
(6) In this section:
matter includes act, omission, body, person or thing.
Section overrides other provisions of the Corporations legislation
(1) This section has effect despite anything else in the Corporations legislation.
Section does not deal with provisions capable of concurrent operation
(2) This section does not apply to a provision of a law of a State or Territory that is capable of concurrent operation with the Corporations legislation.
Note: This kind of provision is dealt with by section 5E.
When this section applies to a provision of a State or Territory law
(3) This section applies to the interaction between:
(a) a provision of a law of a State or Territory (the State provision); and
(b) a provision of the Corporations legislation (the Commonwealth provision);
only if the State provision meets the conditions set out in the following table:
| Conditions to be met before section applies | [operative] |
| Item | Kind of provision | Conditions to be met |
| 1 | a pre‑commencement (commenced) provision | (a) the State provision operated, immediately before this Act commenced, despite the provision of: (i) the Corporations Law of the State or Territory (as in force at that time); or (ii) the ASC or ASIC Law of the State or Territory (as in force at that time); that corresponds to the Commonwealth provision; and (b) the State provision is not declared to be one that this section does not apply to (either generally or specifically in relation to the Commonwealth provision) by: (i) regulations made under this Act; or (ii) a law of the State or Territory. |
| 2 | a pre‑commencement (enacted) provision | (a) the State provision would have operated, immediately before this Act commenced, despite the provision of: (i) the Corporations Law of the State or Territory (as in force at that time); or (ii) the ASC or ASIC Law of the State or Territory (as in force at that time); that corresponds to the Commonwealth provision if the State provision had commenced before the commencement of this Act; and (b) the State provision is not declared to be one that this section does not apply to (either generally or specifically in relation to the Commonwealth provision) by: (i) regulations made under this Act; or (ii) a law of the State or Territory. |
| 3 | a post‑commencement provision | the State provision is declared by a law of the State or Territory to be a Corporations legislation displacement provision for the purposes of this section (either generally or specifically in relation to the Commonwealth provision) |
| 4 | a provision that is materially amended on or after this Act commenced if the amendment was enacted before this Act commenced | (a) the State provision as amended would have operated, immediately before this Act commenced, despite the provision of: (i) the Corporations Law of the State or Territory (as in force at that time); or (ii) the ASC or ASIC Law of the State or Territory (as in force at that time); that corresponds to the Commonwealth provision if the amendment had commenced before the commencement of this Act; and (b) the State provision is not declared to be one that this section does not apply to (either generally or specifically in relation to the Commonwealth provision) by: (i) regulations made under this Act; or (ii) a law of the State or Territory. |
| 5 | a provision that is materially amended on or after this Act commenced if the amendment is enacted on or after this Act commenced | the State provision as amended is declared by a law of the State or Territory to be a Corporations legislation displacement provision for the purposes of this section (either generally or specifically in relation to the Commonwealth provision) |
| | | |
Note 1: Item 1—subsection (12) tells you when a provision is a pre‑commencement (commenced) provision.
Note 2: Item 1 paragraph (a)—For example, a State or Territory provision enacted after the commencement of the Corporations Law might not have operated despite the Corporations Law if it was not expressly provided that the provision was to operate despite a specified provision, or despite any provision, of the Corporations Law (see, for example, section 5 of the Corporations (New South Wales) Act 1990).
Note 3: Item 2—subsection (13) tells you when a provision is a pre‑commencement (enacted) provision.
Note 4: Item 3—subsection (14) tells you when a provision is a post‑commencement provision.
Note 5: Subsections (15) to (17) tell you when a provision is materially amended after commencement.
State and Territory laws specifically authorising or requiring act or thing to be done
(4) A provision of the Corporations legislation does not:
(a) prohibit the doing of an act; or
(b) impose a liability (whether civil or criminal) for doing an act;
if a provision of a law of a State or Territory specifically authorises or requires the doing of that act.
Instructions given to directors under State and Territory laws
(5) If a provision of a law of a State or Territory specifically:
(a) authorises a person to give instructions to the directors or other officers of a company or body; or
(b) requires the directors of a company or body to:
(i) comply with instructions given by a person; or
(ii) have regard to matters communicated to the company or body by a person; or
(c) provides that a company or body is subject to the control or direction of a person;
a provision of the Corporations legislation does not:
(d) prevent the person from giving an instruction to the directors or exercising control or direction over the company or body; or
(e) without limiting subsection (4):
(i) prohibit a director from complying with the instruction or direction; or
(ii) impose a liability (whether civil or criminal) on a director for complying with the instruction or direction.
The person is not taken to be a director of a company or body for the purposes of the Corporations legislation merely because the directors of the company or body are accustomed to act in accordance with the person’s instructions.
Use of names authorised by State and Territory laws
(6) The provisions of Part 2B.6 and Part 5B.3 of this Act do not:
(a) prohibit a company or other body from using a name if the use of the name is expressly provided for, or authorised by, a provision of a law of a State or Territory; or
(b) require a company or other body to use a word as part of its name if the company or body is expressly authorised not to use that word by a provision of a law of a State or Territory.
Meetings held in accordance with requirements of State and Territory laws
(7) The provisions of Chapter 2G of this Act do not apply to the calling or conduct of a meeting of a company to the extent to which the meeting is called or conducted in accordance with a provision of a law of a State or Territory. Any resolutions passed at the meeting are as valid as if the meeting had been called and conducted in accordance with this Act.
External administration under State and Territory laws
(8) The provisions of Chapter 5 of this Act do not apply to a scheme of arrangement, receivership, winding up or other external administration of a company to the extent to which the scheme, receivership, winding up or administration is carried out in accordance with a provision of a law of a State or Territory.
State and Territory laws dealing with company constitutions
(9) If a provision of a law of a State or Territory provides that a provision is included, or taken to be included, in a company’s constitution, the provision is included in the company’s constitution even though the procedures and other requirements of this Act are not complied with in relation to the provision.
(10) If a provision of a law of a State or Territory provides that additional requirements must be met for an alteration of a company’s constitution to take effect, the alteration does not take effect unless those requirements are met.
Other cases
(11) A provision of the Corporations legislation does not operate in a State or Territory to the extent necessary to ensure that no inconsistency arises between:
(a) the provision of the Corporations legislation; and
(b) a provision of a law of the State or Territory that would, but for this subsection, be inconsistent with the provision of the Corporations legislation.
Note 1: A provision of the State or Territory law is not covered by this subsection if one of the earlier subsections in this section applies to the provision: if one of those subsections applies there would be no potential inconsistency to be dealt with by this subsection.
Note 2: The operation of the provision of the State or Territory law will be supported by section 5E to the extent to which it can operate concurrently with the provision of the Corporations legislation.
Pre‑commencement (commenced) provision
(12) A provision of a law of a State or Territory is a pre‑commencement (commenced) provision if it:
(a) is enacted, and comes into force, before the commencement of this Act; and
(b) is not a provision that has been materially amended after commencement (see subsections (15) to (17)).
Pre‑commencement (enacted) provision
(13) A provision of a law of a State or Territory is a pre‑commencement (enacted) provision if it:
(a) is enacted before, but 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)).
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)).
Provision materially amended after commencement
(15) A provision of a law of a State or Territory is materially amended after commencement if:
(a) an amendment of the provision commences on or after the commencement of this Act; and
(b) neither subsection (16) nor subsection (17) applies to the amendment.
(16) A provision of a law of a State or Territory is not materially amended after commencement under subsection (15) if the amendment merely:
(a) changes:
(i) a reference to the Corporations Law or the ASC or ASIC Law, or the Corporations Law or the ASC or ASIC Law of a State or Territory, to a reference to the Corporations Act or the ASIC Act; or
(ii) a reference to a provision of the Corporations Law or the ASC or ASIC Law, or the Corporations Law or ASC or ASIC Law of a State or Territory, to a reference to a provision of the Corporations Act or the ASIC Act; or
(iii) a penalty for a contravention of a provision of a law of a State or Territory; or
(iv) a reference to a particular person or body to a reference to another person or body; or
(b) adds a condition that must be met before a right is conferred, an obligation imposed or a power conferred; or
(c) adds criteria to be taken into account before a power is exercised; or
(d) amends the provision in way declared by the regulations to not constitute a material amendment for the purposes of this subsection.
(17) A provision of a law of a State or Territory is not materially amended after commencement under subsection (15) if:
(a) the provision as amended would be inconsistent with a provision of the Corporations legislation but for this section; and
(b) the amendment would not materially reduce the range of persons, acts and circumstances to which the provision of the Corporations legislation applies if this section applied to the provision of the State or Territory law as amended.
(1) A body is taken to be registered under this Act as a company of a particular type under section 118 if a law of a State or Territory in this jurisdiction:
(a) provides that the body is a deemed registration company for the purposes of this section; and
(b) specifies:
(i) the day on which the body is to be taken to be registered (the registration day) or the manner in which that day is to be fixed; and
(ii) the type of company the body is to be registered as under this Act;
(iii) the company’s proposed name (unless the ACN is to be used in its name);
and subsections (2) and (3) are satisfied.
(2) A notice setting out the following details must be lodged before the registration day:
(a) the name and address of each person who is to be a member on registration;
(b) the present given and family name, all former given and family names and the date and place of birth of each person who is to be a director on registration;
(c) the present given and family name, all former given and family names and the date and place of birth of each person who consents in writing to become a company secretary;
(d) the address of each person who is to be a director or company secretary on registration;
(e) the address of the company’s proposed registered office;
(f) for a public company—the proposed opening hours of its registered office (if they are not the standard opening hours);
(g) the address of the company’s proposed principal place of business (if it is not the address of the proposed registered office);
(h) for a company limited by shares or an unlimited company—the following:
(i) the number and class of shares each member agrees in writing to take up;
(ii) the amount (if any) each member agrees in writing to pay for each share;
(iii) if that amount is not to be paid in full on registration—the amount (if any) each member agrees in writing to be unpaid on each share;
(i) for a public company that is limited by shares or is an unlimited company, if shares will be issued for non‑cash consideration—the prescribed particulars about the issue of the shares, unless the shares will be issued under a written contract and a copy of the contract is lodged with the application;
(j) for a company limited by guarantee—the proposed amount of the guarantee that each member agrees to in writing.
(3) If the company:
(a) is to be a public company; and
(b) is to have a constitution on registration;
a copy of the constitution must be lodged before the registration day.
(4) On the registration day, the body is taken:
(a) to be registered as a company under this Act; and
(b) to be registered in the State or Territory referred to in subsection (1).
(5) The regulations may modify the operation of this Act to facilitate the registration of the company.
(6) Without limiting subsection (5), the regulations may make provision in relation to:
(a) the share capital of the company on registration; and
(b) the issue of a certificate of registration on the basis of the company’s registration.
(1) The regulations may modify the operation of the Corporations legislation so that:
(a) provisions of the Corporations legislation do not apply to a matter that is dealt with by a law of a State or Territory specified in the regulations; or
(b) no inconsistency arises between the operation of a provision of the Corporations legislation and the operation of a provision of a State or Territory law specified in the regulations.
(2) Without limiting subsection (1), regulations made for the purposes of that subsection may provide that the provision of the Corporations legislation:
(a) does not apply to:
(i) a person specified in the regulations; or
(ii) a body specified in the regulations; or
(iii) circumstances specified in the regulations; or
(iv) a person or body specified in the regulations in the circumstances specified in the regulations; or
(b) does not prohibit an act to the extent to which the prohibition would otherwise give rise to an inconsistency with the State or Territory law; or
(c) does not require a person to do an act to the extent to which the requirement would otherwise give rise to an inconsistency with the State or Territory law; or
(d) does not authorise a person to do an act to the extent to which the conferral of that authority on the person would otherwise give rise to an inconsistency with the State or Territory law; or
(e) does not impose an obligation on a person to the extent to which complying with that obligation would require the person to not comply with an obligation imposed on the person under the State or Territory law; or
(f) authorises a person to do something for the purposes of the Corporations legislation that the person:
(i) is authorised to do under the State or Territory law; and
(ii) would not otherwise be authorised to do under the Corporations legislation; or
(g) will be taken to be satisfied if the State or Territory law is satisfied.
(3) In this section:
matter includes act, omission, body, person or thing.
(1) The provisions of this Part have effect for the purposes of this Act, except so far as the contrary intention appears in this Act.
(2) This Part applies for the purposes of:
(a) Part 5.7; and
(b) Chapter 5 as applying by virtue of Part 5.7; and
(c) Part 9.2;
as if a reference in this Part to a person or to a body corporate included a reference to a Part 5.7 body.
(3) This Part applies for the purposes of Chapter 6 as if a reference in this Part to a body corporate included a reference to a Chapter 6 body.
(4) Where, because of Part 11.2, provisions of this Act, as in force at a particular time, continue to apply:
(a) in relation to someone or something; or
(b) for particular purposes;
then, for the purposes of those provisions as so applying:
(c) this Part as in force at that time continues to have effect; and
(d) this Part as in force at a later time does not have effect.
(1) Most of the interpretation provisions for this Act are in this Part.
(2) However, interpretation provisions relevant only to Chapters 6, 7 and 8, respectively, are to be found at the beginning of those Chapters.
(3) Also, interpretation provisions relevant to a particular Part, Division or Subdivision may be found at the beginning of that Part, Division or Subdivision.
(4) Occasionally, an individual section contains its own interpretation provisions, not necessarily at the beginning.
Unless the contrary intention appears:
AASB means the Australian Accounting Standards Board.
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:
(a) in relation to a futures contract—has the meaning given by sections 23, 26, 27 and 28; and
(b) in relation to shares—has, in Chapter 7, the meaning given by section 51.
act includes thing.
adjustment agreement means a standardised agreement the effect of which is that:
(a) a particular person will either be under a Chapter 8 obligation to pay, or will have a Chapter 8 right to receive, an amount of money; and
(b) whether the person will be under such an obligation to pay, or will have such a right to receive, the amount of money will depend on a particular state of affairs existing at a particular future time, including, without limiting the generality of the foregoing, a state of affairs that relates to fluctuations in the value or price of a commodity or other property, or in an index or other factor; and
(c) the amount of money will be calculated in a particular manner by reference to that state of affairs;
whether or not the agreement has any other effect or is capable of being varied or discharged before that future time.
administration, in relation to a company, has the meaning given by:
(a) section 435C; and
(b) section 1381.
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
(ii) has a meaning affected by section 1381; and
(iii) if 2 or more persons are appointed under that Part as administrators of the body or entity—has a meaning affected by paragraph 451A(2)(b); or
(b) in relation to a deed of company arrangement:
(i) means an administrator of the deed appointed under Part 5.3A; and
(ii) if 2 or more persons are appointed under that Part as administrators of the deed—has a meaning affected by paragraph 451B(2)(b).
admit to quotation: securities are admitted to quotation on a stock market of a securities exchange if the exchange has given unconditional permission for quotation of the securities on the stock market.
Advisory Committee means the Companies and Securities Advisory Committee.
affairs, in relation to a body corporate, has, in the provisions referred to in section 53, a meaning affected by that section.
affidavit includes affirmation.
agency means an agency, authority, body or person.
AGM means an annual general meeting of a company that section 250N requires to be held.
agreement means:
(a) in Chapter 6 or 7—a relevant agreement; or
(b) in Chapter 8—a Chapter 8 agreement.
amount includes a nil amount and zero.
ancillary offence, in relation to another offence, means an offence against:
(a) section 5, 6, 7 or 7A of the Crimes Act 1914; or
(b) subsection 86(1) of that Act by virtue of paragraph 86(1)(a) of that Act;
being an offence that is related to that other offence.
annual return:
(a) of a company—means the return that subsection 345(1) requires the company to lodge with ASIC; and
(b) of a registered managed investment scheme—means the return that subsection 345(2) requires the responsible entity of the scheme to lodge with ASIC.
appropriate dealer for a market bid means a member of the relevant securities exchange.
approved foreign bank, in relation to a member of a futures organisation, means a bank, established by or under the law of a foreign country, in relation to which there is in force an approval given by the futures organisation in accordance with its business rules (within the meaning of Chapter 8).
approved securities organisation means a body corporate in relation to which an approval under section 770 is in force.
APRA means the Australian Prudential Regulation Authority.
arbitrage transaction means a purchase or sale of securities effected in the ordinary course of trading on a stock market together with an offsetting sale or purchase of those securities effected at the same time, or at as nearly the same time as practicable, in the ordinary course of trading on another stock market for the purpose of obtaining a profit from the difference between the prices of those securities in the 2 stock markets.
ARBN (short for “Australian Registered Body Number”) is the number given by ASIC to a registrable body on registration under Part 5B.2.
arrangement, in Part 5.1, includes a reorganisation of the share capital of a body corporate by the consolidation of shares of different classes, by the division of shares into shares of different classes, or by both of those methods.
ARSN (short for “Australian Registered Scheme Number”) is the number given by ASIC to a registered scheme on registration (see section 601EB).
ASIC means the Australian Securities and Investments Commission.
ASIC Act means the Australian Securities and Investments Commission Act 2001 and includes the regulations made under that Act.
ASIC database means so much of the national companies database kept by ASIC as consists of:
(a) some or all of a register kept by ASIC under this Act; or
(b) information set out in a document lodged under this Act;
but does not include ASIC’s document imaging system.
assets means:
(a) in relation to the holder of a futures brokers licence—all the assets of the holder, whether or not used in connection with a business of dealing in futures contracts; and
(b) in relation to the holder of a dealers licence—all the assets of the holder, whether or not used in connection with a securities business.
associate: the following are the associates of a bidder making a takeover offer, a substantial holder or a 90% holder:
(a) if the bidder or holder is a body corporate:
(i) a body corporate it controls; or
(ii) a body corporate that controls it; or
(iii) a body corporate that is controlled by an entity that controls it;
(b) a person with whom the bidder or holder has, or proposes to enter into, a relevant agreement for the purpose of controlling or influencing the composition of the body’s board or the conduct of the body’s affairs;
(c) a person with whom the bidder or holder is acting, or proposes to act, in concert in relation to the body’s affairs.
Otherwise a person’s associates are determined under sections 10 to 17.
ASX means Australian Stock Exchange Limited.
Australia, when used in a geographical sense, does not include an external Territory.
Note: Paragraph 17(a) of the Acts Interpretation Act 1901 would otherwise provide that Australia included the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands.
Australian ADI means:
(a) an ADI (authorised deposit‑taking institution) within the meaning of the Banking Act 1959; and
(b) a person who carries on State banking within the meaning of paragraph 51(xiii) of the Constitution.
Australian bank means an Australian ADI that is permitted under section 66 of the Banking Act 1959 to assume or use:
(a) the word bank, banker or banking; or
(b) any other word (whether or not in English) that is of like import to a word referred to in paragraph (a).
Australian court means a federal court or a court of a State or Territory.
Australian law means a law of the Commonwealth or of a State or Territory.
Australian register of a foreign company means a branch register of members kept under section 601CM.
authorised trustee corporation means a body corporate that is declared by the regulations to be an authorised trustee corporation for the purposes of the provision in which the expression appears.
bank or banker includes, but is not limited to, a body corporate that is an ADI (authorised deposit‑taking institution) for the purposes of the Banking Act 1959.
banker’s books means:
(a) books of an Australian ADI, including documents used in the ordinary business of an Australian bank; or
(b) cheques, orders for the payment of money, bills of exchange and promissory notes in an Australian ADI’s possession; or
(c) scrip in an Australian ADI’s possession, whether by way of pledge or otherwise; or
(d) documents that create or evidence futures contracts and are in an Australian ADI’s possession.
banking corporation means a body corporate that carries on, as its sole or principal business, the business of banking (other than State banking not extending beyond the limits of the State concerned).
banning order means:
(a) in Chapter 7—an order by ASIC in force under Division 5 of Part 7.3; and
(b) in Chapter 8—an order by ASIC in force under Division 5 of Part 8.3.
begin, in relation to a winding up, has the meaning given by Division 1A of Part 5.6.
benefit:
(a) means any benefit, whether by way of payment of cash or otherwise; and
(b) when used in Division 2 of Part 2D.2 (sections 200A to 200J)—means:
(i) a payment or other valuable consideration; or
(ii) an interest in property of any kind; or
(iii) any other benefit.
bid class of securities for a takeover bid is the class of securities to which the securities being bid for belong.
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: The dealer who announces a market bid is not the bidder; the bidder is the person or people on whose behalf the announcement is made.
bidder’s statement means a bidder’s statement under sections 636 and 637 as supplemented.
bid period:
(a) for an off‑market bid—starts when the bidder’s statement is given to the target and ends:
(i) 1 month later if no offers are made under the bid; or
(ii) at the end of the offer period; and
(b) for a market bid—starts when the bid is announced to the relevant securities exchange and ends at the end of the offer period.
Board means:
(a) in Part 7.10—the board of SEGC; or
(b) in Part 9.2—the Companies Auditors and Liquidators Disciplinary Board.
board or managerial office (when used in Division 2 of Part 2D.2 (sections 200A to 200J) in relation to a body corporate) means:
(a) an office of director of the body corporate; and
(b) any other office in connection with the management of the body corporate’s affairs that is held by:
(i) a person who also holds an office of director of the body corporate or a related body corporate; or
(ii) a person who has held an office of director of the body corporate or a related body corporate at any time within the 12 months immediately before the loss of, or retirement from, that office.
body means a body corporate or an unincorporated body and includes, for example, a society or association.
body corporate:
(a) includes a body corporate that is being wound up or has been dissolved; and
(b) in this Chapter (except section 66A) and section 206E includes an unincorporated registrable body.
books includes:
(a) a register; and
(b) any other record of information; and
(c) financial reports or financial records, however compiled, recorded or stored; and
(d) a document.
borrower, in relation to a debenture, means the body that is or will be liable to repay money under the debenture.
bought position means:
(a) in relation to a commodity agreement, or in relation to a futures contract, being a commodity agreement—the position of a person who, by virtue of the agreement, is under a Chapter 8 obligation to accept delivery in accordance with the agreement; or
(b) in relation to a futures contract, being an adjustment agreement—the position of a person who, by virtue of the agreement:
(i) will, if the value or worth of the agreement (as determined in accordance with the agreement) as at a particular future time is less by a particular amount than the value or worth of the agreement (as so determined) as at a particular earlier time, be under a Chapter 8 obligation to pay that amount; and
(ii) will, if the value or worth of the agreement (as so determined) as at a particular future time exceeds by a particular amount the value or worth of the agreement (as so determined) as at a particular earlier time, have a Chapter 8 right to receive that amount.
business affairs, in relation to an entity, has a meaning affected by sections 53AA, 53AB, 53AC and 53AD.
business day means a day that is not a Saturday, a Sunday or a public holiday or bank holiday in the place concerned.
buy‑back by a company means the acquisition by the company of shares in itself.
buy‑back agreement by a company means an agreement by the company to buy back its own shares (whether the agreement is conditional or not).
Capital Territory means the Australian Capital Territory and the Jervis Bay Territory.
carry on has a meaning affected by Division 3.
cash management trust interest means an interest that:
(a) is an interest in a registered scheme; and
(b) relates to an undertaking of the kind commonly known as a cash management trust.
cause includes procure.
certified means:
(a) in relation to a copy of, or extract from, a document—certified by a statement in writing to be a true copy of, or extract from, the document; or
(b) in relation to a translation of a document—certified by a statement in writing to be a correct translation of the document into English.
Chapter 8 agreement means:
(a) a relevant agreement; or
(b) a proposed relevant agreement; or
(c) a relevant agreement as varied, or as proposed to be varied; or
(d) where a relevant agreement has been varied—the relevant agreement as in force at any time before the variation; or
(e) where a relevant agreement has been discharged—the relevant agreement as in force at any time before its discharge.
Chapter 8 obligation has the meaning given by section 55.
Chapter 8 right has the meaning given by section 55.
charge means a charge created in any way and includes a mortgage and an agreement to give or execute a charge or mortgage, whether on demand or otherwise.
chargeable matter has the same meaning as in the Corporations (Fees) Act 2001.
chargee means the holder of a charge and includes a person in whose favour a charge is to be given or executed, whether on demand or otherwise, under an agreement.
civil matter means a matter other than a criminal matter.
civil penalty disqualification has the meaning given by subsection 91(4A).
civil penalty order means any of the following:
(a) a declaration of contravention under section 1317F;
(b) a pecuniary penalty order under section 1317G;
(c) a compensation order under section 1317H;
(d) an order under section 206C disqualifying a person from managing corporations.
civil penalty provision has the meaning given in subsection 1317E(1).
class has:
(a) in relation to futures contracts—a meaning affected by subsection 72(3); and
(b) in relation to shares or interests in a managed investment scheme—a meaning affected by section 57; and
(c) when used in relation to securities for the purposes of Chapter 6, 6A or 6C—a meaning affected by subsection 605(2).
clearing house means:
(a) in relation to a body corporate:
(i) in any case—a person who provides, or proposes to provide, clearing house facilities for a futures market conducted by that body; or
(ii) in the case of a futures exchange—a body corporate in relation to which an approval as a clearing house for that futures exchange is in force under subsection 1131(2); and
(b) in relation to a futures market:
(i) in any case—a person who provides, or proposes to provide, clearing house facilities for that futures market; or
(ii) in the case of a futures market of a futures exchange—a body corporate in relation to which an approval as a clearing house for that futures exchange is in force under subsection 1131(2).
clearing house facilities, in relation to a futures market, means facilities for the registration of futures contracts acquired or disposed of on that futures market.
client, in relation to a futures broker, means, except in Division 2 of Part 8.3, a person on whose behalf the broker deals, or from whom the broker accepts instructions to deal, in futures contracts.
clients’ segregated account, in relation to a person who is a member of a futures organisation, means an account that:
(a) the person maintains, whether in Australia or elsewhere, with:
(i) an Australian ADI; or
(ii) an approved foreign bank in relation to the person; and
(b) is maintained for the sole purpose of containing money deposited by the person into the account under section 1209.
close out, in relation to a futures contract, means:
(a) discharge the Chapter 8 obligations of the person in the bought position, or sold position, under the futures contract as a result of the matching up of the futures contract with a futures contract of the same kind under which the person has assumed an offsetting sold position, or offsetting bought position, as the case may be; or
(b) otherwise discharge the Chapter 8 obligations of a party to the futures contract.
coastal sea:
(a) in relation to Australia—means:
(i) the territorial sea of Australia; and
(ii) the sea on the landward side of the territorial sea of Australia and not within the limits of a State or internal Territory;
and includes the airspace over, and the sea‑bed and subsoil beneath, any such sea; and
(b) in relation to a State or Territory—means so much of the coastal sea of Australia as is within the area described in Schedule 2 to the Petroleum (Submerged Lands) Act 1967 under the heading that refers to that State or Territory.
commence, in relation to a winding up, has the meaning given by Division 1A of Part 5.6.
commencement, in relation to an accounting standard, means:
(a) in the case of an accounting standard as originally in effect—the time when the accounting standard took effect; or
(b) in the case of an accounting standard as varied by a particular provision of an instrument made under section 334—the time when that provision took effect.
Commission delegate has the same meaning as in the ASIC Act.
committee of creditors, in relation to a company under administration, means a committee of creditors of the company appointed at a meeting convened under section 436E.
commodity means:
(a) any thing that is capable of delivery pursuant to an agreement for its delivery; or
(b) without limiting the generality of paragraph (a), an instrument creating or evidencing a thing in action.
commodity agreement means a standardised agreement the effect of which is that:
(a) a person is under a Chapter 8 obligation to make delivery; or
(b) a person is under a Chapter 8 obligation to accept delivery;
at a particular future time of a particular quantity of a particular commodity for a particular price or for a price to be calculated in a particular manner, whether or not:
(c) the subject matter of the agreement is in existence; or
(d) the agreement has any other effect; or
(e) the agreement is capable of being varied or discharged before that future time.
Commonwealth authority means an authority or other body (whether incorporated or not) that is established or continued in existence by or under an Act.
company means a company registered under this Act and:
(a) in Chapter 2K (other than sections 273A to 273E), includes a registrable body that is registered under Division 1 or 2 of Part 5B.2 of this Act; and
(b) in sections 273A to 273E, includes a registered body that carries on business outside its place of origin; and
(c) in Parts 5.7B and 5.8 (except sections 595 and 596), includes a Part 5.7 body; and
(d) in Part 5B.1, includes an unincorporated registrable body.
company limited by guarantee means a company formed on the principle of having the liability of its members limited to the respective amounts that the members undertake to contribute to the property of the company if it is wound up.
company limited by shares means a company formed on the principle of having the liability of its members limited to the amount (if any) unpaid on the shares respectively held by them.
condition, in relation to a licence, means a condition or restriction to which the licence is subject, or will be subject, as the case requires.
conduct:
(a) in relation to a futures market, a stock market, or any other market, exchange, place or facility—includes maintain or provide; and
(b) in Chapter 7—has a meaning affected by section 762.
connected entity, in relation to a corporation, means:
(a) a body corporate that is, or has been, related to the corporation; or
(b) an entity that is, or has been, connected (as defined by section 64B) with the corporation.
consolidated entity means a company, registered managed investment scheme or disclosing entity together with all the entities it is required by the accounting standards to include in consolidated financial statements.
constitution means (depending on the context):
(a) a company’s constitution, which (where relevant) includes rules and consequential amendments that are part of the company’s constitution because of the Life Insurance Act 1995; or
(b) a managed investment scheme’s constitution; or
(c) in relation to any other kind of body:
(i) the body’s charter or memorandum; or
(ii) any instrument or law (other than this Act) constituting, or defining the constitution of, the body or governing the activities of the body or its members.
Note: The Life Insurance Act 1995 has rules about how benefit fund rules become part of a company’s constitution. They override this Act. See Subdivision 2 of Division 4 of Part 2A of that Act.
continuous disclosure notice means:
(a) a document used to notify a securities exchange of information relating to a body under provisions of the securities exchange’s listing rules referred to in subsection 1001A(1); or
(b) a document under section 1001B lodged in relation to the body.
continuously quoted securities are securities that:
(a) are in a class of securities that were quoted ED securities at all times in the 12 months before the date of the prospectus; and
(b) are securities of an entity that was not covered by any of the following at any time in that 12 months:
(i) an exemption under section 111AS or 111AT, or a modification under section 111AV;
(ii) an exemption under paragraph 741(1)(a), or a declaration under paragraph 741(1)(b), relating to a provision that is a disclosing entity provision for the purposes of Division 4 of Part 1.2A;
and, for these purposes, securities are not in different classes merely because of a temporary difference in the dividend, or distribution rights, attaching to the securities or because different amounts have been paid up on the securities.
contributing member, in relation to a futures organisation, means:
(a) in the case of a futures exchange—a member or member organisation of the futures exchange; or
(b) in the case of a futures association:
(i) a member of that futures association that is a member of no futures exchange; or
(ii) a member organisation of that futures association that is a member organisation of no futures exchange.
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
(ii) in the case of any other person who is in possession, or has control, of that property for the purpose of enforcing a charge—the day when the person entered into possession, or took control, of property of the corporation for the purpose of enforcing that charge; or
(b) if the controller became a controller of property of the corporation:
(i) to act with an existing controller of such property; or
(ii) in place of a controller of such property who has died or ceased to be a controller of such property;
the day that is, because of any other application or applications of this definition, the control day in relation to the controller referred to in subparagraph (i) or (ii).
controller, in relation to property of a corporation, means:
(a) a receiver, or receiver and manager, of that property; or
(b) anyone else who (whether or not as agent for the corporation) is in possession, or has control, of that property for the purpose of enforcing a charge.
convertible note has the same meaning as in Division 3A of Part III of the Income Tax Assessment Act 1936.
convertible securities: securities are convertible into another class of securities if the holder may have the other class of securities issued to them by the exercise of rights attached to those securities. An option may be a convertible security even if it is non‑renounceable.
corporation has the meaning given by section 57A.
Corporations legislation means:
(a) this Act; and
(b) the ASIC Act; and
(c) rules of court made by the Federal Court, the Supreme Court of the Capital Territory, or the Family Court, because of a provision of this Act; and
(d) rules of court applied by the Supreme Court, or a State Family Court, of a State when exercising jurisdiction conferred by Division 1 of Part 9.6A (including jurisdiction conferred by virtue of any previous application or applications of this paragraph).
court has the meaning given by section 58AA.
Court has the meaning given by section 58AA.
court of summary jurisdiction means any justice or justices of the peace or other magistrate sitting as a court for the making of summary orders or the summary punishment of offences:
(a) under a law of the Commonwealth or of a State or Territory; or
(b) by virtue of his or her commission or their commissions.
creditors’ voluntary winding up means a winding up under Part 5.5, other than a members’ voluntary winding up.
current market bid price for securities covered by a market bid is the price specified in the announcement of the bid as increased or decreased during the offer period.
daily newspaper means a newspaper that is ordinarily published on each day that is a business day in the place where the newspaper is published, whether or not the newspaper is ordinarily published on other days.
date of a takeover bid is:
(a) for an off‑market bid—the date on which offers are first made under the bid; or
(b) for a market bid—the date on which the bid is announced to the relevant securities exchange.
deal:
(a) in relation to a futures contract—has the meaning given by Division 4; and
(b) in relation to securities—subject to subsection 93(4), means (whether as principal or agent) acquire, dispose of, subscribe for or underwrite the securities, or make or offer to make, or induce or attempt to induce a person to make or to offer to make, an agreement:
(i) for or with respect to acquiring, disposing of, subscribing for or underwriting the securities; or
(ii) the purpose or purported purpose of which is to secure a profit or gain to a person who acquires, disposes of, subscribes for or underwrites the securities or to any of the parties to the agreement in relation to the securities.
dealer means:
(a) a person who carries on a securities business; or
(b) 2 or more persons who together carry on a securities business.
dealers licence means a dealers licence granted under Part 7.3.
debenture of a body means a chose in action that includes an undertaking by the body to repay as a debt money deposited with or lent to the body. The chose in action may (but need not) include a charge over property of the body to secure repayment of the money. However, a debenture does not include:
(a) an undertaking to repay money deposited with or lent to the body by a person if:
(i) the person deposits or lends the money in the ordinary course of a business carried on by the person; and
(ii) the body receives the money in the ordinary course of carrying on a business that neither comprises nor forms part of a business of borrowing money and providing finance; or
(b) an undertaking by an Australian ADI to repay money deposited with it, or lent to it, in the ordinary course of its banking business; or
(c) an undertaking to pay money under:
(i) a cheque; or
(ii) an order for the payment of money; or
(iii) a bill of exchange; or
(d) an undertaking to pay money under a promissory note that has a face value of at least $50,000; or
(e) an undertaking by a body corporate to pay money to a related body corporate; or
(f) an undertaking to repay money that is prescribed by the regulations.
For the purposes of this definition, if a chose in action that includes an undertaking by a body to pay money as a debt is offered as consideration for the acquisition of securities under an off‑market takeover bid, or is issued under a compromise or arrangement under Part 5.1, the undertaking is taken to be an undertaking to repay as a debt money deposited with or lent to the body.
decision period, in relation to a chargee in relation to a charge on property of a company under administration, means the period beginning on the day when:
(a) if notice of the appointment of the administrator must be given to the chargee under subsection 450A(3)—such notice is so given; or
(b) otherwise—the administration begins;
and ending at the end of the tenth business day after that day.
deed includes a document having the effect of a deed.
deed of company arrangement means a deed of company arrangement executed under Part 5.3A or such a deed as varied and in force from time to time.
de facto spouse, in relation to a person, means an individual of the opposite sex to that person who is living with that person as his or her spouse on a genuine domestic basis although not legally married to that person.
defalcation, in Part 7.9, includes a contravention of subsection 870(3).
defeating condition for a takeover bid means a condition that:
(a) will, in circumstances referred to in the condition, result in the rescission of, or entitle the bidder to rescind, a takeover contract; or
(b) prevents a binding takeover contract from resulting from an acceptance of the offer unless or until the condition is fulfilled.
defect, in relation to a statutory demand, includes:
(a) an irregularity; and
(b) a misstatement of an amount or total; and
(c) a misdescription of a debt or other matter; and
(d) a misdescription of a person or entity.
deregistered means:
(a) in relation to a company—deregistered under Chapter 5A; and
(b) in relation to any other body corporate—deregistered in a way that results in the body corporate ceasing to exist.
director of a company or other body means:
(a) a person who:
(i) is appointed to the position of a director; or
(ii) is appointed to the position of an alternate director and is acting in that capacity;
regardless of the name that is given to their position; and
(b) unless the contrary intention appears, a person who is not validly appointed as a director if:
(i) they act in the position of a director; or
(ii) the directors of the company or body are accustomed to act in accordance with the person’s instructions or wishes.
Subparagraph (b)(ii) does not apply merely because the directors act on advice given by the person in the proper performance of functions attaching to the person’s professional capacity, or the person’s business relationship with the directors or the company or body.
Note: Paragraph (b)—Contrary intention—Examples of provisions for which a person referred to in paragraph (b) would not be included in the term “director” are:
· section 249C (power to call meetings of a company’s members)
· subsection 251A(3) (signing minutes of meetings)
· section 205B (notice to ASIC of change of address).
disclosing entity has the meaning given by section 111AC.
disclosure document for an offer of securities means:
(a) a prospectus for the offer; or
(b) a profile statement for the offer; or
(c) an offer information statement for the offer.
discretionary account has the meaning given by section 61.
dispose of a futures contract has the meaning given by sections 24, 26, 27 and 28. For the purposes of Chapter 6, a person who has a relevant interest in securities disposes of the securities if, and only if, they cease to have a relevant interest in the securities.
document of title, in relation to securities, includes an instrument of transfer relating to the securities.
domestic corporation means a corporation that is incorporated or formed in Australia or an external Territory.
ED securities has the meaning given by section 111AD.
eligible applicant, in relation to a corporation, means:
(a) ASIC; or
(b) a liquidator or provisional liquidator of the corporation; or
(c) an administrator of the corporation; or
(d) an administrator of a deed of company arrangement executed by the corporation; or
(e) a person authorised in writing by ASIC to make:
(i) applications under the Division of Part 5.9 in which the expression occurs; or
(ii) such an application in relation to the corporation.
eligible commodity agreement means a commodity agreement (in this definition called the relevant agreement), where, at the time when the relevant agreement:
(a) unless paragraph (b) applies—is entered into; or
(b) if the relevant agreement is not a commodity agreement at the time when it is entered into—becomes a commodity agreement;
it appears likely, having regard to all relevant circumstances (other than the respective intentions of the person in the sold position, and the person in the bought position, under the relevant agreement), including, without limiting the generality of the foregoing:
(c) the provisions of any agreement; and
(d) the rules and practices of any market; and
(e) the manner in which the respective Chapter 8 obligations of persons in sold positions, and persons in bought positions, under agreements of the same kind as the first‑mentioned agreement are generally discharged;
that:
(f) the Chapter 8 obligation of the person in the sold position under the relevant agreement to make delivery in accordance with the relevant agreement will be discharged otherwise than by the person so making delivery; or
(g) the Chapter 8 obligation of the person in the bought position under the relevant agreement to accept delivery in accordance with the relevant agreement will be discharged otherwise than by the person so accepting delivery; or
(h) the person in the sold position, or bought position, under the relevant agreement will assume an offsetting bought position, or offsetting sold position, as the case may be, under an agreement of the same kind as the relevant agreement.
eligible exchange‑traded option means a contract that is entered into on a futures market of a futures exchange and under which a party acquires from another party an option or right, exercisable at or before a specified time:
(a) to purchase from, or to sell to, that other party a specified quantity of a specified commodity at a price specified in, or to be determined in accordance with, the contract; or
(b) to be paid by that other party an amount of money to be determined by reference to the amount by which a specified number is greater or less than the number of a specified index, being the Australian Stock Exchanges All Ordinaries Price Index or a prescribed index, as at the time when the option or right is exercised.
eligible money market dealer means a body corporate in respect of which a declaration is in force under section 65.
eligible securities conduct means conduct in the course of, for the purposes of, or otherwise in connection with:
(a) dealing in securities; or
(b) advising a person about securities; or
(c) giving to a person a securities report.
emoluments means the amount or value of any money, consideration or benefit given, directly or indirectly, to a director of a body corporate in connection with the management of affairs of the body or of any holding company or subsidiary of the body, whether as a director or otherwise, but does not include amounts in payment or reimbursement of out‑of‑pocket expenses incurred for the benefit of the body.
employee share scheme for a company means a scheme under which shares (or units in shares) in the company or a holding company may be acquired:
(a) by, or for the benefit of:
(i) employees of the company, or of a related body corporate; or
(ii) directors of the company, or of a related body corporate, who hold a salaried employment or office in the company or in a related body corporate; or
(b) by a corporation all of whose members are:
(i) employees of the company, or of a related body corporate; or
(ii) directors of the company, or of a related body corporate, who hold a salaried employment or office in the company or in a related body corporate.
employee share scheme buy‑back means a buy‑back under a scheme that:
(a) has as its purpose the acquisition of shares in a company by, or on behalf of:
(i) employees of the company, or of a related body corporate; or
(ii) directors of the company, or a related body corporate, who hold a salaried employment or office in the company or in a related body corporate; and
(b) has been approved by the company in general meeting.
enforce, in relation to a charge on property of a company under administration, includes:
(a) appoint a receiver of property of the company under a power contained in an instrument relating to the charge; or
(b) obtain an order for the appointment of a receiver of such property for the purpose of enforcing the charge; or
(c) enter into possession, or assume control, of such property for that purpose; or
(d) appoint a person so to enter into possession or assume control (whether as agent for the chargee or for the company); or
(e) exercise, as chargee or as a receiver or person so appointed, a right, power or remedy existing because of the charge, whether arising under an instrument relating to the charge, under a written or unwritten law, or otherwise.
enforcement process, in relation to property, means:
(a) execution against that property; or
(b) any other enforcement process in relation to that property that involves a court or a sheriff.
enter into: a person who:
(a) enters into, or becomes a party to, a relevant agreement in relation to voting shares or other securities; or
(b) exercises an option to have voting shares or other securities issued or granted;
is taken to enter into a transaction in relation to the shares or securities. Enter into, in relation to a futures contract, has a meaning affected by subsection 72(2).
entitlements of an employee of a company has the meaning given by subsections 596AA(2) and (3).
entity: for the purposes of Chapter 2E an entity is any of the following:
(a) a body corporate;
(b) a partnership;
(c) an unincorporated body;
(d) an individual;
(e) for a trust that has only 1 trustee—the trustee;
(f) for a trust that has more than 1 trustee—the trustees together.
Otherwise, entity has the meaning given by section 64A.
equal access scheme has the meaning given by subsections 257B(2) and (3).
event includes any happening, circumstance or state of affairs.
examinable affairs, in relation to a corporation means:
(a) the promotion, formation, management, administration or winding up of the corporation; or
(b) any other affairs of the corporation (including anything that is included in the corporation’s affairs because of section 53); or
(c) the business affairs of a connected entity of the corporation, in so far as they are, or appear to be, relevant to the corporation or to anything that is included in the corporation’s examinable affairs because of paragraph (a) or (b).
examinable assets and liabilities, in relation to an entity, means all of the following:
(a) the entity’s property and assets:
(i) whether present or future; and
(ii) whether held alone or jointly with any other person or persons; and
(iii) whether or not held as agent, bailee or trustee;
(b) the entity’s liabilities:
(i) whether present or future; and
(ii) whether actual or contingent; and
(iii) whether owed alone or jointly with any other person or persons; and
(iv) whether or not owed as trustee.
examinable officer, in relation to a corporation, means:
(a) a director, secretary or executive officer of the corporation; or
(b) a receiver, or receiver and manager, of property of the corporation (whether appointed under a provision contained in an instrument, or by a court); or
(c) an administrator of the corporation; or
(d) an administrator of a deed of company arrangement executed by the corporation; or
(e) a liquidator or provisional liquidator of the corporation (whether or not appointed by a court); or
(f) a trustee or other person administering a compromise or arrangement made between the corporation and any other person or persons.
examinable operations, in relation to an entity, means all of the following:
(a) the entity’s business, trading, transactions and dealings:
(i) whether alone or jointly with any other entity or entities; and
(ii) whether or not as agent, bailee or trustee;
(b) the entity’s profits, income and receipts;
(c) the entity’s losses, outgoings and expenditure.
Exchange means Australian Stock Exchange Limited.
exchange member, in relation to a futures exchange, means:
(a) a corporation that is a member of the futures exchange; or
(b) a partnership that is a member of the futures exchange; or
(c) a member of such a partnership.
Exchange subsidiary, in Chapter 7, means a securities exchange that is a subsidiary of the Exchange.
exchange traded option means an option declared by a securities exchange to be an exchange traded option.
excluded security means:
(a) where:
(i) there is attached to a share or debenture a right to participate in a retirement village scheme; and
(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.
executive officer of a body corporate means a person who is concerned in, or takes part in, the management of the body (regardless of the person’s designation and whether or not the person is a director of the body).
exempt body has the meaning given by section 66A.
exempt broker means a person who is an exempt broker by virtue of section 67.
exempt dealer has the meaning given by section 68.
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 futures market means a futures market in relation to which a declaration under section 1127 is in force.
exempt investment adviser has the meaning given by section 68.
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.
exempt stock market means a stock market in relation to which, or a stock market in a class of stock markets in relation to which, a declaration is in force under section 771.
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.
extraordinary resolution, in relation to a registered scheme, means a resolution:
(a) of which notice as set out in paragraph 252J(c) has been given; and
(b) that has been passed by at least 50% of the total votes that may be cast by members entitled to vote on the resolution (including members who are not present in person or by proxy).
Family Court means the Family Court of Australia.
Federal Court means the Federal Court of Australia.
fidelity fund means:
(a) in relation to a futures organisation—the fidelity fund (if any) that section 1228 requires the futures organisation to keep; or
(b) in relation to a securities exchange within the meaning of Chapter 7—the fidelity fund (if any) that section 895 requires or required the securities exchange to keep.
financial benefit (when used in Chapter 2E) has a meaning that is affected by section 229.
financial corporation means a financial corporation within the meaning of paragraph 51(20) of the Constitution.
financial records includes:
(a) invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers; and
(b) documents of prime entry; and
(c) working papers and other documents needed to explain:
(i) the methods by which financial statements are made up; and
(ii) adjustments to be made in preparing financial statements.
financial report means an annual financial report or a half‑year financial report prepared under Chapter 2M.
Note: Section 295 deals with the contents of annual financial reports and section 302 deals with the contents of half‑year financial reports.
financial statements means annual financial statements under section 295 or half‑year financial statements under section 303.
financial year has the meaning given by section 323D.
find, in the case of a reference to a court finding a person guilty of an offence, has a meaning affected by section 73A.
floating charge includes a charge that conferred a floating security at the time of its creation but has since become a fixed or specific charge.
for, in relation to a fee or tax, includes in respect of.
foreign company means:
(a) a body corporate that is incorporated in an external Territory, or outside Australia and the external Territories, and is not:
(i) a corporation sole; or
(ii) an exempt public authority; or
(b) an unincorporated body that:
(i) is formed in an external Territory or outside Australia and the external Territories; and
(ii) under the law of its place of formation, may sue or be sued, or may hold property in the name of its secretary or of an officer of the body duly appointed for that purpose; and
(iii) does not have its head office or principal place of business in Australia.
foreign holder of securities means a holder of the securities whose address, as shown in the register in which details of their holding is recorded, is a place outside Australia and the external Territories.
franchise means an arrangement under which a person earns profits or income by exploiting a right, conferred by the owner of the right, to use a trade mark or design or other intellectual property or the goodwill attached to it in connection with the supply of goods or services. An arrangement is not a franchise if the person engages the owner of the right, or an associate of the owner, to exploit the right on the person’s behalf.
Full Court, in relation to a Supreme Court of a State or Territory, includes any court of the State or Territory to which appeals lie from a single judge of that Supreme Court.
fully paid share means a share on which no amount remains unpaid.
function includes a duty.
Fund means the National Guarantee Fund continued in existence by section 928B.
futures advice business has the meaning given by section 71.
futures adviser means a person who carries on, or 2 or more persons who together carry on, a futures advice business.
futures advisers licence means a futures advisers licence granted under Part 8.3.
futures association, in this Chapter and Chapter 8, means a body corporate in relation to which an approval under section 1132 is in force.
futures broker means:
(a) except in section 1209 and Part 8.5:
(i) a person who carries on, or 2 or more persons who together carry on, a futures broking business, whether or not the person, or any of the persons, also deals in futures contracts on the person’s own account; or
(ii) the holder of a futures brokers licence; and
(b) in section 1209 or Part 8.5—the holder of a futures brokers licence.
futures brokers licence, in this Chapter or Chapter 8, means a futures brokers licence granted under Part 8.3.
futures broking business, in relation to a person, means, subject to subsection 25(4), a business of dealing in futures contracts on behalf of other persons.
futures contract has the meaning given by section 72.
futures exchange, in this Chapter and Chapter 8, means a body corporate in relation to which an approval under section 1126 is in force.
futures law means a provision of Chapter 8.
futures licence means a futures brokers licence or a futures advisers licence.
futures licensee means a person who holds a futures licence.
futures market means a market, exchange or other place at which, or a facility by means of which, futures contracts are regularly acquired or disposed of.
futures option means an option or Chapter 8 right to assume, at a specified price or value and within a specified period, a bought position, or a sold position, in relation to an eligible commodity agreement or in relation to an adjustment agreement.
futures organisation means:
(a) in this Chapter and Chapter 8 (other than Part 8.6)—a futures exchange or a futures association; and
(b) in Part 8.6—a futures exchange or a futures association (other than a futures association each of whose members is also a member of a futures exchange).
futures report means an analysis or report about futures contracts.
futures representative has the meaning given by section 73.
Gazette notice means a notice published in the Gazette.
general law means the principles and rules of the common law and equity.
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.
in Australia has the meaning given by section 102C.
included, in relation to an official list, has the meaning given by section 75.
incorporated in Australia, in relation to a body corporate, includes incorporated by or under a law of:
(a) the Commonwealth; or
(b) a State; or
(c) an internal Territory.
incorporation:
(a) of a company—means the company’s first registration under this Act; and
(b) of any other incorporated body—means the body’s incorporation by or under a law (other than this Act).
industrial instrument means:
(a) a contract of employment; or
(b) a law, award, determination or agreement relating to terms or conditions of employment.
information includes complaint.
information service means:
(a) a broadcasting service; or
(b) an interactive or broadcast videotext or teletext service or a similar service; or
(c) an online database service or a similar service; or
(d) any other prescribed service.
injury compensation means compensation payable under any law relating to workers compensation.
inside information, in relation to a futures contract, means information that is not generally available but, if it were generally available, would be likely to affect materially the price for dealing in:
(a) that futures contract; or
(b) a futures contract of the same kind as that futures contract.
insolvent has the meaning given by subsection 95A(2) and, in Part 7.10, has a meaning affected by section 922.
insolvent transaction has the meaning given by section 588FC.
insolvent under administration means a person who:
(a) under the Bankruptcy Act 1966 or the law of an external Territory, is a bankrupt in respect of a bankruptcy from which the person has not been discharged; or
(b) under the law of an external Territory or the law of a foreign country, has the status of an undischarged bankrupt;
and includes:
(c) a person any of whose property is subject to control under:
(i) section 50 or Division 2 of Part X of the Bankruptcy Act 1966; or
(ii) a corresponding provision of the law of an external Territory or the law of a foreign country; or
(d) a person who has executed a deed of assignment or a deed of arrangement under:
(i) Part X of the Bankruptcy Act 1966; or
(ii) the corresponding provisions of the law of an external Territory or the law of a foreign country;
where the terms of the deed have not been fully complied with; or
(e) a person whose creditors have accepted a composition under:
(i) Part X of the Bankruptcy Act 1966; or
(ii) the corresponding provisions of the law of an external Territory or the law of a foreign country;
where a final payment has not been made under that composition.
interest in a managed investment scheme means a right to benefits produced by the scheme (whether the right is actual, prospective or contingent and whether it is enforceable or not).
invalid futures authority has the meaning given by subsection 87(2).
invalid securities authority has the meaning given by subsection 88(2).
investment advice business has the meaning given by section 77.
investment adviser means a person who carries on, or 2 or more persons who together carry on, an investment advice business.
investment advisers licence, in this Chapter or Chapter 7, means an investment advisers licence granted under Part 7.3.
investment contract means any contract, scheme or arrangement that, in substance and irrespective of its form, involves the investment of money in or under such circumstances that the investor acquires or may acquire an interest in, or right in respect of, property, whether in this jurisdiction or elsewhere, that, under, or in accordance with, the terms of investment will, or may at the option of the investor, be used or employed in common with any other interest in, or right in respect of, property, whether in this jurisdiction or elsewhere, acquired in or under like circumstances.
involved, in relation to a contravention, has the meaning given by section 79.
issue includes:
(a) in relation to interests in a managed investment scheme—make available; and
(b) otherwise—circulate, distribute and disseminate.
Judge means a judge of the Court.
judgment means a judgment, decree or order, whether final or interlocutory.
large proprietary company has the meaning given by subsection 45A(3).
law of a State or Territory means a law of, or in force in, the State or Territory.
Note: This definition does not affect the meaning of law when used otherwise than in a phrase such as “law of a State or Territory”. Examples of such a use is in the phrase “any provision of any law” in section 100A and the phrase “law of the Commonwealth” in section 156.
lawyer means a duly qualified legal practitioner and, in relation to a person, means such a practitioner acting for the person.
leave of absence means long service leave, extended leave, recreation leave, annual leave, sick leave or any other form of leave of absence from employment.
licence means:
(a) in Chapter 7—a securities licence; and
(b) in Chapter 8—a futures licence.
licensee means:
(a) in Chapter 7—a securities licensee; and
(b) in Chapter 8—a futures licensee; and
(c) in relation to a licence—the person who holds the licence.
limited company means:
(a) a company limited by shares; or
(b) a company limited by guarantee; or
(c) a company limited both by shares and guarantee;
but does not include a no liability company.
linked: the incurring of a debt and a contravention of section 596AB are linked if they are linked under subsection 596AB(4).
liquidating trade means a transaction whereby, for the purpose of closing out a futures contract, the person in the bought position, or sold position, under the futures contract assumes an offsetting sold position, or offsetting bought position, as the case may be, under another futures contract.
liquidator, in Chapters 7 and 8, 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 securities exchange.
listed corporation means a body corporate that is included in an official list of a securities exchange (as defined, for the purposes of this definition, by the regulations) in Australia or an external Territory.
listed disclosing entity has the meaning given by subsection 111AL(1).
listing rules, when used in Chapter 7, has the meaning given by section 761.
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.
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 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, prospective or contingent and whether they are enforceable or not);
(ii) any of the contributions are to be pooled, or used in a common enterprise, to produce financial benefits, or benefits consisting of rights or interests in property, for the people (the members) who hold interests in the scheme (whether as contributors to the scheme or as people who have acquired interests from holders);
(iii) the members do not have day‑to‑day control over the operation of the scheme (whether or not they have the right to be consulted or to give directions); or
(b) a time‑sharing scheme;
but does not include the following:
(c) a partnership that has more than 20 members but does not need to be incorporated or formed under an Australian law because of regulations made for the purposes of subsection 115(2);
(d) a body corporate (other than a body corporate that operates as a time sharing scheme);
(e) a scheme in which all the members are bodies corporate that are related to each other and to the body corporate that promotes the scheme;
(f) a franchise;
(g) a statutory fund maintained under the Life Insurance Act 1995;
(h) a regulated superannuation fund, an approved deposit fund, a pooled superannuation trust, or a public sector superannuation scheme, within the meaning of the Superannuation Industry (Supervision) Act 1993;
(i) a scheme operated by an Australian ADI in the ordinary course of its banking business;
(j) the issue of debentures or convertible notes by a body corporate;
(k) a barter scheme under which each participant may obtain goods or services from another participant for consideration that is wholly or substantially in kind rather than in cash;
(l) a retirement village scheme operating within or outside Australia:
(i) under which the participants, or a majority of them, are provided, or are to be provided, with residential accommodation within a retirement village (whether or not the entitlement of a participant to be provided with accommodation derives from a proprietary interest held by the participant in the premises where the accommodation is, or is to be, provided); and
(ii) which is not a time‑sharing scheme;
(m) a scheme that is operated by a co‑operative company registered under Part VI of the Companies (Co‑operative) Act 1943 of Western Australia or under a previous law of Western Australia that corresponds to that Part;
(n) a scheme of a kind declared by the regulations not to be a managed investment scheme.
Note: Paragraph (c)—A partnership with less than 20 members will usually not require registration because of paragraph 601ED(1)(a) and under section 115 a partnership with more than 20 members can only operate if covered by regulations made for the purposes of subsection 115(2).
manager has a meaning affected by section 90.
managing controller, in relation to property of a corporation, means:
(a) a receiver and manager of that property; or
(b) any other controller of that property who has functions or powers in connection with managing the corporation.
marketable securities means debentures, stocks, shares or bonds of any Government, of any local government authority or of any body corporate, association or society, and includes any right or option in respect of shares in any body corporate and any prescribed interest.
market bid means a takeover bid made under Chapter 6 as a market bid (see section 616).
member:
(a) in relation to a managed investment scheme¾means a person who holds an interest in the scheme; or
(b) when used in Chapter 6 or Chapter 7 (except Part 7.1A and the provisions mentioned in paragraph (aa) of this definition) in relation to a securities exchange or stock exchange, means:
(i) a person who is a member organisation of that exchange; or
(ii) a person who is a partner in a partnership that is a member organisation of that exchange; or
(c) when used in section 769, 769A or 772A, subsection 776(2), section 779, subsection 786(8) or 910(3) or section 913 or 1115, in relation to a securities exchange or stock exchange, means:
(i) a person who is a member organisation of that exchange; or
(ii) a person who is a partner in a partnership that is a member organisation of that exchange; or
(iii) a person who is recognised under the business rules of the exchange as a suitably qualified affiliate of the exchange and who is involved in the carrying on of a business of dealing in securities (whether as an employee, director or in any other capacity); or
(d) in relation to a body corporate that is, or proposes to become, a futures organisation—has a meaning affected by section 56; or
(e) in relation to a company—a person who is a member under section 231.
member firm, in relation to a securities exchange, means a partnership that is a member organisation of the securities exchange.
member organisation means:
(a) in relation to a securities exchange or stock exchange:
(i) a person who is recognised under the business rules of the exchange as a suitably qualified participant of the exchange and who carries on a business of dealing in securities otherwise than in partnership; or
(ii) a partnership that is recognised under the business rules of the exchange as a suitably qualified participant of the exchange and that carries on a business of dealing in securities; and
(b) in relation to a futures organisation:
(i) a member of the futures organisation that carries on a business of dealing in futures contracts otherwise than in partnership; or
(ii) a partnership that the futures organisation recognises as a member organisation, that carries on a business of dealing in futures contracts and each partner in which is a member of some futures organisation.
members’ voluntary winding up means a winding up under Part 5.5 where a declaration has been made and lodged pursuant to section 494.
minerals means minerals in any form, whether solid, liquefied or gaseous and whether organic or inorganic.
minimum holding buy‑back means a buy‑back of all of a holder’s shares in a listed corporation if the shares are less than a marketable parcel within the meaning of the rules of the relevant securities exchange.
mining purposes means any or all of the following purposes:
(a) prospecting for ores, metals or minerals;
(b) obtaining, by any mode or method, ores, metals or minerals;
(c) the sale or other disposal of ores, metals, minerals or other products of mining;
(d) the carrying on of any business or activity necessary for, or incidental to, any of the foregoing purposes;
whether in Australia or elsewhere, but does not include quarrying operations for the sole purpose of obtaining stone for building, roadmaking or similar purposes.
misconduct includes fraud, negligence, default, breach of trust and breach of duty.
modifications includes additions, omissions and substitutions.
money includes a payment order.
national business names register means the record or records of information identified by the Minister in a notice under subsection 147(5).
national newspaper means a daily newspaper that circulates generally in each State and each internal Territory.
NCSC means the National Companies and Securities Commission.
necessary transfer documents for the transfer of securities to a person means the documents that are sufficient to enable the person to become the holder of the securities.
negative, in relation to a document, means a transparent negative photograph used, or intended to be used, as a medium for reproducing the contents of the document, and includes a transparent photograph made from surface contact with the original negative photograph.
negotiable instrument, in relation to a body corporate, means:
(a) a bill of exchange, promissory note, cheque or other negotiable instrument; or
(b) an indorsement on, or order in, a bill of exchange, promissory note, cheque or other negotiable instrument; or
(c) a letter of credit;
of, or purporting to be issued or signed by or on behalf of, the body.
no liability company means a company that is registered as, or converts to, a no liability company under this Act.
Note 1: A no liability company can be registered under section 118 or 601BD. A company can convert to a no liability company under Part 2B.7.
Note 2: A no liability company must have solely mining purposes and have no contractual right to recover unpaid calls (see subsection 112(2)).
nominee corporation means a body corporate whose principal business is the business of holding marketable securities as a trustee or nominee.
non‑broker means a person who is neither a futures broker nor one of 2 or more persons who together constitute a futures broker.
non‑dealer means a person who is neither a dealer nor one of 2 or more persons who together constitute a dealer.
non‑voting share, in relation to a body corporate, means an issued share in the body that is not a voting share in the body.
notice includes a circular and an advertisement.
of, in relation to securities, means, in the case of interests in a managed investment scheme, made available by.
offence means an offence against a law of the Commonwealth or a State or Territory.
offer information statement means an offer information statement that is lodged with ASIC.
offer period for a takeover bid is the period for which offers under the bid remain open.
officer of a corporation means:
(a) a director or secretary of the corporation; or
(b) a person:
(i) who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or
(ii) who has the capacity to affect significantly the corporation’s financial standing; or
(iii) in accordance with whose instructions or wishes the directors of the corporation are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the corporation); or
(c) a receiver, or receiver and manager, of the property of the corporation; or
(d) an administrator of the corporation; or
(e) an administrator of a deed of company arrangement executed by the corporation; or
(f) a liquidator of the corporation; or
(g) a trustee or other person administering a compromise or arrangement made between the corporation and someone else.
Note: Section 201B contains rules about who is a director of a corporation.
officer of the Commonwealth has the same meaning as in paragraph 75(v) of the Constitution.
official liquidator means a person registered as an official liquidator under section 1283.
official manager means a person appointed as an official manager under Part 5.3.
off‑market bid means a takeover bid made under Chapter 6 as an off‑market bid (see section 616).
old Corporations Law, in relation to a State or Territory, has the same meaning as it has in Part 11.1.
old Division 11 of Part 11.2 transitionals means the following:
(a) the provisions of Division 11 of Part 11.2 of the old Corporations Law of each State or Territory in this jurisdiction, to the extent they continue to have effect because of section 1408 of this Act; and
(b) if regulations for the purposes of subsection 1408(3) deal with a matter or matters dealt with in those provisions—the regulations that so deal with the matter or matters.
old Division 12 of Part 11.2 transitionals means the following:
(a) the provisions of Division 12 of Part 11.2 of the old Corporations Law of each State or Territory in this jurisdiction, to the extent they continue to have effect because of section 1408 of this Act; and
(b) if regulations for the purposes of subsection 1408(3) deal with a matter or matters dealt with in those provisions—the regulations that so deal with the matter or matters.
on, in relation to a stock market or futures market, includes at or by means of.
on behalf of includes on the instructions of.
on‑market: a transaction of any kind is an on‑market transaction if it is effected on a stock market of a securities exchange and is:
(a) an on‑market transaction as defined in the rules governing the operation of the exchange; or
(b) if those rules do not define on‑market transactions—effected in the ordinary course of trading on the stock market.
on‑market buy‑back means a buy‑back by a listed corporation at an official meeting of a securities exchange in the ordinary course of trading on a stock market of the exchange.
option contract, in Chapter 7, means:
(a) a contract under which a party acquires from another party an option or right, exercisable at or before a specified time, to buy from, or to sell to, that other party a number of specified securities, or of a specified class of securities, being securities of a kind referred to in paragraph 92(1)(a), (b), (c) or (d), at a price specified in, or to be determined in accordance with, the contract; or
(b) a contract entered into on a stock market of a securities exchange or on an exempt stock market, being a contract under which a party to the contract acquires from another party to the contract an option or right, exercisable at or before a specified time:
(i) to buy from, or to sell to, that other party an amount of a specified foreign currency, or a quantity of a specified commodity, at a price specified in, or to be determined in accordance with, the contract; or
(ii) to be paid by that other party an amount of money to be determined by reference to the amount by which a specified number is greater or less than the number of a specified index, being the Australian Stock Exchanges All Ordinaries Price Index or a prescribed index, as at the time when the option or right is exercised.
outside this jurisdiction has a meaning affected by subsection 102B(2).
outstanding property, in relation to a body corporate that has been dissolved or deregistered, means outstanding property (other than unpaid capital, whether called or uncalled) that was vested in the body, to which it was entitled, or over which it had a disposing power, when it was dissolved or deregistered, but that neither the body nor its liquidator got in, realised on or otherwise disposed of or dealt with.
own account has:
(a) in relation to a person dealing in a futures contract—a meaning affected by section 29; or
(b) in relation to a person dealing in, or entering into a transaction in relation to, securities—a meaning affected by section 84.
Panel means the Corporations and Securities Panel.
Part 5.1 body means:
(a) a company; or
(b) a registrable body that is registered under Division 1 or 2 of Part 5B.2.
Part 5.7 body means:
(a) a registrable body that is a registrable Australian body and:
(i) is registered under Division 1 of Part 5B.2; or
(ii) is not registered under that Division but carries on business in this jurisdiction and outside its place of origin; or
(b) a registrable body that is a foreign company and:
(i) is registered under Division 2 of Part 5B.2; or
(ii) is not registered under that Division but carries on business in Australia; or
(c) a partnership, association or other body (whether a body corporate or not) that consists of more than 5 members and that is not a registrable body.
Part 10.1 transitionals means the provisions of Part 10.1 and of regulations for the purposes of those provisions.
party:
(a) in relation to a transaction—includes, if the transaction has been completed or given effect to, or has been terminated, a person who was a party to the transaction; and
(b) in relation to a Chapter 8 agreement—means, in the case of a proposed or discharged relevant agreement, a person who would be a party to the relevant agreement if it were in effect.
payment (when used in Division 2 of Part 2D.2 (sections 200A to 200J) includes a payment by way of damages for breach of contract.
payment order means a cheque (including a cheque that a bank or other institution draws on itself), bank draft, money order or postal order.
person:
(a) has a meaning affected by section 85A; and
(b) when used in Division 2 of Part 2D.2 (sections 200A to 200J)—includes a superannuation fund.
place of origin:
(a) in relation to a body corporate at a particular time, means:
(i) in the case of a body incorporated at that time in a State or Territory—that State or Territory; or
(ii) otherwise—the place of the body’s incorporation at that time; or
(b) in relation to an unincorporated body—the State or Territory, or other place, in which the body is formed.
possession has a meaning affected by section 86.
power includes an authority.
premises includes:
(a) a structure, building, aircraft, vehicle or vessel; and
(b) any land or place (whether enclosed or built on or not); and
(c) a part of a structure, building, aircraft, vehicle or vessel or of such a place.
price, in relation to a commodity agreement or a futures contract, or in Chapter 8, includes any amount payable for the delivery of a commodity under an agreement.
printed includes type‑written, lithographed or reproduced by any mechanical means.
procure includes cause.
profile statement means a profile statement that is lodged with ASIC.
proper authority has:
(a) in relation to a futures licensee—the meaning given by subsection 87(1); and
(b) in relation to a securities licensee—the meaning given by subsection 88(1).
proper SCH transfer means:
(a) an SCH‑regulated transfer of a quoted security or quoted right effected in accordance with the SCH business rules; or
(b) a transfer that is taken by section 1097D to be a proper SCH transfer.
property means any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and includes a thing in action.
proportional takeover approval provisions, in relation to a company, means provisions of the kind referred to in subsection 648D(1) that are contained in, or that it is proposed to insert in, the constitution of the company.
proportional takeover bid means an off‑market bid for a specified proportion of the securities in the bid class (see paragraph 618(1)(b)).
proprietary company has the meaning given by subsection 45A(1).
prospectus means a prospectus that is lodged with ASIC.
prove includes establish in any way (for example, but without limitation, through the operation of a presumption for which this Act or a law of a State or Territory provides).
providing finance means:
(a) lending money; or
(b) giving guarantees or security for loans made by someone else; or
(c) drawing, accepting, indorsing, negotiating or discounting a bill of exchange, cheque, payment order or promissory note so that someone can obtain funds.
provision of a law includes:
(a) a subsection, section, Subdivision, Division, Part or Chapter of the law; and
(b) a Schedule, or an item in a Schedule, to the law.
public company means a company other than a proprietary company and:
(a) in section 195 and Chapter 2E, includes a body corporate (other than a prescribed body corporate) that:
(i) is incorporated in a State or an internal Territory, but not under this Act; and
(ii) is included in the official list of a securities exchange; and
(b) in Chapter 2E does not include a company that does not have “Limited” in its name because of section 150 or 151.
public document, in relation to a body corporate, has the meaning given by section 88A.
publish:
(a) in relation to a notice—means, in Chapter 7, publish by any means, including in a newspaper or periodical, by broadcasting or televising or in a cinematograph film; and
(b) in any case—includes issue.
qualified accountant means a member of a professional body that is approved by ASIC in writing for the purposes of this definition.
qualified privilege has the meaning given by section 89.
quarter day means 31 March, 30 June, 30 September or 31 December.
quotation, in relation to securities, in relation to a stock market of a securities exchange, or of a stock exchange, within the meaning of the provision where the expression occurs, includes the displaying or providing, on a stock market of the securities exchange or stock exchange, of information concerning:
(a) if offers to sell, purchase or exchange the securities at particular prices, or for particular consideration, are made or accepted on that stock market—those prices or that consideration; or
(b) if offers or invitations are made on that stock market, being offers or invitations that are intended, or may reasonably be expected, to result in the making or acceptance of offers to sell, purchase or exchange the securities at particular prices, or for particular consideration—those prices or that consideration; or
(c) in any case—the price at which, or the consideration for which, particular persons, or particular classes of persons, propose, or may reasonably be expected, to sell, purchase or exchange the securities.
quoted ED securities has the meaning given by section 111AM.
quoted right has the meaning given by section 1097A.
Note: The meaning of quoted right may be extended by the SCH business rules (under section 1097B) or by an ASIC declaration (under section 1097C).
quoted security has the meaning given by section 1097A.
Note: The meaning of quoted security may be extended by the SCH business rules (under section 1097B) or by an ASIC declaration (under section 1097C).
receiver and manager has a meaning affected by section 90.
recognised futures exchange means a body corporate that:
(a) conducts a futures market outside Australia; and
(b) is prescribed for the purposes of this definition.
redeemable preference share means a preference share in a body corporate that is, or at the body’s option is to be, liable to be redeemed.
referring State has the meaning given by section 4.
register means register under this Act.
registered Australian body means a registrable Australian body that is registered under Division 1 of Part 5B.2.
registered body mean a registered Australian body or a registered foreign company.
registered company auditor:
(a) means a person registered as an auditor under Part 9.2; and
(b) in relation to a body corporate that is not a company—includes a person qualified to act as the body’s auditor under the law of the body’s incorporation.
registered foreign company means a foreign company that is registered under Division 2 of Part 5B.2.
registered liquidator means a person registered as a liquidator under subsection 1282(2).
registered office, in relation to a body corporate, means the body’s registered office under section 142 or 601CT, as the case requires.
registered scheme means a managed investment scheme that is registered under section 601EB.
registrable Australian body means:
(a) a body corporate, not being:
(i) a company; or
(ii) an exempt public authority; or
(iii) a corporation sole; or
(b) an unincorporated body that, under the law of its place of formation:
(i) may sue or be sued; or
(ii) may hold property;
in the name of its secretary or of an officer of the body duly appointed for that purpose;
but does not include a foreign company.
registrable body means a registrable Australian body or a foreign company.
related body corporate, in relation to a body corporate, means a body corporate that is related to the first‑mentioned body by virtue of section 50.
related entity, in relation to a body corporate, means any of the following:
(a) a promoter of the body;
(b) a relative, or de facto spouse, of such a promoter;
(c) a relative of a spouse, or of a de facto spouse, of such a promoter;
(d) a director or member of the body or of a related body corporate;
(e) a relative, or de facto spouse, of such a director or member;
(f) a relative of a spouse, or of a de facto spouse, of such a director or member;
(g) a body corporate that is related to the first‑mentioned body;
(h) a beneficiary under a trust of which the first‑mentioned body is or has at any time been a trustee;
(i) a relative, or de facto spouse, of such a beneficiary;
(j) a relative of a spouse, or of a de facto spouse, of such a beneficiary;
(k) a body corporate one of whose directors is also a director of the first‑mentioned body;
(l) a trustee of a trust under which a person is a beneficiary, where the person is a related entity of the first‑mentioned body because of any other application or applications of this definition.
related party (when used in Chapter 2E) has the meaning given by section 228.
relation‑back day, in relation to a winding up of a company or Part 5.7 body, means:
(a) if, because of Division 1A of Part 5.6, the winding up is taken to have begun on the day when an order that the company or body be wound up was made—the day on which the application for the order was filed; or
(b) otherwise—the day on which the winding up is taken because of Division 1A of Part 5.6 to have begun.
relative, in relation to a person, means the spouse, parent or remoter lineal ancestor, son, daughter or remoter issue, or brother or sister of the person.
relevant agreement means an agreement, arrangement or understanding:
(a) whether formal or informal or partly formal and partly informal; and
(b) whether written or oral or partly written and partly oral; and
(c) whether or not having legal or equitable force and whether or not based on legal or equitable rights.
relevant date, in relation to a winding up, means the day on which the winding up is taken because of Division 1A of Part 5.6 to have begun.
Note: Subsection 553(1B) modifies the operation of this definition for debts and claims that arise while a company is under a deed of company arrangement if the deed terminates immediately before the winding up.
relevant interest, in relation to securities, has a meaning given by sections 608 and 609.
relevant securities exchange for a listed company, or listed registered managed investment scheme, means:
(a) the securities exchange on whose stock market the company or scheme is listed; or
(b) if the company or scheme is listed on 2 or more exchanges—each of those exchanges.
remedial order means an order that:
(a) restrains a person from exercising any voting or other rights attached to securities; or
(b) directs a body corporate not to make or to defer payment of an amount due from the body corporate in respect of securities; or
(c) restrains a person from acquiring securities or an interest in securities; or
(d) directs a person to dispose of, or not to dispose of, securities or interests in securities; or
(e) directs the disposal referred to in paragraph (d):
(i) to be made within a specified time; or
(ii) to be made subject to specified conditions; or
(iii) not to be made to a specified person or persons or to a specified class or classes of persons;
(f) directs a specified person to pay to the body corporate an amount equal to any profit or benefit that the person obtains because of the disposal referred to in paragraph (d); or
(g) vests securities, or an interest in securities, in ASIC; or
(h) directs a body corporate not to register the transfer or transmission of securities; or
(i) cancels securities issued as consideration for offers under a takeover bid; or
(j) declares that an exercise of the voting or other rights attached to securities be disregarded; or
(k) cancels or declares voidable:
(i) an agreement or offer relating to a takeover bid, or a proposed takeover bid; or
(ii) any other agreement or offer in connection with the acquisition of securities or relevant interests in securities;
(l) directs a person to give specified information to the holders of securities of a body corporate; or
(m) directs a body corporate not to issue securities to a person; or
(n) if an order of a kind referred to in paragraphs (a) to (m) is in force in respect of securities—directs the registered holder of the securities to give written notice of the order to any person whom the holder knows to be entitled to exercise a right to vote attached to those securities; or
(o) directs a body corporate to repeal or modify its existing constitution or adopt a particular constitution; or
(p) if a person has failed to comply with a requirement of Chapter 6, 6A, 6B or 6C—directs that person to comply with that requirement.
remuneration of an officer or employee of a corporation. A benefit given to an officer or employee of a corporation is remuneration if and only if the benefit, were it received by a director of the corporation, would be remuneration of the director for the purposes of an accounting standard that deals with disclosure in companies’ financial reports of information about related parties. For the purposes of this definition, the following are not officers of a corporation:
(a) a receiver, or receiver and manager, of the property of the corporation;
(b) an administrator of the corporation;
(c) an administrator of a deed of company arrangement executed by the corporation;
(d) a liquidator of the corporation;
(e) a trustee or other person administering a compromise or arrangement made between the corporation and someone else.
renounceable option means an assignable option to have an allotment of shares in a body corporate made to the holder of the option.
representative means:
(a) in Chapter 7—a securities representative; or
(b) in Chapter 8—a futures representative.
reproduction, in relation to a document, means a machine‑copy of the document or a print made from a negative of the document.
resolution, in relation to creditors or contributories, means a resolution passed at a meeting of the creditors or contributories.
resolution for voluntary winding up means the special resolution referred to in section 491.
responsible entity of a registered scheme means the company named in ASIC’s record of the scheme’s registration as the responsible entity or temporary responsible entity of the scheme.
responsible officer means:
(a) in relation to a body corporate that is, or proposes to be, a member of another body corporate:
(i) a director or executive officer of the first‑mentioned body; or
(ii) a person who has control or substantial control of the first‑mentioned body; and
(b) in relation to a body corporate that applies for a licence—an officer of the body who would perform duties in connection with the holding of the licence.
result includes:
(a) when used as a verb—result indirectly; and
(b) when used as a noun—an indirect result.
retirement village scheme means a scheme, undertaking or enterprise (in this definition called the relevant scheme), whether in Australia or elsewhere, that is being, or is proposed to be, carried out or undertaken with the intention that the participants, or a majority of the participants, in the relevant scheme be provided, in connection with the relevant scheme, with residential accommodation within a retirement community, whether or not the entitlement of a participant to be provided with such accommodation derives from a proprietary interest held by the participant in the premises where the accommodation is provided, but does not include a time‑sharing scheme.
revoke, in relation to an accounting standard, means, in the case of a provision of an accounting standard, vary the last‑mentioned accounting standard by omitting the provision.
rules means:
(a) rules of the Federal Court; or
(b) rules of the Supreme Court of a State or internal Territory;
as the case requires.
same kind, in relation to a Chapter 8 agreement, has the meaning given by section 54.
SCH is short for securities clearing house.
SCH business rules means the business rules (within the meaning of Chapter 7) of the securities clearing house.
SCH certificate cancellation provisions means the provisions of the SCH business rules that deal with:
(a) brokers cancelling certificates or other documents of title to quoted securities or quoted rights; and
(b) matters incidental to brokers cancelling such certificates or documents.
scheme property of a registered scheme means:
(a) contributions of money or money’s worth to the scheme; and
(b) money that forms part of the scheme property under provisions of this Act or the ASIC Act; and
(c) money borrowed or raised by the responsible entity for the purposes of the scheme; and
(d) property acquired, directly or indirectly, with, or with the proceeds of, contributions or money referred to in paragraph (a), (b) or (c); and
(e) income and property derived, directly or indirectly, from contributions, money or property referred to in paragraph (a), (b), (c) or (d).
Note 1: Paragraph (a)—if what a member contributes to a scheme is rights over property, the rights in the property that the member retains do not form part of the scheme property.
Note 2: For provisions that are relevant to paragraph (b), see subsections 177(4), 1317HA(1A), 1317HB(3) and 1317HD(3) of this Act and subsection 93A(5) of the ASIC Act.
SCH participant means a person who, or a partnership that, under the SCH business rules, is entitled to participate in the facilities provided by the securities clearing house.
SCH‑regulated transfer means a transfer (within the meaning of Division 3 of Part 7.13) of a quoted security or a quoted right that, according to the SCH business rules, is an SCH‑regulated transfer.
SCH subregister means a subregister of quoted securities or quoted rights maintained by the SCH under the SCH business rules.
scrip means documents that are, or are documents of title to, securities.
section 513C day, in relation to the administration of a company, has the meaning given by section 513C.
section 770A stock market means a stock market in relation to which an approval under section 770A is in force.
securities has the meaning given by section 92.
securities adviser means a dealer, an investment adviser or a securities representative of a dealer or of an investment adviser.
securities business has the meaning given by section 93.
Note: The activities of the securities clearing house will not generally constitute a securities business—see subsection 779J(1).
securities clearing house means the body corporate in relation to which an approval under section 779B is in force.
securities exchange means:
(a) in a provision (other than a provision of this Chapter or Chapter 6, 6C, 6D or 7) for the purposes of which a regulation is in force defining that expression—a securities exchange as defined by that regulation; or
(b) in Chapters 6 and 6C:
(i) the Exchange;
(ii) Australian Stock Exchange (Adelaide) Limited; or
(iii) Australian Stock Exchange (Brisbane) Limited; or
(iv) Australian Stock Exchange (Hobart) Limited; or
(v) Australian Stock Exchange (Melbourne) Limited; or
(vi) Australian Stock Exchange (Perth) Limited; or
(vii) Australian Stock Exchange (Sydney) Limited; or
(viii) a body corporate that is declared by the regulations to be a securities exchange for the purposes of that Chapter; or
(c) in this Chapter or Chapter 6D or 7:
(i) a stock exchange; or
(ii) a body corporate in relation to which an approval under section 770 is in force.
securities law means a provision of Chapter 5C, 6, 6A, 6B, 6C, 6D or 7.
securities licence means a dealers licence or an investment advisers licence.
securities licensee means a person who holds a securities licence.
securities recommendation means a recommendation with respect to securities or a class of securities, whether made expressly or by implication.
securities report means an analysis or report about securities.
securities representative has the meaning given by section 94.
SEGC means a body corporate in relation to which a nomination as the Securities Exchanges Guarantee Corporation is in force under subsection 925A(1).
selective buy‑back means a buy‑back that is none of the following:
(a) a buy‑back under an equal access scheme within the meaning of subsections 257B(2) and (3);
(b) a minimum holding buy‑back;
(c) an on‑market buy‑back;
(d) an employee share scheme buy‑back.
serious fraud means an offence involving fraud or dishonesty, being an offence:
(a) against an Australian law or any other law; and
(b) punishable by imprisonment for life or for a period, or maximum period, of at least 3 months.
sheriff includes a person charged with the execution of a writ or other process.
small proprietary company has the meaning given by subsection 45A(2).
sold position means:
(a) in relation to a commodity agreement, or in relation to a futures contract, being a commodity agreement—the position of a person who, by virtue of the agreement, is under a Chapter 8 obligation to make delivery in accordance with the agreement; or
(b) in relation to a futures contract, being an adjustment agreement—the position of a person who, by virtue of the agreement:
(i) will, if the value or worth of the agreement (as determined in accordance with the agreement) as at a particular future time exceeds by a particular amount the value or worth of the agreement (as so determined) as at a particular earlier time, be under a Chapter 8 obligation to pay that amount; and
(ii) will, if the value or worth of the agreement (as so determined) as at a particular future time is less by a particular amount than the value or worth of the agreement (as so determined) as at a particular earlier time, have a Chapter 8 right to receive that amount.
sole trader means a person who is a member organisation of a securities exchange.
solvent has the meaning given by subsection 95A(1).
special resolution means:
(a) in relation to a company, a resolution:
(i) of which notice as set out in paragraph 249L(c) has been given; and
(ii) that has been passed by at least 75% of the votes cast by members entitled to vote on the resolution; or
(b) in relation to a registered scheme, a resolution:
(i) of which notice as set out in paragraph 252J(c) has been given; and
(ii) that has been passed by at least 75% of the votes cast by members entitled to vote on the resolution.
staff member, in relation to ASIC, means a person who is a staff member for the purposes of the ASIC Act.
standardised agreement means a Chapter 8 agreement that is one of 2 or more Chapter 8 agreements each of which is a Chapter 8 agreement of the same kind as the other, or as each of the others, as the case may be.
standard opening hours means 10 am to 12 noon and 2 pm to 4 pm each business day.
State, when used in a geographical sense, includes the coastal sea of the State.
State Fair Trading Act means the following Acts for each State and Territory:
| State Fair Trading Acts |
| | State or Territory | Act |
| 1 | New South Wales | Fair Trading Act 1987 |
| 2 | Victoria | Fair Trading Act 1999 |
| 3 | Queensland | Fair Trading Act 1987 |
| 4 | South Australia | Fair Trading Act 1987 |
| 5 | Western Australia | Fair Trading Act 1987 |
| 6 | Tasmania | Fair Trading Act 1990 |
| 7 | Northern Territory | Fair Trading Act 1990 |
| 8 | Australian Capital Territory | Fair Trading Act 1992 |
State Family Court, in relation to a State, means a court of that State to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.
statement, in Chapter 7, includes matter that is not written but conveys a message.
State or Territory court means a court of a State, the Capital Territory or the Northern Territory.
State or Territory Supreme Court means the Supreme Court of:
(a) a State; or
(b) the Capital Territory; or
(c) the Northern Territory.
statutory demand means:
(a) a document that is, or purports to be, a demand served under section 459E; or
(b) such a document as varied by an order under subsection 459H(4).
statutory minimum means:
(a) if an amount greater than $2,000 is prescribed—the prescribed amount; or
(b) otherwise—$2,000.
stock exchange means:
(a) in a provision (other than a provision of this Chapter or Chapter 6 or 7) for the purposes of which a regulation is in force defining that expression—a stock exchange as defined by that regulation; or
(b) in Chapter 6:
(i) the Exchange;
(ii) Australian Stock Exchange (Adelaide) Limited; or
(iii) Australian Stock Exchange (Brisbane) Limited; or
(iv) Australian Stock Exchange (Hobart) Limited; or
(v) Australian Stock Exchange (Melbourne) Limited; or
(vi) Australian Stock Exchange (Perth) Limited; or
(vii) Australian Stock Exchange (Sydney) Limited; or
(viii) a body corporate that is declared by the regulations to be a stock exchange for the purposes of that Chapter; or
(c) in this Chapter or Chapter 7—any of the following:
(i) the Exchange;
(ii) Australian Stock Exchange (Adelaide) Limited;
(iii) Australian Stock Exchange (Brisbane) Limited;
(iv) Australian Stock Exchange (Hobart) Limited;
(v) Australian Stock Exchange (Melbourne) Limited;
(vi) Australian Stock Exchange (Perth) Limited;
(vii) Australian Stock Exchange (Sydney) Limited;
(viii) the Stock Exchange of Bendigo Limited;
(ix) the Stock Exchange of Ballarat Limited;
(x) the Stock Exchange of Newcastle Limited;
(xi) a body corporate in relation to which an approval under section 769 is in force.
stock market means, subject to section 97, a market, exchange or other place at which, or a facility by means of which:
(a) offers to sell, purchase or exchange securities are regularly made or accepted; or
(b) offers or invitations are regularly made, being offers or invitations that are intended, or may reasonably be expected, to result, whether directly or indirectly, in the making or acceptance of offers to sell, purchase or exchange securities; or
(c) information is regularly provided about the prices at which, or the consideration for which, particular persons, or particular classes of persons, propose, or may reasonably be expected, to sell, purchase or exchange securities.
subscriber for securities that are interests in a managed investment scheme means any person:
(a) accepting an offer, or making an offer pursuant to an invitation, in respect of the interests; or
(b) subscribing for or buying the interests.
subsection 1337B(3) proceeding means a proceeding with respect to a matter referred to in subsection 1337B(3).
subsidiary, in relation to a body corporate, means a body corporate that is a subsidiary of the first‑mentioned body by virtue of Division 6.
substantial holding: A person has a substantial holding in a body corporate, or listed registered managed investment scheme, if:
(a) the total votes attached to voting shares in the body, or voting interests in the scheme, in which they or their associates:
(i) have relevant interests; and
(ii) would have a relevant interest but for subsection 609(6) (exchange traded options) or 609(7) (conditional agreements);
is 5% or more of the total number of votes attached to voting shares in the body, or interests in the scheme; or
(b) the person has made a takeover bid for voting shares in the body, or voting interests in the scheme, and the takeover period has started and not yet ended.
Note: For relevant interest, see section 608.
substantial part, in relation to activities, includes the whole of those activities.
superior court means the Federal Court of Australia, the Supreme Court of a State or Territory, the Family Court or a State Family Court.
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.
suspend, in relation to a licence, includes, except in sections 827 and 1192, make under section 827 or 1192, as the case requires, an order prohibiting the licensee as mentioned in paragraph 827(1)(d) or 1192(1)(d).
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).
time‑sharing scheme means a scheme, undertaking or enterprise, whether in Australia or elsewhere:
(a) participants in which are, or may become, entitled to use, occupy or possess, for 2 or more periods during the period for which the scheme, undertaking or enterprise is to operate, property to which the scheme, undertaking or enterprise relates; and
(b) that is to operate for a period of not less than 3 years.
trade, in relation to securities, in relation to a stock market, includes:
(a) make or accept on that stock market an offer to sell, buy or exchange the securities; and
(b) make on that stock market an offer or invitation that is intended, or may reasonably be expected, to result in the making or acceptance of an offer to sell, buy or exchange the securities.
trading day of a securities exchange or stock exchange means a day on which a stock market of the exchange or stock exchange is open for trading in securities.
trading floor, in relation to a futures market conducted by a body corporate, means a place or facility that the body maintains or provides for the acquisition or disposal of futures contracts by members of the body, or by such members and other persons.
transaction, in Part 5.7B, in relation to a body corporate or Part 5.7 body, means a transaction to which the body is a party, for example (but without limitation):
(a) a conveyance, transfer or other disposition by the body of property of the body; and
(b) a charge created by the body on property of the body; and
(c) a guarantee given by the body; and
(d) a payment made by the body; and
(e) an obligation incurred by the body; and
(f) a release or waiver by the body; and
(g) a loan to the body;
and includes such a transaction that has been completed or given effect to, or that has terminated.
transmission means a transmission, by means of electric or electromagnetic energy, of:
(a) sounds, including speech and music; or
(b) visual images; or
(c) signals for the communication, whether as between persons and persons, persons and things or things and things, of any matter otherwise than in the form of sounds or visual images; or
(d) signals for the actuation or control of machinery or apparatus.
transparency, in relation to a document, means:
(a) a developed negative or positive photograph of that document (in this definition called an original photograph) made, on a transparent base, by means of light reflected from, or transmitted through, the document; or
(b) a copy of an original photograph made by the use of photo‑sensitive material (being photo‑sensitive material on a transparent base) placed in surface contact with the original photograph; or
(c) any one of a series of copies of an original photograph, the first of the series being made by the use of photo‑sensitive material (being photo‑sensitive material on a transparent base) placed in surface contact with a copy referred to in paragraph (b), and each succeeding copy in the series being made, in the same manner, from any preceding copy in the series.
Tribunal means the Administrative Appeals Tribunal.
ultimate holding company, in relation to a body corporate, means a body corporate that:
(a) is a holding company of the first‑mentioned body; and
(b) is itself a subsidiary of no body corporate.
unauthorised futures market means a futures market that is neither a futures market of a futures exchange nor an exempt futures market.
unauthorised stock market means a stock market that is not:
(a) a stock market of a securities exchange; or
(b) a section 770A stock market; or
(c) an exempt stock market.
unclaimed money account means an account that:
(a) ASIC maintains under section 63J of the Audit Act 1901; and
(b) is maintained for the sole purpose of containing money that is unclaimed property.
unclaimed property means:
(a) property paid or transferred to ASIC under a provision of this Act that provides for property to be transferred, or for the Court to direct that property be transferred, to ASIC to be dealt with under Part 9.7; or
(b) any other property that a provision of this Act provides for ASIC to deal with under Part 9.7; or
(c) property that vests in ASIC under section 1404; or
(d) an accretion to, or substitution for, property that is unclaimed property because of any other application or applications of this definition; or
(e) without limiting paragraph (d), money paid, or required to be paid, under paragraph 1339(2)(b) into an unclaimed money account;
but does not include income that the Minister has applied under subsection 1339(3).
uncommercial transaction has the meaning given by section 588FB.
underlying securities means:
(a) in relation to an option over securities—those securities; and
(b) in relation to scrip that is constituted by documents that are, or are documents of title to, securities—those securities.
undertaking, in relation to a managed investment scheme, means the undertaking, scheme, enterprise, contract or arrangement to which the scheme relates.
underwrite includes sub‑underwrite.
unfair loan has the meaning given by section 588FD.
unfair preference has the meaning given by section 588FA.
unit, in relation to a share, debenture or other interest, means a right or interest, whether legal or equitable, in the share, debenture or other interest, by whatever term called, and includes an option to acquire such a right or interest in the share, debenture or other interest.
unlimited company means a company whose members have no limit placed on their liability.
unlisted disclosing entity has the meaning given by subsection 111AL(2).
unsecured, in relation to a debt, has in Part 5.7B a meaning affected by section 588D.
value, in relation to an asset, includes amount.
voting interest, in relation to a managed investment scheme, means an issued interest in the scheme that confers a right to vote, not being a right to vote that is exercisable only in one or more of the following circumstances:
(a) on a proposal that affects rights attached to the interests;
(b) on a proposal to wind up the scheme;
(c) on a proposal for the disposal of the whole of the scheme property, business and undertaking;
(d) during the winding up of the scheme.
voting power in a company has the meaning given by section 610.
voting share in a body corporate means an issued share in the body that carries any voting rights beyond the following:
(a) a right to vote while a dividend (or part of a dividend) in respect of the share is unpaid;
(b) a right to vote on a proposal to reduce the body’s share capital;
(c) a right to vote on a resolution to approve the terms of a buy‑back agreement;
(d) a right to vote on a proposal that affects the rights attached to the share;
(e) a right to vote on a proposal to wind the body up;
(f) a right to vote on a proposal for the disposal of the whole of the body’s property, business and undertaking;
(g) a right to vote during the body’s winding up.
wages, in relation to a company, means amounts payable to or in respect of an employee of the company (whether the employee is remunerated by salary, wages, commission or otherwise) under an industrial instrument, including amounts payable by way of allowance or reimbursement but excluding amounts payable in respect of leave of absence.
wholly‑owned subsidiary, in relation to a body corporate, means a body corporate none of whose members is a person other than:
(a) the first‑mentioned body; or
(b) a nominee of the first‑mentioned body; or
(c) a subsidiary of the first‑mentioned body, being a subsidiary none of whose members is a person other than:
(i) the first‑mentioned body; or
(ii) a nominee of the first‑mentioned body; or
(d) a nominee of such a subsidiary.
winding up by the Court includes winding up in insolvency.
wound up by the Court includes wound up in insolvency.
(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.
If the primary person is a body corporate, the associate reference includes a reference to:
(a) a director or secretary of the body; and
(b) a related body corporate; and
(c) a director or secretary of a related body corporate.
(1) If the associate reference relates to:
(a) the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a body corporate; or
(b) the primary person’s voting power in a body corporate; or
(c) a takeover bid for securities in a body corporate;
it includes a reference to a person with whom the primary person has, or proposes to enter into, a relevant agreement:
(d) because of which one of those persons has or will have power (even if it is in any way qualified):
(i) to exercise; or
(ii) to control, directly or indirectly, the exercise of; or
(iii) to influence substantially the exercise of;
any voting power attached to shares in the body;
(e) for the purpose of controlling or influencing:
(i) the composition of the body’s board; or
(ii) the conduct of affairs of the body;
(f) under which one of those persons:
(i) will or may acquire; or
(ii) may be required by the other to acquire;
shares in the body in which the other has a relevant interest; or
(g) under which one of those persons may be required to dispose of shares in the body in accordance with the other’s directions;
whatever other effect the relevant agreement may have.
(2) In relation to a matter relating to shares in a body corporate, a person may be an associate of the body and the body may be an associate of a person.
If the associate reference occurs in Chapter 7 and relates to a matter that is not of a kind referred to in paragraph 12(1)(a), (b) or (c), it includes a reference to:
(a) a person in partnership with whom the primary person carries on a securities 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 securities 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 securities 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 securities business.
If it occurs in section 29 or 1323 or Chapter 8, the associate reference includes a reference to:
(a) a person in partnership with whom the primary person carries on a business of dealing in futures contracts; and
(b) subject to subsection 16(2), a person who is a partner of the primary person otherwise than because of carrying on in partnership with the primary person a business of dealing in futures contracts; 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 business of dealing in futures contracts; 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 business of dealing in futures contracts.
(1) The associate reference includes a reference to:
(a) a person in concert with whom the primary person is acting, or proposes to act; and
(b) a person who, under the regulations, is, for the purposes of the provision in which the associate reference occurs, an associate of the primary person; and
(c) a person with whom the primary person is, or proposes to become, associated, whether formally or informally, in any other way;
in respect of the matter to which the associate reference relates.
(2) If the primary person has entered, or proposes to enter, into a transaction, or has done, or proposes to do, any act or thing, in order to become associated with another person as mentioned in an applicable provision of this Division, the associate reference includes a reference to that other person.
(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 securities, to acquire shares 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) or 14(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.
A reference to an associate, in relation to a dealer, investment adviser, futures broker or futures adviser, is, if 2 or more persons constitute the dealer, investment adviser, futures broker or futures adviser, a reference to an associate of any of those persons.
A reference to a person carrying on business, carrying on a business, or carrying on a business of a particular kind, includes a reference to the person carrying on business, carrying on a business, or carrying on a business of that kind, as the case may be:
(a) in any case—otherwise than for profit; or
(b) in the case of a body corporate—otherwise than for the profit of the members or corporators of the body.
A reference to a business of a particular kind includes a reference to a business of that kind that is part of, or is carried on in conjunction with, any other business.
A reference in this Act to a person carrying on a business, or a business of a particular kind, is a reference to the person carrying on a business, or a business of that kind, whether alone or together with any other person or persons.
(1) A body corporate that has a place of business in Australia, or in a State or Territory, carries on business in Australia, or in that State or Territory, as the case may be.
(2) A reference to a body corporate carrying on business in Australia, or in a State or Territory, includes a reference to the body:
(a) establishing or using a share transfer office or share registration office in Australia, or in the State or Territory, as the case may be; or
(b) administering, managing, or otherwise dealing with, property situated in Australia, or in the State or Territory, as the case may be, as an agent, legal personal representative or trustee, whether by employees or agents or otherwise.
(3) Despite subsection (2), a body corporate does not carry on business in Australia, or in a State or Territory, merely because, in Australia, or in the State or Territory, as the case may be, the body:
(a) is or becomes a party to a proceeding or effects settlement of a proceeding or of a claim or dispute; or
(b) holds meetings of its directors or shareholders or carries on other activities concerning its internal affairs; or
(c) maintains a bank account; or
(d) effects a sale through an independent contractor; or
(e) solicits or procures an order that becomes a binding contract only if the order is accepted outside Australia, or the State or Territory, as the case may be; or
(f) creates evidence of a debt, or creates a charge on property; or
(g) secures or collects any of its debts or enforces its rights in regard to any securities relating to such debts; or
(h) conducts an isolated transaction that is completed within a period of 31 days, not being one of a number of similar transactions repeated from time to time; or
(j) invests any of its funds or holds any property.
(1) A person acquires a futures contract (other than a futures option or an eligible exchange‑traded option) if, and only if, the person enters into, or takes an assignment of, the futures contract, whether or not on another’s behalf.
(2) A person acquires a futures option or an eligible exchange‑traded option if, and only if, the person takes the option, or takes an assignment of the option, whether or not on another’s behalf.
(3) This section has effect subject to sections 26 and 27.
(1) A person disposes of a futures contract (other than a futures option or an eligible exchange‑traded option) if, and only if, the person takes, or causes to be taken, such action as closes out the futures contract, whether or not the action is taken on another’s behalf.
(2) A person disposes of a futures option or an eligible exchange‑traded option if, and only if, the person:
(a) grants, assigns or exercises the option; or
(b) takes, or causes to be taken, such action as releases the option; or
(c) allows the option to lapse;
whether or not on another’s behalf.
(3) This section has effect subject to sections 26 and 27.
(1) Subject to sections 26 and 27, a person deals in a futures contract if, and only if, the person:
(a) acquires, or disposes of, the futures contract; or
(b) offers to acquire, or to dispose of, the futures contract; or
(c) induces, or attempts to induce, another person to acquire, or to dispose of, the futures contract.
(2) Subject to sections 26 and 27, a person deals in a futures contract on another person’s behalf if, and only if, the first‑mentioned person acquires, or disposes of, the futures contract on the other person’s behalf, or offers so to acquire, or so to dispose of, the futures contract.
(3) In determining whether or not a person who is not a resident of Australia or of an external Territory deals in a futures contract on another person’s behalf, an act that the holder of a futures brokers licence or an exempt broker does on the first‑mentioned person’s behalf is to be disregarded.
(4) Subsection (5) has effect for the purposes of determining:
(a) whether or not a person deals in a futures contract on another person’s behalf; and
(c) what constitutes such a business carried on by a person.
(5) An act that the person does:
(a) while employed by, or acting for or by arrangement with, a futures broker; and
(b) as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the broker; and
(c) in connection with a business of dealing in futures contracts that the broker carries on;
is to be disregarded.
(6) Subsections (3), (4) and (5) do not have effect for the purposes of sections 26, 27, 28, 1126 and 1132.
Where a person acquires, disposes of, or otherwise deals in, a futures contract on another person’s behalf, the other person is also taken to acquire, dispose of, or deal in, as the case may be, the futures contract.
(1) Where:
(a) because of instructions given, or any other act done, by a person (in this section called the intermediary), the intermediary is, by virtue of:
(i) an application of section 26; or
(ii) an application of section 26 and an application, or 2 or more applications, of this section;
taken to acquire, dispose of, or deal in, a futures contract; and
(b) the intermediary gave the instructions, or did that other act, on behalf of another person (in this section called the principal);
this section has effect, except for the purposes of section 26.
(2) The principal is also taken to acquire, dispose of, or deal in, as the case may be, the futures contract.
(3) The intermediary and:
(a) if subparagraph (1)(a)(i) applies—the person who acquires, disposes of, or otherwise deals in, as the case may be; or
(b) if subparagraph (1)(a)(ii) applies—the persons who, by virtue of the applications referred to in that subparagraph, are each taken to acquire, dispose of, or deal in, as the case may be;
the futures contract on the intermediary’s behalf is each taken to acquire, dispose of, or deal in, as the case may be, the futures contract on the principal’s behalf.
(1) This section has effect where a person acquires, disposes of, or otherwise deals in, a futures contract on a futures market and by virtue of:
(a) an application of section 26; or
(b) an application of section 26 and an application or applications of section 27;
another person:
(c) is also taken to acquire, dispose of, or deal in, the futures contract; or
(d) is taken to acquire, dispose of, or deal in, the futures contract on a third person’s behalf.
(2) The other person is taken to acquire, dispose of, or deal in, the futures contract on that futures market, or on the third person’s behalf on that futures market, as the case may be.
(1) A reference to a person dealing in a futures contract, or entering into a transaction in relation to a futures contract, on the person’s own account includes a reference to a person so dealing, or entering into such a transaction, as the case may be, as principal or on behalf of:
(a) in any case—an associate of the person; or
(b) in any case—a body corporate in which the person has a controlling interest; or
(c) if the person carries on a futures broking business in partnership—a body corporate in which the person’s interests and the interests of the other partners together constitute a controlling interest.
(2) A futures broker who is a member of a futures exchange or of a recognised futures exchange does not deal in a futures contract, or enter into a transaction in relation to a futures contract, on the broker’s own account merely because the dealing is with, or the transaction is entered into with, another futures broker who is a member of a futures exchange or of a recognised futures exchange.
(3) Despite Division 2, a person is not an associate of another person for the purposes of subsection (1) merely because the first‑mentioned person is either or both of the following:
(a) a partner of the other person otherwise than because of carrying on in partnership with the other person a business of dealing in futures contracts;
(b) a director of a body corporate of which the other person is also a director, whether or not the body carries on a business of dealing in futures contracts.
(1) A proprietary company is a company that is registered as, or converts to, a proprietary company under this Act.
Note 1: A proprietary company can be registered under section 118 or 601BD. A company can convert to a proprietary company under Part 2B.7.
Note 2: A proprietary company must:
· be limited by shares or be an unlimited company with a share capital
· have no more than 50 non‑employee shareholders
· not do anything that would require disclosure to investors under Chapter 6D (except in limited circumstances).
(see section 113).
Small proprietary company
(2) A proprietary company is a small proprietary company for a financial year if it satisfies at least 2 of the following paragraphs:
(a) the consolidated gross operating revenue for the financial year of the company and the entities it controls (if any) is less than $10 million;
(b) the value of the consolidated gross assets at the end of the financial year of the company and the entities it controls (if any) is less than $5 million;
(c) the company and the entities it controls (if any) have fewer than 50 employees at the end of the financial year.
Note: A small proprietary company generally has reduced financial reporting requirements (see subsection 292(2)).
Large proprietary company
(3) A proprietary company is a large proprietary company for a financial year if it satisfies at least 2 of the following paragraphs:
(a) the consolidated gross operating revenue for the financial year of the company and the entities it controls (if any) is $10 million or more;
(b) the value of the consolidated gross assets at the end of the financial year of the company and the entities it controls (if any) is $5 million or more;
(c) the company and the entities it controls (if any) have 50 or more employees at the end of the financial year.
When a company controls an entity
(4) For the purposes of this section, the question whether a proprietary company controls an entity is to be decided in accordance with the accounting standards made for the purposes of paragraph 295(2)(d) (even if the standards do not otherwise apply to the company).
Counting employees
(5) In counting employees for the purposes of subsections (2) and (3), take part‑time employees into account as an appropriate fraction of a full‑time equivalent.
Accounting standards
(6) Consolidated gross operating revenue and the value of consolidated gross assets are to be calculated for the purposes of this section in accordance with accounting standards in force at the relevant time (even if the standard does not otherwise apply to the financial year of some or all of the companies concerned).
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.
Without limiting by implication the circumstances in which the composition of a body corporate’s board is taken to be controlled by another body corporate, the composition of the board is taken to be so controlled if the other body, by exercising a power exercisable (whether with or without the consent or concurrence of any other person) by it, can appoint or remove all, or the majority, of the directors of the first‑mentioned body, and, for the purposes of this Division, the other body is taken to have power to make such an appointment if:
(a) a person cannot be appointed as a director of the first‑mentioned body without the exercise by the other body of such a power in the person’s favour; or
(b) a person’s appointment as a director of the first‑mentioned body follows necessarily from the person being a director or other officer of the other body.
(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.
A reference in paragraph 46(b) or 48(3)(b) or subsection 48(5) to being a subsidiary, or to a subsidiary, of a body corporate includes a reference to being a subsidiary, or to a body corporate that is a subsidiary, as the case may be, of the first‑mentioned body by virtue of any other application or applications of this Division.
Where a body corporate is:
(a) a holding company of another body corporate; or
(b) a subsidiary of another body corporate; or
(c) a subsidiary of a holding company of another body corporate;
the first‑mentioned body and the other body are related to each other.
(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.
For the purposes of the definition of deal in section 9 and of Chapter 7, a person acquires shares in a body corporate if, and only if:
(a) the person acquires a relevant interest in those shares as a result of a transaction entered into by or on behalf of the person in relation to those shares, in relation to any other securities of that body corporate or in relation to securities of any other body corporate; or
(b) the person acquires any legal or equitable interest in securities of that body corporate or in securities of any other body corporate and, as a result of the acquisition, another person acquires a relevant interest in those shares.
A reference to doing an act or thing includes a reference to causing or authorising the act or thing to be done.
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.
For the purposes of the definition of examinable affairs in section 9, section 53AA 232, 233 or 234, paragraph 461(1)(e), section 487, subsection 1307(1) or section 1309, or of a prescribed provision of this Act, the affairs of a body corporate include:
(a) the promotion, formation, membership, control, business, trading, transactions and dealings (whether alone or jointly with any other person or persons and including transactions and dealings as agent, bailee or trustee), property (whether held alone or jointly with any other person or persons and including property held as agent, bailee or trustee), liabilities (including liabilities owed jointly with any other person or persons and liabilities as trustee), profits and other income, receipts, losses, outgoings and expenditure of the body; and
(b) in the case of a body corporate (not being an authorised trustee corporation) that is a trustee (but without limiting the generality of paragraph (a))—matters concerned with the ascertainment of the identity of the persons who are beneficiaries under the trust, their rights under the trust and any payments that they have received, or are entitled to receive, under the terms of the trust; and
(c) the internal management and proceedings of the body; and
(d) any act or thing done (including any contract made and any transaction entered into) by or on behalf of the body, or to or in relation to the body or its business or property, at a time when:
(i) a receiver, or a receiver and manager, is in possession of, or has control over, property of the body; or
(ii) the body is under administration; or
(iia) a deed of company arrangement executed by the body has not yet terminated; or
(iii) a compromise or arrangement made between the body and any other person or persons is being administered; or
(iv) the body is being wound up;
and, without limiting the generality of the foregoing, any conduct of such a receiver or such a receiver and manager, of an administrator of the body, of an administrator of such a deed of company arrangement, of a person administering such a compromise or arrangement or of a liquidator or provisional liquidator of the body; and
(e) the ownership of shares in, debentures of, and interests in a managed investment scheme made available by, the body; and
(f) the power of persons to exercise, or to control the exercise of, the rights to vote attached to shares in the body or to dispose of, or to exercise control over the disposal of, such shares; and
(g) matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the body or are or have been able to control or materially to influence the policy of the body; and
(h) the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of, or interests in a managed investment scheme made available by, the body; and
(j) where the body has made available interests in a managed investment scheme—any matters concerning the financial or business undertaking, scheme, common enterprise or investment contract to which the interests relate; and
(k) matters relating to or arising out of the audit of, or working papers or reports of an auditor concerning, any matters referred to in a preceding paragraph.
A body corporate’s business affairs include (without limitation):
(a) any of the body’s affairs (including anything that is included in the body’s affairs because of section 53); and
(b) matters concerned with ascertaining the corporations with which the body is or has been connected.
A natural person’s business affairs include (without limitation):
(a) the person’s examinable operations and examinable assets and liabilities; and
(b) any act done (including any contract made and any transaction entered into) by or on behalf of the person, or to or in relation to the person or his or her business or property, at a time when:
(i) the person was, under the Bankruptcy Act 1966 or the law of an external Territory, a bankrupt in respect of a bankruptcy from which the person had not been discharged; or
(ii) the person had, under a law of an external Territory or of a foreign country, the status of an undischarged bankrupt; or
(iii) the person’s property was subject to control under Division 2 of Part X of the Bankruptcy Act 1966 because of an authority given by the person under section 188 of that Act; or
(iv) a deed of assignment, deed of arrangement, or composition, under Part X of the Bankruptcy Act 1966 or under the corresponding provisions of the law of an external Territory or of a foreign country was in effect in relation to the person or the person’s property; and
(c) without limiting the generality of paragraph (b), any conduct of the trustee of such a bankrupt estate or of such a deed of assignment or arrangement, a person acting under such an authority or a person administering such a composition; and
(d) matters concerned with ascertaining the corporations with which the person is or has been connected.
A partnership’s business affairs include (without limitation):
(a) the partnership’s promotion, formation, membership, control, examinable operations and examinable assets and liabilities; and
(b) the partnership’s management and proceedings; and
(c) any act done (including any contract made and any transaction entered into) by or on behalf of the partnership, or to or in relation to the partnership, at a time when the partnership is being wound up; and
(d) matters concerned with ascertaining the corporations with which the partnership is or has been connected.
A trust’s business affairs include (without limitation):
(a) the creation of the trust; and
(b) matters arising under, or otherwise relating to, the terms of the trust; and
(c) the appointment and removal of a trustee of the trust; and
(d) the business, trading, transactions and dealings of the trustee of the trust; and
(e) the profits, income and receipts of the trustee of the trust; and
(f) the losses, outgoings and expenditure of the trustee of the trust; and
(g) the trust property, including transactions and dealings in, and the income arising from, the trust property; and
(h) the liabilities of the trustee of the trust; and
(j) the management of the trust; and
(k) any act done (including any contract made and any transaction entered into) by or on behalf of the trustee of the trust, or to or in relation to the trust, at a time when the trust is being wound up; and
(l) matters concerned with ascertaining the corporations with which the trust is or has been connected.
A Chapter 8 agreement is of the same kind as another Chapter 8 agreement if, and only if, the provisions of the first‑mentioned Chapter 8 agreement are the same as, or not materially different from, the provisions of the other Chapter 8 agreement, disregarding:
(a) the fact that the parties to the respective Chapter 8 agreements are different; and
(b) any difference in the amounts payable under corresponding provisions of the respective Chapter 8 agreements.
(1) A Chapter 8 obligation, or a Chapter 8 right, is an obligation or right, as the case may be, whether or not enforceable at law or in equity.
(2) A reference to a Chapter 8 obligation of a particular kind includes a reference to alternative Chapter 8 obligations one of which is a Chapter 8 obligation of that kind.
A reference to a member, in relation to a body corporate that is, or proposes to become, a futures organisation, is, if the body may operate otherwise than as a futures organisation and any of the rules, regulations or by‑laws made by the body or contained in its constituent documents provide for:
(a) a separate class of membership for persons to whom the operation of the body otherwise than as a futures organisation relates (whether or not such persons may be members within another class of membership); or
(b) 2 or more such separate classes of membership;
a reference to a person in the person’s capacity as a member of the body in a class of membership other than that separate class or those separate classes, as the case may be.
(1) The shares in a body corporate, if not divided into 2 or more classes, constitute a class.
(2) If the interests in a managed investment scheme to which an undertaking relates are not divided into 2 or more classes, they constitute a class.
(1) Subject to this section, in this Act, corporation includes:
(a) a company; and
(b) any body corporate (whether incorporated in this jurisdiction or elsewhere); and
(c) an unincorporated body that under the law of its place of origin, may sue or be sued, or may hold property in the name of its secretary or of an officer of the body duly appointed for that purpose.
(2) Neither of the following is a corporation:
(a) an exempt public authority;
(b) a corporation sole.
(1) Subject to subsection (2), in this Act:
court means any court.
Court means any of the following courts:
(a) the Federal Court;
(b) the Supreme Court of a State or Territory;
(c) the Family Court of Australia;
(d) a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.
(2) Except where there is a clear expression of a contrary intention (for example, by use of the expression “the Court”), proceedings in relation to a matter under this Act may, subject to Part 9.7, be brought in any court.
Note: The matters dealt with in Part 9.7 include the applicability of limits on the jurisdictional competence of courts.
(2) Subject to subsection (3), an act required to be done under this Act may, for the purposes of this Act, be done anywhere in Australia, whether in or outside this jurisdiction.
(3) Nothing in subsection (2) affects the operation of any provision of this Act that:
(a) expressly requires a particular act to be done in this jurisdiction; or
(b) expressly or by implication permits a particular act to be done outside Australia.
A reference to a body corporate that offers debentures as consideration for the acquisition of shares in a body corporate includes a reference to a body corporate that offers a cash sum as consideration for the acquisition of shares where it is to be a term of the contract for the acquisition of those shares that the offeree makes, or that the sum is applied in whole or in part in making, a payment by way of deposit with, or loan to, the body corporate that offers the sum.
A reference to operation by a futures broker on a discretionary account is a reference to dealings by the broker in futures contracts on instructions of another person that authorise the broker to deal in futures contracts without the prior approval of that other person, whether:
(a) the instructions are given by, and the money used for operating on the account is provided by, one person only; or
(b) the instructions are given by, and the money used for operating on the account is contributed as a common fund by, each of a number of persons;
not being dealings on instructions that authorise dealings in futures contracts without the prior approval of that other person only as to the time when or the price at which the dealings are to be effected, or both.
A reference in section 51 or Chapter 6 to entering into a transaction in relation to shares or securities includes a reference to:
(a) entering into, or becoming a party to, a relevant agreement in relation to the shares or securities; and
(b) exercising an option to have the shares or securities allotted.
Except in Chapter 2E, a reference to an entity:
(a) is a reference to a natural person, a body corporate (other than an exempt public authority), a partnership or a trust; and
(b) includes, in the case of a trust, a reference to the trustee of the trust.
Body corporate
(1) A body corporate is connected with a corporation if, and only if, the corporation:
(a) can control, or influence materially, the body’s activities or internal affairs; or
(b) is a member of the body; or
(c) is in a position to cast, or to control the casting of, a vote at a general meeting of the body; or
(d) has power to dispose of, or to exercise control over the disposal of, a share in the body; or
(e) is financially interested in the body’s success or failure or apparent success or failure; or
(f) is owed a debt by the body; or
(g) is engaged by the body under a contract for services; or
(h) acts as agent for the body in any transaction or dealing.
Natural person
(2) A natural person is connected with a corporation if, and only if, the corporation:
(a) is a trustee of a trust under which the person is capable of benefiting; or
(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
(f) is a creditor of the trustee of the trust; or
(g) is engaged by the trustee of the trust under a contract for services; or
(h) acts as agent for the trustee of the trust in any transaction or dealing.
ASIC may declare a body corporate to be an authorised dealer in the short term money market by notice published in the Gazette.
A body corporate is an exempt body of a State or Territory if, and only if, it:
(a) is not a company; and
(b) is incorporated by or under a law of the State or Territory.
(1) A body corporate is both an exempt broker and an exempt futures adviser if it is:
(a) a prescribed body corporate; or
(b) an exempt public authority in relation to which a declaration is in force under subsection (2).
(2) The Minister may by writing declare that paragraph (1)(b) applies in relation to specified bodies corporate.
(3) ASIC must cause a copy of an instrument executed under subsection (2) to be published in the Gazette.
(4) Subject to this section, a person is an exempt broker or an exempt futures adviser if the person is a futures broker or futures adviser, as the case may be, but does not carry on a futures broking business or a futures advice business, as the case may be, except:
(a) as an official receiver or trustee within the meaning of the Bankruptcy Act 1966; or
(b) as a receiver, receiver and manager, or liquidator, appointed by a court; or
(c) as a person appointed by a court to carry on the business concerned; or
(d) as a receiver, receiver and manager, or liquidator, appointed otherwise than by a court; or
(e) as an administrator of a body corporate; or
(ea) as an administrator of a deed of company arrangement executed by a body corporate; or
(f) as a trustee or other person administering a compromise or arrangement between a body corporate and any other person or persons; or
(g) as a personal representative of a dead futures broker or futures adviser, as the case may be; or
(h) in such other capacity, or in such other circumstances, as are prescribed.
(5) A person who carries on a futures broking business or futures advice business in a capacity referred to in any of paragraphs (4)(d) to (g) (inclusive) is taken for the purposes of subsection (4) to carry on the business otherwise than in that capacity unless there is in force under subsection (6) an approval of the person carrying on the business in that capacity.
(6) ASIC may, on application by a person and after having regard to:
(a) the prescribed matters (if any); and
(b) such matters as it thinks appropriate;
by writing approve of the person carrying on a specified futures broking business or futures advice business in a specified capacity, being a capacity referred to in any of paragraphs (4)(d) to (g), inclusive.
(7) A person is not an exempt broker or an exempt futures adviser except as provided by this section.
(1) A person is both an exempt dealer and an exempt investment adviser if the person is:
(a) an eligible money market dealer; or
(b) an exempt public authority.
(2) Subject to this section, a person is an exempt dealer or an exempt investment adviser if the person is a dealer or investment adviser, as the case may be, but does not carry on a securities business or an investment advice business, as the case may be, except:
(a) as an official receiver or trustee within the meaning of the Bankruptcy Act 1966; or
(b) as a receiver, receiver and manager, or liquidator, appointed by a court; or
(c) as a person appointed by a court to carry on the business concerned; or
(d) by virtue of the person’s powers, as Public Trustee, under a prescribed law of a State or Territory; or
(e) as a receiver, receiver and manager, or liquidator, appointed otherwise than by a court; or
(f) as an administrator of a body corporate; or
(fa) as an administrator of a deed of company arrangement executed by a body corporate; or
(g) as a trustee or other person administering a compromise or arrangement between a body corporate and any other person or persons; or
(h) as a personal representative of a dead dealer or investment adviser, as the case may be; or
(j) in such other capacity, or in such other circumstances, as are prescribed.
(3) A body corporate that carries on, or holds itself out as carrying on, a business of dealing in debentures of that body is an exempt dealer if it neither carries on, nor holds itself out as carrying on, a business of dealing in any other securities.
(4) A person who carries on a securities business or investment advice business in a capacity referred to in any of paragraphs (2)(e) to (h) (inclusive) is taken for the purposes of subsection (2) to carry on the business otherwise than in that capacity unless there is in force under subsection (5) an approval of the person carrying on the business in that capacity.
(5) ASIC may, on application by a person and after having regard to:
(a) the prescribed matters (if any); and
(b) such matters as it thinks appropriate;
by writing approve of the person carrying on a specified securities business or investment advice business in a specified capacity, being a capacity referred to in any of paragraphs (2)(e) to (h), inclusive.
(6) A person who carries on a securities business or investment advice business as a personal representative of a dead dealer or investment adviser, as the case may be, is taken for the purposes of subsection (2) to stop carrying on that business as such a personal representative:
(a) at the end of 6 months after the death of the dealer or investment adviser; or
(b) on being discharged or removed as a personal representative of the dealer or investment adviser; or
(c) on the final distribution of the estate of the dealer or investment adviser;
whichever happens first.
(7) A person is not an exempt dealer or an exempt investment adviser except as provided by this section.
Where this Act confers power to extend the period for doing an act, an application for the exercise of the power may be made, and the power may be exercised, even if the period, or the period as last extended, as the case requires, has ended.
(1) A reference to a futures advice business, in relation to a person, is a reference to:
(a) a business of advising other persons about futures contracts; or
(b) a business in the course of which the person publishes futures reports.
(3) The remaining provisions of this subsection apply for the purposes of determining:
(a) whether or not a person carries on a futures advice business; and
(b) what constitutes a futures advice business carried on by a person; and
(c) whether or not a person holds himself, herself or itself out to be a futures adviser.
(4) If the person is a solicitor or accountant in public practice as such, an act that the person does is to be disregarded if it is merely incidental to the practice of his or her profession.
(5) The fact that the person advises other persons about futures contracts, or publishes futures reports, in some or all of the following circumstances is to be disregarded:
(a) in a newspaper or periodical:
(i) of which the person is the proprietor or publisher; and
(ii) that is generally available to the public otherwise than only on subscription;
(b) in the course of, or by means of, transmissions that:
(i) the person makes by means of an information service; or
(ii) are made by means of an information service that the person owns, operates or makes available;
and are generally available to the public;
(c) in sound recordings, video recordings, or data recordings, that the person makes generally available to the public in either or both of the following ways:
(i) by supplying copies of them to the public;
(ii) by causing the sound recordings to be heard by, the video recordings to be seen and heard by, or the contents of the data recordings to be displayed or reproduced for, the public, as the case may be.
(6) Subsection (5) does not apply in relation to a newspaper or periodical, or transmissions, sound recordings, video recordings or data recordings, whose sole or principal purpose is to advise other persons about futures contracts or to publish futures reports.
(7) The fact that the person holds himself, herself or itself out as advising other persons, or publishing futures reports, as mentioned in subsection (5) is to be disregarded.
(8) An act that the person does:
(a) while employed by, or acting for or by arrangement with, another person; and
(b) as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the other person; and
(c) in connection with a futures advice business carried on by the other person;
is to be disregarded.
(1) A futures contract is:
(a) a Chapter 8 agreement that is, or has at any time been, an eligible commodity agreement or adjustment agreement; or
(b) a futures option; or
(c) an eligible exchange‑traded option;
other than:
(d) a Chapter 8 agreement:
(i) that is:
(A) a currency swap; or
(B) an interest rate swap; or
(C) a forward exchange rate contract; or
(D) a forward interest rate contract; and
(ii) to which an Australian bank, or a merchant bank as defined by subsection (4), is a party; or
(e) a Chapter 8 agreement that, when entered into, is in a class of agreements prescribed for the purposes of this paragraph.
Note: Regulations under subsection 72A(2) may provide that specified provisions of this Act and the regulations apply in relation to Chapter 8 agreements to which section 72A applies as if the agreements were futures contracts.
(2) Where a Chapter 8 agreement that was not a futures contract when it was entered into becomes a futures contract at a later time:
(a) the parties to the Chapter 8 agreement are taken to enter into a futures contract at the later time; and
(b) the Chapter 8 agreement is taken to constitute the futures contract referred to in paragraph (a).
(3) Nothing in this Act limits the manner in which a class of futures contracts may be determined and such a class may be determined according to any criteria relevant to futures contracts.
(4) For the purposes of subparagraph (1)(d)(ii), a body corporate is a merchant bank at a particular time if, and only if, it is at that time a registered corporation in:
(a) the category for authorised money market dealers or, if there is at that time no such category, a prescribed category; or
(b) the category for money market corporations or, if there is at that time no such category, a prescribed category.
(5) An expression has the same meaning in subsection (4) as in the Financial Corporations Act 1974.
(1) This section applies to Chapter 8 agreements:
(a) that are entered into on a futures market of a futures exchange; and
(b) that are of a kind prescribed for the purposes of this paragraph.
(2) The regulations may, in relation to Chapter 8 agreements to which this section applies:
(a) provide that specified provisions of this Act and the regulations apply in relation to the agreements as if the agreements were futures contracts; and
(b) provide that specified provisions of this Act and the regulations do not apply in relation to the agreements; and
(c) make modifications of this Act and the regulations as applying in relation to the agreements.
(3) Modifications made by regulations referred to in paragraph (2)(c) may be of provisions specified in regulations referred to in paragraph (2)(a) or of other provisions of this Act or the regulations.
(1) Subject to subsection (2), a person is a futures representative of another person if, and only if, the first‑mentioned person:
(a) is employed by; or
(b) acts for or by arrangement with;
the other person in connection with a futures broking business or futures advice business carried on by the other person.
(2) Except for the purposes of paragraph 87(1)(b):
(a) a person who holds a proper authority from a futures licensee is a futures representative of the licensee; and
(b) a person who holds an invalid futures authority from another person is a futures representative of the other person.
(3) Subject to subsection (4), a person does an act, or engages in conduct, as a futures representative of another person if, and only if, the first‑mentioned person does the act, or engages in the conduct:
(a) in connection with a futures broking business or futures advice business carried on by the other person; and
(b) while the first‑mentioned person is a futures representative of the other person; and
(c) as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the other person; and
(d) otherwise than in the course of work of a kind ordinarily done by accountants, clerks or cashiers.
(4) Except for the purposes of Division 4 of Part 8.3, a person who holds himself, herself or itself out to be a futures representative of another person does an act as a futures representative of the other person.
An Australian court finds a person guilty of an offence if, and only if:
(a) the court convicts the person of the offence; or
(b) the person is charged before the court with the offence and is found in the court to have committed the offence, but the court does not proceed to convict the person of the offence.
A reference to a body corporate or other person included in an official list of a body corporate is a reference to:
(a) a body corporate or other person whose name is included in that official list; or
(b) a body corporate or other person whose name has been changed but whose previous name was included in that official list immediately before the change and is still so included.
(1) A reference to an investment advice business, in relation to a person, is a reference to:
(a) a business of advising other persons about securities; or
(b) a business in the course of which the person publishes securities reports.
(3) The remaining provisions of this section apply for the purposes of determining:
(a) whether or not a person carries on an investment advice business; and
(b) what constitutes an investment advice business carried on by a person; and
(c) whether or not a person holds himself, herself, or itself out to be an investment adviser.
(4) If the person is a body corporate authorised by a law of a State or Territory to take in its own name a grant of probate of the will, or a grant of letters of administration of the estate, of a dead person, an act done by the first‑mentioned person is to be disregarded.
(5) If the person is a solicitor or accountant in public practice as such, an act that the person does is to be disregarded if it is merely incidental to the practice of his or her profession.
(6) The fact that the person advises other persons about securities, or publishes securities reports, in some or all of the following circumstances is to be disregarded:
(a) in a newspaper or periodical:
(i) of which the person is the proprietor or publisher; and
(ii) that is generally available to the public otherwise than only on subscription;
(b) in the course of, or by means of, transmissions that:
(i) the person makes by means of an information service; or
(ii) are made by means of an information service that the person owns, operates or makes available;
and are generally available to the public;
(c) in sound recordings, video recordings, or data recordings, that the person makes generally available to the public in either or both of the following ways:
(i) by supplying copies of them to the public; or
(ii) by causing the sound recordings to be heard by, the video recordings to be seen and heard by, or the contents of the data recordings to be displayed or reproduced for, the public, as the case may be.
(7) Subsection (6) does not apply in relation to a newspaper or periodical, or transmissions, sound recordings, video recordings or data recordings, as the case may be, whose sole or principal purpose is to advise other persons about securities or to publish securities reports.
(8) The fact that the person holds himself, herself or itself out as advising other persons, or publishing securities reports, as mentioned in subsection (6) is to be disregarded.
(9) An act that the person does:
(a) while employed by, or acting for or by arrangement with, another person; and
(b) as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the other person; and
(c) in connection with an investment advice business carried on by the other person;
is to be disregarded.
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.
The Jervis Bay Territory is taken to be part of the Australian Capital Territory.
A reference in this Act to, or to the making of, an offer to the public or to, or to the issuing of, an invitation to the public is, unless the contrary intention appears, to be construed as including a reference to, or to the making of, an offer to any section of the public or to, or to the issuing of, an invitation to any section of the public, as the case may be, whether selected as clients of the person making the offer or issuing the invitation or in any other manner and notwithstanding that the offer is capable of acceptance only by each person to whom it is made or that an offer or application may be made pursuant to the invitation only by a person to whom the invitation is issued, but a bona fide offer or invitation is not taken to be an offer or invitation to the public if it:
(a) is an offer or invitation to enter into an underwriting agreement; or
(b) is made or issued to a person whose ordinary business is to buy or sell shares, debentures or interests in managed investment schemes, whether as principal or agent; or
(c) is made or issued to existing members or debenture holders of a corporation and relates to shares in, or debentures of, that corporation; or
(d) is made or issued to existing members of a company in connection with a proposal referred to in section 507 and relates to shares in that company.
(1) Subject to subsection (2), officer, in relation to:
(a) a body corporate; or
(b) an entity;
includes:
(c) a director, secretary, executive officer or employee of the body or entity; and
(d) a receiver and manager, appointed under a power contained in an instrument, of property of the body or entity; and
(e) an administrator of the body or entity; and
(ea) an administrator of a deed of company arrangement executed by the body or entity; and
(f) a liquidator of the body or entity appointed in a voluntary winding up of the body or entity; and
(g) a trustee or other person administering a compromise or arrangement made between the body or entity and any other person or persons.
(2) None of the following is an officer of a body corporate, or of an entity:
(a) a receiver who is not also a manager;
(b) a receiver and manager appointed by a court;
(c) a liquidator appointed by a court.
A reference, in relation to a contravention, to an officer of a body corporate, or to a person, who is in default is a reference to an officer of the body (including a person who later ceases to be such an officer), or to a person, as the case may be, who is involved in the contravention.
A person deals in, or enters into a transaction of sale or purchase of, securities on the person’s own account if, and only if, the person deals in the securities, or enters into the transaction, as principal or on behalf of:
(a) in any case—an associate of the person; or
(b) in any case—a body corporate in which the person has a controlling interest; or
(c) if the person carries on a securities business in partnership—a body corporate in which the person’s interest and the interests of the other partners together constitute a controlling interest.
A thing that is in a person’s custody or under a person’s control is in the person’s possession.
(1) A reference, in relation to a person (in this subsection called the representative), to a proper authority from a futures licensee (in this subsection called the principal) is a reference to a copy of the licence on which have been endorsed:
(a) a statement:
(i) certifying the copy to be a true copy of the licence; and
(ii) stating that the representative is employed by, or acts for or by arrangement with, the principal; and
(iii) signed by the principal; and
(b) in relation to each futures licensee (if any), other than the principal, of whom the representative is a futures representative, a statement that:
(i) sets out the name of the licensee; and
(ii) states that the representative is employed by, or acts for or by arrangement with, the licensee; and
(iii) states that the licensee consents to the representative being employed by, or acting for or by arrangement with, the principal; and
(iv) is signed by the licensee.
(2) A reference, in relation to a person (in this subsection called the representative), to an invalid futures authority from a person (in this subsection called the principal) is a reference to a document:
(a) on which is endorsed a statement:
(i) stating that the representative is employed by, or acts for or by arrangement with, the principal; and
(ii) signed by the principal; and
(b) that purports to be a copy of a futures licence and to be a proper authority of the representative from the principal, but is not in fact such a proper authority;
whether or not:
(c) the principal is, or has ever been, a futures licensee; or
(d) the document is in fact a copy of a futures licence that exists or has ever existed.
(3) For the purposes of this section, a statement is signed by a person if, and only if, it is signed:
(a) if the person is a natural person—by the person; or
(b) if the person is a body corporate:
(i) by a director or secretary; or
(ii) by an executive officer who is authorised to sign the statement.
(1) A reference, in relation to a person (in this subsection called the representative), to a proper authority from a securities licensee (in this subsection called the principal) is a reference to a copy of the licence on which are endorsed:
(a) a statement:
(i) certifying the copy to be a true copy of the licence; and
(ii) stating that the representative is employed by, or acts for or by arrangement with, the principal; and
(iii) signed by the principal; and
(b) in relation to each licensee (if any), other than the principal, of whom the representative is a securities representative, a statement that:
(i) sets out the name of the licensee; and
(ii) states that the representative is employed by, or acts for or by arrangement with, the licensee; and
(iii) states that the licensee consents to the representative being employed by, or acting for or by arrangement with, the principal; and
(iv) is signed by the licensee.
(2) A reference, in relation to a person (in this subsection called the representative), to an invalid securities authority from a person (in this subsection called the principal) is a reference to a document:
(a) on which is endorsed a statement:
(i) stating that the representative is employed by, or acts for or by arrangement with, the principal; and
(ii) signed by the principal; and
(b) that purports to be a copy of a securities licence and to be a proper authority of the representative from the principal, but is not in fact such a proper authority;
whether or not:
(c) the principal is, or has ever been, a securities licensee; or
(d) the document is in fact a copy of a securities licence that exists or has ever existed.
(3) For the purposes of this section, a statement is signed by a person if, and only if, it is signed:
(a) if the person is a natural person—by the person; or
(b) if the person is a body corporate:
(i) by a director or secretary; or
(ii) by an executive officer who is authorised to sign the statement.
(1) Subject to this section, public document, in relation to a body, means:
(a) an instrument of, or purporting to be signed, issued or published by or on behalf of, the body that:
(i) when signed, issued or published, is intended to be lodged or is required by or under this Act or the ASIC Act to be lodged; or
(ii) is signed, issued or published under or for the purposes of this Act, the ASIC Act or any other Australian law; or
(b) an instrument of, or purporting to be signed or issued by or on behalf of, the body that is signed or issued in the course of, or for the purposes of, a particular transaction or dealing; or
(c) without limiting paragraph (a) or (b), a business letter, statement of account, invoice, receipt, order for goods, order for services or official notice of, or purporting to be signed or issued by or on behalf of, the body.
(2) A thing is not a public document of a body if it:
(a) is applied, or is intended or required to be applied:
(i) to goods; or
(ii) to a package, label, reel or thing in or with which goods are, or are to be, supplied; and
(b) is so applied, or is intended or required to be so applied, for a purpose connected with the supply of the goods.
(3) In subsection (2):
apply to includes print on, weave in, impress on, work into, or annex, affix or attach to.
label includes a band or ticket.
package includes:
(a) a covering, stopper, glass, bottle, vessel, box, capsule, case, frame or wrapper; or
(b) any other container or thing in which goods are, or are to be, packed.
(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.
A receiver of property of a body corporate is also a manager if the receiver manages, or has under the terms of the receiver’s appointment power to manage, affairs of the body.
(1) For the purposes of this Act, a person is taken to be or become subject to a section 206B prohibition if, and only if, the person is or becomes, as the case may be, by virtue of section 206B, prohibited as mentioned in that section.
(2) For the purposes of this Act, a person is taken to be or become subject to a section 206D order if, and only if, an order relating to the person is in force, or is made, as the case may be, under section 206D, and a reference in this Act to a section 599 order is a reference to an order so in force or made.
(3) For the purposes of this Act, a person is taken to be or become subject to a section 206E order if, and only if, an order relating to the person is in force, or is made, as the case may be, under section 206E, and a reference in this Act to a section 230 order is a reference to an order so in force or made.
(4) For the purposes of this Act, a person is taken to be or become subject to a section 206F notice if, and only if, a notice relating to the person is in force, or is served, as the case may be, under section 206F, and a reference in this Act to a section 600 notice is a reference to a notice so in force or served.
(5) For the purposes of this section, an order or notice that prohibits a person for a specified period from engaging in particular conduct is, unless sooner revoked, taken to cease to be in force at the end of that period.
(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
(ca) in Parts 7.3 to 7.6 (inclusive)—interests that would be interests in a managed investment scheme but for paragraph (h) of the definition of managed investment scheme in section 9; or
(d) units of such shares; or
(e) an option contract within the meaning of Chapter 7;
but does not include a futures contract or an excluded security.
Note: Regulations under subsection 92A(2) may provide that specified provisions of this Act and the regulations apply in relation to relevant agreements to which section 92A applies as if the agreements were securities.
(2) The expression securities, when used in relation to a body, means:
(a) shares in the body; or
(b) debentures of the body; or
(c) interests in a managed investment scheme made available by the body; or
(ca) in Parts 7.3 to 7.6 (inclusive)—interests made available by the body that would be interests in a managed investment scheme but for paragraph (h) of the definition of managed investment scheme in section 9; or
(d) units of such shares;
but does not include a futures contract or an excluded security.
(2A) In Parts 7.3 to 7.6 (inclusive):
securities includes an interest in a benefit fund (within the meaning of the Life Insurance Act 1995).
Note: See section 16B of the Life Insurance Act 1995.
(3) In Chapters 6 to 6D (inclusive):
securities means:
(a) shares in a body; or
(b) debentures of a body; or
(c) interests in a registered managed investment scheme; or
(d) legal or equitable rights or interests in:
(i) shares; or
(ii) debentures; or
(iii) interests in a registered managed investment scheme;
(e) options to acquire (whether by way of issue or transfer) a security covered by paragraph (a), (b), (c) or (d).
It does not cover a futures contract or an option approved by a securities exchange as an exchange traded option.
Note: Section 9 defines body and sections 9 and 72 define futures contract.
(1) This section applies to relevant agreements (whether or not they are futures contracts):
(a) that are entered into on a stock market of a securities exchange; and
(b) that are of a kind prescribed for the purposes of this paragraph.
(2) The regulations may, in relation to relevant agreements to which this section applies:
(a) provide that specified provisions of this Act and the regulations apply in relation to the agreements as if the agreements were securities; and
(b) provide that specified provisions of this Act and the regulations do not apply in relation to the agreements; and
(c) make modifications of this Act and the regulations as applying in relation to the agreements.
(3) Modifications made by regulations referred to in paragraph (2)(c) may be of provisions specified in regulations referred to in paragraph (2)(a) or of other provisions of this Act or the regulations.
(1) A securities business is a business of dealing in securities.
(3) Subsections (5), (6) and (7) apply for the purposes of determining:
(a) whether or not a person carries on, or holds himself, herself or itself out as carrying on, a securities business; and
(b) what constitutes such a business carried on by a person.
(4) Subsection (7) also applies for the purposes of determining whether or not a person deals in securities.
(5) An act done on behalf of the person by the holder of a dealers licence or an exempt dealer is to be disregarded.
(6) An act that the person does:
(a) while employed by, or acting for or by arrangement with, a dealer; and
(b) as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the dealer; and
(c) in connection with a securities business carried on by the dealer;
is to be disregarded.
(7) An act or acts done by the person that constitutes or together constitute a dealing by the person in a futures contract is to be disregarded.
(1) Subject to subsection (2), a person is a securities representative of another person if, and only if, the first‑mentioned person:
(a) is employed by; or
(b) acts for or by arrangement with;
the other person in connection with a securities business or investment advice business carried on by the other person.
(2) Except for the purposes of paragraph 88(1)(b):
(a) a person who holds a proper authority from a securities licensee is a securities representative of the licensee; and
(b) a person who holds an invalid securities authority from another person is a securities representative of the other person.
(3) Subject to subsection (4), a person does an act, or engages in conduct, as a securities representative of another person if, and only if, the first‑mentioned person does the act, or engages in the conduct:
(a) in connection with a securities business or investment advice business carried on by the other person; and
(b) while the first‑mentioned person is a securities representative of the other person; and
(c) as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the other person; and
(d) otherwise than in the course of work of a kind ordinarily done by accountants, clerks or cashiers.
(4) Except for the purposes of Division 4 of Part 7.3, a person who holds himself, herself or itself out to be a securities representative of another person does an act as a securities representative of the other person.
(1) A person is solvent if, and only if, the person is able to pay all the person’s debts, as and when they become due and payable.
(2) A person who is not solvent is insolvent.
(3) Section 922 defines when a person becomes insolvent for the purposes of Part 7.10.
In determining whether a market, exchange, place or facility is a stock market, regard is not to be had to the making at that market, exchange or other place, or by means of that facility, as the case may be, of futures contracts.
(1) Where a provision of this Act requires a notice to be lodged of, or information in an application to specify:
(a) the address of an office, or of a proposed office, of a body corporate or other person; or
(b) a change in the situation of an office of a body corporate or other person;
the notice:
(c) must specify the full address, or the full new address, as the case requires, of the relevant office including, where applicable, the number of the room and of the floor or level of the building on which the office is situated; and
(d) where the notice or application relates to the address or situation of an office of a body corporate and the address specified in accordance with paragraph (a) is the address of premises that are not to be occupied by the body corporate—must include a written statement to the effect that the person who occupies those premises has consented in writing to the address being specified in the notice or application and has not withdrawn that consent.
(2) ASIC may require a person who has lodged a notice or application that includes a statement under paragraph (1)(d) to produce to ASIC the consent referred to in the statement.
Nothing in this Act affects the operation of any provision of any law:
(a) relating to the admissibility in evidence, or any other use, in any proceedings, of a document in respect of which any applicable stamp duty has not been paid; or
(b) prohibiting the registration by a company of a transfer of securities if any stamp duty applicable in respect of the transfer has not been paid.
In relation to a body corporate the whole or a portion of whose share capital consists of stock, a reference to a number of shares (including a number expressed as a percentage) is, in relation to an amount of stock, a reference to the amount of stock that represents that number of shares.
An application to ASIC for the issuing of a document or the doing of any other act or thing by ASIC under this Act must be in writing.
Note: For electronic lodgment of documents with ASIC, see section 352.
102B In Australia or elsewhere, in this jurisdiction or elsewhere etc.
(1) The expression in Australia or elsewhere, or a similar expression, does not limit the generality of the expression in this jurisdiction or elsewhere or a similar expression.
(2) The expression outside this jurisdiction includes places outside 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.
(1) This section has effect except so far as this Act otherwise provides.
(2) An act, transaction, agreement, instrument, matter or thing is not invalid merely because of:
(a) a contravention of section 115, 208, 209, 601CA, 601CD or of Chapter 8; or
(b) a failure to comply with a requirement of this Act that a person cause a notice, or a copy of a document, to be published in the Gazette or in a newspaper.
(4) In this section:
invalid includes void, voidable and unenforceable.
(5) Nothing in this section limits the generality of anything else in it.
Where, in accordance with a provision of this Act other than the replaceable rules, a person requires another person to do, or prohibits another person from doing, a particular act, that provision is taken to require the other person to comply with the requirement or prohibition, as the case may be.
Without limiting subsection 36(1) of the Acts Interpretation Act 1901, in calculating how many days a particular day, act or event is before or after another day, act or event, the first‑mentioned day, or the day of the first‑mentioned act or event, is to be counted but not the other day, or the day of the other act or event.
For the purpose of the performance of a function, or the exercise of a power, under this Act by a Commission delegate, a reference to ASIC in a provision of this Act relating to the performance of the function, or the exercise of the power, includes a reference to the Commission delegate.
In determining whether a majority in value of creditors, or a particular proportion in value of creditors, has passed a resolution or done any other act or thing, if a creditor’s debt consists of a number of whole dollars and a part of a dollar, the part of the dollar is to be disregarded.
(1) Except so far as the contrary intention appears, a provision of this Act is to be interpreted in such a manner that any 2 or more references in the provision are capable of having the same referent or referents, or of having a referent or referents in common, as the case requires.
(2) In subsection (1), referent, in relation to a reference in a provision, means:
(a) in so far as the reference is interpreted as being in the singular number—a person to whom, or a thing or matter to which; or
(b) in so far as the reference is interpreted as being in the plural number—any one or 2 or more persons to whom, or of 2 or more things or matters to which;
the reference is taken, in the application of the provision, to refer.
(1) For the purposes of any law, a document may be served on a company by:
(a) leaving it at, or posting it to, the company’s registered office; or
(b) delivering a copy of the document personally to a director of the company who resides in Australia or in an external Territory; or
(c) if a liquidator of the company has been appointed—leaving it at, or posting it to, the address of the liquidator’s office in the most recent notice of that address lodged with ASIC; or
(d) if an administrator of the company has been appointed—leaving it at, or posting it to, the address of the administrator in the most recent notice of that address lodged with ASIC.
(2) For the purposes of any law, a document may be served on a director or company secretary (in addition to the methods of service set out in subsection (4)) by leaving it at, or posting it to, the alternative address notified to ASIC under subsection 5H(2), 117(2), 205B(1) or (4) or 601BC(2). However, this only applies to service on the director or company secretary:
(a) in their capacity as a director or company secretary; or
(b) for the purposes of a proceeding in respect of conduct they engaged in as a director or company secretary.
(3) Subsections (1) and (2) do not apply to a process, order or document that may be served under section 9 of the Service and Execution of Process Act 1992.
(6) This section does not affect the operation of a law or the power of a court to authorise a document to be served in a different way.
(7) This section applies to provisions of a law dealing with service whether it uses the expression “serve” or uses any other similar expression such as “give” or “send”.
The object of this Part is:
(a) to define disclosing entity and other key terms relevant to disclosing entities (this is done in Division 2); and
(b) to outline the significance for this Act of being a disclosing entity (this is done in Division 3); and
(c) to provide for exemptions from, and modifications of, the special requirements imposed by this Act in relation to disclosing entities (this is done in Division 4).
This Division contains definitions of the following terms:
(a) disclosing entity (section 111AC);
(b) ED securities (section 111AD);
(c) ED securities of a disclosing entity (section 111AK);
(d) listed disclosing entity (subsection 111AL(1));
(e) quoted ED securities (section 111AM);
(f) unlisted disclosing entity (subsection 111AL(2)).
(1) If any securities of a body (except interests in a managed investment scheme) are ED securities, the body is a disclosing entity for the purposes of this Act.
(2) If any interests in a managed investment scheme are ED securities, the undertaking to which the interests relate is a disclosing entity for the purposes of this Act.
(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, 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.
(1) Securities in a class of securities of a body are ED securities if securities in that class are quoted on a stock market of a securities exchange.
(2) Subsection (1) does not apply to securities of a body if:
(a) the body is a public authority of the Commonwealth or an instrumentality or agency of the Crown in right of the Commonwealth; and
(b) the only securities of the body that are quoted as mentioned in subsection (1) are debentures; and
(c) both the repayment of principal, and the payment of interest, in respect of those debentures is guaranteed by the Commonwealth.
(3) Subsection (1) does not apply to securities of a body that is:
(a) a public authority of a State or Territory; or
(b) an instrumentality or agency of the Crown in right of a State or Territory.
Securities (except debentures) in a class of securities of a body are ED securities if:
(a) a disclosure document in relation to securities in that class has been lodged with ASIC under Chapter 6D; or
(b) securities in that class have been issued pursuant to the disclosure document; and
(c) after an issue of securities in that class pursuant to the disclosure document, 100 or more persons held securities in that class; and
(d) securities in that class have been held by 100 or more persons at all times since the issue of securities referred to in paragraph (c).
(1) Securities (except debentures) in a class of securities of a body are ED securities if:
(a) securities in that class have been issued by the body as consideration for offers under an off‑market bid; and
(b) after an issue of securities in that class under the off‑market bid, 100 or more persons held securities in that class; and
(c) securities in that class have been held by 100 or more persons at all times since the issue of securities referred to in paragraph (b).
(2) Securities in a class of securities of a body are ED securities if:
(a) securities in that class have been issued as consideration for the acquisition or cancellation of securities of another body pursuant to a compromise or arrangement under Part 5.1; and
(b) securities in that class, or those or any other securities of the other body, were ED securities immediately before securities in that class were first issued pursuant to the compromise or arrangement; and
(c) after an issue of securities in that class pursuant to the compromise or arrangement, 100 or more persons held securities in that class; and
(d) securities in that class have been held by 100 or more persons at all times since the issue of securities referred to in paragraph (c).
(1) For the purposes of sections 111AF and 111AG, a person holds securities if, and only if:
(a) the person is registered as the holder of the securities in a register under section 169, 170, 171, 601CZB or 1070; or
(b) the person is entitled to be so registered.
(2) For the purposes of sections 111AF and 111AG, joint holders of securities count as one person.
Debentures of a borrower are ED securities if section 283AA requires the borrower to appoint a trustee.
(1) The regulations may declare specified securities of bodies not to be ED securities.
(2) Regulations in force for the purposes of subsection (1) have effect accordingly, despite anything else in this Division.
For the purposes of this Act, ED securities because of which (having regard to section 111AC) a disclosing entity is such an entity are ED securities of the entity.
(1) For the purposes of this Act, a disclosing entity is a listed disclosing entity if all or any ED securities of the entity are quoted ED securities.
(2) For the purposes of this Act, a disclosing entity that is not a listed disclosing entity is an unlisted disclosing entity.
For the purposes of this Act, ED securities are quoted ED securities if they are ED securities because of section 111AE.
This Division outlines the significance for this Act of being a disclosing entity.
A disclosing entity has to prepare financial statements and reports for half‑years as well as full financial years. These requirements are set out in Chapter 2M.
(1) A disclosing entity is subject to the continuous disclosure requirements of sections 1001A and 1001B.
(2) Section 1001A applies to listed disclosing entities and requires them to comply with certain obligations in the listing rules of a securities exchange requiring the notification of information.
(3) Section 1001B applies to unlisted disclosing entities and requires them to lodge documents containing information.
Section 713 applies (subject to certain qualifications) to prospectuses for quoted ED securities of disclosing entities. The section’s requirements for the content of prospectuses are less comprehensive than those that apply to other prospectuses under section 710.
(1) For the purposes of this Division, the disclosing entity provisions are the provisions of the following:
(a) Chapter 2M as it applies to disclosing entities;
(d) sections 1001A and 1001B.
(2) A reference in subsection (1) to a Part, Division or section includes a reference to regulations in force for the purposes of the Part, Division or section.
(1) The regulations may exempt specified persons from all or specified disclosing entity provisions:
(a) either generally or as otherwise specified; and
(b) either unconditionally or subject to specified conditions.
(2) Without limiting subsection (1), an exemption may relate to specified securities.
(1) ASIC may, by writing, exempt specified persons from all or specified disclosing entity provisions:
(a) either generally or as otherwise specified; and
(b) either unconditionally or subject to specified conditions.
(2) Without limiting subsection (1), an exemption may relate to specified securities.
(3) ASIC must cause a copy of an exemption to be published in the Gazette.
(1) A person must not intentionally or recklessly contravene a condition to which an exemption under section 111AS or 111AT is subject.
(2) If a person contravenes such a condition, the Court may, on the application of ASIC, order the person to comply with the condition.
(1) The regulations may make modifications of all or specified disclosing entity provisions.
(2) Without limiting subsection (1), a modification may relate to specified securities.
Exemptions and modifications under this Division have effect accordingly.
Nothing in this Division limits, or is limited by, any other exemption or modification power (for example, section 340, 341 or 741).
(1) If, because of:
(a) regulations made under this Act; or
(b) instruments issued by ASIC under this Act;
the small business guide as set out in Part 1.5 has become out of date, the regulations may set out modifications of the guide that would bring it up to date. The guide then is to be read as if it were so modified.
(2) The small business guide is divided into sections (numbered 1, 2, 3…) and the sections are divided into paragraphs (numbered 1.1, 1.2, 1.3…). For example, a reference in the guide to 3.1 is a reference to paragraph 3.1 of the guide.
This guide summarises the main rules in the Corporations Act (the Corporations Act 2001) that apply to proprietary companies limited by shares—the most common type of company used by small business. The guide gives a general overview of the Corporations Act as it applies to those companies and directs readers to the operative provisions in the Corporations Act.
The notes in square brackets at the end of paragraphs in the guide indicate the main provisions of the Corporations Act, the regulations made under the Corporations Act, and ASIC Practice Notes that are relevant to the information in the paragraphs.
Other Commonwealth, State and Territory laws also impose obligations on proprietary companies and their operators.
1.1 Separate legal entity that has its own powers
As far as the law is concerned, a company has a separate legal existence that is distinct from that of its owners, managers, operators, employees and agents. A company has its own property, its own rights and its own obligations. A company’s money and other assets belong to the company and must be used for the company’s purposes.
A company has the powers of an individual, including the powers to:
• own and dispose of property and other assets
• enter into contracts
• sue and be sued.
Once a company is registered, its separate legal status, property, rights and liabilities continue until ASIC (Australian Securities and Investments Commission) deregisters the company.
[sections 119, 124—125, 601AA—601AD]
1.2 Limited liability of shareholders
Shareholders of a company are not liable (in their capacity as shareholders) for the company’s debts. As shareholders, their only obligation is to pay the company any amount unpaid on their shares if they are called upon to do so. However, particularly if a shareholder is also a director, this limitation may be affected by other laws and the commercial practices discussed in 1.3 and 1.4.
[section 516]
1.3 Director’s liability for company’s debts
A director of a company may be liable for debts incurred by the company at a time when the company itself is unable to pay those debts as they fall due.
A director of a company may be liable to compensate the company for any losses the company suffers from a breach of certain of the director’s duties to the company (see 5.3).
In addition to having liability for the company’s debts or to pay compensation to the company, a director may also be subject to a civil penalty.
If a company holds property on trust, a director of the company may be liable in some circumstances for liabilities incurred by the company as trustee.
[sections 197, 344, 588G, 588J, 588M, 1317H]
1.4 Director’s liability as guarantor/security over personal assets
As a matter of commercial practice, a bank, trade creditor or anyone else providing finance or credit to a company may ask a director of the company:
• for a personal guarantee of the company’s liabilities; and
• for some form of security over their house or personal assets to secure the performance by the company of its obligations.
The director of a company may, for example, be asked by a bank to give a mortgage over their house to secure the company’s repayment of a loan. If the company does not repay the loan as agreed with the bank, the director may lose the house.
1.5 Continuous existence
A company continues to exist even if 1 or more of its shareholders or directors sells their shares, dies or leaves the company. If a company has only 1 shareholder who is also the only director of the company and that person dies, their personal representative is able to ensure that the company continues to operate.
[sections 119, 224A]
1.6 Rules for the internal management of a company
The Corporations Act contains a basic set of rules for the internal management of a company (appointments, meetings etc.).
Some of these rules are mandatory for all companies. There are a few special rules for single shareholder/single director companies.
Other internal management rules in the Corporations Act are replaceable rules. The replaceable rules do not apply to:
• a single shareholder/single director company; or
• a company that had a constitution before the introduction of the replaceable rules regime and has not repealed it.
A company does not need to have a separate constitution of its own; it can simply take advantage of the rules in the Corporations Act. The company will need a constitution only if it wants to displace, modify or add to the replaceable rules.
[sections 134—141, 224B]
1.7 How a company acts
A company does not have a physical existence. It must act through other people.
Individual directors, the company secretary, company employees or agents may be authorised to enter into contracts that bind the company (see 7).
In some circumstances, a company will be bound by something done by another person (see 1.8).
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
• by having all of the directors record and sign their decision.
If a company has only 1 director, the sole director may also pass a resolution by recording and signing their decision.
[sections 224B, 226A, 248A—248G, 251A]
1.9 Shareholders
The shareholders of a company own the company, but the company has a separate legal existence and the company’s assets belong to the company.
Shareholders can make decisions about the company by passing a resolution, usually at a meeting. A “special resolution” usually involves more important questions affecting the company as a whole or the rights of some or all of its shareholders.
There are 2 ways that shareholders may pass a resolution:
• at a meeting; or
• by having all of the shareholders record and sign their decision.
If a meeting is held, an ordinary resolution must be passed by a majority of the votes cast by shareholders of the company entitled to vote on the resolution at the meeting in person or by proxy (if proxies are allowed). A special resolution must be passed by at least 75% of the votes cast by shareholders of the company entitled to vote on the resolution and who vote at the meeting in person or by proxy (if proxies are allowed).
The sole shareholder of a company may pass a resolution by recording and signing their decision.
A company must keep a written record (minutes) of the members’ resolutions and meetings.
[sections 9 (special resolution), 249A, 249B, 249L, 251A]
1.10 What others can assume about the company
Anyone who does any business with the company is entitled to assume that the company has a legal right to conduct that business unless the person knows, or suspects, otherwise. For example, an outsider dealing with the company is entitled to assume:
• that a person who is shown in a notice lodged with ASIC as being the director or company secretary of a company has been properly appointed and is authorised to act for the company; and
• that a person who is held out by the company to be a director, company secretary or agent of the company has been properly appointed and is authorised to act for the company.
[sections 128—130]
2.1 Proprietary company for small business
Generally, a proprietary company limited by shares is the most suitable company for use by small business. Such a proprietary company must have a least 1 shareholder but no more than 50 shareholders (not counting employee shareholders). It may have 1 or more directors.
[sections 112—113]
The operators of small businesses can either buy “shelf” companies or set up new companies themselves.
3.1 “Shelf” companies
The operator of a small business may find it more convenient to buy a “shelf” company (a company that has already been registered but has not traded) from businesses which set up companies for this purpose or from some legal or accounting firms.
3.2 Setting up a company
To set up a new company themselves, the operator must apply to ASIC for registration of the company.
A proprietary company limited by shares must have at least 1 shareholder.
To obtain registration, a person must lodge a properly completed application form with ASIC. The form must set out certain information including details of every person who has consented to be a shareholder, director or company secretary of the company.
The company comes into existence when ASIC registers it.
[sections 117—119, 135—136, 140]
3.3 ACN and name
When a company is registered, ASIC allocates to it a unique 9 digit number called the Australian Company Number (ACN). (For use of the ACN see 4.1).
In practice, a new company must have a name that is different from the name of a company that is already registered. A proprietary company limited by shares must have the words “Proprietary Limited” as part of its name. Those words can be abbreviated to “Pty Ltd”.
A proprietary company may adopt its ACN as its name. If it does so, its name must also contain the words “Australian Company Number” (which can be abbreviated to “ACN”). For example, the company’s name might be “ACN 123 456 789 Pty Ltd”.
[sections 119, 147—161]
3.4 Contracts entered into before the company is registered
A company can ratify a contract entered into by someone on its behalf or for its benefit before it was registered. If the company does not ratify the contract, the person who entered into the contract may be personally liable.
[sections 131—133]
3.5 First shareholders, directors and company secretary
A person listed with their consent as a shareholder, director or company secretary in the application for registration of the company becomes a shareholder, director or company secretary of the company on its registration.
The same person may be both a director of the company and the company secretary.
See 5.1 and 5.2 for directors and 5.4 for company secretaries. See 6.1 for shareholders.
[section 120]
3.6 Issuing shares
It is a replaceable rule (see 1.6) that, before issuing new shares, a company must first offer them to the existing shareholders in the proportions that the shareholders already hold. A company may issue shares at a price it determines.
[sections 254B, 254D]
3.7 Registered office
A company must have a registered office in this jurisdiction and must inform ASIC of the location of the office. A post office box cannot be the registered office of a company. The purpose of the registered office is to have a place where all communications and notices to the company may be sent.
If the company does not occupy the premises where its registered office is located, the occupier of the premises must agree in writing to having the company’s registered office located there.
A proprietary company is not required to open its registered office to the public but this does not affect its obligation to make documents available for inspection.
The company must notify ASIC of any change of address of its registered office.
Note: If all the States refer power to the Commonwealth to enact the Corporations Act 2001, this jurisdiction is effectively the whole of Australia. If they do not, this jurisdiction consists of:
(a) those States that do refer the power to the Commonwealth; and
(b) the Northern Territory; and
(c) the Australian Capital Territory.
[sections 100, 142, 143, 173, 1300]
3.8 Principal place of business
If a company has a principal place of business that is different from its registered office, it must notify ASIC of the address of its principal place of business and of any changes to that address.
[sections 117, 146]
3.9 Registers kept by the company
A company must keep registers, including a register of shareholders and a register of charges. A company must keep its registers at:
• the company’s registered office; or
• the company’s principal place of business; or
• a place (whether on premises of the company or of someone else) where the work in maintaining the register is done; or
• another place approved by ASIC.
A register may be kept either in a bound or looseleaf book or on computer.
If a register is kept on computer, its contents must be capable of being printed out in hard copy.
[sections 172, 1300—1302, 1306]
3.10 Register of shareholders
A company must keep in its register of shareholders such information as:
• the names and addresses of its shareholders; and
• details of shares held by individual shareholders.
[sections 168—169]
3.11 Register of charges
A company must keep a register of charges if the company gives a bank, trade creditor or anybody else a charge over company assets.
[section 271]
The Corporations Act and other laws impose obligations on companies themselves and on their directors and company secretaries. Some of the more important obligations imposed under the Corporations Act are discussed below.
4.1 Use of company name and ACN
The name of a company must be shown at all the company’s business premises (including its registered office) that are open to the public. The company’s name and its ACN must appear:
• on some of its public documents; and
• on its cheques and negotiable instruments; and
• on all documents lodged with ASIC; and
• if it has one, on its common seal.
[sections 123, 144, 147—156,
ASIC Practice Note 47]
4.2 Annual return
A company must lodge with ASIC an annual return which contains such information as:
• names and addresses of each director and company secretary; and
• issued shares and options granted; and
• details of its shareholders; and
• address of its registered office; and
• address of its principal place of business; and
• a statement that the directors have resolved in the last month that, in the directors’ opinion, there are reasonable grounds to believe the company will be able to pay its debts as and when they become payable (but if the company has lodged an annual financial report with ASIC within the last 12 months, it does not need to include this statement).
An annual return may be lodged with ASIC on a printed form or, if an agreement is in place to lodge electronically, in accordance with the agreement.
ASIC may send a partially completed annual return to a company that wants to lodge its annual return on a printed form for the company to check, amend if necessary, verify and send back to ASIC. However, a company must lodge an annual return with ASIC even if ASIC does not send a partially completed annual return to the company.
[sections 345—348, 352]
4.3 Annual fee
A company must pay an annual fee to ASIC on lodgment of the annual return.
[Corporations (Fees) Regulations]
4.4 Notification to ASIC of changes
The company must notify ASIC if certain basic changes to the company occur. The following table sets out these notification requirements.
| Notification requirements | | |
| | If… | the company must notify ASIC of the change… | using
Form No… | see
section… |
| 1. | a company issues shares | within 1 month after the issue | 207 | 254X |
| 2. | a company changes the location of a register | within 7 days after the change | 909 | 172, 1302 |
| 3. | a company changes the address of its registered office or principal place of business | within 14 days after the change | 203 | 142, 146 |
| 4. | a company changes its directors or company secretary | within 14 days after the change | 304 | 205B |
| 5. | there is a change in the name or address of the company’s directors or secretary | within 14 days after the change | 304 | 205B |
| 6. | a company creates certain kinds of charges | within 45 days after the charge is created | 309 | 263 |
| | | | | |
5.1 Who can be a director
Only an individual who is at least 18 years old can be a director. If a company has only 1 director, they must ordinarily reside in Australia. If a company has more than 1 director, at least 1 of the directors must ordinarily reside in Australia.
A director must consent in writing to holding the position of director. The company must keep the consent and must notify ASIC of the appointment.
In some circumstances, the Corporations Act imposes the duties and obligations of a director on a person who, although not formally appointed as a director of a company, nevertheless acts as a director or gives instructions to the formally appointed directors as to how they should act.
The Court or ASIC may prohibit a person from being a director or from otherwise being involved in the management of a company if, for example, the person has breached the Corporations Act.
A person needs the Court’s permission to be a director if the person has been convicted of certain offences or is, in some circumstances, unable to pay their debts as they fall due.
Generally, a director may resign by giving notice of the resignation to the company. The company must notify ASIC of a director’s resignation. A director who resigns may also notify ASIC of the resignation.
[sections 60, 221, 222A, 224, 228—230, 242, 242C, 599, 600, 206C, 1317G, 1317EA(3)]
5.2 Appointment of new directors
It is a replaceable rule (see 1.6) that shareholders may appoint directors by resolution at a general meeting.
[section 224C]
5.3 Duties and liabilities of directors
In managing the business of a company (see 1.7), each of its directors is subject to a wide range of duties under the Corporations Act and other laws. Some of the more important duties are:
• to act in good faith
• to act in the best interests of the company
• to avoid conflicts between the interests of the company and the director’s interests
• to act honestly
• to exercise care and diligence
• to prevent the company trading while it is unable to pay its debts
• if the company is being wound up—to report to the liquidator on the affairs of the company
• if the company is being wound up—to help the liquidator (by, for example, giving to the liquidator any records of the company that the director has).
A director who fails to perform their duties:
• may be guilty of a criminal offence with a penalty of $200,000 or imprisonment for up to 5 years, or both; and
• may contravene a civil penalty provision (and the Court may order the person to pay to the Commonwealth an amount of up to $200,000); and
• may be personally liable to compensate the company or others for any loss or damage they suffer; and
• may be prohibited from managing a company.
A director’s obligations may continue even after the company has been deregistered.
[Sections 180, 181, 182, 183, 184, 475, 530A, 588G, 596, 601AE, 601AH, 1317H]
5.4 Company secretaries
A company must have a company secretary. The directors appoint the company secretary. A company secretary must be at least 18 years old. If a company has only 1 company secretary, they must ordinarily reside in Australia. If a company has more than 1 company secretary, at least 1 of them must ordinarily reside in Australia.
A company secretary must consent in writing to holding the position of company secretary. The company must keep the consent and must notify ASIC of the appointment.
The same person may be both a director of a company and the company secretary.
Generally, a company secretary may resign by giving written notice of the resignation to the company. The company must notify ASIC of a company secretary’s resignation. A company secretary who resigns may also notify ASIC of the resignation.
The company secretary is an officer of the company and, in that capacity, may be subject to the requirements imposed by the Corporations Act on company officers. The company secretary has specific responsibilities under the Corporations Act, including responsibility for ensuring that the company notifies ASIC about changes to the identities, names and addresses of the company’s directors and company secretaries and that the company lodges its annual return.
A company secretary’s obligations may continue even after the company has been deregistered.
[sections 83, 142, 222A, 240, 242, 242C, 345, 601AD, 601AH]
A proprietary company limited by shares must have a share capital and at least 1 shareholder. ASIC may apply to a Court to have a company wound up if it does not have any shareholders.
[sections 461—462]
6.1 Becoming a shareholder and ceasing to be a shareholder
A person may become a shareholder of a company in several ways, including the following:
• the person being listed as a shareholder of the company in the application for registration of the company
• the company issuing shares to the person
• the person buying shares in the company from an existing shareholder and the company registering the transfer.
Some of the ways in which a person ceases to be a shareholder are:
• the person sells all of their shares in the company and the company registers the transfer of the shares
• the company buys back all the person’s shares
• ASIC cancels the company’s registration.
[sections 117, 120, 601AA—601AD]
6.2 Classes of shares
A company may have different classes of shares. The rights and restrictions attached to the shares in a class distinguish it from other classes of shares.
[sections 254A—254B]
6.3 Meetings of shareholders
Directors have the power to call meetings of all shareholders or meetings of only those shareholders who hold a particular class of shares.
Shareholders who hold at least 5% of the votes which may be cast at a general meeting of a company have the power to call and hold a meeting themselves or to require the directors to call and hold a meeting. Meetings may be held regularly or to resolve specific questions about the management or business of the company.
The Corporations Act sets out rules dealing with shareholders’ meetings.
A shareholder of a company may ask the company for a copy of the record of a meeting or of a decision of shareholders taken without a meeting.
[sections 249A—251B]
6.4 Voting rights
Different rights to vote at meetings of shareholders may attach to different classes of shares. It is a replaceable rule (see 1.6) that, subject to those different rights, each shareholder has 1 vote on a show of hands and, on a poll, 1 vote for each share held.
[sections 250E, 254A—254B]
6.5 Buying and selling shares
A shareholder may sell their shares but only if the sale would not breach the company’s constitution (if any). It is a replaceable rule (see 1.6) that the directors have a discretion to refuse to register a transfer of shares.
[sections 1091D—1091E]
A company’s power to sign, discharge and otherwise deal with contracts can be exercised by an individual acting with the company’s authority and on its behalf. A company can deal with contracts without using a common seal.
A company may execute a document by having it signed by:
• 2 directors of the company; or
• a director and the company secretary; or
• for a company with a sole director who is also the sole secretary—that director.
If the document is to have effect as a deed, it should be expressed to be a deed.
[sections 126—127, 240]
A company is not required to have a common seal. If it does, the seal must show the company’s name and its ACN. The seal is equivalent to the company’s signature and may be used on important company documents such as mortgages.
[sections 123, 127(2)]
The shareholders may fund the company’s operations by lending money to the company or by taking up other shares in the company. Except if it is raising funds from its own employees or shareholders, a proprietary company must not engage in any fundraising activity that would require disclosure to investors under Chapter 6D (for example, advertising in a newspaper inviting people to invest in the company).
The company may also borrow money from banks and other financial organisations.
Anyone who has lent money, or provided credit, to the company may ask for a mortgage or charge over the company’s assets to secure the performance by the company of its obligations.
[sections 113, 124]
Shareholders can take money out of the company in a number of ways, but only if the company complies with its constitution (if any), the Corporations Act and all other relevant laws. If a company pays out money in a way that results in the company being unable to pay its debts as they fall due, its directors may be liable:
• to pay compensation; and
• for criminal and civil penalties.
[sections 588G, 1317H]
9.1 Dividends
Dividends are payments to shareholders out of the company’s after tax profits. It is a replaceable rule (see 1.6) that the directors decide whether the company should pay a dividend.
[sections 254T, 254U]
9.2 Buy‑back of shares
A company can buy back shares from shareholders.
[sections 257A—257J]
9.4 Distribution of surplus assets on winding up
If a company is wound up and there are any assets left over after all the company’s debts have been paid, the surplus is distributed to shareholders in accordance with the rights attaching to their shares.
10.1 The small/large distinction
The accounting requirements imposed on a proprietary company under the Corporations Act depend on whether the company is classified as small or large. A company’s classification can change from 1 financial year to another as its circumstances change.
A company is classified as small for a financial year if it satisfies at least 2 of the following tests:
• gross operating revenue of less than $10 million for the year
• gross assets of less than $5 million at the end of the year
• fewer than 50 employees at the end of the year.
A company that does not satisfy at least 2 of these tests is classified as large.
[section 45A]
As the great majority of proprietary companies are small under these tests, the discussion below deals mainly with the accounting requirements for small proprietary companies.
[sections 286—301]
10.2 Financial records
Under the Corporations Act, all proprietary companies must keep sufficient financial records to record and explain their transactions and financial position and to allow true and fair financial statements to be prepared and audited. Financial record here means some kind of systematic record of the company’s financial transactions—not merely a collection of receipts, invoices, bank statements and cheque butts. Financial records may be kept on computer.
[sections 286—289]
10.3 Preparing annual financial reports and directors’ reports
The Corporations Act requires a small proprietary company to prepare an annual financial report (an annual profit and loss statement, a balance sheet and a statement of cash flows) and a directors’ report (about the company’s operations, dividends paid or recommended, options issued etc.) if:
• the shareholders with at least 5% of the votes in the company direct it to do so; or
• ASIC directs it to do so.
Unless the shareholders’ direction specifies otherwise, the company must prepare the annual financial report in accordance with the applicable accounting standards.
Although the Corporations Act itself may not require a small proprietary company to prepare a financial report except in the circumstances mentioned, the company may need to prepare the annual financial reports for the purposes of other laws (for example, income tax laws). Moreover, good business practice may also make it advisable for the company to prepare the financial reports so that it can monitor and better manage its financial position.
Large proprietary companies must prepare annual financial reports and a directors’ report, have the financial report audited and send both reports to shareholders. They must also lodge the annual financial reports with ASIC unless exempted.
[sections 286—301, 319—320]
11.1 Special problems faced by minority shareholders
There are remedies available to a shareholder of a company if:
• the affairs of the company are being conducted in a way that is unfair to that shareholder or to other shareholders of the company; or
• the affairs of the company are being conducted in a way that is against the interests of the company as a whole.
A Court may, for example, order the winding up of a company or the appointment of a receiver.
[sections 246AA, 461]
11.2 Buy—back of shares
A company may buy back the shares of a shareholder who wants to sever their relationship with the company.
[sections 257A—257J]
11.3 Selling shares
A shareholder in a company who wants to sever their relationship with the company may decide to sell their shares. However, the shareholder may not be able to sell their shares readily—particularly if they want to sell their shares to someone who is not an existing shareholder. Some of the difficulties they may face in that case are:
• under the replaceable rules the directors have a discretion to refuse to transfer the shares; and
• restrictions in the company’s constitution (if any) on transferring shares.
[sections 995, 707, 1091D—1091E]
12.1 Voluntary administration
If a company experiences financial problems, the directors may appoint an administrator to take over the operations of the company to see if the company’s creditors and the company can work out a solution to the company’s problems.
If the company’s creditors and the company cannot agree, the company may be wound up (see 12.3).
[Part 5.3A]
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]
12.3 Winding up and distribution
A company may be wound up by order of a Court, or voluntarily if the shareholders of the company pass a special resolution to do so.
A liquidator is appointed:
• when a Court orders a company to be wound up; or
• the shareholders of a company pass a resolution to wind up the company.
[Part 5.2, section 495]
12.4 Liquidators
A liquidator is appointed to administer the winding up of a company. The liquidator’s main functions are:
• to take possession of the company’s assets; and
• to determine debts owed by the company and pay the company’s creditors; and
• to distribute to shareholders any assets of the company left over after paying creditors (any distribution to shareholders is made according to the rights attaching to their shares); and
• finally, to have the company deregistered.
[Parts 5.4B, 5.5]
12.5 Order of payment of debts
Generally, creditors who hold security over company assets are paid first.
[Division 6 of Part 5.6]
12.6 Cancellation of registration
If a company has ceased trading or has been wound up, it remains on the register until ASIC cancels the company’s registration. Once a company is deregistered, it ceases to exist.
[sections 601AA—601AB, 601AH]
Types of companies
(1) The following types of companies can be registered under this Act:
| Proprietary companies | Limited by shares |
| | Unlimited with share capital |
| Public companies | Limited by shares |
| | Limited by guarantee |
| | Unlimited with share capital |
| | No liability company |
Note: Other types of companies that were previously allowed continue to exist under the Part 10.1 transitionals.
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:
| No liability company provisions |
| item | topic | provisions |
| 1 | names | 148, 156, 162 |
| 2 | terms of issue of shares | 254B |
| 3 | liability on partly‑paid shares | 254M |
| 4 | calls | 254P‑254R |
| 5 | winding up | 477‑478, 483, 514 |
| 6 | registering a body as a company | 610BA |
| 7 | transitional | the Part 10.1 transitionals |
(3) A no liability company must not engage in activities that are outside its mining purposes objects.
(4) The directors of a no liability company must not:
(a) let the whole or proportion of a mine or claim on tribute; or
(b) make any contract for working any land on tribute;
unless:
(c) the letting or contract is approved by a special resolution; or
(d) no such letting or contract has been made within the period of 2 years immediately preceding the proposed letting or contract.
(5) An act or transaction is not invalid merely because of a contravention of subsection (3) or (4).
(1) A company must have no more than 50 non—employee shareholders if it is to:
(a) be registered as a proprietary company; or
(b) change to a proprietary company; or
(c) remain registered as a proprietary company.
Note: Proprietary companies have different financial reporting obligations depending on whether they are small proprietary companies or large proprietary companies (see section 45A and Part 2M.3).
(2) In applying subsection (1):
(a) count joint holders of a particular parcel of shares as 1 person; and
(b) an employee shareholder is:
(i) a shareholder who is an employee of the company or of a subsidiary of the company; or
(ii) a shareholder who was an employee of the company, or of a subsidiary of the company, when they became a shareholder.
(3) A proprietary company must not engage in any activity that would require disclosure to investors under Chapter 6D, except for an offer of its shares to:
(a) existing shareholders of the company; or
(b) employees of the company or of a subsidiary of the company.
(4) An act or transaction is not invalid merely because of a contravention of subsection (3).
Note: If a proprietary company contravenes this section, ASIC may require it to change to a public company (see section 165).
A company needs to have at least 1 member.
(1) A person must not participate in the formation of a partnership or association that:
(a) has as an object gain for itself or for any of its members; and
(b) has more than 20 members;
unless the partnership or association is incorporated or formed under an Australian law.
Note: For the effect of a contravention of this section, see section 103.
(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.
A trade union cannot be registered under this Act.
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.
Contents of the application
(2) The application must state the following:
(a) the type of company that is proposed to be registered under this Act;
(b) the company’s proposed name (unless the ACN is to be used in its name);
(c) the name and address of each person who consents to become a member;
(d) the present given and family name, all former given and family names and the date and place of birth of each person who consents in writing to become a director;
(e) the present given and family name, all former given and family names and the date and place of birth of each person who consents in writing to become a company secretary;
(f) the address of each person who consents in writing to become a director or company secretary;
(g) the address of the company’s proposed registered office;
(h) for a public company—the proposed opening hours of its registered office (if they are not the standard opening hours);
(j) the address of the company’s proposed principal place of business (if it is not the address of the proposed registered office);
(k) for a company limited by shares or an unlimited company—the following:
(i) the number and class of shares each member agrees in writing to take up;
(ii) the amount (if any) each member agrees in writing to pay for each share;
(iii) if that amount is not to be paid in full on registration—the amount (if any) each member agrees in writing to be unpaid on each share;
(l) for a public company that is limited by shares or is an unlimited company, if shares will be issued for non‑cash consideration—the prescribed particulars about the issue of the shares, unless the shares will be issued under a written contract and a copy of the contract is lodged with the application;
(m) for a company limited by guarantee—the proposed amount of the guarantee that each member agrees to in writing;
(n) the State or Territory in this jurisdiction in which the company is to be taken to be registered.
Note 1: Paragraph (b)—sections 147 and 152 deal with the availability and reservation of names.
Note 2: Paragraph (f)—the address that must be stated is usually the residential address, although an alternative address can sometimes be stated instead (see section 205D).
Note 3: Paragraph (g)—if the company is not to be the occupier of premises at the address of its registered office, the application must state that the occupier has consented to the address being specified in the application and has not withdrawn that consent (see section 100).
Note 4: Paragraph (h)—for standard opening hours, see section 9.
(3) If the company is to be a public company and is to have a constitution on registration, a copy of the constitution must be lodged with the application.
(4) The application must be in the prescribed form.
(5) An applicant must have the consents and agreements referred to in subsection (2) when the application is lodged. After the company is registered, the applicant must give the consents and agreements to the company. The company must keep the consents and agreements.
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).
ASIC must keep record of registration
(2) ASIC must keep a record of the registration. Subsections 1274(2) and (5) apply to the record as if it were a document lodged with ASIC.
A company comes into existence as a body corporate at the beginning of the day on which it is registered. The company’s name is the name specified in the certificate of registration.
Note: The company remains in existence until it is deregistered (see Chapter 5A).
Jurisdiction in which company incorporated
(1) A company is incorporated in this jurisdiction.
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.
(3) The State or Territory in which a company is taken to be registered changes to the State or Territory in this jurisdiction nominated by the company if:
(a) either:
(i) the relevant Minister of the State or Territory in which the company is taken to be registered before the change approves the change; or
(ii) the State in which the company is taken to be registered ceases to be a referring State; and
(b) the procedural requirements specified in the regulations are satisfied.
(4) A company continues to be registered under this Act even if the State in which the company is taken to be registered ceases to be a referring State.
(1) A person becomes a member, director or company secretary of a company on registration if the person is specified in the application with their consent as a proposed member, director or company secretary of the company.
(2) The shares to be taken up by the members as specified in the application are taken to be issued to the members on registration of the company.
Note: A member’s name must be entered in the register of members (see section 169).
The address specified in the application for registration for the company’s proposed registered office becomes the address of the company’s registered office on registration.
The expenses incurred before registration in promoting and setting up a company may be paid out of the company’s assets.
(1) A company may have a common seal. If a company does have a common seal, the company must set out on it:
(a) for a company that has its ACN in its name—the company’s name; or
(b) otherwise—the company’s name, the expression “Australian Company Number” and the company’s ACN.
Note 1: A company may make contracts and execute documents without using a seal (see sections 126 and 127).
Note 2: For abbreviations that can be used on a seal, see section 149.
(2) A company may have a duplicate common seal. The duplicate must be a copy of the common seal with the words “duplicate seal”, “share seal” or “certificate seal” added.
(3) A person must not use, or authorise the use of, a seal that purports to be the common seal of a company or a duplicate if the seal does not comply with the requirements set out in subsection (1) or (2).
(1) A company has the legal capacity and powers of an individual both in and outside this jurisdiction. A company also has all the powers of a body corporate, including the power to:
(a) issue and cancel shares in the company;
(b) issue debentures (despite any rule of law or equity to the contrary, this power includes a power to issue debentures that are irredeemable, redeemable only if a contingency, however remote, occurs, or redeemable only at the end of a period, however long);
(c) grant options over unissued shares in the company;
(d) distribute any of the company’s property among the members, in kind or otherwise;
(e) give security by charging uncalled capital;
(f) grant a floating charge over the company’s property;
(g) arrange for the company to be registered or recognised as a body corporate in any place outside this jurisdiction;
(h) do anything that it is authorised to do by any other law (including a law of a foreign country).
A company limited by guarantee does not have the power to issue shares.
Note: For a company’s power to issue bonus, partly—paid, preference and redeemable preference shares, see section 254A.
(2) A company’s legal capacity to do something is not affected by the fact that the company’s interests are not, or would not be, served by doing it.
(3) For the avoidance of doubt, this section does not:
(a) authorise a company to do an act that is prohibited by a law of a State or Territory; or
(b) give a company a right that a law of a State or Territory denies to the company.
(1) If a company has a constitution, it may contain an express restriction on, or a prohibition of, the company’s exercise of any of its powers. The exercise of a power by the company is not invalid merely because it is contrary to an express restriction or prohibition in the company’s constitution.
(2) If a company has a constitution, it may set out the company’s objects. An act of the company is not invalid merely because it is contrary to or beyond any objects in the company’s constitution.
(1) A company’s power to make, vary, ratify or discharge a contract may be exercised by an individual acting with the company’s express or implied authority and on behalf of the company. The power may be exercised without using a common seal.
(2) This section does not affect the operation of a law that requires a particular procedure to be complied with in relation to the contract.
(1) A company may execute a document without using a common seal if the document is signed by:
(a) 2 directors of the company; or
(b) a director and a company secretary of the company; or
(c) for a proprietary company that has a sole director who is also the sole company secretary—that director.
Note: If a company executes a document in this way, people will be able to rely on the assumptions in subsection 129(5) for dealings in relation to the company.
(2) A company with a common seal may execute a document if the seal is fixed to the document and the fixing of the seal is witnessed by:
(a) 2 directors of the company; or
(b) a director and a company secretary of the company; or
(c) for a proprietary company that has a sole director who is also the sole company secretary—that director.
Note: If a company executes a document in this way, people will be able to rely on the assumptions in subsection 129(6) for dealings in relation to the company.
(3) A company may execute a document as a deed if the document is expressed to be executed as a deed and is executed in accordance with subsection (1) or (2).
(4) This section does not limit the ways in which a company may execute a document (including a deed).
128 Entitlement to make assumptions
(1) A person is entitled to make the assumptions in section 129 in relation to dealings with a company. The company is not entitled to assert in proceedings in relation to the dealings that any of the assumptions are incorrect.
(2) A person is entitled to make the assumptions in section 129 in relation to dealings with another person who has, or purports to have, directly or indirectly acquired title to property from a company. The company and the other person are not entitled to assert in proceedings in relation to the dealings that any of the assumptions are incorrect.
(3) The assumptions may be made even if an officer or agent of the company acts fraudulently, or forges a document, in connection with the dealings.
(4) A person is not entitled to make an assumption in section 129 if at the time of the dealings they knew or suspected that the assumption was incorrect.
Constitution and replaceable rules complied with
(1) A person may assume that the company’s constitution (if any), and any provisions of this Act that apply to the company as replaceable rules, have been complied with.
Director or company secretary
(2) A person may assume that anyone who appears, from information provided by the company that is available to the public from ASIC, to be a director or a company secretary 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 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.
Proper performance of duties
(4) A person may assume that the officers and agents of the company properly perform their duties to the company.
Document duly executed without seal
(5) A person may assume that a document has been duly executed by the company if the document appears to have been signed in accordance with subsection 127(1). For the purposes of making the assumption, a person may also assume that anyone who signs the document and states next to their signature that they are the sole director and sole company secretary of the company occupies both offices.
Document duly executed with seal
(6) A person may assume that a document has been duly executed by the company if:
(a) the company’s common seal appears to have been fixed to the document in accordance with subsection 127(2); and
(b) the fixing of the common seal appears to have been witnessed in accordance with that subsection.
For the purposes of making the assumption, a person may also assume that anyone who witnesses the fixing of the common seal and states next to their signature that they are the sole director and sole company secretary of the company occupies both offices.
Officer or agent with authority to warrant that document is genuine or true copy
(7) A person may assume that an officer or agent of the company who has authority to issue a document or a certified copy of a document on its behalf also has authority to warrant that the document is genuine or is a true copy.
(8) Without limiting the generality of this section, the assumptions that may be made under this section apply for the purposes of this section.
(1) A person is not taken to have information about a company merely because the information is available to the public from ASIC.
(2) Subsection (1) does not apply in relation to a document that has been lodged with ASIC to the extent that the document relates to a charge that is registrable under this Act.
(1) If a person enters into, or purports to enter into, a contract on behalf of, or for the benefit of, a company before it is registered, the company becomes bound by the contract and entitled to its benefit if the company, or a company that is reasonably identifiable with it, is registered and ratifies the contract:
(a) within the time agreed to by the parties to the contract; or
(b) if there is no agreed time—within a reasonable time after the contract is entered into.
(2) The person is liable to pay damages to each other party to the pre‑registration contract if the company is not registered, or the company is registered but does not ratify the contract or enter into a substitute for it:
(a) within the time agreed to by the parties to the contract; or
(b) if there is no agreed time—within a reasonable time after the contract is entered into.
The amount that the person is liable to pay to a party is the amount the company would be liable to pay to the party if the company had ratified the contract and then did not perform it at all.
(3) If proceedings are brought to recover damages under subsection (2) because the company is registered but does not ratify the pre‑registration contract or enter into a substitute for it, the court may do anything that it considers appropriate in the circumstances, including ordering the company to do 1 or more of the following:
(a) pay all or part of the damages that the person is liable to pay;
(b) transfer property that the company received because of the contract to a party to the contract;
(c) pay an amount to a party to the contract.
(4) If the company ratifies the pre—registration contract but fails to perform all or part of it, the court may order the person to pay all or part of the damages that the company is ordered to pay.
(1) A party to the pre—registration contract may release the person from all or part of their liability under section 131 to the party by signing a release.
(2) Despite any rule of law or equity, the person does not have any right of indemnity against the company in respect of the person’s liability under this Part. This is so even if the person was acting, or purporting to act, as trustee for the company.
This Part replaces any rights or liabilities anyone would otherwise have on the pre—registration contract.
A company’s internal management may be governed by provisions of this Act that apply to the company as replaceable rules, by a constitution or by a combination of both.
Note: There are additional rules about internal management in ordinary provisions of this Act and also in the common law.
Companies to which replaceable rules apply
(1) A section or subsection (except subsection 129(1), this section and sections 140 and 141) whose heading contains the words:
(a) replaceable rule—applies as a replaceable rule to:
(i) each company that is or was registered after 1 July 1998; and
(ii) any company registered before 1 July 1998 that repeals or repealed its constitution after that day; and
(b) replaceable rule for proprietary companies and mandatory rule for public companies—applies:
(i) as a replaceable rule to any proprietary company that is or was registered after 1 July 1998; and
(ii) as a replaceable rule to any company that is or eas registered after 1 July 1998 and that changes or changed to a proprietary company (but only while it is a proprietary company); and
(iii) as a replaceable rule to any proprietary company that is or was registered before 1 July 1998 that repeals or repealed its constitution after that day; and
(iv) as an ordinary provision of this Act to any public company whenever registered.
The section or subsection does not apply to a proprietary company while the same person is both its sole director and sole shareholder.
Note 1: See sections 198E, 201F and 202C for the special provisions that apply to a proprietary company while the same person is both its sole director and sole shareholder.
Note 2: A company may include in its constitution (by reference or otherwise) a replaceable rule that does not otherwise apply to it.
Company’s constitution can displace or modify replaceable rules
(2) A provision of a section or subsection that applies to a company as a replaceable rule can be displaced or modified by the company’s constitution.
Failure to comply with replaceable rules
(3) A failure to comply with the replaceable rules as they apply to a company is not of itself a contravention of this Act (so the provisions about criminal liability, civil liability and injunctions do not apply).
Note: Replaceable rules that apply to a company have effect as a contract (see section 140).
(1) A company adopts a constitution:
(a) on registration—if each person specified in the application for the company’s registration as a person who consents to become a member agrees in writing to the terms of a constitution before the application is lodged; or
(b) after registration—if the company passes a special resolution adopting a constitution or a court order is made under section 233 that requires the company to adopt the constitution.
Note: The Life Insurance Act 1995 has rules about how benefit fund rules become part of a company’s constitution and about amending those rules. They override this Act (see section 1348 of this Act). Consequential amendments to the rest of the company’s constitution can be made under that Act or this Act (see Subdivision 2 of Division 4 of Part 2A of that Act).
(2) The company may modify or repeal its constitution, or a provision of its constitution, by special resolution.
Note: The company may need leave of the Court to modify or repeal its constitution if it was adopted as the result of a Court order (see subsection 233(3)).
(3) The company’s constitution may provide that the special resolution does not have any effect unless a further requirement specified in the constitution relating to that modification or repeal has been complied with.
(4) Unless the constitution provides otherwise, the company may modify or repeal a further requirement described in subsection (3) only if the further requirement is itself complied with.
(5) A public company must lodge with ASIC a copy of a special resolution adopting, modifying or repealing its constitution within 14 days after it is passed. The company must also lodge with ASIC within that period:
(a) if the company adopts a constitution—a copy of that constitution; or
(b) if the company modifies its constitution—a copy of that modification.
This also applies to a proprietary company that has applied under Part 2B.7 to change to a public company, while its application has not yet been determined.
If a new constitution is adopted or an existing constitution is modified or repealed, that adoption, modification or repeal takes effect:
(a) if it is the result of a special resolution:
(i) on the date on which the resolution is passed if it specified no later date; or
(ii) on a date specified in, or determined in accordance with, the resolution if the relevant date is later than the date on which the resolution is passed; or
(b) if it is the result of a Court order made under section 233:
(i) on the date on which the order is made if it specifies no later date; or
(ii) on a date specified by the order.
ASIC may direct a company to lodge a consolidated copy of its constitution with ASIC.
A company must send a copy of its constitution to a member of the company within 7 days if the member:
(a) asks the company, in writing, for the copy; and
(b) pays any fee (up to the prescribed amount) required by the company.
(1) A company’s constitution (if any) and any replaceable rules that apply to the company have effect as a contract:
(a) between the company and each member; and
(b) between the company and each director and company secretary; and
(c) between a member and each other member;
under which each person agrees to observe and perform the constitution and rules so far as they apply to that person.
(2) Unless a member of a company agrees in writing to be bound, they are not bound by a modification of the constitution made after the date on which they became a member so far as the modification:
(a) requires the member to take up additional shares; or
(b) increases the member’s liability to contribute to the share capital of, or otherwise to pay money to, the company; or
(c) imposes or increases restrictions on the right to transfer the shares already held by the member, unless the modification is made:
(i) in connection with the company’s change from a public company to a proprietary company under Part 2B.7; or
(ii) to insert proportional takeover approval provisions into the company’s constitution.
The following table sets out the provisions of this Act that apply as replaceable rules.
| Provisions that apply as replaceable rules |
| | Officers and Employees | |
| 1 | Voting and completion of transactions—directors of proprietary companies | 194 |
| 2 | Powers of directors | 198A |
| 3 | Negotiable instruments | 198B |
| 4 | Managing director | 198C |
| 5 | Company may appoint a director | 201G |
| 6 | Directors may appoint other directors | 201H |
| 7 | Appointment of managing directors | 201J |
| 8 | Alternate directors | 201K |
| 9 | Remuneration of directors | 202A |
| 10 | Director may resign by giving written notice to company | 203A |
| 11 | Removal by members—proprietary company | 203C |
| 12 | Termination of appointment of managing director | 203F |
| 13 | Terms and conditions of office for secretaries | 204F |
| | Inspection of books | |
| 14 | Company or directors may allow member to inspect books | 247D |
| | Director’s Meetings | |
| 15 | Circulating resolutions of companies with more than 1 director | 248A |
| 16 | Calling directors’ meetings | 248C |
| 17 | Chairing directors’ meetings | 248E |
| 18 | Quorum at directors’ meetings | 248F |
| 19 | Passing of directors’ resolutions | 248G |
| | Meetings of members | |
| 20 | Calling of meetings of members by a director | 249C |
| 21 | Notice to joint members | 249J(2) |
| 22 | When notice by post or fax is given | 249J(4) |
| 23 | Notice of adjourned meetings | 249M |
| 24 | Quorum | 249T |
| 25 | Chairing meetings of members | 249U |
| 26 | Business at adjourned meetings | 249W(2) |
| 27 | Who can appoint a proxy [replaceable rule for proprietary companies only] | 249X |
| 28 | Proxy vote valid even if member dies, revokes appointment etc. | 250C(2) |
| 29 | How many votes a member has | 250E |
| 30 | Jointly held shares | 250F |
| 31 | Objections to right to vote | 250G |
| 32 | How voting is carried out | 250J |
| 33 | When and how polls must be taken | 250M |
| | Shares | |
| 32 | Pre‑emption for existing shareholders on issue of shares in proprietary company | 254D |
| 33 | Other provisions about paying dividends | 254U |
| 34 | Dividend rights for shares in proprietary companies | 254W(2) |
| | Transfer of Shares | |
| 35 | Transmission of shares on death | 1091AA |
| 36 | Transmission of shares on bankruptcy | 1091AB |
| 37 | Transmission of shares on mental incapacity | 1091B |
| 38 | Registration of transfers | 1091D |
| 39 | Additional general discretion for directors of proprietary companies to refuse to register transfers | 1091E |
(1) A company must have a registered office in this jurisdiction. Communications and notices to the company may be addressed to its registered office.
Note: A document may be served on a company by leaving it at, or posting it to, the company’s registered office (see subsection 109X(1)).
(2) A company must lodge notice of a change of address of its registered office with ASIC not later than 14 days after the date on which the change occurs. The notice must be in the prescribed form.
Note: If the company is not to be the occupier of premises at the address of its new registered office, the notice must state that the occupier has consented to the address being specified in the notice and has not withdrawn that consent (see section 100).
(3) A notice of change of address takes effect from the later of:
(a) the seventh day after the notice was lodged; or
(b) a later day specified in the notice as the date from which the change is to take effect.
(1) A company that does not occupy the premises at the address of its registered office must be able to show to ASIC the occupier’s written consent to the company’s use of those premises as its registered office.
Note: ASIC can require the company to produce the consent (see section 100).
(2) If ASIC becomes aware that the occupier of those premises:
(a) has not consented to the use of the premises as the address of the company’s registered office; or
(b) has withdrawn the consent;
ASIC may give written notice to a director of the company who resides in this jurisdiction that ASIC intends to change the address of the company’s registered office to the director’s address.
(3) If ASIC is not notified of the address of the company’s proposed new registered office under subsection 142(2) within 14 days after the notice under subsection (2) is sent, ASIC may change the address of the company’s registered office to the director’s address.
(1) A company must display its name prominently at every place at which the company carries on business and that is open to the public.
(2) A public company must also display its name and the words “Registered Office” prominently at its registered office.
(1) The registered office of a public company must be open to the public:
(a) each business day from at least 10 am to 12 noon and from at least 2 pm to 4 pm; or
(b) at least 3 hours chosen by the company between 9 am and 5 pm each business day.
(2) If the company chooses its own opening hours, the hours must be specified:
(a) if the company is to have its own opening hours from its registration—in the application for registration of the company under section 117 (normal registration process) or the notice lodged under section 5H (registration of body as company on basis of State or Territory law); or
(b) if the company changes its opening hours after its registration—in the most recent notice of change of opening hours lodged with ASIC under subsection (3).
(3) The company must lodge notice of a change in the opening hours of its registered office with ASIC before the day on which a change occurs. The notice must be in the prescribed form.
A company must lodge with ASIC notice of a change of the address of its principal place of business not later than 14 days after the date on which the change occurs. The notice must be in the prescribed form.
Name is available unless identical or unacceptable
(1) A name is available to a company unless the name is:
(a) identical (under rules set out in the regulations) to a name that is reserved or registered under this Act for another body; or
(b) identical (under rules set out in the regulations) to a name that is included on the national business names register in respect of another individual or body who is not the person applying to have the name; or
(c) unacceptable for registration under the regulations.
Minister may consent to a name being available to a company
(2) The Minister may consent in writing to a name being available to a company even if the name is:
(a) identical to a name that is reserved or registered under this Act for another body; or
(b) unacceptable for registration under the regulations.
(3) The Minister’s consent may be given subject to conditions.
Note: If the company breaches a condition, ASIC may direct it to change its name under section 158.
(4) The regulations may specify that a particular unacceptable name is available to a company if:
(a) a specified public authority, or an instrumentality or agency of the Crown in right of the Commonwealth, a State or an internal Territory has consented to the company using or assuming the name; or
(b) the company is otherwise permitted to use or assume the name by or under:
(i) an Act of the Commonwealth, a State or an internal Territory; or
(ii) a specified provision of an Act of the Commonwealth, a State or an internal Territory.
The consent of the authority, instrumentality or agency may be given subject to conditions.
Note: If the consent is withdrawn, the company ceases to be permitted or the company breaches a condition, ASIC may direct it to change its name under section 158.
National business names register
(5) If the Minister is satisfied that ASIC has access to electronic records of information containing, in relation to a State or Territory in this jurisdiction, names registered from time to time as business names in that State or Territory, the Minister may, by notice published in the Gazette identifying the records concerned, declare that he or she is so satisfied.
Company may use available name or ACN
(1) A company may have as its name:
(a) an available name; or
(b) the expression “Australian Company Number” followed by the company’s ACN.
The name must also include the words required by subsection (2) or (3).
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.
Unlimited proprietary companies
(3) An unlimited proprietary company must have the word “Proprietary” at the end of its name.
No liability companies
(4) A no liability company must have the words “No Liability” at the end of its name.
Public companies with “Proprietary” included in their name
(5) A public company must not include the word “Proprietary” (or an abbreviation of it) in its name unless:
(a) it was a public company before 1 July 1998; and
(b) the word “Proprietary” (or an abbreviation of it) was included in its name before 1 July 1998.
(1) The abbreviations set out in the following table may be used:
(a) instead of words that this Act requires to be part of a company’s name or to be included in a document or on a company’s common seal; and
(b) instead of words that are part of a company’s name; and
(c) with or without full stops.
| Acceptable abbreviations | [operative table] |
| | Word | Abbreviation |
| 1 | Company | Co or Coy |
| 2 | Proprietary | Pty |
| 3 | Limited | Ltd |
| 4 | No Liability | NL |
| 5 | Australian | Aust |
| 6 | Number | No |
| 7 | and | & |
| 8 | Australian Company Number | ACN |
(2) If a company’s name includes any of these abbreviations, the word corresponding to the abbreviation may be used instead.
(1) ASIC may register a company limited by guarantee without “Limited” in its name, or alter the registration of a company of that type by omitting “Limited” from its name, if its constitution:
(a) requires the company to pursue charitable purposes only and to apply its income in promoting those purposes; and
(b) prohibits the company making distributions to its members and paying fees to its directors; and
(c) requires the directors to approve all other payments the company makes to directors.
(2) The company must notify ASIC as soon as practicable if any of those requirements or prohibitions in its constitution are not complied with or if its constitution is modified to remove any of those requirements or prohibitions.
(1) A licence that:
(a) allowed a company to omit “Limited” from its name; and
(b) was in force immediately before 1 July 1998; and
(c) was in force immediately before the commencement of this section;
continues in force subject to subsection (3).
(2) The company must notify ASIC as soon as practicable if it:
(a) breaches a condition of the licence; or
(b) pursues objects or purposes that would have prevented it being granted the licence; or
(c) applies its profits or other income to promote objects or purposes that would have prevented it being granted the licence; or
(d) pays a dividend to its members; or
(e) modifies its constitution to allow it to do anything set out in paragraphs (a) to (d).
(3) ASIC may revoke the company’s licence if the company does anything set out in paragraphs (2)(a) to (e).
(1) A person may lodge an application in the prescribed form with ASIC to reserve a name for a company. If the name is available, ASIC must reserve it.
Note: For available names, see section 147.
(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.
(1) A company must set out its name on all its public documents and negotiable instruments.
(2) Subject to sections 154 and 155, if the company’s ACN is not used in its name, the company must also set out with its name, or with 1 of the references to its name, the expression “Australian Company Number” followed by its ACN. If the company’s name appears on 2 or more pages of the document or instrument, this must be done on the first of those pages.
Note 1: If a company has a common seal, its name and ACN must be set out on the seal (see section 123).
Note 2: A public company must display its name at its registered office. Every company must display its name at places at which the company carries on business and that are open to the public (see section 144).
Note 3: Section 149 provides that “ACN” is an acceptable abbreviation of “Australian Company Number”.
A company does not have to set out the expression “Australian Company Number” followed by its ACN on a receipt (for example, a cash register receipt) that sets out information recorded in the machine that produced the receipt.
The regulations may exempt a specified company, or a class of companies, from the requirement in subsection 153(2) to set out information on its public documents and negotiable instruments. The exemption may relate to specified documents or instruments, or a class of documents or instruments.
A person must not carry on business in this jurisdiction under a name or title that:
(a) has the words “Limited” or “No Liability” (or an abbreviation of those words) at the end; or
(b) includes the word “Proprietary” (or an abbreviation of it);
unless allowed or required to do so under a law of the Commonwealth or a law of a State or Territory in this jurisdiction.
(1) If a company wants to change its name, it must:
(a) pass a special resolution adopting a new name; and
(b) lodge an application in the prescribed form with ASIC.
Note: The company may reserve a name before the resolution is passed or the application is lodged (see section 152).
(2) The company must lodge a copy of the special resolution with ASIC within 14 days after it is passed.
(3) If 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.
158 ASIC’s power to direct company to change its name
(1) ASIC may direct a company in writing to change its name within 2 months if:
(a) the name should not have been registered; or
(b) the company has breached a condition under subsection 147(3) on the availability of the name; or
(c) a consent given under subsection 147(4) to use or assume the name has been withdrawn; or
(d) the company has breached a condition on a consent given under subsection 147(4); or
(e) the company ceases to be permitted to use or assume the name (as referred to in paragraph 147(4)(b)).
(2) The company must comply with the direction within 2 months after being given it by doing everything necessary to change its name under section 157.
(3) If the company does not comply with subsection (2), ASIC may change the company’s name to its ACN and any other words that section 148 requires, by altering the details of the company’s registration to reflect the change.
(4) A change of name under subsection (3) takes effect when ASIC alters the details of the company’s registration.
(1) ASIC may change a company’s name so that it includes the word “Limited” by altering the details of the company’s registration to reflect the change if:
(a) the company contravenes any of the requirements or prohibitions in its constitution referred to in subsection 150(1); or
(b) the company modifies its constitution to remove any of those requirements or prohibitions; or
(c) ASIC revokes a licence referred to in section 151 that applies to the company.
(2) The change of name takes effect when ASIC alters the details of the company’s registration.
If ASIC changes a company’s name, it must give the company a new certificate of registration. The company’s new 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).
(1) A change of company name does not:
(a) create a new legal entity; or
(b) affect the company’s existing property, rights or obligations; or
(c) render defective any legal proceedings by or against the company.
(2) Any legal proceedings that could have been continued or begun by or against the company in its former name may be continued or begun by or against it in its new name.
(1) A company may change to a company of a different type as set out in the following table by:
(a) passing a special resolution resolving to change its type; and
(b) complying with sections 163 and 164.
| Allowed conversions | [operative table] |
| | This type of company may change… | …to this type of company |
| 1 | proprietary company limited by shares | unlimited proprietary company unlimited public company public company limited by shares |
| 2 | unlimited proprietary company | proprietary company limited by shares (but only if, within the last 3 years, it was not a limited company that became an unlimited company) public company limited by shares (but only if, within the last 3 years, it was not a limited company that became an unlimited company) unlimited public company |
| 3 | public company limited by shares | unlimited public company unlimited proprietary company proprietary company limited by shares no liability company (see subsection (2)) |
| 4 | company limited by guarantee | public company limited by shares unlimited public company proprietary company limited by shares unlimited proprietary company |
| 5 | unlimited public company | public company limited by shares (but only if, within the last 3 years, it was not a limited company that became an unlimited company) proprietary company limited by shares (but only if, within the last 3 years, it was not a limited company that became an unlimited company) unlimited proprietary company |
| 6 | public no liability company | public company limited by shares (but only if all the issued shares are fully paid up) proprietary company limited by shares (but only if all the issued shares are fully paid up) |
Note 1: A public company seeking to change to a proprietary company must comply with the requirements for proprietary companies set out in section 113.
Note 2: Other types of companies that were previously allowed can change type under the Part 10.1 transitionals.
(2) A public company limited by shares may only convert to a no liability company if:
(a) the company’s constitution states that its sole objects are mining purposes; and
(b) under the constitution the company has no contractual right to recover calls made on its shares from a shareholder who fails to pay them; and
(c) all the company’s issued shares are fully paid up.
Note: Section 9 defines mining purposes and minerals.
(3) The company must lodge a copy of the special resolution with ASIC within 14 days after it is passed.
(4) A special resolution to change an unlimited company that has share capital to a company limited by shares may also provide that a specified portion of its uncalled share capital may only be called up if the company becomes an externally‑administered body corporate.
Lodging application
(1) To change its type, a company must lodge an application with ASIC.
Contents of the application
(2) The application must be accompanied by the following:
(a) a copy of:
(i) the special resolution that resolves to change the type of the company, specifies the new type and the company’s new name (if a change of name is necessary); and
(ii) any other special resolution passed in connection with the change of type;
(b) for a company limited by guarantee changing to a company limited by shares:
(i) a statement signed by the directors of the company that in their opinion the company’s creditors are not likely to be materially prejudiced by the change of type and that sets out their reasons for that opinion; and
(ii) any special resolution dealing with an issue of shares according to section 167;
(c) for a company limited by shares or a company limited by guarantee changing to an unlimited company:
(i) an assent to the change of type in the prescribed form signed by all the members of the company; and
(ii) a statement signed by a director or a company secretary of the company that all the members of the company have signed the assent;
(d) for a proprietary company changing to a public company:
(i) a consolidated copy of the company’s constitution (if any) as at the date of lodgment; and
(ii) a copy of each document (including an agreement or consent) or resolution that is necessary to ascertain the rights attached to issued or unissued shares of the company.
Note 1: The company must lodge a copy of any special resolution modifying its constitution passed after the application is lodged (see subsection 136(5)).
Note 2: The company must lodge information relating to any change of rights attached to its shares, or any division or conversion of its shares into new classes, occurring after the application is lodged (see section 246F).
Company limited by guarantee to company limited by shares
(3) If shares will be issued to persons under paragraph 166(2)(c) on the change of type from a company limited by guarantee to a company limited by shares, the application must state:
(a) that the company has prepared a list that sets out the following details about each person to whom the shares will be issued:
(i) name and address;
(ii) the number and class of shares the person will take up;
(iii) the amount (if any) the person will pay for the shares;
(iv) the amount (if any) that will be unpaid on the shares; and
(b) the number and class of shares those persons will take up; and
(c) the amount (if any) those persons will pay for the shares; and
(ca) the amount (if any) that will be unpaid on the shares; and
(d) if the shares will be issued for non‑cash consideration—the prescribed particulars about the issue of the shares, unless the shares will be issued under a written contract and a copy of the contract is lodged with the application; and
(e) that each of those persons who is not a member of the company when the application is made consents in writing to the inclusion in the list of the details about them that are referred to in paragraph (a).
The shares may be issued to existing members only, to new members only or to existing and new members.
Note: An offer of shares associated with a proposed change of type may need disclosure to investors under Part 6D.2 (see sections 706, 707 and 708).
(4) The application must be in the prescribed form.
(5) The company must have the consents referred to in paragraph (3)(e) (if any) when the application is lodged. The company must keep the consents.
(1) ASIC must give notice under subsection (3) that it intends to alter the details of the company’s registration if:
(a) ASIC is satisfied that:
(i) the application complies with section 163; and
(ii) for an application by a company limited by guarantee to change to a company limited by shares—the company’s creditors are not likely to be materially prejudiced by the change; and
(b) for an application by a company limited by guarantee to change to a company limited by shares that is accompanied by a copy of a special resolution dealing with an issue of shares according to section 167—ASIC is not of the opinion that the obligations that would attach to the shares are unreasonable compared with the obligations that attach to membership of the company limited by guarantee.
(2) To make a decision under subparagraph (1)(a)(ii), ASIC may direct the company in writing to:
(a) notify some or all of its creditors of the proposed change in the way ASIC specifies; and
(b) invite those creditors to make submissions to ASIC.
(3) The notice that ASIC intends to alter the details of the company’s registration must be:
(a) included on ASIC database; and
(b) published in the Gazette.
The notice must also state that ASIC will alter the details of the company’s registration 1 month after the notice has been published in the Gazette unless an order by a court or the Administrative Appeals Tribunal prevents it from doing so.
(4) Subject to an order made by a court or the Administrative Appeals Tribunal within that month, after that month has passed ASIC must alter the details of the company’s registration to reflect the company’s new type.
(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).
(7) If ASIC alters the details of a company’s registration under subsection (4), a court is not to make an order reversing the alteration of the details of the company’s registration.
Note: The Administrative Appeals Tribunal cannot review the change of the company’s type once ASIC has issued a new certificate of registration to the company (see subsection 1274(7A) and paragraph 1317C(b)).
(1) ASIC may direct a proprietary company in writing to change to a public company within 2 months if it is satisfied that the company has contravened section 113 (requirements for proprietary companies).
(2) The company must comply with the direction within 2 months after being given it by doing everything necessary to change to a public company under section 164.
(3) If a proprietary company does not comply with subsection (2), ASIC may change the company from a proprietary to a public company by altering the details of the company’s registration to reflect the company’s new type.
(4) A change of type under this section takes effect when ASIC alters the details of the company’s registration.
(5) ASIC must give the company a new certificate of registration after it alters the details of the company’s registration under 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).
(1) A change of type does not:
(a) create a new legal entity; or
(b) affect the company’s existing property, rights or obligations (except as against the members of the company in their capacity as members); or
(c) render defective any legal proceedings by or against the company or its members.
(2) On the change of type of a company from a company limited by guarantee to a company limited by shares:
(a) the liability of each member and past member as a guarantor on the winding up of the company is extinguished; and
(b) the members cease to be members of the company; and
(c) if shares are to be issued to a person as specified in the list referred to in subsection 163(3):
(i) the shares are taken to be issued to that person; and
(ii) the person is taken to have consented to be a member of the company; and
(iii) the person becomes a member of the company.
Note: The company must maintain a register of members that complies with subsection 169(3).
(1) If:
(a) a company limited by guarantee changes type under this Part to a company limited by shares; and
(b) that company, or another company that beneficially owns all the shares in that company, issues shares to a person who was a member of that company immediately before the change of type took effect;
the person becomes a member of the company issuing the shares if:
(c) the issue of the shares is in accordance with the special resolution that accompanied the application to change type under subparagraph 163(2)(a)(ii); and
(d) the shares are fully paid up; and
(e) the business, assets and liabilities of the issuing company (together with its subsidiaries) when the shares are issued are substantially the same as the business, assets and liabilities of the company changing type (together with its subsidiaries) immediately before the change of type took effect.
(2) If shares are issued according to this section, a court is not to make an order reversing the issue of the shares.
(1) A company limited both by shares and by guarantee may change to one of the following types of companies under this Part:
(a) a proprietary company limited by shares;
(b) a public company limited by shares;
(c) a company limited by guarantee.
(2) This Part applies to the change with any modifications that are necessary.
(1) This Chapter covers:
(a) all companies; and
(b) all registered schemes.
(2) A registered scheme’s responsible entity:
(a) must perform the obligations imposed under this Chapter in respect of the scheme; and
(b) may exercise the powers given by this Chapter in respect of the scheme.
(1) A company or registered scheme must set up and maintain:
(a) a register of members (see section 169); and
(b) if the company or scheme grants options over unissued shares or interests—a register of option holders and copies of options documents (see section 170); and
(c) if the company issues debentures—a register of debenture holders (see section 171).
Note 1: See also section 271 (register of charges).
Note 2: The registers may be kept on computer (see section 1306).
(2) For the purposes of this Chapter, choses in action (including an undertaking) that fall into one of the exceptions in paragraphs (a), (b), (e) and (f) of the definition of debenture in section 9 must also be entered into the register of debenture holders.
General requirements
(1) The register of members must contain the following information about each member:
(a) the member’s name and address;
(b) the date on which the entry of the member’s name in the register is made.
Index to register
(2) If the company or scheme has more than 50 members, the company or scheme must include in the register an up‑to‑date index of members’ names. The index must be convenient to use and allow a member’s entry in the register to be readily found. A separate index need not be included if the register itself is kept in a form that operates effectively as an index.
Companies with share capital
(3) If the company has a share capital, the register must also show:
(a) the date on which every allotment of shares takes place; and
(b) the number of shares in each allotment; and
(c) the shares held by each member; and
(d) the class of shares; and
(e) the share numbers (if any), or share certificate numbers (if any), of the shares; and
(f) the amount unpaid on the shares (if any).
Note 1: Transfers of shares are entered in the register under section 1092. Section 1091C deals with the registration of trustees etc. on the death, incapacity or bankruptcy of the shareholder.
Note 2: For the treatment of joint holders see subsection (8).
(4) The register does not have to show the amount unpaid on the shares (see paragraph (1)(f)) if:
(a) all of the company’s shares were issued before 1 July 1998; and
(b) the register continues to show the par values of the shares as they were immediately before 1 July 1998.
(5) The register does not have to show the amount unpaid on the shares (see paragraph (1)(f)) if:
(a) all of the company’s shares were issued before 1 July 1998; and
(b) the company is not a listed company.
Non‑beneficial ownership—companies other than listed companies
(5A) The register of a company that:
(a) has a share capital; and
(b) is neither a listed company (within the meaning of section 603) nor a company covered by an order under section 707;
must indicate any shares that a member does not hold beneficially.
Note: See also section 1096A (in particular, subsection 1096A(9) which contains relevant presumptions about beneficial ownership).
(6) In deciding for the purposes of subsection (5) whether a member holds shares beneficially or non‑beneficially, the company is to have regard only to information in notices given to the company under section 1096A, 672B or 672C.
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
(b) the date on which the person stopped being a member.
The company or scheme may keep these entries separately from the rest of the register.
Joint holders
(8) For the purposes of this section:
(a) 2 or more persons who jointly hold shares in the company or interests in the scheme are taken to be a single member of the company or scheme in relation to those shares or interests; and
(b) 2 or more persons who have given a guarantee jointly are taken to be a single member of the company.
They may also be members of the company or scheme because of shares or interests that they hold, or a guarantee that they have given, in their own right or jointly with others.
(1) The register of option holders must contain the following information about each holder of options over unissued shares in the company or unissued interests in the scheme:
(a) the option holder’s name and address;
(b) the date on which the entry of the option holder’s name in the register is made;
(c) the date of grant of the options;
(d) the number and description of the shares or interests over which the options were granted;
(e) either:
(i) the period during which the options may be exercised; or
(ii) the time at which the options may be exercised;
(f) any event that must happen before the options can be exercised;
(g) any consideration for the grant of the options;
(h) any consideration for the exercise of the options or the method by which that consideration is to be determined.
Because it is a register of the holders of options that are still exercisable, the register must be updated whenever options are exercised or expire.
(2) Information about the grant of an option must be entered in the register within 14 days after the grant of the option.
Copies of options documents
(3) The company or scheme must keep with the register a copy of every document that grants an option over unissued shares or interests unless the option has been granted official quotation by a securities exchange.
(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.
(1) The register of debenture holders must contain the following information about each holder of a debenture:
(a) the debenture holder’s name and address;
(b) the amount of the debentures held.
Note: See subsection 168(2) for the coverage of debenture.
(2) A company’s failure to comply with this section in relation to a debenture does not affect the debenture itself.
(1) A register kept under this Chapter that relates to a company must be kept at:
(a) the company’s registered office; or
(b) the company’s principal place of business in this jurisdiction; or
(c) a place in this jurisdiction (whether of the company or of someone else) where the work involved in maintaining the register is done; or
(d) another place in this jurisdiction approved by ASIC.
(1A) A register kept under this Chapter that relates to a registered scheme must be kept at:
(a) the responsible entity’s registered office; or
(b) an office at the responsible entity’s principal place of business in this jurisdiction; or
(c) an office in this jurisdiction (whether of the responsible entity or of someone else) where the work involved in maintaining the register is done; or
(d) another office in this jurisdiction approved by ASIC.
Notice to ASIC
(2) The company or scheme must lodge with ASIC a notice of the address at which the register is kept within 7 days after the register is:
(a) established at an office that:
(i) is not the registered office of the company or responsible entity; and
(ii) is not at the principal place of business of the company or responsible entity in this jurisdiction; or
(b) moved from one place to another.
Notice is not required for moving the register between the registered office and the principal place of business in this jurisdiction.
Right to inspect
(1) A company or registered scheme must allow anyone to inspect a register kept under this Chapter. If the register is not kept on a computer, the person inspects the register itself. If the register is kept on a computer, the person inspects a hard copy of the information on the register unless the person and the company or the responsible entity agree that the person can access the information by computer.
Note: Other provisions that are relevant to the inspection of registers are:
· section 1300 (place and times for inspection)
· section 1301 (the location of documents that are kept on computers)
· section 1306 (form and evidentiary value).
Inspection fees
(2) A member of a company or a registered scheme, a registered option holder or a registered debenture holder may inspect a 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.
Right to get copies
(3) The company or scheme must give a person a copy of the register (or a part of the register) within 7 days if the person:
(a) asks for the copy; and
(b) pays any fee (up to the prescribed amount) required by the company or scheme.
ASIC may allow a longer period to comply with the request. If the register is kept on a computer and the person asks for the data on floppy disk, the company or scheme must give the data to the person on floppy disk. The data must be readable but the floppy disk need not be formatted for the person’s preferred operating system.
(4) A person has the same rights to inspect, and obtain copies of, thedocuments kept under subsection 170(3) as the person has in respect of the register of option holders itself.
(5) The company is not required under subsection (1) or (3) to allow a person to see, or to give a person a copy that contains, share certificate numbers.
ASIC power in relation to register of debenture holders
(6) ASIC may exempt a company from complying with subsections (1) and (3) in relation to information in a register of debenture holders about debentures that are not convertible into shares or options over unissued shares.
(7) The exemption:
(a) must be in writing; and
(b) may be general or limited; and
(c) may be subject to conditions specified in the exemption.
(8) ASIC must publish a copy of the exemption in the Gazette.
(9) A person must not contravene a condition of the exemption.
(10) On application by ASIC, the Court may order a person who contravenes a condition of the exemption to comply with the condition.
A person who agrees to maintain a register on behalf of a company or registered scheme for the purposes of this Chapter must:
(a) make the register available for inspection under this Chapter; and
(b) provide the copies required by this Chapter.
(1) A company or registered scheme or a person aggrieved may apply to the Court to have a register kept by the company or scheme under this Part corrected.
(2) If the Court orders the company or scheme to correct the register, it may also order the company or scheme to compensate a party to the application for loss or damage suffered.
(3) If:
(a) the Court orders a company or scheme to correct its register of members; and
(b) the company or scheme has lodged a list of its members with ASIC;
the company or scheme must lodge notice of the correction with ASIC.
In the absence of evidence to the contrary, a register kept under this Chapter is proof of the matters shown in the register under this Chapter.
(1) A person must not:
(a) use information about a person obtained from a register kept under this Chapter to contact or send material to the person; or
(b) disclose information of that kind knowing that the information is likely to be used to contact or send material to the person;
unless that use or disclosure of the information is:
(c) relevant to the holding of the interests recorded in the register or the exercise of the rights attaching to them; or
(d) approved by the company or scheme.
Note: An example of using information to send material to a person is putting a person’s name and address on a mailing list for advertising material.
(2) A person who contravenes subsection (1) is liable to compensate anyone else who suffers loss or damage because of the contravention.
(3) A person who makes a profit from a contravention of subsection (1) owes a debt to the company or the scheme. The amount of the debt is the amount of the profit.
(4) If a person owes a debt under subsection (3) to the scheme:
(a) the debt may be recovered by the responsible entity as a debt due to it; and
(b) any amount paid or recovered in respect of the debt forms part of the scheme property.
(1) A company may keep a branch register of members at a place outside Australia.
(2) If a company keeps an overseas branch register under subsection (1):
(a) the company must keep the branch register in the same manner as this Act requires the company to keep the register kept under section 169 (the principal register); and
(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.
(1) This Part sets out some of the most significant duties of directors, secretaries, other officers and employees of corporations. Other duties are imposed by other provisions of this Act and other laws (including the general law).
(2) Section 9 defines both director and officer. Officer includes, as well as directors and secretaries, some other people who manage the corporation or its property (such as receivers and liquidators).
Care and diligence—directors and other officers
(1) A director or other officer of a corporation must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they:
(a) were a director or officer of a corporation in the corporation’s circumstances; and
(b) occupied the office held by, and had the same responsibilities within the corporation as, the director or officer.
Note: This subsection is a civil penalty provision (see section 1317E).
Business judgment rule
(2) A director or other officer of a corporation who makes a business judgment is taken to meet the requirements of subsection (1), and their equivalent duties at common law and in equity, in respect of the judgment if they:
(a) make the judgment in good faith for a proper purpose; and
(b) do not have a material personal interest in the subject matter of the judgment; and
(c) inform themselves about the subject matter of the judgment to the extent they reasonably believe to be appropriate; and
(d) rationally believe that the judgment is in the best interests of the corporation.
The director’s or officer’s belief that the judgment is in the best interests of the corporation is a rational one unless the belief is one that no reasonable person in their position would hold.
Note: This subsection only operates in relation to duties under this section and their equivalent duties at common law or in equity (including the duty of care that arises under the common law principles governing liability for negligence)—it does not operate in relation to duties under any other provision of this Act or under any other laws.
(3) In this section:
business judgment means any decision to take or not take action in respect of a matter relevant to the business operations of the corporation.
Good faith—directors and other officers
(1) A director or other officer of a corporation must exercise their powers and discharge their duties:
(a) in good faith in the best interests of the corporation; and
(b) for a proper purpose.
Note 1: This subsection is a civil penalty provision (see section 1317E).
Note 2: Section 187 deals with the situation of directors of wholly‑owned subsidiaries.
(2) A person who is involved in a contravention of subsection (1) contravenes this subsection.
Note 1: Section 79 defines involved.
Note 2: This subsection is a civil penalty provision (see section 1317E).
Use of position—directors, other officers and employees
(1) A director, secretary, other officer or employee of a corporation must not improperly use their position to:
(a) gain an advantage for themselves or someone else; or
(b) cause detriment to the corporation.
Note: This subsection is a civil penalty provision (see section 1317E).
(2) A person who is involved in a contravention of subsection (1) contravenes this subsection.
Note 1: Section 79 defines involved.
Note 2: This subsection is a civil penalty provision (see section 1317E).
Use of information—directors, other officers and employees
(1) A person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to:
(a) gain an advantage for themselves or someone else; or
(b) cause detriment to the corporation.
Note 1: This duty continues after the person stops being an officer or employee of the corporation.
Note 2: This subsection is a civil penalty provision (see section 1317E).
(2) A person who is involved in a contravention of subsection (1) contravenes this subsection.
Note 1: Section 79 defines involved.
Note 2: This subsection is a civil penalty provision (see section 1317E).
Good faith—directors and other officers
(1) A director or other officer of a corporation commits an offence if they:
(a) are reckless; or
(b) are intentionally dishonest;
and fail to exercise their powers and discharge their duties:
(c) in good faith in the best interests of the corporation; or
(d) for a proper purpose.
Note: Section 187 deals with the situation of directors of wholly‑owned subsidiaries.
Use of position—directors, other officers and employees
(2) A director, other officer or employee of a corporation commits an offence if they use their position dishonestly:
(a) with the intention of directly or indirectly gaining an advantage for themselves, or someone else, or causing detriment to the corporation; or
(b) recklessly as to whether the use may result in themselves or someone else directly or indirectly gaining an advantage, or in causing detriment to the corporation.
Use of information—directors, other officers and employees
(3) A person who obtains information because they are, or have been, a director or other officer or employee of a corporation commits an offence if they use the information dishonestly:
(a) with the intention of directly or indirectly gaining an advantage for themselves, or someone else, or causing detriment to the corporation; or
(b) recklessly as to whether the use may result in themselves or someone else directly or indirectly gaining an advantage, or in causing detriment to the corporation.
Sections 180 to 184:
(a) have effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person because of their office or employment in relation to a corporation; and
(b) do not prevent the commencement of civil proceedings for a breach of a duty or in respect of a liability referred to in paragraph (a).
This section does not apply to subsections 180(2) and (3) to the extent to which they operate on the duties at common law and in equity that are equivalent to the requirements of subsection 180(1).
Sections 180 to 184 do not apply to an act or omission by a director or other officer or employee of a foreign company unless the act or omission occurred in connection with:
(a) the foreign company carrying on business in this jurisdiction; or
(b) an act that the foreign company does, or proposes to do, in this jurisdiction; or
(c) a decision by the foreign company whether or not to do, or refrain from doing, an act in this jurisdiction.
A director of a corporation that is a wholly‑owned subsidiary of a body corporate is taken to act in good faith in the best interests of the subsidiary if:
(a) the constitution of the subsidiary expressly authorises the director to act in the best interests of the holding company; and
(b) the director acts in good faith in the best interests of the holding company; and
(c) the subsidiary is not insolvent at the time the director acts and does not become insolvent because of the director’s act.
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 345 (annual returns); or
(d) section 205B (lodgment of notices with ASIC).
Note: See section 203C for the circumstances in which a company must have a secretary.
Consequence if director of proprietary company without secretary does not fulfil secretary’s function
(2) Each director of a proprietary company contravenes this subsection if:
(a) the proprietary company contravenes section 142, 145, 205B or 345; and
(b) the proprietary company does not have a secretary when it contravenes that section.
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.
If:
(a) a director relies on information, or professional or expert advice, given or prepared by:
(i) an employee of the corporation whom the director believes on reasonable grounds to be reliable and competent in relation to the matters concerned; or
(ii) a professional adviser or expert in relation to matters that the director believes on reasonable grounds to be within the person’s professional or expert competence; or
(iii) another director or officer in relation to matters within the director’s or officer’s authority; or
(iv) a committee of directors on which the director did not serve in relation to matters within the committee’s authority; and
(b) the reliance was made:
(i) in good faith; and
(ii) after making an independent assessment of the information or advice, having regard to the director’s knowledge of the corporation and the complexity of the structure and operations of the corporation; and
(c) the reasonableness of the director’s reliance on the information or advice arises in proceedings brought to determine whether a director has performed a duty under this Part or an equivalent general law duty;
the director’s reliance on the information or advice is taken to be reasonable unless the contrary is proved.
(1) If the directors delegate a power under section 198D, a director is responsible for the exercise of the power by the delegate as if the power had been exercised by the directors themselves.
(2) A director is not responsible under subsection (1) if:
(a) the director believed on reasonable grounds at all times that the delegate would exercise the power in conformity with the duties imposed on directors of the company by this Act and the company’s constitution (if any); and
(b) the director believed:
(i) on reasonable grounds; and
(ii) in good faith; and
(iii) after making proper inquiry if the circumstances indicated the need for inquiry;
that the delegate was reliable and competent in relation to the power delegated.
This Division does not apply to an act or omission by a director or other officer or employee of a corporation that is a registrable Australian body unless the act or omission occurred in connection with:
(a) the body carrying on business outside its place of origin; or
(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.
Director’s duty to notify other directors of material personal interest when conflict arises
(1) A director of a company who has a material personal interest in a matter that relates to the affairs of the company must give the other directors notice of the interest unless subsection (2) says otherwise.
(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 make the company or a related body corporate the insurer); or
(vii) relates to any payment by the company or a related body corporate in respect of an indemnity permitted under section 199A or any contract relating to such an indemnity; or
(viii) is in a contract, or proposed contract, with, or for the benefit of, or on behalf of, a related body corporate and arises merely because the director is a director of the related body corporate; or
(b) the company is a proprietary company and the other directors are aware of the nature and extent of the interest and its relation to the affairs of the company; or
(c) all the following conditions are satisfied:
(i) the director has already given notice of the nature and extent of the interest and its relation to the affairs of the company under subsection (1);
(ii) if a person who was not a director of the company at the time when the notice under subsection (1) was given is appointed as a director of the company—the notice is given to that person;
(iii) the nature or extent of the interest has not materially increased above that disclosed in the notice; or
(d) the director has given a standing notice of the nature and extent of the interest under section 192 and the notice is still effective in relation to the interest.
Note: Subparagraph (c)(ii)—the notice may be given to the person referred to in this subparagraph by someone other than the director to whose interests it relates (for example, by the secretary).
(3) The notice required by subsection (1) must:
(a) give details of:
(i) the nature and extent of the interest; and
(ii) the relation of the interest to the affairs of the company; and
(b) be given at a directors’ meeting as soon as practicable after the director becomes aware of their interest in the matter.
The details must be recorded in the minutes of the meeting.
Effect of contravention by director
(4) A contravention of this section by a director does not affect the validity of any act, transaction, agreement, instrument, resolution or other thing.
Section does not apply to single director proprietary company
(5) This section does not apply to a proprietary company that has only 1 director.
Power to give notice
(1) A director of a company who has an interest in a matter may give the other directors standing notice of the nature and extent of the interest in the matter in accordance with subsection (2). The notice may be given at any time and whether or not the matter relates to the affairs of the company at the time the notice is given.
Note: The standing notice may be given to the other directors before the interest becomes a material personal interest.
(2) The notice under subsection (1) must:
(a) give details of the nature and extent of the interest; and
(b) be given:
(i) at a directors’ meeting (either orally or in writing); or
(ii) to the other directors individually in writing.
The standing notice is given under subparagraph (b)(ii) when it has been given to every director.
Standing notice must be tabled at meeting if given to directors individually
(3) If the standing notice is given to the other directors individually in writing, it must be tabled at the next directors’ meeting after it is given.
Nature and extent of interest must be recorded in minutes
(4) The director must ensure that the nature and extent of the interest disclosed in the standing notice is recorded in the minutes of the meeting at which the standing notice is given or tabled.
Dates of effect and expiry of standing notice
(5) The standing notice:
(a) takes effect as soon as it is given; and
(b) ceases to have effect if a person who was not a director of the company at the time when the notice was given is appointed as a director of the company.
A standing notice that ceases to have effect under paragraph (b) commences to have effect again if it is given to the person referred to in that paragraph.
Note: The notice may be given to the person referred to in paragraph (b) by someone other than the director to whose interests it relates (for example, by the secretary).
Effect of material increase in nature or extent of interest
(6) The standing notice ceases to have effect in relation to a particular interest if the nature or extent of the interest materially increases above that disclosed in the notice.
Effect of contravention by director
(7) A contravention of this section by a director does not affect the validity of any act, transaction, agreement, instrument, resolution or other thing.
Sections 191 and 192 have effect in addition to, and not in derogation of:
(a) any general law rule about conflicts of interest; and
(b) any provision in a company’s constitution (if any) that restricts a director from:
(i) having a material personal interest in a matter; or
(ii) holding an office or possessing property;
involving duties or interests that conflict with their duties or interests as a director.
If a director of a proprietary company has a material personal interest in a matter that relates to the affairs of the company and:
(a) under section 191 the director discloses the nature and extent of the interest and its relation to the affairs of the company at a meeting of the directors; or
(b) the interest is one that does not need to be disclosed under section 191;
then:
(c) the director may vote on matters that relate to the interest; and
(d) any transactions that relate to the interest may proceed; and
(e) the director may retain benefits under the transaction even though the director has the interest; and
(f) the company cannot avoid the transaction merely because of the existence of the interest.
If disclosure is required under section 191, paragraphs (e) and (f) apply only if the disclosure is made before the transaction is entered into.
Note: A director may need to give notice to the other directors if the director has a material personal interest in a matter relating to the affairs of the company (see section 191).
Restrictions on voting and being present
(1) A director of a public company who has a material personal interest in a matter that is being considered at a directors’ meeting must not:
(a) be present while the matter is being considered at the meeting; or
(b) vote on the matter;
unless:
(c) subsection (2) or (3) allows the director to be present; or
(d) the interest does not need to be disclosed under section 191.
Participation with approval of other directors
(2) The director may be present and vote if directors who do not have a material personal interest in the matter have passed a resolution that:
(a) identifies the director, the nature and extent of the director’s interest in the matter and its relation to the affairs of the company; and
(b) states that those directors are satisfied that the interest should not disqualify the director from voting or being present.
Participation with ASIC approval
(3) The director may be present and vote if they are so entitled under a declaration or order made by ASIC under section 196.
Director may consider or vote on resolution to deal with matter at general meeting
(4) If there are not enough directors to form a quorum for a directors’ meeting because of subsection (1), 1 or more of the directors (including those who have a material personal interest in that matter) may call a general meeting and the general meeting may pass a resolution to deal with the matter.
Effect of contravention by director
(5) A contravention by a director of:
(a) this section; or
(b) a condition attached to a declaration or order made by ASIC under section 196;
does not affect the validity of any resolution.
ASIC’s power to make specific declarations
(1) ASIC may declare in writing that a director of a public company who has a material personal interest in a matter that is being, or is to be, considered at a directors’ meeting may, despite the director’s interest, be present while the matter is being considered at the meeting, vote on the matter, or both be present and vote. However, ASIC may only make the declaration if:
(a) the number of directors entitled to be present and vote on the matter would be less than the quorum for a directors’ meeting if the director were not allowed to vote on the matter at the meeting; and
(b) the matter needs to be dealt with urgently, or there is some other compelling reason for the matter being dealt with at the directors’ meeting, rather than by a general meeting called under subsection 195(4).
(2) The declaration may:
(a) apply to all or only some of the directors; or
(b) specify conditions that the company or director must comply with.
ASIC’s power to make class orders
(3) ASIC may make an order in writing that enables directors who have a material personal interest in a matter to be present while the matter is being considered at a directors’ meeting, vote on that matter, or both be present and vote. The order may be made in respect of a specified class of public companies, directors, resolutions or interests.
(4) The order may be expressed to be subject to conditions.
(5) Notice of the making, revocation or suspension of the order must be published in the Gazette.
(1) A person who is a director of a corporation when it incurs a liability while acting, or purporting to act, as trustee, is liable to discharge the whole or a part of the liability if the corporation:
(a) has not, and cannot, discharge the liability or that part of it; and
(b) is not entitled to be fully indemnified against the liability out of trust assets.
This is so even if the trust does not have enough assets to indemnify the trustee. The person is liable both individually and jointly with the corporation and anyone else who is liable under this subsection.
(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.
(1) The business of a company is to be managed by or under the direction of the directors.
Note: See section 198E for special rules about the powers of directors who are the single director/shareholder of proprietary companies.
(2) The directors may exercise all the powers of the company except any powers that this Act or the company’s constitution (if any) requires the company to exercise in general meeting.
Note: For example, the directors may issue shares, borrow money and issue debentures.
(1) Any 2 directors of a company that has 2 or more directors, or the director of a proprietary company that has only 1 director, may sign, draw, accept, endorse or otherwise execute a negotiable instrument.
(2) The directors may determine that a negotiable instrument may be signed, drawn, accepted, endorsed or otherwise executed in a different way.
(1) The directors of a company may confer on a managing director any of the powers that the directors can exercise.
(2) The directors may revoke or vary a conferral of powers on the managing director.
(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
(d) any other person.
Note: The delegation must be recorded in the company’s minute book (see section 251A).
(2) The delegate must exercise the powers delegated in accordance with any directions of the directors.
(3) The exercise of the power by the delegate is as effective as if the directors had exercised it.
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.
Right while director
(1) A director of a company may inspect the books of the company (other than its financial records) at all reasonable times for the purposes of a legal proceeding:
(a) to which the person is a party; or
(b) that the person proposes in good faith to bring; or
(c) that the person has reason to believe will be brought against them.
Note: Section 290 gives the director a right of access to financial records.
Right during 7 years after ceasing to be director
(2) A person who has ceased to be a director of a company may inspect the books of the company (including its financial records) at all reasonable times for the purposes of a legal proceeding:
(a) to which the person is a party; or
(b) that the person proposes in good faith to bring; or
(c) that the person has reason to believe will be brought against them.
This right continues for 7 years after the person ceased to be a director of the company.
Right to take copies
(3) A person authorised to inspect books under this section for the purposes of a legal proceeding may make copies of the books for the purposes of those proceedings.
Company not to refuse access
(4) A company must allow a person to exercise their rights to inspect or take copies of the books under this section.
Interaction with other rules
(5) This section does not limit any right of access to company books that a person has apart from this section.
Exemptions not allowed
(1) A company or a related body corporate must not exempt a person (whether directly or through an interposed entity) from a liability to the company incurred as an officer or auditor of the company.
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;
(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.
When indemnity for legal costs not allowed
(3) A company or 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 legal costs incurred in defending an action for a liability incurred as an officer or auditor of the company if the costs are incurred:
(a) in defending or resisting proceedings in which the person is found to have a liability for which they could not be indemnified under subsection (2); or
(b) in defending or resisting criminal proceedings in which the person is found guilty; or
(c) in defending or resisting proceedings brought by ASIC or a liquidator for a court order if the grounds for making the order are found by the court to have been established; or
(d) in connection with proceedings for relief to the person under this Act in which the Court denies the relief.
Paragraph (c) does not apply to costs incurred in responding to actions taken by ASIC or a liquidator as part of an investigation before commencing proceedings for the court order.
Note 1: Paragraph (c)—This includes proceedings by ASIC for an order under section 206C, 206D or 206E (disqualification), section 232 (oppression), section 1317E, 1317G or 1317H (civil penalties) or section 1324 (injunction).
Note 2: The company may be able to give the person a loan or advance in respect of the legal costs (see section 212).
(4) For the purposes of subsection (3), the outcome of proceedings is the outcome of the proceedings and any appeal in relation to the proceedings.
A company or a related body corporate must not pay, or agree to pay, a premium for a contract insuring a person who is or has been an officer or auditor of the company against a liability (other than one for legal costs) arising out of:
(a) conduct involving a wilful breach of duty in relation to the company; or
(b) a contravention of section 182 or 183.
This section applies to a premium whether it is paid directly or through an interposed entity.
(1) Sections 199A and 199B do not authorise anything that would otherwise be unlawful.
(2) Anything that purports to indemnify or insure a person against a liability, or exempt them from a liability, is void to the extent that it contravenes section 199A or 199B.
(1) For the purposes of this Division:
(a) a benefit is given in connection with a person’s retirement from an office 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
(ii) in connection with the person’s retirement from the office; 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
(d) a pension or lump sum is paid or payable in connection with the person’s retirement from an office if the pension or lump sum is paid or payable:
(i) by way of compensation for, or otherwise in connection with, the loss by the person of the office; or
(ii) in connection with the person’s retirement from the office; and
(e) retirement from an office includes:
(i) loss of the office; and
(ii) resignation from the office; and
(iii) death of a person at a time when they hold the office.
(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;
person A is taken to give benefit A in connection with the person B’s retirement from that office.
Benefits in connection with retirement from board or managerial office
(1) The following must not give a person a benefit in connection with that person’s, or someone else’s, retirement from a board or managerial office in a company, or a related body corporate, without member approval under section 200E:
(a) the company;
(b) an associate of the company (other than a body corporate that is related to the company and is itself a company);
(c) a prescribed superannuation fund in relation to the company.
Note 1: Sections 200F, 200G and 200H provide for exceptions to this rule.
Note 2: Section 9 defines board or managerial office.
Prescribed superannuation funds
(2) For the purposes of this section:
(a) a superannuation fund is taken to be a prescribed superannuation fund in relation to a company if the company, or an associate of the company, gives a benefit to the superannuation fund in prescribed circumstances; and
(b) if a prescribed superannuation fund in relation to a company gives a benefit to another superannuation fund in prescribed circumstances, the other superannuation fund is taken to be a prescribed superannuation fund in relation to the company.
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 a person’s retirement from an office 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 a person’s retirement from an office 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.
A person must not give a benefit to a person who:
(a) holds, or has at any previous time held, a board or managerial office in a company or a related body corporate; or
(b) is the spouse of a person referred to in paragraph (a); or
(c) is a relative of a person referred to in paragraph (a) or of the spouse of such a person; or
(d) is an associate of a person referred to in paragraph (a) or the spouse of an associate of such a person;
in connection with the transfer of the whole or any part of the undertaking or property of the company without member approval under section 200E.
Note: Section 9 defines board or managerial office.
A person who:
(a) holds, or has at any previous time held, a board or managerial office in a company or related body corporate; or
(b) is the spouse of a person referred to in paragraph (a); or
(c) is a relative of a person referred to in paragraph (a) or of the spouse of such a person; or
(d) is an associate of a person referred to in paragraph (a) or the spouse of an associate of such a person;
must not receive a benefit if the giving of the benefit contravenes section 200B or 200C.
Note: Section 9 defines board or managerial office.
(1) If section 200B or 200C requires member approval for giving a person a benefit, it must 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.
(2) Details of the benefit must be set out in, or accompany, the notice of the meeting at which the resolution is to be considered. 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 prescribed 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.
(3) The approval extends to the giving of another benefit to the person if:
(a) the other benefit is given to the person instead of the proposed benefit; and
(b) the amount or money value of the benefit is less than the amount or money value of the proposed benefit.
(4) The approval does not relieve a director of a body corporate from any duty to the body corporate (whether under section 180, 181, 182, 183 or 184 or otherwise and whether of a fiduciary nature or not) in connection with the giving of the benefit.
Subsection 200B(1) does not apply to:
(a) a benefit given in connection with a person’s retirement from an office in relation to a company if the benefit is:
(i) given under an agreement entered into before 1 January 1991 if giving the benefit in accordance with the agreement would have been lawful if the benefit were given when the agreement was entered into; or
(ii) a genuine payment by way of damages for breach of contract; or
(iii) given to the person under an agreement made between the company and the person before the person became the holder of the office as the consideration, or part of the consideration, for the person agreeing to hold the office; or
(iv) a payment made in respect of leave of absence to which the person is entitled under an industrial instrument; or
(b) a benefit given in prescribed circumstances.
(1) Subsection 200B(1) does not apply to a benefit if:
(a) the benefit is a payment in connection with a person’s retirement from a board or managerial office (the relevant office) in a company or a related body corporate; and
(b) the payment is for past services the person rendered to:
(i) the company; or
(ii) a related body corporate; or
(iii) a body that was a related body corporate of the company when the past services were rendered; and
(c) the value of the benefit, when added to the value of all other payments (if any) already made or payable in connection with the person’s retirement from board or managerial offices in the company and related bodies corporate does not exceed the payment limit set by subsection (2).
In applying paragraph (c), disregard any pensions or lump sums that section 200F applies to.
(2) The payment limit is:
(a) the amount worked out under subsection (3) if the person:
(i) was an eligible employee in relation to the company at the time when the person retired from the relevant office; and
(ii) has been an eligible employee in relation to the company throughout a period (the relevant period), or throughout periods totalling a period (also the relevant period), of more than 3 years; or
(b) otherwise—the total remuneration of the person from the company and related bodies corporate during the period of 3 years ending when the person retired from the relevant office.
Note: Section 9 defines remuneration.
(3) The amount worked out under this subsection is the amount worked out using the formula:
where:
relevant period is the number of years in the relevant period or 7, whichever is the lesser number.
total remuneration is the amount of the total remuneration of the person from the company and related bodies corporate during the last 3 years of the relevant period.
(4) In determining for the purposes of paragraph (1)(c) the value of a pension or lump sum payment, disregard any part of the pension or lump sum payment that is attributable to:
(a) a contribution made by the person; or
(b) a contribution made by a person other than:
(i) the company; or
(ii) a body corporate (a relevant body corporate) that is a related body corporate of the company, or that was, when the contribution was made, such a related body corporate; or
(iii) an associate of the company, or of a relevant body corporate, in respect of:
(A) the payment of the pension, or the making of the lump sum payment, as the case may be; or
(B) the making of the contribution.
(5) For the purposes of subparagraph (2)(a), a person is taken to have been an eligible employee in relation to a company at a particular time if:
(a) the person was a genuine full‑time employee of the company at that time; or
(b) the person was a genuine full‑time employee of a body corporate at that time and the body corporate was related to the company at that time.
(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.
Subsection 200B(1) does not apply to a benefit given by a person if failure to give the benefit would constitute a contravention of a law in force in Australia or elsewhere (otherwise than because of breach of contract or breach of trust).
(1) If giving a benefit to a person contravenes section 200B, then:
(a) if the benefit is a payment—the amount of the payment; or
(b) otherwise—the money value of the prescribed benefit;
is taken to be received by the person in trust for the company concerned.
(2) Subsection (1) applies to the whole of the amount of a payment or of the money value of the benefit even though giving the benefit would not have contravened section 200B if that amount or value of the benefit had been less.
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.
(1) Only an individual who is at least 18 may be appointed as a director of a company.
(2) A person who is disqualified from managing corporations under Part 2D.6 may only be appointed as director of a company if the appointment is made with permission granted by ASIC under section 206F or leave granted by the Court under section 206G.
(1) A person who has turned 72 may only be appointed or act as a director of:
(a) a public company; or
(b) a company that is a subsidiary of a public company;
if authorised to do so under this section.
(2) A person may act as a director of a company during the period that:
(a) starts on the day on which they turn 72; and
(b) ends at the conclusion of the AGM beginning next after that day.
(3) The office of a director of a public company, or of a subsidiary of a public company, becomes vacant at the conclusion of the AGM of the public company, or the subsidiary, beginning next after the director turns 72.
(4) If a proprietary company is a subsidiary of a public company:
(a) subsection (3) does not apply to it; and
(b) a person may continue to act as a director of the proprietary company until the next AGM of the public company after the person turns 72; and
(c) the person’s office of director becomes vacant at the end of that meeting.
Note: Proprietary companies do not need to hold annual general meetings (see section 250N).
(5) An act done by a person as a director is valid even if it is afterwards discovered that they had turned 72 at the time when they were appointed or that their appointment had terminated under subsection (3) or (4).
(6) If the office of a director has become vacant under subsection (3) or (4), no provision for the automatic re‑appointment of retiring directors in default of another appointment applies in relation to that director.
(7) If a vacancy created under subsection (3) or (4) is not filled at the meeting at which the office became vacant, the office may be filled as a casual vacancy.
(8) Subject to subsections (9) and (10), a person who has turned 72 may by special resolution be appointed or re‑appointed as a director of that company to hold office until the conclusion of the company’s next AGM if:
(a) the resolution states the person’s age; and
(b) the notice of meeting states that the person is a candidate for election who has turned 72 and states the person’s age.
(9) If the company is a subsidiary of a public company, the appointment or re‑appointment referred to in subsection (8) does not have effect unless:
(a) the person appointed or re‑appointed is a director of the public company; or
(b) the appointment or re‑appointment of the person as a director of the company has been approved by a special resolution of the public company and the notice of meeting states that the person is a candidate for election as a director of the company who has turned 72 and states the person’s age.
(10) If the subsidiary is a proprietary company:
(a) the person may be appointed or re‑appointed as a director of the subsidiary until the end of the next AGM of the holding company; and
(b) the appointment does not need a resolution under subsection (8); and
(c) the appointment must satisfy either paragraph (9)(a) or (b).
(11) If:
(a) the constitution of a company limited by guarantee provides for the holding of postal ballots for the election of a director or directors; and
(b) a postal ballot for the election of a director or directors is held and in the ballot:
(i) the members entitled to vote have been given notice in writing by the company stating that a candidate for election has turned 72 and stating the age of the candidate; and
(ii) that candidate is elected by a majority of not less than 75% of the members who, being entitled to vote, vote in the ballot;
that candidate may be appointed or re‑appointed as a director to hold office until the conclusion of the next AGM of the company.
(12) If:
(a) the constitution of a company limited by guarantee provides for the election or appointment of a director or directors otherwise than by members at a general meeting or by postal ballot of members; and
(b) ASIC declares in writing that this section does not apply to the company or its directors;
then, subject to the conditions (if any) that ASIC specifies in the declaration, this section does not so apply.
(13) A vacancy in the office of a director occurring under subsection (3) or (4) is not to be taken into account in determining when other directors are to retire.
(14) Nothing in this section limits, or affects the operation of, any provision of a company’s constitution that prevents any person from being appointed as a director or requiring any director to vacate their office at any age less than 72 years.
(1) A company contravenes this subsection if a person does not give the company a signed consent to act as a director of the company before being appointed.
(2) The company must keep the consent.
(1) A resolution passed at a general meeting of a public company appointing or confirming the appointment of 2 or more directors is void unless:
(a) the meeting has resolved that the appointments or confirmations may be voted on together; and
(b) no votes were cast against the resolution.
(2) This section does not affect:
(a) a resolution to appoint directors by an amendment to the company’s constitution (if any); or
(b) a ballot or poll to elect 2 or more directors if the ballot or poll does not require members voting for 1 candidate to vote for another candidate.
(3) For the purposes of paragraph (2)(b), a ballot or poll does not require a member to vote for a candidate merely because the member is required to express a preference among individual candidates in order to cast a valid vote.
(1) The director of a proprietary company who is its only director and only shareholder may appoint another director by recording the appointment and signing the record.
Appointment of new director on death, mental incapacity or bankruptcy
(2) If a person who is the only director and the only shareholder of a proprietary company:
(a) dies; or
(b) cannot manage the company because of the person’s mental incapacity;
and a personal representative or trustee is appointed to administer the person’s estate or property, the personal representative or trustee may appoint a person as the director of the company.
(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.
A company may appoint a person as a director by resolution passed in general meeting.
Appointment by other directors
(1) The directors of a company may appoint a person as a director. A person can be appointed as a director in order to make up a quorum for a directors’ meeting even if the total number of directors of the company is not enough to make up that quorum.
Proprietary company—confirmation by meeting within 2 months
(2) If a person is appointed under this section as a director of a proprietary company, the company must confirm the appointment by resolution within 2 months after the appointment is made. If the appointment is not confirmed, the person ceases to be a director of the company at the end of those 2 months.
Public company—confirmation by next AGM
(3) If a person is appointed by the other directors as a director of a public company, the company must confirm the appointment by resolution at the company’s next AGM. If the appointment is not confirmed, the person ceases to be a director of the company at the end of the AGM.
The directors of a company may appoint 1 or more of themselves to the office of managing director of the company for the period, and on the terms (including as to remuneration), as the directors see fit.
(1) With the other directors’ approval, a director may appoint an alternate to exercise some or all of the director’s powers for a specified period.
(2) If the appointing director requests the company to give the alternate notice of directors’ meetings, the company must do so.
(3) When an alternate exercises the director’s powers, the exercise of the powers is just as effective as if the powers were exercised by the director.
(4) The appointing director may terminate the alternate’s appointment at any time.
(5) An appointment or its termination must be in writing. A copy must be given to the company.
Note: ASIC must be given notice of the appointment and termination of appointment of an alternate (see subsections 205B(2) and (5)).
Under section 205B, a company must notify ASIC within 14 days if a person is appointed as a director or as an alternate director.
(1) An act done by a director is effective even if their appointment, or the continuance of their appointment, is invalid because the company or director did not comply with the company’s constitution (if any) or any provision of this Act.
(2) Subsection (1) does not deal with the question whether an effective act by a director:
(a) binds the company in its dealings with other people; or
(b) makes the company liable to another person.
Note: The kinds of acts that this section validates are those that are only legally effective if the person doing them is a director (for example, calling a meeting of the company’s members or signing a document to be lodged with ASIC or minutes of a meeting). Sections 128‑130 contain rules about the assumptions people are entitled to make when dealing with a company and its officers.
(1) The directors of a company are to be paid the remuneration that the company determines by resolution.
Note: Chapter 2E makes special provision for the payment of remuneration to the directors of public companies.
(2) The company may also pay the directors’ travelling and other expenses that they properly incur:
(a) in attending directors’ meetings or any meetings of committees of directors; and
(b) in attending any general meetings of the company; and
(c) in connection with the company’s business.
(1) A company must disclose the remuneration paid to each director of the company or a subsidiary (if any) by the company or by an entity controlled by the company if the company is directed to disclose the information by:
(a) members with at least 5% of the votes that may be cast at a general meeting of the company; or
(b) at least 100 members who are entitled to vote at a general meeting of the company.
The company must disclose all remuneration paid to the director, regardless of whether it is paid to the director in relation to their capacity as director or another capacity.
(2) The company must comply with the direction as soon as practicable by:
(a) preparing a statement of the remuneration of each director of the company or subsidiary for the last financial year before the direction was given; and
(b) having the statement audited; and
(c) sending a copy of the audited statement to each person entitled to receive notice of general meetings of the company.
A person who is the only director and the only shareholder of a proprietary company is to be paid any remuneration for being a director that the company determines by resolution. The company may also pay the director’s travelling and other expenses properly incurred by the director in connection with the company’s business.
A director of a company may resign as a director of the company by giving a written notice of resignation to the company at its registered office.
A person ceases to be a director of a company if the person becomes disqualified from managing corporations under Part 2D.6 (see subsection 206A(2)) unless ASIC or the Court allows them to manage the company (see sections 206F and 206G).
A proprietary company:
(a) may by resolution remove a director from office; and
(b) may by resolution appoint another person as a director instead.
Resolution for removal of director
(1) A public company may by resolution remove a director from office despite anything in:
(a) the company’s constitution (if any); or
(b) an agreement between the company and the director; or
(c) an agreement between any or all members of the company and the director.
If the director was appointed to represent the interests of particular shareholders or debenture holders, the resolution to remove the director does not take effect until a replacement to represent their interests has been appointed.
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.
Notice of intention to move resolution for removal of director
(2) Notice of intention to move the resolution must be given to the company at least 2 months before the meeting is to be held. However, if the company calls a meeting after the notice of intention is given under this subsection, the meeting may pass the resolution even though the meeting is held less than 2 months after the notice of intention is given.
Note: Short notice of the meeting cannot be given for this resolution (see subsection 249H(3)).
Director to be informed
(3) The company must give the director a copy of the notice as soon as practicable after it is received.
Director’s right to put case to members
(4) The director is entitled to put their case to members by:
(a) giving the company a written statement for circulation to members (see subsections (5) and (6)); and
(b) speaking to the motion at the meeting (whether or not the director is a member of the company).
(5) The written statement is to be circulated by the company to members by:
(a) sending a copy to everyone to whom notice of the meeting is sent if there is time to do so; or
(b) if there is not time to comply with paragraph (a)—having the statement distributed to members attending the meeting and read out at the meeting before the resolution is voted on.
(6) The director’s statement does not have to be circulated to members if it is more than 1,000 words long or defamatory.
Time of retirement
(7) If a person is appointed to replace a director removed under this section, the time at which:
(a) the replacement director; or
(b) any other director;
is to retire is to be worked out as if the replacement director had become director on the day on which the replaced director was last appointed a director.
A resolution, request or notice of any or all of the directors of a public company is void to the extent that it purports to:
(a) remove a director from their office; or
(b) require a director to vacate their office.
(1) A person ceases to be managing director if they cease to be a director.
(2) The directors may revoke or vary an appointment of a managing director.
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.
(1) Only an individual who is at least 18 may be appointed as a secretary of a company.
(2) A person who is disqualified from managing corporations under Part 2D.6 may only be appointed as a secretary of a company if the appointment is made with permission granted by ASIC under section 206F or leave granted by the Court under section 206G.
(1) A company contravenes this subsection if a person does not give the company a signed consent to act as secretary of the company before being appointed.
(2) The company must keep the consent.
A secretary is to be appointed by the directors.
Note 1: The company must notify ASIC of the appointment within 14 days (see subsection 205B(1)).
Note 2: Section 188 deals with the responsibilities of secretaries for contraventions by the company.
(1) An act done by a secretary is effective even if their appointment, or the continuance of their appointment, is invalid because the company or secretary did not comply with the company’s constitution (if any) or any provision of this Act.
(2) Subsection (1) does not deal with the question whether an effective act by a secretary:
(a) binds the company in its dealings with other people; or
(b) makes the company liable to another person.
Note: The kinds of acts that this section validates are those that are only legally effective if the person doing them is a secretary (for example, signing and sending out a notice of a meeting of directors if the company’s constitution authorises the secretary to do so or signing a document to be lodged with ASIC). Sections 128‑130 contain rules about the assumptions people are entitled to make when dealing with a company and its officers.
A secretary holds office on the terms and conditions (including as to remuneration) that the directors determine.
A person ceases to be a secretary of a company if the person becomes disqualified from managing corporations under Part 2D.6 (see subsection 206A(2)) unless ASIC or the Court allows them to manage the company (see sections 206F and 206G).
(1) If a director, secretary or alternate director retires or resigns, they may give ASIC written notice of the retirement or resignation. The notice must be in the prescribed form.
(2) To be effective, a notice of resignation must be accompanied by a copy of the letter of resignation given to the company.
(3) Nothing in this section affects the company’s obligations to notify ASIC of the resignation or retirement.
New directors or secretaries
(1) A company must lodge with ASIC a notice of the personal details of a director or secretary within 14 days after they are appointed. The notice must be in the prescribed form.
Note 1: If a person becomes a director under subsection 120(1) there is no appointment and no notice is required under this subsection.
Note 2: If a person who was appointed as an alternate director becomes a director under the terms of their appointment as an alternate director, there is no appointment as a director and no notice is required under this subsection.
New alternate directors
(2) A company must lodge with ASIC a notice of:
(a) the personal details of a person who is appointed as an alternate director; and
(b) the terms of their appointment (including terms about when the alternate director is to act as a director);
within 14 days after their appointment as an alternate director. The notice must be in the prescribed form.
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 14 days after the change. The notice must be in the prescribed form.
Notice required if person stops being a director or secretary
(5) If a person stops being a director, alternate director or secretary of the company, the company must lodge with ASIC notice of the fact within 14 days. The notice must be in the prescribed form. However, the company does not need to lodge a notice if the person was an alternate director who stopped being a director in accordance with the terms of their appointment as an alternate director.
(1) A director, alternate director or secretary must give the company any information the company needs to comply with subsection 205B(1) or (2) within 7 days after their initial appointment unless they have previously given the information to the company.
(2) A director, alternate director or secretary must give the company any information the company needs to comply with subsection 205B(4) within 7 days after any change in their personal details.
Address is normally residential address
(1) A person’s address for the purposes of a notice or application under subsection 5H(2), 117(2), 205B(1), (2) or (4) or 601BC(2) must be their usual residential address unless they are entitled to have an alternative address substituted for their usual residential address under subsection (2).
Entitlement to have alternative address
(2) The person is entitled to have an alternative address substituted for their usual residential address if:
(a) their name, but not their residential address, is on an electoral roll under the Commonwealth Electoral Act 1918 because of section 104 of that Act; or
(b) their name is not on an electoral roll under that Act and ASIC determines, in writing, that including their residential address in the notice or application would put at risk their personal safety or the personal safety of members of their family.
This alternative address must be in Australia and be one at which documents can be served on the person. At any particular time, a person is entitled to have only 1 alternative address under this section.
Note: See subsection 109X(2) on the status of the alternative address as an address for service.
(3) A person who takes advantage of subsection (2) must:
(a) before or at the same time as the alternative address is first included in a notice or application, lodge with ASIC notice of the person’s usual residential address; and
(b) lodge with ASIC notice of any change in the person’s usual residential address within 14 days after the change.
A notice under this subsection must be in the prescribed form.
(4) If a court gives a judgment for payment of a sum of money against a person who is taking advantage of subsection (2), ASIC may give details of the person’s usual residential address to an officer of the court for the purposes of enforcing the judgment debt.
(1) ASIC may ask a person, in writing, to inform ASIC:
(a) whether the person is a director or secretary of a particular company; and
(b) if the person is no longer a director or secretary of the company—the date on which the person stopped being a director or secretary.
(2) The person must give the information to ASIC in writing by the date specified in the request.
A director must give the company any information affecting or relating to the director that the company needs, or will need, to comply with Chapter 6. The director must give the information to the company as soon as practicable after becoming aware that the company needs, or will need, the information. The company must give the information to each of the other directors of the company within 7 days of receiving it.
Notifiable interests
(1) A director of a listed public company must notify the relevant securities exchange 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.
(2) A notice of a relevant interest in securities under paragraph (1)(a) must give details of:
(a) the number of securities; and
(b) the circumstances giving rise to the relevant interest.
Occasions for initial notification
(3) The director must notify the exchange within 14 days after each of the following occasions:
(a) appointment as a director of the company;
(b) the listing of the company.
Paragraph (a) does not apply to a director who retires and is then reappointed at the same meeting.
Updating notices
(4) The director must notify the exchange within 14 days after any change in the director’s interests.
(5) The director need not give the information to the exchange under this section if the director has already given the information to the exchange.
ASIC’s power to make class orders
(6) ASIC may make an order in writing relieving a director of the obligation to notify the relevant securities exchange of an interest in a security or contract. The order may be made in respect of a specified class of companies, directors, securities or contracts.
(7) The order may be expressed to be subject to conditions.
(8) Notice of the making, revocation or suspension of the order must be published in the Gazette.
(1) A person who is disqualified from managing corporations under this Part commits an offence if:
(a) they make, or participate in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or
(b) they exercise the capacity to affect significantly the corporation’s financial standing; or
(c) they communicate instructions or wishes (other than advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the corporation) to the directors of the corporation:
(i) knowing that the directors are accustomed to act in accordance with the person’s instructions or wishes; or
(ii) intending that the directors will act in accordance with those instructions or wishes.
It is a defence to the contravention if the person had permission to manage the corporation under either section 206F or 206G and their conduct was within the terms of that permission.
Note: Under section 1274AA, ASIC is required to keep a record of persons disqualified from managing corporations.
(2) A person ceases to be a director, alternate director or a secretary of a company if:
(a) the person becomes disqualified from managing corporations under this Part; and
(b) they are not given permission to manage the corporation under section 206F or 206G.
Note: If a person ceases to be a director, alternate director or a secretary under subsection (2) the company must notify ASIC (see subsection 205B(5)).
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.
Bankruptcy, deed of arrangement or composition with creditors
(3) A person is disqualified from managing corporations if the person is an undischarged bankrupt under the law of Australia, its external territories or another country.
(4) A person is disqualified from managing corporations if:
(a) the person has executed a deed of arrangement under Part X of the Bankruptcy Act 1966 (or a similar law of an external Territory or another country) and the terms of the deed have not been fully complied with; or
(b) the person’s creditors have accepted a composition under Part X of the Bankruptcy Act 1966 (or a similar law of an external Territory or another country) and final payment has not been made under the composition.
(1) On application by ASIC, the Court may disqualify a person from managing corporations for a period that the Court considers appropriate if:
(a) a declaration is made under section 1317E (civil penalty provision) that the person has contravened a civil penalty provision; and
(b) the Court is satisfied that the disqualification is justified.
Note: The civil penalty provisions are subsection 180(1) and (2), 181(1) and (2), 182(1) and (2), 183(1) and (2), 209(2), 254L(2), 256D(3), 259F(2), 260D(2) or 344(1) or section 588G.
(2) In determining whether the disqualification is justified, the Court may have regard to:
(a) the person’s conduct in relation to the management, business or property of any corporation; and
(b) any other matters that the Court considers appropriate.
(1) On application by ASIC, the Court may disqualify a person from managing corporations for up to 10 years if:
(a) within the last 7 years, the person has been an officer of 2 or more corporations when they have failed; and
(b) the Court is satisfied that:
(i) the manner in which the corporation was managed was wholly or partly responsible for the corporation failing; and
(ii) the disqualification is justified.
(2) For the purposes of subsection (1), a corporation fails if:
(a) a Court orders the corporation to be wound up under section 459B because the Court is satisfied that the corporation is insolvent; or
(b) the corporation enters into voluntary liquidation and creditors are not fully paid or are unlikely to be fully paid; or
(c) the corporation executes a deed of company arrangement and creditors are not fully paid or are unlikely to be fully paid; or
(d) the corporation ceases to carry on business and creditors are not fully paid or are unlikely to be fully paid; or
(e) a levy of execution against the corporation is not satisfied; or
(f) a receiver, receiver and manager, or provisional liquidator is appointed in relation to the corporation; or
(g) the corporation enters into a compromise or arrangement with its creditors under Part 5.1; or
(h) the corporation is wound up and a liquidator lodges a report under subsection 533(1) about the corporation’s inability to pay its debts.
Note: To satisfy paragraph (h), a corporation must begin to be wound up while the person is an officer or within 12 months after the person ceases to be an officer. However, the report under subsection 533(1) may be lodged by the liquidator at a time that is more than 12 months after the person ceases to be an officer. Sections 513A to 513D contain rules about when a company begins to be wound up.
(3) In determining whether the disqualification is justified, the Court may have regard to:
(a) the person’s conduct in relation to the management, business or property of any corporation; and
(b) any other matters that the Court considers appropriate.
(1) On application by ASIC, the Court may disqualify a person from managing corporations for the period that the Court considers appropriate if:
(a) the person:
(i) has at least twice been an officer of a body corporate that has contravened this Act while they were an officer of the body corporate and each time the person has failed to take reasonable steps to prevent the contravention; or
(ii) has at least twice contravened this Act while they were an officer of a body corporate; or
(iii) has been an officer of a body corporate and has done something that would have contravened subsection 180(1) or section 181 if the body corporate had been a corporation; and
(b) the Court is satisfied that the disqualification is justified.
(2) In determining whether the disqualification is justified, the Court may have regard to:
(a) the person’s conduct in relation to the management, business or property of any corporation; and
(b) any other matters that the Court considers appropriate.
Power to disqualify
(1) ASIC may disqualify a person from managing corporations for up to 5 years if:
(a) within 7 years immediately before ASIC gives a notice under paragraph (b)(i):
(i) the person has been an officer of 2 or more corporations; and
(ii) while the person was an officer, or within 12 months after the person ceased to be an officer of those corporations, each of the corporations was wound up and a liquidator lodged a report under subsection 533(1) about the corporation’s inability to pay its debts; and
(b) ASIC has given the person:
(i) a notice in the prescribed form requiring them to demonstrate why they should not be disqualified; and
(ii) an opportunity to be heard on the question; and
(c) ASIC is satisfied that the disqualification is justified.
Grounds for disqualification
(2) In determining whether disqualification is justified, ASIC:
(a) must have regard to whether any of the corporations mentioned in subsection (1) were related to one another; and
(b) may have regard to:
(i) the person’s conduct in relation to the management, business or property of any corporation; and
(ii) whether the disqualification would be in the public interest; and
(iii) any other matters that ASIC considers appropriate.
Notice of disqualification
(3) If ASIC disqualifies a person from managing corporations under this section, ASIC must serve a notice on the person advising them of the disqualification. The notice must be in the prescribed form.
Start of disqualification
(4) The disqualification takes effect from the time when a notice referred to in subsection (3) is served on the person.
ASIC power to grant leave
(5) ASIC may give a person who it has disqualified from managing corporations under this Part written permission to manage a particular corporation or corporations. The permission may be expressed to be subject to conditions and exceptions determined by ASIC.
(1) A person who is disqualified from managing corporations may apply to the Court for leave to manage:
(a) corporations; or
(b) a particular class of corporations; or
(c) a particular corporation;
if the person was not disqualified by ASIC.
(2) The person must lodge a notice with ASIC at least 21 days before commencing the proceedings. The notice must be in the prescribed form.
(3) The order granting leave may be expressed to be subject to exceptions and conditions determined by the Court.
Note: If the Court grants the person leave to manage the corporation, the person may be appointed as a director (see section 201B) or secretary (see section 204B) of a company.
(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.
This Part does not apply in respect of an act or omission by a person while they are managing a corporation that is a foreign company unless the act or omission occurred in connection with:
(a) the foreign company carrying on business in this jurisdiction; or
(b) an act that the foreign company does, or proposes to do, in this jurisdiction; or
(c) a decision by the foreign company whether or not to do, or refrain from doing, an act in this jurisdiction.
This Part does not apply in respect of an act or omission by a person while they are managing a corporation that is a registrable Australian body unless the act or omission occurred in connection with:
(a) the body carrying on business outside its place of origin; or
(b) an act that the body does or proposes to do outside its place of origin; or
(c) a decision by the body whether or not to do, or refrain from doing, an act outside its place of origin.
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.
(1) For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company:
(a) the public company or entity must:
(i) obtain the approval of the public company’s members in the way set out in sections 217 to 227; and
(ii) give the benefit within 15 months after the approval; or
(b) the giving of the benefit must fall within an exception set out in sections 210 to 216.
Note: Section 228 defines related party, section 9 defines entity, section 50AA defines control and section 229 affects the meaning of giving a financial benefit.
(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.
(1) If the public company or entity contravenes section 208:
(a) the contravention does not affect the validity of any contract or transaction connected with the giving of the benefit; and
(b) the public company or entity is not guilty of an offence.
Note: A Court may order an injunction to stop the company or entity giving the benefit to the related party (see section 1324).
(2) A person contravenes this subsection if they are involved in a contravention of section 208 by a public company or entity.
Note 1: This subsection is a civil penalty provision.
Note 2: Section 79 defines involved.
(3) A person commits an offence if they are involved in a contravention of section 208 by a public company or entity and the involvement is dishonest.
Member approval is not needed to give a financial benefit on terms that:
(a) would be reasonable in the circumstances if the public company or entity and the related party were dealing at arm’s length; or
(b) are less favourable to the related party than the terms referred to in paragraph (a).
Benefits that are reasonable remuneration
(1) Member approval is not needed to give a financial benefit if:
(a) the benefit is remuneration to a related party as an officer or employee of the following:
(i) the public company;
(ii) an entity that the public company controls;
(iii) an entity that controls the public company;
(iv) an entity that is controlled by an entity that controls the public company; and
(b) to give the remuneration would be reasonable given:
(i) the circumstances of the public company or entity giving the remuneration; and
(ii) the related party’s circumstances (including the responsibilities involved in the office or employment).
Benefits that are payments of expenses incurred
(2) Member approval is not needed to give a financial benefit if:
(a) the benefit is payment of expenses incurred or to be incurred, or reimbursement for expenses incurred, by a related party in performing duties as an officer or employee of the following:
(i) the public company;
(ii) an entity that the public company controls;
(iii) an entity that controls the public company;
(iv) an entity that is controlled by an entity that controls the public company; and
(b) to give the benefit would be reasonable in the circumstances of the public company or entity giving the remuneration.
(3) For the purposes of this section:
(a) a contribution made by a body corporate to a fund for the purpose of making provision for, or obtaining, superannuation benefits for an officer of the body, or for dependants of an officer of the body, is remuneration provided by the body to the officer of the body; and
(b) a financial benefit given to a person because of the person ceasing to hold an office or employment as an officer or employee of a body corporate is remuneration paid or provided to the person in a capacity as an officer of the body.
Indemnities, exemptions and insurance premiums
(1) Member approval is not needed to give a financial benefit if:
(a) the benefit is for a related party who is an officer of the public company or entity; and
(b) the benefit is:
(i) an indemnity, exemption or insurance premium in respect of a liability incurred as an officer of the public company or entity; or
(ii) an agreement to give an indemnity or exemption, or to pay an insurance premium, of that kind; and
(c) to give the benefit would be reasonable in the circumstances of the public company or entity giving the benefit.
Note: Sections 199A to 199C may prohibit giving an indemnity or exemption or paying an insurance premium for an officer.
Payments in respect of legal costs
(2) Member approval is not needed to give a financial benefit if:
(a) the benefit is for a related party who is an officer of the public company or entity; and
(b) the benefit is the making of, or an agreement to make, a payment (whether by way of advance, loan or otherwise) in respect of legal costs incurred by the officer in defending an action for a liability incurred as an officer of the public company or entity; and
(c) either:
(i) section 199A does not apply to the costs; or
(ii) if section 199A applies to the costs—the officer must repay the amount paid if the costs become costs for which the company must not give the officer an indemnity under that section; and
(d) to give the benefit would be reasonable in the circumstances of the public company or entity giving the benefit.
(3) In working out for the purposes of subsection (1) or (2) whether giving the benefit is reasonable in the circumstances:
(a) assess whether it would be reasonable on the basis of the circumstances existing:
(i) if the benefit is given under an agreement—at the time when the agreement is or was made; or
(ii) if the benefit is not given under an agreement—at the time when the benefit is or was given; and
(b) disregard any other financial benefit given or payable to the officer by the public company or entity.
(1) Member approval is not needed to give a financial benefit that is an amount of money for a director of the public company or their spouse or de facto spouse if the amount does not exceed $2,000 or a greater amount as prescribed by the regulations.
(2) In working out the amount given:
(a) add in all amounts previously given by the public company and any entities controlled by the public company to:
(i) the director; or
(ii) their spouse; or
(iii) their de facto spouse; and
(b) disregard:
(i) amounts that have been repaid; and
(ii) amounts that fall under any other exception in this Part.
For the purposes of this subsection, the time at which the entity must be controlled by the public company is the time at which the amount is given.
(1) Member approval is not needed to give a financial benefit if the benefit is given:
(a) by a body corporate to a closely‑held subsidiary of the body; or
(b) by a closely‑held subsidiary of a body corporate to the body or an entity it controls.
(2) For the purposes of this section, a body corporate is a closely‑held subsidiary of another body corporate if, and only if, no member of the first‑mentioned body is a person other than:
(a) the other body; or
(b) a nominee of the other body; or
(c) a body corporate that is a closely‑held subsidiary of the other body because of any other application or applications of this subsection; or
(d) a nominee of a body referred to in paragraph (c).
(3) For the purposes of subsection (2), disregard shares that are not voting shares.
Member approval is not needed to give a financial benefit if:
(a) the benefit is given to the related party in their capacity as a member of the public company; and
(b) giving the benefit does not discriminate unfairly against the other members of the public company.
Member approval is not needed to give a financial benefit under an order of a court.
A resolution under this Division may specify anything either in particular or by reference to class or kind.
(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).
(1) The proposed explanatory statement lodged under section 218 must be in writing and set out:
(a) the related parties to whom the proposed resolution would permit financial benefits to be given; and
(b) the nature of the financial benefits; and
(c) in relation to each director of the company:
(i) if the director wanted to make a recommendation to members about the proposed resolution—the recommendation and his or her reasons for it; or
(ii) if not—why not; or
(iii) if the director was not available to consider the proposed resolution—why not; and
(d) in relation to each such director:
(i) whether the director had an interest in the outcome of the proposed resolution; and
(ii) if so—what it was; and
(e) all other information that:
(i) is reasonably required by members in order to decide whether or not it is in the company’s interests to pass the proposed resolution; and
(ii) is known to the company or to any of its directors.
(2) An example of the kind of information referred to in paragraph (1)(d) is information about what, from an economic and commercial point of view, are the true potential costs and detriments of, or resulting from, giving financial benefits as permitted by the proposed resolution, including (without limitation):
(a) opportunity costs; and
(b) taxation consequences (such as liability to fringe benefits tax); and
(c) benefits forgone by whoever would give the benefits.
Note: Sections 180 and 181 require an officer of a corporation to act honestly and to exercise care and diligence. These duties extend to preparing an explanatory statement under this section. Section 1309 creates offences where false and misleading material relating to a corporation’s affairs is made available or furnished to members.
(1) Within 14 days after a public company lodges documents under section 218, ASIC may give to the company written comments on those documents (other than comments about whether the proposed resolution is in the company’s best interests).
(2) ASIC may consult with the Exchange for the purposes of giving comments to a company that is included in the official list of the Exchange.
(3) Subsection (2) does not limit the persons with whom ASIC may consult.
(4) ASIC must keep a copy of the written comments it gives to a company under subsection (1), and subsections 1274(2) and (5) apply to the copy as if it were a document lodged with ASIC.
(5) The fact that ASIC has given particular comments, or has declined to give comments, under subsection (1) does not in any way affect the performance or exercise of any of ASIC’s functions and powers.
The notice convening the meeting:
(a) must be the same, in all material respects, as the proposed notice lodged under section 218; and
(b) must be accompanied by an explanatory statement that is the same, in all material respects, as the proposed explanatory statement lodged under that section; and
(c) must be accompanied by a document that is, or documents that are, the same, in all material respects, as the document or documents (if any) lodged under paragraph 218(1)(c); and
(d) if ASIC has given to the public company, under section 220, comments on the documents lodged under section 218—must be accompanied by a copy of those comments; and
(e) must not be accompanied by any other documents.
Each document (if any) that:
(a) did not accompany the notice convening the meeting; and
(b) was given to members of the public company before or at the meeting by:
(i) the public company; or
(ii) a related party of the public company to whom the proposed resolution would permit a financial benefit to be given; or
(iii) an associate of the public company or of such a related party; and
(c) can reasonably be expected to have been material to a member in deciding how to vote on the proposed resolution;
must be the same, in all material respects, as a document lodged under paragraph 218(1)(d).
The resolution must be the same as the proposed resolution set out in the proposed notice lodged under section 218.
(1) At a general meeting, a vote on a proposed resolution under this Division must not be cast (in any capacity) by or on behalf of:
(a) a related party of the public company to whom the resolution would permit a financial benefit to be given; or
(b) an associate of such a related party.
(2) Subsection (1) does not prevent the casting of a vote if:
(a) it is cast by a person as a proxy appointed by writing that specifies how the proxy is to vote on the proposed resolution; and
(b) it is not cast on behalf of a related party or associate of a kind referred to in subsection (1).
(3) The regulations may prescribe cases where subsection (1) does not apply.
(4) ASIC may by writing declare that:
(a) subsection (1) does not apply to a specified proposed resolution; or
(b) subsection (1) does not prevent the casting of a vote, on a specified proposed resolution, by a specified entity, or on behalf of a specified entity;
but may only do so if satisfied that the declaration will not cause unfair prejudice to the interests of any member of the public company.
(5) A declaration in force under subsection (4) has effect accordingly.
(6) If a vote is cast in contravention of subsection (1), the related party or associate, as the case may be, contravenes this subsection, whether or not the proposed resolution is passed.
(7) For the purposes of this section, a vote is cast on behalf of an entity if, and only if, it is cast:
(a) as proxy for the entity; or
(b) otherwise on behalf of the entity; or
(c) in respect of a share in respect of which the entity has:
(i) power to vote; or
(ii) power to exercise, or control the exercise of, a right to vote.
(8) Subject to subsection 225(1), a contravention of this section does not affect the validity of a resolution.
(9) Subject to Part 1.1A, this section has effect despite:
(a) anything else in:
(i) this Act; or
(ii) any other law (including the general law) of a State or Territory; or
(b) anything in a body corporate’s constitution.
(1) If any votes on the resolution are cast in contravention of subsection 224(1), it must be the case that the resolution would still be passed even if those votes were disregarded.
(2) If a poll was duly demanded on the question that the resolution be passed, subsections (3) and (4) apply in relation to voting on the poll.
(3) In relation to each member of the public company who voted on the resolution in person, the public company must record in writing:
(a) the member’s name; and
(b) how many votes the member cast for the resolution and how many against.
(4) In relation to each member of the public company who voted on the resolution by proxy, or by a representative authorised under section 250D, the public company must record in writing:
(a) the member’s name; and
(b) in relation to each person who voted as proxy, or as such a representative, for the member:
(i) the person’s name; and
(ii) how many votes the person cast on the resolution as proxy, or as such a representative, for the member; and
(iii) how many of those votes the person cast for the resolution and how many against.
(5) For 7 years after the day when a resolution under this Division is passed, the public company must retain the records it made under this section in relation to the resolution.
The public company must lodge a notice setting out the text of the resolution within 14 days after the resolution is passed.
(1) The Court may declare that the conditions prescribed by this Division have been satisfied if it finds that they have been substantially satisfied.
(2) A declaration may be made only on the application of an interested person.
Controlling entities
(1) An entity that controls a public company is a related party of the public company.
Directors and their spouses
(2) The following persons are related parties of a public company:
(a) directors of the public company;
(b) directors (if any) of an entity that controls the public company;
(c) if the public company is controlled by an entity that is not a body corporate—each of the persons making up the controlling entity;
(d) spouses and de facto spouses of the persons referred to in paragraphs (a), (b) and (c).
Relatives of directors and spouses
(3) The following relatives of persons referred to in subsection (2) are related parties of the public company:
(a) parents;
(b) children.
Entities controlled by other related parties
(4) An entity controlled by a related party referred to in subsection (1), (2) or (3) is a related party of the public company unless the entity is also controlled by the public company.
Related party in previous 6 months
(5) An entity is a related party of a public company at a particular time if the entity was a related party of the public company of a kind referred to in subsection (1), (2), (3) or (4) at any time within the previous 6 months.
Entity has reasonable grounds to believe it will become related party in future
(6) An entity is a related party of a public company at a particular time if the entity believes or has reasonable grounds to believe that it is likely to become a related party of the public company of a kind referred to in subsection (1), (2), (3) or (4) at any time in the future.
Acting in concert with related party
(7) An entity is a related party of a public company if the entity acts in concert with a related party of the public company on the understanding that the related party will receive a financial benefit if the public company gives the entity a financial benefit.
(1) In determining whether a financial benefit is given for the purposes of this Chapter:
(a) give a broad interpretation to financial benefits being given, even if criminal or civil penalties may be involved; and
(b) the economic and commercial substance of conduct is to prevail over its legal form; and
(c) disregard any consideration that is or may be given for the benefit, even if the consideration is adequate.
(2) Giving a financial benefit includes the following:
(a) giving a financial benefit indirectly, for example, through 1 or more interposed entities;
(b) giving a financial benefit by making an informal agreement, oral agreement or an agreement that has no binding force;
(c) giving a financial benefit that does not involve paying money (for example by conferring a financial advantage).
(3) The following are examples of giving a financial benefit to a related party:
(a) giving or providing the related party finance or property;
(b) buying an asset from or selling an asset to the related party;
(c) leasing an asset from or to the related party;
(d) supplying services to or receiving services from the related party;
(e) issuing securities or granting an option to the related party;
(f) taking up or releasing an obligation of the related party.
A director is not relieved from any of their duties under this Act (including sections 180 and 184), or their fiduciary duties, in connection with a transaction merely because the transaction is authorised by a provision of this Chapter or is approved by a resolution of members under a provision of this Chapter.
A person is a member of a company if they:
(a) are a member of the company on its registration; or
(b) agree to become a member of the company after its registration and their name is entered on the register of members; or
(c) become a member of the company under section 167 (membership arising from conversion of a company from one limited by guarantee to one limited by shares).
The Court may make an order under section 233 if:
(a) the conduct of a company’s affairs; or
(b) an actual or proposed act or omission by or on behalf of a company; or
(c) a resolution, or a proposed resolution, of members or a class of members of a company;
is either:
(d) contrary to the interests of the members as a whole; or
(e) oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity.
For the purposes of this Part, a person to whom a share in the company has been transmitted by will or by operation of law is taken to be a member of the company.
Note: For affairs, see section 53.
(1) The Court can make any order under this section that it considers appropriate in relation to the company, including an order:
(a) that the company be wound up;
(b) that the company’s existing constitution be modified or repealed;
(c) regulating the conduct of the company’s affairs in the future;
(d) for the purchase of any shares by any member or person to whom a share in the company has been transmitted by will or by operation of law;
(e) for the purchase of shares with an appropriate reduction of the company’s share capital;
(f) for the company to institute, prosecute, defend or discontinue specified proceedings;