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Corporations Bill 2001

  • - C2004B00937
A Bill for an Act to make provision in relation to corporations, securities, the futures industry and financial products and services, and for other purposes
For authoritative information on the progress of bills and on amendments proposed to them, please see the House of Representatives Votes and Proceedings, and the Journals of the Senate as available on the Parliament House website.
Introduced HR 04 Apr 2001
Table of contents.

1998‑1999‑2000‑2001

 

The Parliament of the

Commonwealth of Australia

 

HOUSE OF REPRESENTATIVES

 

 

 

 

Presented and read a first time

 

 

 

 

 

 

 

 

 

Corporations Bill 2001 Volume 1

 

No.      , 2001

 

(Treasury)

 

 

 

A Bill for an Act to make provision in relation to corporations, securities, the futures industry and financial products and services, and for other purposes

 

 

ISBN:  0642 466351


Contents

Chapter 1—Introductory                                                                                        2

Part 1.1—Preliminary                                                                                                           2

1............ Short title............................................................................................ 2

2............ Commencement.................................................................................. 2

3............ Constitutional basis for this Act........................................................ 2

4............ Referring States................................................................................... 3

5............ General territorial application of Act................................................. 6

5A......... Application to the Crown.................................................................. 7

5B......... ASIC has general administration of this Act...................................... 8

5C......... Application of Acts Interpretation Act 1901....................................... 8

Part 1.1A—Interaction between Corporations legislation and State and Territory laws   9

5D......... Coverage of Part................................................................................. 9

5E.......... Concurrent operation intended........................................................... 9

5F.......... Corporations legislation does not apply to matters declared by State or Territory law to be an excluded matter 11

5G......... Avoiding direct inconsistency arising between the Corporations legislation and State and Territory laws            12

5H......... Registration of body as company on basis of State or Territory law 19

5I........... Regulations may modify operation of the Corporations legislation to deal with interaction between that legislation and State and Territory laws................................................................... 21

Part 1.2—Interpretation                                                                                                    23

Division 1—General                                                                                         23

6............ Effect of this Part............................................................................. 23

7............ Location of other interpretation provisions..................................... 23

9............ Dictionary......................................................................................... 24

Division 2—Associates                                                                                  95

10.......... Effect of Division............................................................................. 95

11.......... Associates of bodies corporate......................................................... 95

12.......... Matters relating to voting shares...................................................... 95

13.......... References in Chapter 7.................................................................... 96

14.......... References in Chapter 8.................................................................... 97

15.......... General.............................................................................................. 97

16.......... Exclusions......................................................................................... 98

17.......... Associates of composite persons..................................................... 98

Division 3—Carrying on business                                                      99

18.......... Carrying on business: otherwise than for profit............................... 99

19.......... Businesses of a particular kind......................................................... 99

20.......... Carrying on a business: alone or together with others...................... 99

21.......... Carrying on business in Australia or a State or Territory................ 99

Division 4—Dealing in futures contracts                                  101

23.......... Acquiring a futures contract........................................................... 101

24.......... Disposing of a futures contract...................................................... 101

25.......... Dealing in futures contracts: general............................................... 101

26.......... Dealing in futures contracts through intermediaries: first step....... 102

27.......... Dealing in futures contracts through intermediaries: second and later steps           103

28.......... Dealing in futures contracts, through intermediaries, on futures markets                103

29.......... Own account dealings and transactions: futures contracts............. 104

Division 5A—Types of company                                                        106

45A....... Proprietary companies................................................................... 106

Division 6—Subsidiaries and related bodies corporate 108

46.......... What is a subsidiary....................................................................... 108

47.......... Control of a body corporate’s board.............................................. 108

48.......... Matters to be disregarded............................................................... 109

49.......... References in this Division to a subsidiary.................................... 109

50.......... Related bodies corporate................................................................ 110

50AA.... Control............................................................................................ 110

Division 7—Interpretation of other expressions               111

51.......... Acquisition and disposal of shares................................................. 111

52.......... Doing acts....................................................................................... 111

52A....... Signing............................................................................................. 111

53.......... Affairs of a body corporate............................................................ 111

53AA.... Business affairs of a body corporate.............................................. 113

53AB.... Business affairs of a natural person................................................ 113

53AC.... Business affairs of a partnership.................................................... 114

53AD.... Business affairs of a trust............................................................... 114

54.......... Chapter 8 agreements of the same kind.......................................... 115

55.......... Chapter 8 obligations and rights..................................................... 115

56.......... Classes of futures organisation membership.................................. 116

57.......... Classes of shares or interests in managed investment schemes...... 116

57A....... Meaning of corporation.................................................................. 116

58AA.... Meaning of court and Court........................................................... 117

58B....... Discharge of obligations under this Act.......................................... 117

59.......... Debentures as consideration for acquisition of shares.................... 118

61.......... Discretionary accounts................................................................... 118

64.......... Entering into a transaction in relation to shares or securities......... 118

64A....... Entities............................................................................................ 118

64B....... Entities connected with a corporation............................................ 119

65.......... Eligible money market dealer.......................................................... 121

66A....... Exempt bodies................................................................................ 121

67.......... Exempt brokers and exempt futures advisers................................. 121

68.......... Exempt dealers and exempt investment advisers............................ 122

70.......... Extension of period for doing an act............................................... 124

71.......... Futures advice business.................................................................. 124

72.......... Futures contract.............................................................................. 126

72A....... Act applies to certain Chapter 8 agreements as if they were futures contracts      127

73.......... Futures representatives.................................................................. 128

73A....... When a court is taken to find a person guilty of an offence........... 129

75.......... Inclusion in official list................................................................... 129

77.......... Investment advice business............................................................ 129

79.......... Involvement in contraventions....................................................... 131

80.......... Jervis Bay Territory taken to be part of the Australian Capital Territory             131

82.......... Offers and invitations to the public................................................ 131

82A....... Officers of bodies corporate and other entities.............................. 132

83.......... Officers, and other persons, in default........................................... 133

84.......... Own account dealings and transactions: securities......................... 133

86.......... Possession...................................................................................... 133

87.......... Proper authority from futures licensee; invalid futures authority.. 133

88.......... Proper authority from securities licensee; invalid securities authority 135

88A....... Public document of a body corporate............................................. 136

89.......... Qualified privilege........................................................................... 137

90.......... Receivers and managers.................................................................. 137

91.......... Being or becoming subject to a section 206B prohibition, a section 206D or 206E order, a section 206F notice   138

92.......... Securities......................................................................................... 138

92A....... Act applies to certain relevant agreements as if they were securities 140

93.......... Securities business.......................................................................... 140

94.......... Securities representatives............................................................... 141

95A....... Solvency and insolvency................................................................ 142

97.......... Stock market not to include futures market.................................... 142

Division 8—Miscellaneous interpretation rules                143

100........ Address of registered office etc...................................................... 143

100A..... Operation of certain laws relating to instruments on which stamp duty has not been paid   143

101........ Amount of stock representing a number of shares......................... 144

102........ Applications to be in writing.......................................................... 144

102B..... In Australia or elsewhere, in this jurisdiction or elsewhere etc...... 144

102C..... In Australia..................................................................................... 144

103........ Effect of certain contraventions of this Act................................... 144

104........ Effect of provisions empowering a person to require or prohibit conduct              145

105........ Calculation of time.......................................................................... 145

106........ Performance of functions by Commission delegate........................ 145

108........ Parts of dollar to be disregarded in determining majority in value of creditors etc. 146

109........ References to persons, things and matters..................................... 146

109X..... Service of documents...................................................................... 146

Part 1.2A—Disclosing entities                                                                                     148

Division 1—Object of Part                                                                      148

111AA.. Object of Part................................................................................. 148

Division 2—Definitions                                                                                149

111AB.. Terms defined in Division.............................................................. 149

111AC.. Disclosing entity............................................................................. 149

111AD.. ED securities................................................................................... 149

111AE... Securities quoted on a stock market............................................... 150

111AF... Securities to which lodged or deemed prospectus relates............... 150

111AG.. Securities issued as consideration for an acquisition under an off‑market takeover bid or Part 5.1 compromise or arrangement..................................................................................... 151

111AH.. When a person holds securities for the purposes of sections 111AF and 111AG  151

111AI.... Debentures that need trustee appointed under section 283AA..... 152

111AJ... Regulations may declare securities not to be ED securities............ 152

111AK.. ED securities of a disclosing entity................................................ 152

111AL... Listed or unlisted disclosing entity................................................. 152

111AM. Quoted ED securities...................................................................... 152

Division 3—Significance of being a disclosing entity   153

111AN.. Division contains outline of significance of being a disclosing entity 153

111AO.. Accounting requirements................................................................ 153

111AP... Continuous disclosure requirements............................................... 153

111AQ.. Prospectus relief............................................................................. 153

Division 4—Exemptions and modifications                            154

111AR.. Meaning of disclosing entity provisions......................................... 154

111AS... Exemptions by regulations............................................................. 154

111AT.. Exemptions by ASIC...................................................................... 154

111AU.. Enforcing conditions of exemptions............................................... 155

111AV.. Modifications by regulations.......................................................... 155

111AW. Exemptions and modifications have effect..................................... 155

111AX.. Effect of Division........................................................................... 155

Part 1.4—Technical provisions about aids for readers                                  156

111J...... Small business guide....................................................................... 156

Part 1.5—Small business guide                                                                                   157

1............ What registration means................................................................. 157

2............ The company structure for small business..................................... 162

3............ Setting up a new company............................................................. 162

4............ Continuing obligations after the company is set up....................... 166

5............ Company directors and company secretaries................................. 168

6............ Shares and shareholders.................................................................. 171

7............ Signing company documents.......................................................... 173

8............ Funding the company’s operations................................................ 174

9............ Returns to shareholders.................................................................. 174

10.......... Annual financial reports and audit.................................................. 175

11.......... Disagreements within the company............................................... 177

12.......... Companies in financial trouble....................................................... 178

Chapter 2A—Registering a company                                                   181

Part 2A.1—What companies can be registered                                                 181

112........ Types of companies....................................................................... 181

113........ Proprietary companies................................................................... 182

114........ Minimum of 1 member................................................................... 183

115........ Restrictions on size of partnerships and associations.................... 183

116........ Trade unions cannot be registered.................................................. 184

Part 2A.2—How a company is registered                                                             185

117........ Applying for registration................................................................ 185

118........ ASIC gives company ACN, registers company and issues certificate 187

119........ Company comes into existence on registration.............................. 187

119A..... Jurisdiction of incorporation and jurisdiction of registration......... 188

120........ Members, directors and company secretary of a company........... 189

121........ Registered office............................................................................. 189

122........ Expenses incurred in promoting and setting up company.............. 189

123........ Company may have common seal.................................................. 189

Chapter 2B—Basic features of a company                                     191

Part 2B.1—Company powers and how they are exercised                          191

124........ Legal capacity and powers of a company...................................... 191

125........ Constitution may limit powers and set out objects....................... 192

126........ Agent exercising a company’s power to make contracts................ 192

127........ Execution of documents (including deeds) by the company itself. 192

Part 2B.2—Assumptions people dealing with companies are entitled to make       194

128........ Entitlement to make assumptions.................................................. 194

129........ Assumptions that can be made under section 128......................... 194

130........ Information available to the public from ASIC does not constitute constructive notice         196

Part 2B.3—Contracts before registration                                                             197

131........ Contracts before registration.......................................................... 197

132........ Person may be released from liability but is not entitled to indemnity 198

133........ This Part replaces other rights and liabilities.................................. 198

Part 2B.4—Replaceable rules and constitution                                                 199

134........ Internal management of companies................................................. 199

135........ Replaceable rules............................................................................ 199

136........ Constitution of a company............................................................. 200

137........ Date of effect of adoption, modification or repeal of constitution. 201

138........ ASIC may direct company to lodge consolidated constitution...... 202

139........ Company must send copy of constitution to member................... 202

140........ Effect of constitution and replaceable rules.................................... 202

141........ Table of replaceable rules............................................................... 203

Part 2B.5—Registered office and places of business                                    205

142........ Registered office............................................................................. 205

143........ ASIC may change address of registered office to a director’s address 205

144........ Company’s name must be displayed at registered office etc......... 206

145........ Opening hours of registered office of public company.................. 206

146........ Change of address of principal place of business........................... 207

Part 2B.6—Names                                                                                                              208

Division 1—Selecting and using a name                                   208

147........ When a name is available................................................................ 208

148........ A company’s name......................................................................... 209

149........ Acceptable abbreviations................................................................ 210

150........ Exception to requirement for using “Limited” in name.................. 211

151........ Exception to requirement for using “Limited” in name—pre‑existing licences        211

152........ Reserving a name............................................................................ 212

153........ Using a name and ACN on documents........................................... 212

154........ Exception to requirement to have ACN on receipts....................... 213

155........ Regulations may exempt from requirement to set out information on documents  213

156........ Carrying on business using “Limited”, “No Liability” or “Proprietary” in name   213

Division 2—Changing a company’s name                               214

157........ Company changing its name........................................................... 214

158........ ASIC’s power to direct company to change its name.................... 214

159........ ASIC’s power to include “Limited” in company’s name............... 215

160........ ASIC must issue new certificate if company’s name changes........ 215

161........ Effect of name change..................................................................... 215

Part 2B.7—Changing company type                                                                        217

162........ Changing company type................................................................. 217

163........ Applying for change of type.......................................................... 219

164........ ASIC changes type of company..................................................... 221

165........ ASIC may direct a proprietary company to change to a public company in certain circumstances       222

166........ Effect of change of type................................................................. 223

167........ Issue of shares by company or holding company—company limited by guarantee changing to company limited by shares.............................................................................................. 224

167AA.. Application of Part to company limited both by shares and by guarantee             224

Chapter 2C—Registers                                                                                        226

167A..... Who is covered by this Chapter..................................................... 226

168........ Registers to be maintained.............................................................. 226

169........ Register of members....................................................................... 226

170........ Register of option holders and copies of options documents........ 229

171........ Register of debenture holders......................................................... 230

172........ Location of registers....................................................................... 230

173........ Right to inspect and get copies....................................................... 231

174........ Agent’s obligations......................................................................... 233

175........ Correction of registers.................................................................... 233

176........ Evidentiary value of registers......................................................... 234

177........ Use of information on registers...................................................... 234

178........ Overseas branch registers............................................................... 235

Chapter 2D—Officers and employees                                                  236

Part 2D.1—Duties and powers                                                                                    236

179........ Background to duties of directors, other officers and employees.. 236

Division 1—General duties                                                                     237

180........ Care and diligence—civil obligation only........................................ 237

181........ Good faith—civil obligations.......................................................... 238

182........ Use of position—civil obligations.................................................. 238

183........ Use of information—civil obligations............................................. 239

184........ Good faith, use of position and use of information—criminal offences  239

185........ Interaction of sections 180 to 184 with other laws etc.................. 240

186........ Territorial application of sections 180 to 184................................ 240

187........ Directors of wholly‑owned subsidiaries......................................... 241

188........ Responsibility of secretaries and directors for certain contraventions 241

189........ Reliance on information or advice provided by others................... 242

190........ Responsibility for actions of delegate............................................ 243

190A..... Limited application of Division to registrable Australian bodies... 243

Division 2—Disclosure of, and voting on matters involving, material personal interests                                                                                             245

191........ Material personal interest—director’s duty to disclose................. 245

192........ Director may give other directors standing notice about an interest 247

193........ Interaction of sections 191 and 192 with other laws etc................ 248

194........ Voting and completion of transactions—directors of proprietary companies (replaceable rule—see section 135)........................................................................................................ 249

195........ Restrictions on voting—directors of public companies only......... 249

196........ ASIC power to make declarations and class orders........................ 251

Division 3—Duty to discharge certain trust liabilities 252

197........ Directors liable for debts and other obligations incurred by corporation as trustee                252

Division 4—Powers                                                                                         253

198A..... Powers of directors (replaceable rule—see section 135)................ 253

198B..... Negotiable instruments (replaceable rule—see section 135).......... 253

198C..... Managing director (replaceable rule—see section 135).................. 253

198D..... Delegation....................................................................................... 253

198E...... Single director/shareholder proprietary companies........................ 254

198F...... Right of access to company books................................................. 254

Part 2D.2—Restrictions on indemnities, insurance and termination payments      256

Division 1—Indemnities and insurance for officers and auditors           256

199A..... Indemnification and exemption of officer or auditor...................... 256

199B..... Insurance premiums for certain liabilities of director, secretary, other officer or auditor        257

199C..... Certain indemnities, exemptions, payments and agreements not authorised and certain documents void              258

Division 2—Termination payments                                                 259

200A..... When benefit given in connection with retirement from office....... 259

200B..... Retirement benefits generally need membership approval............. 260

200C..... Benefits on transfer of undertaking or property need membership approval         261

200D..... Contravention to receive benefit without member approval.......... 261

200E...... Approval by members.................................................................... 262

200F...... Exempt benefits and benefits given in certain circumstances......... 263

200G..... Genuine payments of pension and lump sum................................ 264

200H..... Benefits required by law................................................................. 266

200J...... Benefits to be held in trust for company........................................ 266

Part 2D.3—Appointment, remuneration and cessation of appointment of directors            267

Division 1—Appointment of directors                                         267

201A..... Minimum number of directors........................................................ 267

201B..... Who can be a director..................................................................... 267

201C..... Directors of public companies, or subsidiaries, over 72................. 267

201D..... Consent to act as director............................................................... 270

201E...... Special rules for the appointment of public company directors.... 270

201F...... Special rules for the appointment of directors for single director/single shareholder proprietary companies         271

201G..... Company may appoint a director (replaceable rule—see section 135).. 272

201H..... Directors may appoint other directors (replaceable rule—see section 135)           272

201J...... Appointment of managing directors (replaceable rule—see section 135)               272

201K..... Alternate directors (replaceable rule—see section 135)................. 273

201L...... Signpost—ASIC to be notified of appointment............................. 273

201M.... Effectiveness of acts by directors................................................... 273

Division 2—Remuneration of directors                                     275

202A..... Remuneration of directors (replaceable rule—see section 135)..... 275

202B..... Members may obtain information about directors’ remuneration.. 275

202C..... Special rule for single director/single shareholder proprietary companies               276

Division 3—Resignation, retirement or removal of directors     277

203A..... Director may resign by giving written notice to company (replaceable rule—see section 135)             277

203B..... Signpost to consequences of disqualification from managing corporations             277

203C..... Removal by members—proprietary companies (replaceable rule—see section 135)             277

203D..... Removal by members—public companies..................................... 277

203E...... Director cannot be removed by other directors—public companies 279

203F...... Termination of appointment of managing director (replaceable rule—see section 135)         279

Part 2D.4—Appointment of secretaries                                                                 280

204A..... Minimum number of secretaries..................................................... 280

204B..... Who can be a secretary................................................................... 280

204C..... Consent to act as secretary............................................................. 280

204D..... How a secretary is appointed......................................................... 280

204E...... Effectiveness of acts by secretaries................................................ 281

204F...... Terms and conditions of office for secretaries (replaceable rule—see section 135)                281

204G..... Signpost to consequences of disqualification from managing corporations             281

Part 2D.5—Public information about directors and secretaries               282

205A..... Director, secretary or alternate director may notify ASIC of resignation or retirement          282

205B..... Notice of name and address of directors and secretaries to ASIC.. 282

205C..... Director and secretary must give information to company............ 283

205D..... Address for officers........................................................................ 284

205E...... ASIC’s power to ask for information about person’s position as director or secretary         285

205F...... Director must give information to company.................................. 285

205G..... Listed company—director to notify securities exchange of shareholdings etc.       285

Part 2D.6—Disqualification from managing corporations                           287

206A..... Disqualified person not to manage corporations............................ 287

206B..... Automatic disqualification.............................................................. 288

206C..... Court power of disqualification—contravention of civil penalty provision           289

206D..... Court power of disqualification—insolvency and non‑payment of debts              289

206E...... Court power of disqualification—repeated contraventions of Act 291

206F...... ASIC’s power of disqualification................................................... 291

206G..... Court power to grant leave............................................................. 293

206H..... Territorial application of this Part.................................................. 293

206HA.. Limited application of Part to registrable Australian bodies.......... 294

Chapter 2E—Related party transactions                                          295

207........ Purpose........................................................................................... 295

Part 2E.1—Member approval needed for related party benefit              296

Division 1—Need for member approval                                    296

208........ Need for member approval for financial benefit............................. 296

209........ Consequences of breach.................................................................. 296

Division 2—Exceptions to the requirement for member approval         298

210........ Arm’s length terms......................................................................... 298

211........ Remuneration and reimbursement for officer or employee............ 298

212........ Indemnities, exemptions, insurance premiums and payment for legal costs for officers         299

213........ Small amounts given to director or spouse..................................... 301

214........ Benefit to or by closely‑held subsidiary........................................ 301

215........ Benefits to members that do not discriminate unfairly.................. 302

216........ Court order..................................................................................... 302

Division 3—Procedure for obtaining member approval 303

217........ Resolution may specify matters by class or kind.......................... 303

218........ Company must lodge material that will be put to members with ASIC  303

219........ Requirements for explanatory statement to members.................... 304

220........ ASIC may comment on proposed resolution................................. 305

221........ Requirements for notice of meeting................................................ 305

222........ Other material put to members....................................................... 306

223........ Proposed resolution cannot be varied............................................. 306

224........ Voting by or on behalf of related party interested in proposed resolution             306

225........ Voting on the resolution................................................................. 308

226........ Notice of resolution to be lodged.................................................... 309

227........ Declaration by court of substantial compliance............................. 309

Part 2E.2—Related parties and financial benefits                                           310

228........ Related parties................................................................................ 310

229........ Giving a financial benefit................................................................ 311

Part 2E.3—Interaction with other rules                                                                  313

230........ General duties still apply............................................................... 313

Chapter 2F—Members’ rights and remedies                                314

231........ Membership of a company............................................................ 314

Part 2F.1—Oppressive conduct of affairs                                                             315

232........ Grounds for Court order................................................................. 315

233........ Orders the Court can make............................................................. 315

234........ Who can apply for order................................................................ 316

235........ Requirement for person to lodge order........................................... 317

Part 2F.1A—Proceedings on behalf of a company by members and others              318

236........ Bringing, or intervening in, proceedings on behalf of a company... 318

237........ Applying for and granting leave..................................................... 318

238........ Substitution of another person for the person granted leave.......... 320

239........ Effect of ratification by members................................................... 321

240........ Leave to discontinue, compromise or settle proceedings brought, or intervened in, with leave              321

241........ General powers of the Court.......................................................... 321

242........ Power of the Court to make costs orders....................................... 322

Part 2F.2—Class rights                                                                                                    324

246B..... Varying and cancelling class rights.................................................. 324

246C..... Certain actions taken to vary rights etc.......................................... 325

246D..... Variation, cancellation or modification without unanimous support of class          326

246E...... Variation, cancellation or modification with unanimous support of class               327

246F...... Company must lodge documents and resolutions with ASIC........ 327

246G..... Member’s copies of documents and resolutions............................ 328

Part 2F.3—Inspection of books                                                                                   329

247A..... Order for inspection of books of company or registered managed investment scheme           329

247B..... Ancillary orders.............................................................................. 330

247C..... Disclosure of information acquired in inspection........................... 330

247D..... Company or directors may allow member to inspect books (replaceable rule see section 135)             330

Chapter 2G—Meetings                                                                                        331

Part 2G.1—Directors’ meetings                                                                                 331

Division 1—Resolutions and declarations without meetings       331

248A..... Circulating resolutions of companies with more than 1 director (replaceable rule see section 135)       331

248B..... Resolutions and declarations of 1 director proprietary companies 331

Division 2—Directors’ meetings                                                        333

248C..... Calling directors’ meetings (replaceable rule see section 135)....... 333

248D..... Use of technology........................................................................... 333

248E...... Chairing directors’ meetings (replaceable rule see section 135)..... 333

248F...... Quorum at directors’ meetings (replaceable rule see section 135). 333

248G..... Passing of directors’ resolutions (replaceable rule see section 135) 334

Part 2G.2—Meetings of members of companies                                              335

Division 1—Resolutions without meetings                              335

249A..... Circulating resolutions of proprietary companies with more than 1 member         335

249B..... Resolutions of 1 member companies.............................................. 336

Division 2—Who may call meetings of members             337

249C..... Calling of meetings of members by a director (replaceable rule—see section 135) 337

249CA.. Calling of meetings of members of a listed company by a director 337

249D..... Calling of general meeting by directors when requested by members 337

249E...... Failure of directors to call general meeting...................................... 338

249F...... Calling of general meetings by members......................................... 339

249G..... Calling of meetings of members by the Court................................ 339

Division 3—How to call meetings of members                   340

249H..... Amount of notice of meetings........................................................ 340

249HA.. Amount of notice of meetings of listed company.......................... 341

249J...... Notice of meetings of members to members and directors............. 341

249K..... Auditor entitled to notice and other communications.................... 342

249L...... Contents of notice of meetings of members................................... 342

249M.... Notice of adjourned meetings (replaceable rule—see section 135) 343

Division 4—Members’ rights to put resolutions etc. at general meetings      344

249N..... Members’ resolutions..................................................................... 344

249O..... Company giving notice of members’ resolutions........................... 344

249P...... Members’ statements to be distributed.......................................... 345

Division 5—Holding meetings of members                             347

249Q..... Purpose........................................................................................... 347

249R..... Time and place for meetings of members....................................... 347

249S...... Technology..................................................................................... 347

249T..... Quorum (replaceable rule—see section 135).................................. 347

249U..... Chairing meetings of members (replaceable rule—see section 135) 348

249V..... Auditor’s right to be heard at general meetings.............................. 348

249W.... Adjourned meetings........................................................................ 349

Division 6—Proxies and body corporate representatives               350

249X..... Who can appoint a proxy (replaceable rule for proprietary companies and mandatory rule for public companies—see section 135)..................................................................................... 350

249Y..... Rights of proxies............................................................................. 350

249Z..... Company sending appointment forms or lists of proxies must send to all members              351

250A..... Appointing a proxy........................................................................ 351

250B..... Proxy documents............................................................................ 352

250BA.. Proxy documents—listed companies............................................. 353

250C..... Validity of proxy vote.................................................................... 354

250D..... Body corporate representative....................................................... 354

Division 7—Voting at meetings of members                          356

250E...... How many votes a member has (replaceable rule—see section 135) 356

250F...... Jointly held shares (replaceable rule—see section 135)................. 356

250G..... Objections to right to vote (replaceable rule—see section 135)..... 356

250H..... Votes need not all be cast in the same way.................................... 357

250J...... How voting is carried out (replaceable rule—see section 135)...... 357

250K..... Matters on which a poll may be demanded.................................... 357

250L...... When a poll is effectively demanded.............................................. 358

250M.... When and how polls must be taken (replaceable rule—see section 135)                358

Division 8—AGMs of public companies                                    359

250N..... Public company must hold AGM.................................................. 359

250P...... Extension of time for holding AGM............................................... 359

250R..... Business of AGM.......................................................................... 360

250S...... Questions and comments by members on company management at AGM            360

250T..... Questions by members of auditors at AGM.................................. 360

Part 2G.3—Minutes and members’ access to minutes                                 361

251A..... Minutes.......................................................................................... 361

251AA.. Disclosure of proxy votes—listed companies................................ 362

251B..... Members’ access to minutes.......................................................... 362

Part 2G.4—Meetings of members of registered managed investment schemes    364

Division 1—Who may call meetings of members             364

252A..... Calling of meetings of members by responsible entity................... 364

252B..... Calling of meetings of members by responsible entity when requested by members             364

252C..... Failure of responsible entity to call meeting of the scheme’s members.. 365

252D..... Calling of meetings of members by members................................. 366

252E...... Calling of meetings of members by the Court................................ 366

Division 2—How to call meetings of members                   368

252F...... Amount of notice of meetings........................................................ 368

252G..... Notice of meetings of members to members, directors and auditors 368

252H..... Auditors entitled to other communications.................................... 369

252J...... Contents of notice of meetings of members................................... 369

252K..... Notice of adjourned meetings......................................................... 370

Division 3—Members’ rights to put resolutions etc. at meetings of members           371

252L...... Members’ resolutions..................................................................... 371

252M.... Responsible entity giving notice of members’ resolutions............. 372

252N..... Members’ statements to be distributed.......................................... 372

Division 4—Holding meetings of members                             375

252P...... Time and place for meetings of members....................................... 375

252Q..... Technology..................................................................................... 375

252R..... Quorum........................................................................................... 375

252S...... Chairing meetings of members........................................................ 376

252T..... Auditors’ right to be heard at meetings of members....................... 376

252U..... Adjourned meetings........................................................................ 377

Division 5—Proxies and body corporate representatives               378

252V..... Who can appoint a proxy............................................................... 378

252W.... Rights of proxies............................................................................. 378

252X..... Responsible entity sending appointment forms or lists of proxies must send to all members               379

252Y..... Appointing a proxy........................................................................ 379

252Z..... Proxy documents............................................................................ 380

253A..... Validity of proxy vote.................................................................... 382

253B..... Body corporate representative....................................................... 382

Division 6—Voting at meetings of members                          384

253C..... How many votes a member has...................................................... 384

253D..... Jointly held interests...................................................................... 384

253E...... Responsible entity and associates cannot vote if interested in resolution               384

253F...... How to work out the value of an interest....................................... 384

253G..... Objections to a right to vote........................................................... 385

253H..... Votes need not all be cast in the same way.................................... 385

253J...... How voting is carried out............................................................... 385

253K..... Matters on which a poll may be demanded.................................... 386

253L...... When a poll is effectively demanded.............................................. 386

Division 7—Minutes and members’ access to minutes 388

253M.... Minutes.......................................................................................... 388

253N..... Members’ access to minutes.......................................................... 388

Chapter 2H—Shares                                                                                               390

Part 2H.1—Issuing and converting shares                                                           390

254A..... Power to issue bonus, partly‑paid, preference and redeemable preference shares  390

254B..... Terms of issue................................................................................ 391

254C..... No par value shares........................................................................ 392

254D..... Pre‑emption for existing shareholders on issue of shares in proprietary company (replaceable rule—see section 135)........................................................................................................ 392

254E...... Court validation of issue................................................................. 393

254F...... Bearer shares and stock must not be issued................................... 393

254G..... Conversion of shares...................................................................... 393

254H..... Resolution to convert shares into larger or smaller number............ 394

Part 2H.2—Redemption of redeemable preference shares                        395

254J...... Redemption must be in accordance with terms of issue................. 395

254K..... Other requirements about redemption............................................ 395

254L...... Consequences of contravening section 254J or 254K.................... 395

Chapter 2H—Shares                                                                                               397

Part 2H.3—Partly‑paid shares                                                                                     397

254M.... Liability on partly‑paid shares....................................................... 397

254N..... Calls may be limited to when company is externally‑administered 397

254P...... No liability companies—calls on shares......................................... 398

254Q..... No liability companies—forfeiture and sale of shares for failure to meet call         398

254R..... No liability companies—redemption of forfeited shares............... 401

Part 2H.4—Capitalisation of profits                                                                         402

254S...... Capitalisation of profits................................................................. 402

Part 2H.5—Dividends                                                                                                       403

254T..... Dividends to be paid out of profits................................................ 403

254U..... Other provisions about paying dividends (replaceable rule—see section 135)       403

254V..... When does the company incur a debt?........................................... 403

254W.... Dividend rights............................................................................... 403

Part 2H.6—Notice requirements                                                                                405

254X..... Notice to ASIC of share issue........................................................ 405

254Y..... Notice to ASIC of share cancellation.............................................. 406

Chapter 2J—Transactions affecting share capital                 407

Part 2J.1—Share capital reductions and share buy‑backs                          407

256A..... Purpose........................................................................................... 407

Division 1—Reductions in share capital not otherwise authorised by law    408

256B..... Company may make reduction not otherwise authorised.............. 408

256C..... Shareholder approval...................................................................... 409

256D..... Consequences of failing to comply with section 256B.................. 410

256E...... Signposts to other relevant provisions........................................... 410

Division 2—Share buy‑backs                                                                412

257A..... The company’s power to buy back its own shares....................... 412

257B..... Buy‑back procedure—general........................................................ 412

257C..... Buy‑back procedure—shareholder approval if the 10/12 limit exceeded                415

257D..... Buy‑back procedure—special shareholder approval for selective buy‑back           415

257E...... Buy‑back procedure—lodgment of offer documents with ASIC... 416

257F...... Notice of intended buy‑back.......................................................... 417

257G..... Buy‑back procedure—disclosure of relevant information when offer made           417

257H..... Acceptance of offer and transfer of shares to the company........... 418

257J...... Signposts to other relevant provisions........................................... 418

Division 3—Other share capital reductions                          420

258A..... Unlimited companies...................................................................... 420

258B..... Right to occupy or use real property............................................. 420

258C..... Brokerage or commission................................................................ 420

258D..... Cancellation of forfeited shares...................................................... 420

258E...... Other share cancellations................................................................ 420

258F...... Reductions because of lost capital.................................................. 421

Part 2J.2—Self‑acquisition and control of shares                                             422

259A..... Directly acquiring own shares........................................................ 422

259B..... Taking security over own shares or shares in holding company.... 422

259C..... Issuing or transferring shares to controlled entity.......................... 423

259D..... Company controlling entity that holds shares in it........................ 424

259E...... When a company controls an entity............................................... 425

259F...... Consequences of failing to comply with section 259A or 259B.... 426

Part 2J.3—Financial assistance                                                                                  427

260A..... Financial assistance by a company for acquiring shares in the company or a holding company            427

260B..... Shareholder approval...................................................................... 427

260C..... Exempted financial assistance......................................................... 429

260D..... Consequences of failing to comply with section 260A.................. 430

Part 2J.4—Interaction with general directors’ duties                                    432

260E...... General duties still apply............................................................... 432

Chapter 2K—Charges                                                                                          433

Part 2K.1—Preliminary                                                                                                   433

261........ Interpretation and application........................................................ 433

Part 2K.2—Registration                                                                                                 435

262........ Charges required to be registered.................................................... 435

263........ Lodgment of notice of charge and copy of instrument................... 438

264........ Acquisition of property subject to charge...................................... 441

265........ Registration of documents relating to charges................................ 442

265A..... Standard time for the purposes of section 265............................... 446

266........ Certain charges void against liquidator or administrator................. 446

267........ Charges in favour of certain persons void in certain cases............. 450

268........ Assignment and variation of charges.............................................. 452

269........ Satisfaction of, and release of property from, charges................... 453

270........ Lodgment of notices, offences etc.................................................. 454

271........ Company to keep documents relating to charges and register of charges                455

272........ Certificates...................................................................................... 456

273A..... Application of State and Territory laws to charges required to be registered under this Part 457

273B..... Application of State and Territory laws to transfers, assignments or giving of charges registered under this Part........................................................................................................ 458

273C..... Application of specified State and Territory laws to crop liens, wool liens and stock mortgages registered under this Part................................................................................................. 460

273D..... Sections 273A to 273C do not apply to charges given by company jointly with person who is not a company  463

274........ Power of Court to rectify Register................................................. 463

277........ Power to exempt from compliance with certain requirements of Division              463

Part 2K.3—Order of priority                                                                                        465

278........ Definitions...................................................................................... 465

279........ Priorities of charges........................................................................ 466

280........ General priority rules in relation to registered charges................... 467

281........ General priority rule in relation to unregistered charges................. 468

282........ Special priority rules...................................................................... 468

Chapter 2L—Debentures                                                                                   471

Part 2L.1—Requirement for trust deed and trustee                                       471

283AA.. Requirement for trust deed and trustee.......................................... 471

283AB.. Trust deed....................................................................................... 471

283AC.. Who can be a trustee....................................................................... 472

283AD.. Existing trustee continues to act until new trustee takes office...... 473

283AE... Replacement of trustee................................................................... 473

Part 2L.2—Duties of borrower                                                                                    475

283BA.. Duties of borrower......................................................................... 475

283BB... General duties................................................................................. 475

283BC... Duty to notify ASIC of name of trustee........................................ 475

283BD.. Duty to replace trustee................................................................... 476

283BE... Duty to inform trustee about charges............................................. 476

283BF... Duty to give trustee and ASIC quarterly reports........................... 476

283BG.. Exceptions...................................................................................... 479

283BH.. How debentures may be described................................................. 479

283BI.... Offences for failure to comply with statutory duties.................... 481

Part 2L.3—Duties of guarantor                                                                                  482

283CA.. Duties of guarantor......................................................................... 482

283CB... General duties................................................................................. 482

283CC... Duty to inform trustee about charges............................................. 482

283CD.. Exceptions...................................................................................... 483

283CE... Offences for failure to comply with statutory duties.................... 483

Part 2L.4—Trustee                                                                                                            484

283DA.. Trustee’s duties.............................................................................. 484

283DB.. Exemptions and indemnifications of trustee from liability............. 485

283DC.. Indemnity....................................................................................... 486

Part 2L.5—Meetings of debenture holders                                                         487

283EA... Borrower’s duty to call meeting..................................................... 487

283EB... Trustee’s power to call meeting..................................................... 488

283EC... Court may order meeting................................................................ 489

Part 2L.6—Civil liability                                                                                                  490

283F...... Civil liability for contravening this Chapter................................... 490

Part 2L.7—ASIC powers                                                                                                491

283GA.. ASIC’s power to exempt and modify............................................ 491

283GB.. ASIC may approve body corporate to be trustee.......................... 492

Part 2L.8—Court                                                                                                                 493

283HA.. General Court power to give directions and determine questions.. 493

283HB.. Specific Court powers.................................................................... 493

Part 2L.9—Location of other debenture provisions                                        495

283I....... Signpost to other debenture provisions.......................................... 495

Chapter 2M—Financial reports and audit                                      496

Part 2M.1—Overview                                                                                                      496

285........ Overview of obligations under this Chapter................................... 496

Part 2M.2—Financial records                                                                                      499

286........ Obligation to keep financial records............................................... 499

287........ Language requirements.................................................................... 499

288........ Physical format............................................................................... 499

289........ Place where records are kept.......................................................... 500

290........ Director access................................................................................ 500

291........ Signposts to other relevant provisions........................................... 501

(Volume 2)

Part 2M.3—Financial reporting                                                                                  502

Division 1—Annual financial reports and directors’ reports       502

292........ Who has to prepare annual financial reports and directors’ reports 502

293........ Small proprietary company—shareholder direction...................... 502

294........ Small proprietary company—ASIC direction................................ 503

295........ Contents of annual financial report................................................ 503

296........ Compliance with accounting standards and regulations................. 505

297........ True and fair view........................................................................... 505

298........ Annual directors’ report................................................................. 505

299........ Annual directors’ report—general information.............................. 506

300........ Annual directors’ report—specific information............................. 507

300A..... Annual directors’ report—specific information to be provided by listed companies             512

301........ Audit of annual financial report...................................................... 513

Division 2—Half‑year financial report and directors’ report      514

302........ Disclosing entity must prepare half‑year financial report and directors’ report     514

303........ Contents of half‑year financial report............................................ 514

304........ Compliance with accounting standards and regulations................. 515

305........ True and fair view........................................................................... 516

306........ Half‑year directors’ report............................................................. 516

Division 3—Audit and auditor’s report                                      517

307........ Audit............................................................................................... 517

308........ Auditor’s report on annual financial report.................................... 517

309........ Auditor’s report on half‑year financial report................................ 518

310........ Auditor’s power to obtain information.......................................... 519

311........ Reporting to ASIC.......................................................................... 519

312........ Assisting auditor............................................................................. 519

313........ Special provisions on audit of debenture issuers and guarantors... 520

Division 4—Annual financial reporting to members    521

314........ Annual financial reporting to members........................................... 521

315........ Deadline for reporting to members................................................. 522

316........ Member’s choices for annual financial information........................ 523

317........ Consideration of reports at AGM.................................................. 523

318........ Additional reporting by debenture issuers..................................... 524

Division 5—Lodging reports with ASIC                                    525

319........ Lodgment of annual reports with ASIC......................................... 525

320........ Lodgment of half‑year reports with ASIC..................................... 526

321........ ASIC power to require lodgment.................................................... 526

322........ Relodgment if financial statements or directors’ reports amended after lodgment  526

Division 6—Special provisions about consolidated financial statements        527

323........ Directors and officers of controlled entity to give information...... 527

323A..... Auditor’s power to obtain information from controlled entity...... 527

323B..... Controlled entity to assist auditor.................................................. 527

323C..... Application of Division to entity that has ceased to be controlled 528

Division 7—Financial years and half‑years                           529

323D..... Financial years and half‑years........................................................ 529

Division 8—Disclosure by listed companies of information filed overseas   530

323DA.. Listed companies to disclose information filed overseas................ 530

Part 2M.4—Appointment and removal of auditors                                          531

Division 1—Companies                                                                               531

324........ Qualifications of auditors............................................................... 531

325........ Appointment of auditor by proprietary company........................ 535

327........ Appointment of auditors................................................................ 536

328........ Nomination of auditors................................................................... 539

329........ Removal and resignation of auditors............................................... 540

330........ Effect of winding up on office of auditor....................................... 542

331........ Fees and expenses of auditors........................................................ 542

Division 2—Registered schemes                                                       543

331AA.. Qualifications of auditors............................................................... 543

331AB.. Appointment of auditors................................................................ 544

331AC.. Removal and resignation of auditors............................................... 545

331AD.. Effect of winding up an office of auditor........................................ 547

331AE... Fees and expenses of auditors........................................................ 547

Part 2M.5—Accounting standards                                                                            548

334........ Accounting standards..................................................................... 548

335........ Equity accounting........................................................................... 548

337........ Interpretation of accounting standards........................................... 548

339........ Evidence of text of accounting standard......................................... 549

Part 2M.6—Exemptions and modifications                                                          550

340........ ASIC’s power to make specific exemption orders......................... 550

341........ ASIC’s power to make class orders............................................... 550

342........ Criteria for specific exemption orders and class orders.................. 551

343........ Modification by regulations........................................................... 552

Part 2M.7—Sanctions for contraventions of Chapter                                    553

344........ Contravention of Part 2M.2 or 2M.3............................................. 553

Chapter 2N—Annual return and lodgments with ASIC     554

Part 2N.1—Annual returns                                                                                            554

345........ Deadline for lodging annual return.................................................. 554

346........ Solvency resolution—companies................................................... 555

347........ Lodging annual return with ASIC................................................... 555

348........ Contents of annual return—companies.......................................... 555

349........ Contents of annual return—registered schemes............................. 557

Part 2N.2—Lodgments with ASIC                                                                            559

350........ Forms for documents to be lodged with ASIC............................... 559

351........ Signing documents lodged with ASIC............................................. 559

352........ Documents lodged with ASIC electronically.................................. 559

Chapter 5—External administration                                                      561

Part 5.1—Arrangements and reconstructions                                                     561

410........ Interpretation.................................................................................. 561

411........ Administration of compromises etc............................................... 561

412........ Information as to compromise with creditors................................ 568

413........ Provisions for facilitating reconstruction and amalgamation of Part 5.1 bodies      570

414........ Acquisition of shares of shareholders dissenting from scheme or contract approved by majority         571

415........ Notification of appointment of scheme manager and power of Court to require report         575

Part 5.2—Receivers, and other controllers, of property of corporations 577

416........ Definitions...................................................................................... 577

417........ Application of Part......................................................................... 577

418........ Persons not to act as receivers........................................................ 577

418A..... Court may declare whether controller is validly acting.................. 578

419........ Liability of controller...................................................................... 579

419A..... Liability of controller under pre‑existing agreement about property used by corporation     579

420........ Powers of receiver.......................................................................... 581

420A..... Controller’s duty of care in exercising power of sale..................... 583

420B..... Court may authorise managing controller to dispose of property despite prior charge          583

420C..... Receiver’s power to carry on corporation’s business during winding up               585

421........ Controller’s duties in relation to bank accounts and financial records 586

421A..... Managing controller to report within 2 months about corporation’s affairs           587

422........ Reports by receiver........................................................................ 588

423........ Supervision of controller................................................................ 589

424........ Controller may apply to Court...................................................... 590

425........ Court’s power to fix receiver’s remuneration................................. 590

426........ Controller has qualified privilege in certain cases........................... 591

427........ Notification of matters relating to controller.................................. 591

428........ Statement that receiver appointed or other controller acting.......... 593

429........ Officers to report to controller about corporation’s affairs........... 593

430........ Controller may require reports....................................................... 595

431........ Controller may inspect books........................................................ 596

432........ Lodging controller’s accounts......................................................... 596

433........ Payment of certain debts, out of property subject to floating charge, in priority to claims under charge              598

434........ Enforcing controller’s duty to make returns................................... 600

434A..... Court may remove controller for misconduct................................. 601

434B..... Court may remove redundant controller......................................... 601

434C..... Effect of sections 434A and 434B.................................................. 602

Part 5.3A—Administration of a company’s affairs with a view to executing a deed of company arrangement                                                                                                                                    603

Division 1—Preliminary                                                                             603

435A..... Object of Part................................................................................. 603

435B..... Definitions...................................................................................... 603

435C..... When administration begins and ends............................................. 603

Division 2—Appointment of administrator and first meeting of creditors     605

436A..... Company may appoint administrator if board thinks it is or will become insolvent              605

436B..... Liquidator may appoint administrator........................................... 605

436C..... Chargee may appoint administrator............................................... 605

436D..... Company already under administration......................................... 606

436E...... Purpose and timing of first meeting of creditors............................ 606

436F...... Functions of committee of creditors............................................... 606

436G..... Membership of committee............................................................. 607

Division 3—Administrator assumes control of company’s affairs         608

437A..... Role of administrator...................................................................... 608

437B..... Administrator acts as company’s agent......................................... 608

437C..... Powers of other officers suspended............................................... 608

437D..... Only administrator can deal with company’s property................. 609

437E...... Order for compensation where officer involved in void transaction 610

437F...... Effect of administration on company’s members........................... 611

Division 4—Administrator investigates company’s affairs            612

438A..... Administrator to investigate affairs and consider possible courses of action          612

438B..... Directors to help administrator...................................................... 612

438C..... Administrator’s rights to company’s books.................................. 613

438D..... Reports by administrator............................................................... 613

Division 5—Meeting of creditors decides company’s future        615

439A..... Administrator to convene meeting and inform creditors................ 615

439B..... Conduct of meeting......................................................................... 616

439C..... What creditors may decide............................................................. 616

Division 6—Protection of company’s property during administration              617

440A..... Winding up company..................................................................... 617

440B..... Charge unenforceable...................................................................... 617

440C..... Owner or lessor cannot recover property used by company......... 617

440D..... Stay of proceedings........................................................................ 618

440E...... Administrator not liable in damages for refusing consent............... 618

440F...... Suspension of enforcement process............................................... 618

440G..... Duties of court officer in relation to property of company........... 618

440H..... Lis pendens taken to exist.............................................................. 620

440J...... Administration not to trigger liability of director or relative under guarantee of company’s liability     620

Division 7—Rights of chargee, owner or lessor               622

441A..... Where chargee acts before or during decision period...................... 622

441B..... Where enforcement of charge begins before administration............ 623

441C..... Charge on perishable property....................................................... 624

441D..... Court may limit powers of chargee etc. in relation to charged property 624

441E...... Giving a notice under a charge........................................................ 625

441F...... Where recovery of property begins before administration............. 625

441G..... Recovering perishable property..................................................... 625

441H..... Court may limit powers of receiver etc. in relation to property used by company                626

441J...... Giving a notice under an agreement about property....................... 626

441K..... Effect of Division........................................................................... 627

Division 8—Powers of administrator                                           628

442A..... Additional powers of administrator............................................... 628

442B..... Dealing with property subject to a floating charge that has crystallised 628

442C..... When administrator may dispose of encumbered property........... 628

442D..... Administrator’s powers subject to powers of chargee, receiver etc. 629

442E...... Administrator has qualified privilege.............................................. 629

442F...... Protection of persons dealing with administrator........................... 629

Division 9—Administrator’s liability and indemnity for debts of administration    631

Subdivision A—Liability                                                                                        631

443A..... General debts.................................................................................. 631

443B..... Payments for property used or occupied by, or in the possession of, the company             631

443BA.. Certain taxation liabilities............................................................... 633

443C..... Administrator not otherwise liable for company’s debts............... 633

Subdivision B—Indemnity                                                                                     634

443D..... Right of indemnity.......................................................................... 634

443E...... Right of indemnity has priority over other debts........................... 634

443F...... Lien to secure indemnity................................................................ 635

Division 10—Execution and effect of deed of company arrangement                636

444A..... Effect of creditors’ resolution......................................................... 636

444B..... Execution of deed............................................................................ 637

444C..... Creditor etc. not to act inconsistently with deed before its execution 637

444D..... Effect of deed on creditors.............................................................. 638

444E...... Protection of company’s property from persons bound by deed. 638

444F...... Court may limit rights of secured creditor or owner or lessor........ 639

444G..... Effect of deed on company, officers and members......................... 640

444H..... Extent of release of company’s debts............................................. 640

Division 11—Variation, termination and avoidance of deed         641

445A..... Variation of deed by creditors........................................................ 641

445B..... Court may cancel variation............................................................. 641

445C..... When deed terminates..................................................................... 641

445D..... When Court may terminate deed.................................................... 641

445E...... Creditors may terminate deed and resolve that company be wound up  642

445F...... Meeting of creditors to consider proposed variation or termination of deed          643

445G..... When Court may void or validate deed.......................................... 644

445H..... Effect of termination or avoidance.................................................. 644

Division 12—Transition to creditors’ voluntary winding up         645

446A..... Administrator becomes liquidator in certain cases......................... 645

446B..... Regulations may provide for transition in other cases................... 646

Division 13—Powers of Court                                                             648

447A..... General power to make orders........................................................ 648

447B..... Orders to protect creditors during administration.......................... 648

447C..... Court may declare whether administrator validly appointed......... 649

447D..... Administrator may seek directions................................................. 649

447E...... Supervision of administrator of company or deed......................... 649

447F...... Effect of Division........................................................................... 650

Division 14—Qualifications of administrators                   651

448A..... Appointee must consent................................................................ 651

448B..... Administrator must be registered liquidator................................... 651

448C..... Disqualification of person connected with company..................... 651

448D..... Disqualification of insolvent under administration......................... 652

Division 15—Removal, replacement and remuneration of administrator      653

449A..... Appointment of administrator cannot be revoked......................... 653

449B..... Court may remove administrator.................................................... 653

449C..... Vacancy in office of administrator of company............................. 653

449D..... Vacancy in office of administrator of deed of company arrangement 655

449E...... Remuneration of administrator....................................................... 655

Division 16—Notices about steps taken under Part     656

450A..... Appointment of administrator....................................................... 656

450B..... Execution of deed of company arrangement................................... 657

450C..... Failure to execute deed of company arrangement........................... 657

450D..... Termination of deed of company arrangement............................... 657

450E...... Notice in public documents etc. of company................................. 657

450F...... Effect of contravention of this Division......................................... 658

Division 17—Miscellaneous                                                                   659

451A..... Appointment of 2 or more administrators of company................. 659

451B..... Appointment of 2 or more administrators of deed of company arrangement         659

451C..... Effect of things done during administration of company............... 660

451D..... Time for doing act does not run while act prevented by this Part. 660

Part 5.4—Winding up in insolvency                                                                          661

Division 1—When company to be wound up in insolvency            661

459A..... Order that insolvent company be wound up in insolvency........... 661

459B..... Order made on application under section 234, 462 or 464............. 661

459C..... Presumptions to be made in certain proceedings............................ 661

459D..... Contingent or prospective liability relevant to whether company solvent             662

Division 2—Statutory demand                                                             663

459E...... Creditor may serve statutory demand on company....................... 663

459F...... When company taken to fail to comply with statutory demand... 664

Division 3—Application to set aside statutory demand 665

459G..... Company may apply..................................................................... 665

459H..... Determination of application where there is a dispute or offsetting claim              665

459J...... Setting aside demand on other grounds........................................... 667

459K..... Effect of order setting aside demand............................................... 667

459L...... Dismissal of application................................................................. 667

459M.... Order subject to conditions............................................................ 667

459N..... Costs where company successful................................................... 667

Division 4—Application for order to wind up company in insolvency                668

459P...... Who may apply for order under section 459A.............................. 668

459Q..... Application relying on failure to comply with statutory demand. 669

459R..... Period within which application must be determined.................... 669

459S...... Company may not oppose application on certain grounds........... 670

459T..... Application to wind up joint debtors in insolvency...................... 670

Part 5.4A—Winding up by the Court on other grounds                                 671

461........ General grounds on which company may be wound up by Court. 671

462........ Standing to apply for winding up................................................... 672

464........ Application for winding up in connection with investigation under ASIC Act      673

Part 5.4B—Winding up in insolvency or by the Court                                   674

Division 1—General                                                                                       674

465A..... Notice of application...................................................................... 674

465B..... Substitution of applicants.............................................................. 674

465C..... Applicant to be given notice of grounds for opposing application 675

466........ Payment of preliminary costs etc................................................... 675

467........ Court’s powers on hearing application.......................................... 675

467A..... Effect of defect or irregularity on application under Part 5.4 or 5.4A 677

467B..... Court may order winding up of company that is being wound up voluntarily       677

468........ Avoidance of dispositions of property, attachments etc............... 678

469........ Application to be lis pendens......................................................... 679

470........ Certain notices to be lodged............................................................ 679

Division 1A—Effect of winding up order                                 681

471........ Effect on creditors and contributories............................................ 681

471A..... Powers of other officers suspended during winding up................. 681

471B..... Stay of proceedings and suspension of enforcement process........ 682

471C..... Secured creditor’s rights not affected............................................. 682

Division 2—Court‑appointed liquidators                                  683

472........ Court to appoint official liquidator................................................ 683

473........ General provisions about liquidators.............................................. 684

474........ Custody and vesting of company’s property................................ 685

475........ Report as to company’s affairs to be submitted to liquidator....... 685

476........ Preliminary report by liquidator..................................................... 687

477........ Powers of liquidator....................................................................... 688

478........ Application of property; list of contributories.............................. 690

479........ Exercise and control of liquidator’s powers................................... 691

480........ Release of liquidator and deregistration of company...................... 692

481........ Orders for release or deregistration................................................. 692

Division 3—General powers of Court                                         694

482........ Power to stay or terminate winding up.......................................... 694

483........ Delivery of property to liquidator................................................. 695

484........ Appointment of special manager.................................................... 696

485........ Claims of creditors and distribution of property........................... 697

486........ Inspection of books by creditors and contributories...................... 697

486A..... Court may make order to prevent officer or related entity from avoiding liability to company             697

486B..... Warrant to arrest person who is absconding, or who has dealt with property or books, in order to avoid obligations in connection with winding up........................................................... 699

487........ Power to arrest absconding contributory....................................... 700

488........ Delegation to liquidator of certain powers of Court....................... 700

489........ Powers of Court cumulative........................................................... 701

Part 5.5—Voluntary winding up                                                                                  702

Division 1—Resolution for winding up                                       702

490........ When company cannot wind up voluntarily.................................. 702

491........ Circumstances in which company may be wound up voluntarily. 702

493........ Effect of voluntary winding up...................................................... 702

494........ Declaration of solvency.................................................................. 703

Division 2—Members’ voluntary winding up                       705

495........ Liquidators...................................................................................... 705

496........ Duty of liquidator where company turns out to be insolvent........ 705

Division 3—Creditors’ voluntary winding up                       708

497........ Meeting of creditors....................................................................... 708

498........ Power to adjourn meeting............................................................... 710

499........ Liquidators...................................................................................... 710

500........ Execution and civil proceedings...................................................... 711

Division 4—Voluntary winding up generally                         712

501........ Distribution of property of company............................................ 712

502........ Appointment of liquidator............................................................. 712

503........ Removal of liquidator..................................................................... 712

504........ Review of liquidator’s remuneration.............................................. 712

505........ Acts of liquidator valid etc............................................................. 712

506........ Powers and duties of liquidator...................................................... 713

507........ Power of liquidator to accept shares etc. as consideration for sale of property of company 714

508........ Annual meeting of creditors............................................................ 716

509........ Final meeting and deregistration..................................................... 716

510........ Arrangement: when binding on creditors........................................ 717

511........ Application to Court to have questions determined or powers exercised               718

512........ Costs............................................................................................... 718

Part 5.6—Winding up generally                                                                                  719

Division 1—Preliminary                                                                             719

513........ Application of Part......................................................................... 719

Division 1A—When winding up taken to begin                 720

513A..... Winding up ordered by the Court................................................... 720

513B..... Voluntary winding up..................................................................... 720

513C..... Section 513C day in relation to an administration under Part 5.3A 721

513D..... Validity of proceedings in earlier winding up................................. 721

Division 2—Contributories                                                                     723

514........ Where Division applies.................................................................. 723

515........ General liability of contributory..................................................... 723

516........ Company limited by shares............................................................ 723

517........ Company limited by guarantee....................................................... 723

518........ Company limited both by shares and by guarantee....................... 723

519........ Exceptions for former unlimited company..................................... 724

520........ Past member: later debts................................................................. 724

521........ Person ceasing to be a member a year or more before winding up. 724

522........ Present members to contribute first............................................... 724

523........ Past member of former unlimited company................................... 724

524........ Past member of former limited company....................................... 725

526........ Liability on certain contracts.......................................................... 725

527........ Nature of contributory’s liability................................................... 725

528........ Death of contributory..................................................................... 725

529........ Bankruptcy of contributory........................................................... 726

Division 3—Liquidators                                                                              727

530A..... Officers to help liquidator.............................................................. 727

530B..... Liquidator’s rights to company’s books........................................ 728

530C..... Warrant to search for, and seize, company’s property or books... 729

531........ Books to be kept by liquidator....................................................... 730

532........ Disqualification of liquidator.......................................................... 730

533........ Reports by liquidator..................................................................... 732

534........ Prosecution by liquidator of delinquent officers and members...... 733

535........ When liquidator has qualified privilege........................................... 734

536........ Supervision of liquidators............................................................... 734

537........ Notice of appointment and address of liquidator........................... 735

538........ Regulations relating to money etc. received by liquidator.............. 735

539........ Liquidator’s accounts..................................................................... 736

540........ Liquidator to remedy defaults........................................................ 737

Division 4—General                                                                                       739

541........ Notification that company is in liquidation.................................... 739

542........ Books of company......................................................................... 739

543........ Investment of surplus funds on general account............................ 740

544........ Unclaimed money to be paid to ASIC............................................ 740

545........ Expenses of winding up where property insufficient.................... 742

546........ Resolutions passed at adjourned meetings of creditors and contributories             742

547........ Meetings to ascertain wishes of creditors or contributories........... 742

Division 5—Committees of inspection                                         744

548........ Convening of meetings by liquidator for appointment of committee of inspection                744

549........ Proceedings of committee of inspection......................................... 745

550........ Vacancies on committee of inspection............................................ 745

551........ Member of committee not to accept extra benefit.......................... 746

552........ Powers of Court where no committee of inspection...................... 746

Division 6—Proof and ranking of claims                                 747

Subdivision A—Admission to proof of debts and claims                                  747

553........ Debts or claims that are provable in winding up............................ 747

553A..... Member cannot prove debt unless contributions paid................... 748

553AA.. Selling shareholder cannot prove debt unless documents given...... 748

553B..... Insolvent companies—penalties and fines not generally provable. 748

553C..... Insolvent companies—mutual credit and set‑off............................ 748

553D..... Debts or claims may be proved formally or informally................. 749

553E...... Application of Bankruptcy Act to winding up of insolvent company 749

Subdivision B—Computation of debts and claims                                             750

554........ General rule—compute amount as at relevant date........................ 750

554A..... Determination of value of debts and claims of uncertain value...... 750

554B..... Discounting of debts payable after relevant date........................... 751

554C..... Conversion into Australian currency of foreign currency debts or claims               752

Subdivision C—Special provisions relating to secured creditors of insolvent companies                752

554D..... Application of Subdivision............................................................. 752

554E...... Proof of debt by secured creditor................................................... 752

554F...... Redemption of security by liquidator............................................ 753

554G..... Amendment of valuation................................................................ 754

554H..... Repayment of excess...................................................................... 755

554J...... Subsequent realisation of security.................................................. 755

Subdivision D—Priorities                                                                                     756

555........ Debts and claims proved to rank equally except as otherwise provided 756

556........ Priority payments.......................................................................... 756

558........ Debts due to employees................................................................. 760

559........ Debts of a class to rank equally...................................................... 761

560........ Advances for company to make priority payments in respect of employees        761

561........ Priority of employees’ claims over floating charges....................... 762

562........ Application of proceeds of contracts of insurance......................... 762

562A..... Application of proceeds of contracts of reinsurance...................... 763

563........ Provisions relating to injury compensation.................................... 765

563AA.. Seller under a buy‑back agreement.................................................. 765

563A..... Member’s debts to be postponed until other debts and claims satisfied                765

563AAA.................................................................... Redemption of debentures  766

Subdivision E—Miscellaneous                                                                              766

563B..... Interest on debts and claims from relevant date to date of payment 766

563C..... Debt subordination......................................................................... 767

564........ Power of Court to make orders in favour of certain creditors........ 767

Division 7—Effect on certain transactions                             768

565........ Undue preference............................................................................ 768

566........ Effect of floating charge.................................................................. 768

567........ Liquidator’s right to recover in respect of certain transactions...... 769

Division 7A—Disclaimer of onerous property                    772

568........ Disclaimer by liquidator; application to Court by party to contract 772

568A..... Liquidator must give notice of disclaimer....................................... 773

568B..... Application to set aside disclaimer before it takes effect............... 774

568C..... When disclaimer takes effect.......................................................... 775

568D..... Effect of disclaimer......................................................................... 776

568E...... Application to set aside disclaimer after it has taken effect........... 776

568F...... Court may dispose of disclaimed property.................................... 777

Division 7B—Effect on enforcement process against company’s property  779

569........ Executions, attachments etc. before winding up............................. 779

570........ Duties of sheriff after receiving notice of application.................... 780

Division 9—Co‑operation between Australian and foreign courts in external administration matters                                                      784

580........ Definitions...................................................................................... 784

581........ Courts to act in aid of each other.................................................... 784

Part 5.7—Winding up bodies other than companies                                        786

582........ Application of Part......................................................................... 786

583........ Winding up Part 5.7 bodies............................................................ 786

585........ Insolvency of Part 5.7 body........................................................... 787

586........ Contributories in winding up of Part 5.7 body.............................. 788

587........ Power of Court to stay or restrain proceedings............................. 788

588........ Outstanding property of defunct registrable body......................... 789

Part 5.7B—Recovering property or compensation for the benefit of creditors of insolvent company       790

Division 1—Preliminary                                                                             790

588D..... Secured debt may become unsecured.............................................. 790

588E...... Presumptions to be made in recovery proceedings........................ 790

588F...... Certain taxation liabilities taken to be debts................................... 792

Division 2—Voidable transactions                                                   794

588FA... Unfair preferences.......................................................................... 794

588FB... Uncommercial transactions............................................................. 795

588FC... Insolvent transactions..................................................................... 795

588FD... Unfair loans to a company............................................................. 796

588FE... Voidable transactions...................................................................... 797

588FF... Courts may make orders about voidable transactions.................... 798

588FG... Transaction not voidable as against certain persons....................... 799

588FGA Directors to indemnify Commissioner of Taxation if certain payments set aside   801

588FGB Defences in proceedings under section 588FGA............................ 802

588FH... Liquidator may recover from related entity benefit resulting from insolvent transaction       803

588FI.... Creditor who gives up benefit of unfair preference may prove for preferred debt  804

588FJ.... Floating charge created within 6 months before relation‑back day. 804

Division 3—Director’s duty to prevent insolvent trading 807

588G..... Director’s duty to prevent insolvent trading by company............ 807

588H..... Defences......................................................................................... 809

Division 4—Director liable to compensate company   811

Subdivision A—Proceedings against director                                                   811

588J...... On application for civil penalty order, Court may order compensation 811

588K..... Criminal court may order compensation........................................ 811

588L...... Enforcement of order under section 588J or 588K......................... 812

588M.... Recovery of compensation for loss resulting from insolvent trading 812

588N..... Avoiding double recovery............................................................... 813

588P...... Effect of sections 588J, 588K and 588M....................................... 813

588Q..... Certificates evidencing contravention............................................. 813

Subdivision B—Proceedings by creditor                                                            814

588R..... Creditor may sue for compensation with liquidator’s consent...... 814

588S...... Creditor may give liquidator notice of intention to sue for compensation              814

588T..... When creditor may sue for compensation without liquidator’s consent 815

588U..... Events preventing creditor from suing............................................ 816

Division 5—Liability of holding company for insolvent trading by subsidiary          817

588V..... When holding company liable......................................................... 817

588W.... Recovery of compensation for loss resulting from insolvent trading 817

588X..... Defences......................................................................................... 818

Division 6—Application of compensation under Division 4 or 5              820

588Y..... Application of amount paid as compensation................................ 820

Division 7—Person managing a corporation while disqualified may become liable for corporation’s debts                                                      821

588Z..... Court may make order imposing liability....................................... 821

Part 5.8—Offences                                                                                                             822

589........ Interpretation and application........................................................ 822

590........ Offences by officers of certain companies..................................... 825

592........ Incurring of certain debts; fraudulent conduct................................ 827

593........ Powers of Court............................................................................. 829

594........ Certain rights not affected.............................................................. 830

595........ Inducement to be appointed liquidator etc. of company................ 831

596........ Frauds by officers........................................................................... 831

Part 5.8A—Employee entitlements                                                                           832

596AA.. Object and coverage of Part............................................................ 832

596AB.. Entering into agreements or transactions to avoid employee entitlements              833

596AC.. Person who contravenes section 596AB liable to compensate for loss.. 834

596AD.. Avoiding double recovery............................................................... 835

596AE... Effect of section 596AC................................................................. 835

596AF... Employee may sue for compensation with liquidator’s consent... 835

596AG.. Employee may give liquidator notice of intention to sue for compensation           835

596AH.. When employee may sue for compensation without liquidator’s consent              836

596AI.... Events preventing employee from suing........................................ 837

Part 5.9—Miscellaneous                                                                                                 838

Division 1—Examining a person about a corporation 838

596A..... Mandatory examination.................................................................. 838

596B..... Discretionary examination.............................................................. 838

596C..... Affidavit in support of application under section 596B................ 839

596D..... Content of summons...................................................................... 839

596E...... Notice of examination..................................................................... 839

596F...... Court may give directions about examination................................. 840

597........ Conduct of examination.................................................................. 840

597A..... When Court is to require affidavit about corporation’s examinable affairs             843

597B..... Costs of unnecessary examination or affidavit............................... 844

Division 2—Orders against a person in relation to a corporation         845

598........ Order against person concerned with corporation.......................... 845

Division 3—Provisions applying to various kinds of external administration            847

600A..... Powers of Court where outcome of voting at creditors’ meeting determined by related entity              847

600B..... Review by Court of resolution of creditors passed on casting vote of person presiding at meeting       848

600C..... Court’s powers where proposed resolution of creditors lost as casting vote of person presiding at meeting        849

600D..... Interim order on application under section 600A, 600B or 600C.. 850

600E...... Order under section 600A or 600B does not affect act already done pursuant to resolution 850

600F...... Limitation on right of suppliers of essential services to insist on payment as condition of supply       850

Chapter 5A—Deregistration, and transfer of registration, of companies               853

Part 5A.1—Deregistration                                                                                             853

601AA.. Deregistration—voluntary.............................................................. 853

601AB.. Deregistration—ASIC initiated...................................................... 854

601AC.. Deregistration—following amalgamation or winding up................ 855

601AD.. Effect of deregistration................................................................... 856

601AE... What ASIC does with the property............................................... 856

601AF... ASIC’s power to fulfil outstanding obligations of deregistered company               858

601AG.. Claims against insurers of deregistered company........................... 858

601AH.. Reinstatement................................................................................. 858

Part 5A.2—Transfer of registration                                                                         860

601AI.... Transferring registration................................................................. 860

601AJ... Applying to transfer registration.................................................... 860

601AK.. ASIC makes transfer of registration declaration............................. 860

601AL... ASIC to deregister company.......................................................... 861

Chapter 5B—Bodies corporate registered as companies, and registrable bodies         862

Part 5B.1—Registering a body corporate as a company                             862

Division 1—Registration                                                                           862

601BA.. Bodies corporate may be registered as certain types of companies 862

601BB... Bodies registered as proprietary companies................................... 862

601BC... Applying for registration under this Part....................................... 863

601BD.. ASIC gives body ACN, registers as company and issues certificate 866

601BE... Registered office............................................................................. 867

601BF... Name............................................................................................... 867

601BG.. Constitution.................................................................................... 867

601BH.. Modifications of constitution......................................................... 867

601BJ.... ASIC may direct company to apply for Court approval for modifications of constitution   868

601BK.. Establishing registers and minute books......................................... 868

601BL... Registration of registered bodies..................................................... 869

Division 2—Operation of this Act                                                    870

601BM. Effect of registration under this Part.............................................. 870

601BN.. Liability of members on winding up............................................... 870

601BP... Bearer shares................................................................................... 870

601BQ.. References in pre‑registration contracts and other documents to par value in existing contracts and documents   871

601BR... First AGM..................................................................................... 872

601BS... Modification by regulations........................................................... 872

Part 5B.2—Registrable bodies                                                                                    873

Division 1—Registrable Australian bodies                             873

601CA.. When a registrable Australian body may carry on business in this jurisdiction and outside its place of origin      873

601CB... Application for registration............................................................ 873

601CC... Cessation of business etc................................................................ 874

Division 2—Foreign companies                                                         877

601CD.. When a foreign company may carry on business in this jurisdiction 877

601CE... Application for registration............................................................ 877

601CF... Appointment of local agent............................................................ 878

601CG.. Local agent: how appointed............................................................ 879

601CH.. Local agent: how removed.............................................................. 879

601CJ.... Liability of local agent.................................................................... 880

601CK.. Balance‑sheets and other documents.............................................. 880

601CL... Cessation of business etc................................................................ 882

601CM. Register of members of foreign company....................................... 885

601CN.. Register kept under section 601CM............................................... 886

601CP... Notifying ASIC about register kept under section 601CM........... 887

601CQ.. Effect of right to acquire shares compulsorily................................ 887

601CR... Index of members and inspection of registers................................. 887

601CS... Certificate as to shareholding.......................................................... 887

Division 3—Bodies registered under this Part                   888

601CT... Registered office............................................................................. 888

601CU.. Certificate of registration................................................................ 888

601CV... Notice of certain changes................................................................ 889

601CW.. Body’s name etc. must be displayed at office and place of business 889

601CX.. Service of documents on registered body....................................... 890

601CY... Power to hold land.......................................................................... 892

Division 4—Register of debenture holders for non‑companies 893

601CZA Certain documents are debentures.................................................. 893

601CZB Register of debenture holders to be maintained by non‑companies 893

601CZC Location of register......................................................................... 893

601CZD Application of sections 173 to 177................................................ 894

Part 5B.3—Names of registrable Australian bodies and foreign companies            895

601DA.. Reserving a name............................................................................ 895

601DB.. Acceptable abbreviations................................................................ 895

601DC.. When a name is available................................................................ 896

601DD.. Registered Australian bodies and registered foreign companies can carry on business with some names only      897

601DE... Using a name and ARBN................................................................ 897

601DF... Exception to requirement to have ARBN on receipts.................... 898

601DG.. Regulations may exempt from requirement to set out information on documents  898

601DH.. Notice of name change must be given to ASIC............................... 899

601DJ... ASIC’s power to direct a registered name be changed.................... 899

Chapter 5C—Managed investment schemes                                 901

Part 5C.1—Registration of managed investment schemes                         901

601EA... Applying for registration................................................................ 901

601EB... Registration of managed investment scheme.................................. 901

601EC... All documents etc. lodged with ASIC to bear ARSN..................... 902

601ED... When a managed investment scheme must be registered................ 902

601EE... Unregistered schemes may be wound up....................................... 904

Part 5C.2—The responsible entity                                                                            905

Division 1—Responsibilities and powers                                  905

601FA... Responsible entity to be public company and hold dealers licence 905

601FB... Responsible entity to operate scheme............................................ 905

601FC... Duties of responsible entity........................................................... 906

601FD... Duties of officers of responsible entity.......................................... 908

601FE... Duties of employees of responsible entity.................................... 909

601FF... Surveillance checks by ASIC.......................................................... 909

601FG... Acquisition of interest in scheme by responsible entity................ 909

601FH... Liquidator etc. of responsible entity entitled to exercise indemnity rights              910

Division 2—Changing the responsible entity                        911

601FJ.... Changes only take effect when ASIC alters record of registration. 911

601FK... Requirements of section 601FA must be met................................ 911

601FL... Retirement of responsible entity.................................................... 911

601FM.. Removal of responsible entity by members................................... 912

601FN... ASIC or scheme member may apply to Court for appointment of temporary responsible entity         913

601FP... Appointment of temporary responsible entity by Court.............. 913

601FQ... Temporary responsible entity to take steps for appointment of new responsible entity      914

Division 3—Consequences of change of responsible entity           916

601FR... Former responsible entity to hand over books and provide reasonable assistance 916

601FS.... Rights, obligations and liabilities of former responsible entity...... 916

601FT... Effect of change of responsible entity on documents etc. to which former responsible entity is party 917

Part 5C.3—The constitution                                                                                          918

601GA.. Contents of the constitution........................................................... 918

601GB.. Constitution must be legally enforceable........................................ 919

601GC.. Changing the constitution............................................................... 919

Part 5C.4—The compliance plan                                                                                921

601HA.. Contents of the compliance plan.................................................... 921

601HB.. Compliance plan may incorporate provisions from another scheme’s plan            922

601HC.. Directors must sign lodged copy of compliance plan..................... 922

601HD.. ASIC may require further information about compliance plan...... 922

601HE... Changing the compliance plan........................................................ 923

601HF... ASIC may require consolidation of compliance plan to be lodged. 923

601HG.. Audit of compliance plan............................................................... 923

601HH.. Removal and resignation of auditors............................................... 925

601HI.... Action on change of auditor of compliance plan............................ 927

Part 5C.5—The compliance committee                                                                  928

601JA... When is a compliance committee required?.................................... 928

601JB.... Membership of compliance committee.......................................... 929

601JC.... Functions of compliance committee............................................... 930

601JD... Duties of members.......................................................................... 930

601JE.... Compliance committee members have qualified privilege in certain cases               931

601JF.... When can responsible entity indemnify compliance committee members?             931

601JG... When can responsible entity pay insurance premiums for compliance committee members?                932

601JH... Proceedings of compliance committee............................................ 933

601JJ..... Disclosure of interests.................................................................... 933

Part 5C.6—Members’ rights to withdraw from a scheme                            934

601KA.. Members’ rights to withdraw......................................................... 934

601KB.. Non‑liquid schemes—offers........................................................... 935

601KC.. Non‑liquid schemes—only one withdrawal offer to be open at any time               936

601KD.. Non‑liquid schemes¾how payments are to be made.................... 936

601KE... Non‑liquid schemes¾responsible entity may cancel withdrawal offer  936

Part 5C.7—Related party transactions                                                                  938

601LA... Chapter 2E applies with modifications.......................................... 938

601LB... Replacement section 207................................................................ 938

601LC... Replacement section 208................................................................ 939

601LD... Omission of sections 213, 214 and 224.......................................... 940

601LE... Modification of section 225........................................................... 940

Part 5C.8—Effect of contraventions (civil liability and voidable contracts)              941

601MA. Civil liability of responsible entity to members............................. 941

601MB. Voidable contracts where subscription offers and invitations contravene this Act 941

Part 5C.9—Winding up                                                                                                    943

601NA.. Winding up required by scheme’s constitution.............................. 943

601NB.. Winding up at direction of members............................................... 943

601NC.. Winding up if scheme’s purpose accomplished or cannot be accomplished           943

601ND.. Winding up ordered by Court......................................................... 944

601NE... The winding up of the scheme........................................................ 945

601NF... Other orders about winding up....................................................... 945

601NG.. Unclaimed money to be paid to ASIC............................................ 946

Part 5C.10—Deregistration                                                                                          947

601PA... Deregistration¾voluntary.............................................................. 947

601PB... Deregistration by ASIC.................................................................. 947

601PC... Reinstatement................................................................................. 949

Part 5C.11—Exemptions and modifications                                                         950

601QA.. ASIC’s power to make exemption and modification orders........... 950

601QB.. Modification by regulations........................................................... 951

Chapter 6—Takeovers                                                                                          952

602........ Purposes of Chapter....................................................................... 952

603........ Chapter extends to some listed bodies that are not companies...... 953

604........ Chapter extends to listed managed investment schemes................ 953

605........ Classes of securities........................................................................ 953

Part 6.1—Prohibited acquisitions of relevant interests in voting shares 955

606........ Prohibition on certain acquisitions of relevant interests in voting shares                955

607........ Effect on transactions..................................................................... 957

608........ Relevant interests in securities....................................................... 958

609........ Situations not giving rise to relevant interests................................ 960

610........ Voting power in a body corporate.................................................. 963

Part 6.2—Exceptions to the prohibition                                                                  965

611........ Exceptions to the prohibition......................................................... 965

612........ Effect of non‑compliance with takeover rules for exceptions 1 to 4 970

613........ Bidder not to exercise voting rights if failure to send bids for off‑market acquisition—exception 2 or 3               970

615........ Treatment of foreign holders under equal access issue—exception 10 970

Part 6.3—The different types of takeover bid                                                    972

616........ Off‑market bids and market bids.................................................... 972

Part 6.4—Formulating the takeover offer                                                             973

Division 1—General                                                                                       973

617........ Securities covered by the bid.......................................................... 973

618........ Offers must be for all or a proportion of securities in the bid class 973

619........ General terms of the offer............................................................... 974

620........ Off‑market bid (offer formalities)................................................... 975

Division 2—Consideration for the offer                                    977

621........ Consideration offered..................................................................... 977

622........ Escalation agreements..................................................................... 978

623........ Collateral benefits not allowed....................................................... 979

Division 3—The offer period                                                                 980

624........ Offer period.................................................................................... 980

Division 4—Conditional offers                                                            981

625........ Conditional offers—general............................................................ 981

626........ Maximum acceptance conditions in off‑market bids...................... 981

627........ Discriminatory conditions not allowed for off‑market bids........... 982

628........ Conditions requiring payments to officers of target not allowed in off‑market bids               983

629........ Conditions turning on bidder’s or associate’s opinion not allowed in off‑market bids           983

630........ Defeating conditions....................................................................... 984

Part 6.5—The takeover procedure                                                                           986

Division 1—The overall procedure                                                 986

631........ Proposing or announcing a bid........................................................ 986

632........ Overview of steps in an off‑market bid.......................................... 987

633........ Detailed steps in an off‑market bid................................................ 987

634........ Overview of steps in a market bid.................................................. 991

635........ Detailed steps in a market bid........................................................ 992

Division 2—The bidder’s statement                                               996

636........ Bidder’s statement content............................................................. 996

637........ Bidder’s statement formalities........................................................ 999

Division 3—The target’s response                                                1000

638........ Target’s statement content........................................................... 1000

639........ Target’s statement formalities...................................................... 1001

640........ Expert’s report to accompany target’s statement if bidder connected with target  1002

641........ Target must inform bidder about securities holdings.................... 1002

642........ Expenses of directors of target companies................................... 1003

(Volume 3)

Division 4—Updating and correcting the bidder’s statement and target’s statement                                                                                                                  1005

643........ Supplementary bidder’s statement............................................... 1005

644........ Supplementary target’s statement................................................ 1005

645........ Form of supplementary statement............................................... 1006

646........ Consequences of lodging a supplementary statement.................. 1007

647........ To whom supplementary statement must be sent....................... 1007

Division 5—General rules on takeover procedure       1009

Subdivision A—Experts’ reports                                                                        1009

648A..... Experts’ reports............................................................................ 1009

Subdivision B—Sending documents to holders of securities                       1010

648B..... Address at which bidder may send documents to holders of securities  1010

648C..... Manner of sending documents to holders of securities................ 1010

Subdivision C—Effect of proportional takeover approval provisions           1010

648D..... Constitution may contain proportional takeover approval provisions 1010

648E...... Resolution to be put if proportional bid made............................. 1012

648F...... Effect of rejection of approval resolution..................................... 1012

648G..... Including proportional takeover provisions in constitution......... 1013

648H..... Effect of Subdivision.................................................................... 1016

Part 6.6—Variation of offers                                                                                      1017

Division 1—Market bids                                                                          1017

649A..... General.......................................................................................... 1017

649B..... Market bids—raising bid price..................................................... 1017

649C..... Market bids—extending the offer period..................................... 1017

Division 2—Off‑market bids (express variation by bidder)           1019

650A..... General.......................................................................................... 1019

650B..... Off‑market bids—consideration offered....................................... 1019

650C..... Off‑market bids—extension of offer period................................. 1021

650D..... Off‑market bids—method of making variation............................. 1021

650E...... Right to withdraw acceptance...................................................... 1022

650F...... Freeing off‑market bids from defeating conditions....................... 1023

650G..... Contracts and acceptances void if defeating condition not fulfilled 1024

Division 3—Off‑market bids (automatic variations)  1025

651A..... Off‑market bid—effect on bid consideration of purchases made outside bid          1025

651B..... How to make an election for new forms of consideration............ 1026

651C..... Returning securities as part of election......................................... 1027

Part 6.7—Withdrawal and suspension of offers                                               1028

652A..... Withdrawal of unaccepted offers under takeover bid................... 1028

652B..... Withdrawal of takeover offers with ASIC consent...................... 1028

652C..... Withdrawal of market bids........................................................... 1028

Part 6.8—Acceptances                                                                                                   1030

653A..... Acceptance of offers made under off‑market bid......................... 1030

653B..... Acceptances by transferees and nominees of offers made under off‑market bid     1030

Part 6.9—Other activities during the bid period                                              1033

654A..... Bidder not to dispose of securities during the bid period............. 1033

654B..... Disclosures about substantial shareholdings in listed companies. 1033

654C..... Disclosures about substantial shareholdings in unlisted companies 1033

Part 6.10—Review and intervention                                                                      1035

Division 1—ASIC’s power to exempt and modify         1035

655A..... ASIC’s power to exempt and modify.......................................... 1035

655B..... Notice of decision and review rights............................................. 1036

Division 2—The Corporations and Securities Panel 1037

Subdivision A—Review of ASIC’s exercise of its exemption or modification powers         1037

656A..... Review of exercise of exemption or modification powers............ 1037

656B..... Operation and implementation of a decision that is subject to review 1038

Subdivision B—Unacceptable circumstances                                                  1039

657A..... Declaration of unacceptable circumstances.................................. 1039

657B..... When Panel may make declaration............................................... 1041

657C..... Applying for declarations and orders........................................... 1041

657D..... Orders that Panel may make following declaration...................... 1042

657E...... Interim orders............................................................................... 1044

657EA... Internal Panel reviews................................................................... 1044

657EB... References by Courts................................................................... 1045

657F...... Offence to contravene Panel order................................................ 1045

657G..... Orders by the Court where contravention or proposed contravention of Panel order            1046

657H..... ASIC may publish report about application to Panel or Court... 1046

Subdivision C—General provisions                                                                   1047

658A..... Power of Panel where a proceeding is frivolous or vexatious....... 1047

658B..... Evidentiary value of findings of fact by Panel.............................. 1047

658C..... Panel’s power to make rules......................................................... 1048

658D..... Inconsistency between Panel rules and ASIC exemption or declaration 1048

Division 3—Court powers                                                                      1050

659A..... Panel may refer questions of law to the Court............................. 1050

659AA.. Object of sections 659B and 659C............................................... 1050

659B..... Court proceedings before end of bid period................................. 1050

659C..... Court proceedings after end of bid period.................................... 1052

Chapter 6A—Compulsory acquisitions and buy‑outs         1053

660A..... Chapter extends to some listed bodies that are not companies.... 1053

660B..... Chapter extends to listed managed investment schemes.............. 1053

Part 6A.1—Compulsory acquisitions and buy‑outs following takeover bid                1054

Division 1—Compulsory acquisition of bid class securities          1054

661A..... Compulsory acquisition power following takeover bid............... 1054

661B..... Compulsory acquisition notice..................................................... 1056

661C..... Terms on which securities to be acquired..................................... 1058

661D..... Holder may obtain names and addresses of other holders............ 1058

661E...... Holder may apply to Court to stop acquisition........................... 1059

661F...... Signpost—completing the acquisition of the securities................ 1059

Division 2—Compulsory buy‑out of bid class securities 1060

662A..... Bidder must offer to buy out remaining holders of bid class securities 1060

662B..... Bidder to tell remaining holders of their right to be bought out.... 1060

662C..... Right of remaining holder of securities in the bid class to be bought out 1062

Division 3—Compulsory buy‑out of convertible securities            1063

663A..... Bidder must offer to buy out holders of convertible securities.... 1063

663B..... Bidder to tell holders of convertible securities of their right to be bought out        1063

663C..... Right of holders of convertible securities to be bought out.......... 1065

Part 6A.2—General compulsory acquisitions and buy‑outs                      1066

Division 1—Compulsory acquisition of securities by 90% holder          1066

664A..... Threshold for general compulsory acquisition power.................. 1066

664AA.. Time limit on exercising compulsory acquisition power.............. 1067

664B..... The terms for compulsory acquisition......................................... 1068

664C..... Compulsory acquisition notice..................................................... 1068

664D..... Benefits outside compulsory acquisition procedure.................... 1070

664E...... Holder’s right to object to the acquisition.................................... 1071

664F...... The Court’s power to approve acquisition.................................. 1072

664G..... Signpost—completing the acquisition of the securities................ 1072

Division 2—Compulsory buy‑out of convertible securities by 100% holder                1073

665A..... 100% holder must offer to buy out holders of convertible securities 1073

665B..... 100% holder to tell holders of convertible securities of their right to be bought out               1073

665C..... Right of holders of convertible securities to be bought out.......... 1075

Division 3—Notice that person has become 85% holder of a class of securities   1076

665D..... Notice by 85% holder to company.............................................. 1076

665E...... Notice by company to other members......................................... 1077

Part 6A.3—Completion of compulsory acquisition of securities            1079

666A..... Completing the acquisition of securities....................................... 1079

666B..... Statutory procedure for completion............................................. 1080

Part 6A.4—Experts’ reports and valuations                                                      1081

667A..... Expert’s report............................................................................. 1081

667AA.. Expert to be nominated................................................................. 1081

667B..... Expert must not be an associate and must disclose prior dealings and relationships              1082

667C..... Valuation of securities.................................................................. 1082

Part 6A.5—Records of unclaimed consideration                                            1084

668A..... Company’s power to deal with unclaimed consideration for compulsory acquisition           1084

668B..... Unclaimed consideration to be transferred to ASIC..................... 1085

Part 6A.6—ASIC powers                                                                                              1086

669........ ASIC’s power to exempt and modify.......................................... 1086

Chapter 6B—Rights and liabilities in relation to Chapter 6 and 6A matters      1087

670A..... Misstatements in, or omissions from, takeover and compulsory acquisition and buy‑out documents  1087

670B..... Right to recover for loss or damage resulting from contravention 1088

670C..... People liable on takeover or compulsory acquisition statement to inform maker about deficiencies in the statement...................................................................................................... 1090

670D..... Defences against prosecutions under subsection 670A(3) and actions under section 670B   1091

670E...... Liability for proposing a bid or not carrying through with bid.... 1093

670F...... Defences....................................................................................... 1093

Chapter 6C—Information about ownership of listed companies and managed investment schemes                                                                1095

671A..... Chapter extends to some listed bodies that are not companies.... 1095

Part 6C.1—Substantial holding information                                                       1095

671B..... Information about substantial holdings must be given to company, responsible entity and relevant securities exchange...................................................................................................... 1095

671C..... Civil liability................................................................................. 1098

Part 6C.2—Tracing beneficial ownership of shares                                      1099

672A..... Disclosure notices......................................................................... 1099

672B..... Disclosure by member of relevant interests and instructions....... 1099

672C..... ASIC may pass information on to person who made request...... 1100

672D..... Fee for complying with a direction given by a company or scheme under this Part               1100

672E...... No notice of rights........................................................................ 1101

672F...... Civil liability................................................................................. 1101

Part 6C.3—ASIC powers                                                                                              1102

673........ ASIC’s power to exempt and modify.......................................... 1102

Chapter 6D—Fundraising                                                                               1104

Part 6D.1—Application of the fundraising provisions                                  1104

700........ Coverage of the fundraising rules.................................................. 1104

701........ Treatment of offers of interests in managed investment scheme.. 1104

702........ Treatment of offers of options over securities............................. 1105

703........ Chapter may not be contracted out of.......................................... 1105

Part 6D.2—Disclosure to investors about securities                                    1106

Division 1—Overview                                                                                 1106

704........ When disclosure to investors is needed........................................ 1106

705........ Types of disclosure document..................................................... 1106

Division 2—Offers that need disclosure to investors 1108

706........ Issue offers that need disclosure................................................... 1108

707........ Sale offers that need disclosure..................................................... 1108

708........ Offers that do not need disclosure................................................ 1110

Division 3—Types of disclosure documents                        1117

709........ Prospectuses, short‑form prospectuses, profile statements and offer information statements              1117

Division 4—Disclosure requirements                                         1119

710........ Prospectus content—general disclosure test................................ 1119

711........ Prospectus content—specific disclosures.................................... 1121

712........ Prospectus content—short form prospectuses............................ 1124

713........ Special prospectus content rules for continuously quoted securities 1125

714........ Contents of profile statement....................................................... 1127

715........ Contents of offer information statement...................................... 1128

716........ Disclosure document date and consents....................................... 1129

Division 5—Procedure for offering securities                   1130

717........ Overview of procedure for offering securities.............................. 1130

718........ Lodging of disclosure document................................................... 1132

719........ Lodging supplementary or replacement document....................... 1132

720........ Consents needed for lodgment...................................................... 1134

721........ Offer must be made in, or accompanied by, the disclosure document 1136

722........ Application money to be held on trust........................................ 1137

723........ Issuing or transferring the securities under a disclosure document 1138

724........ Choices open to person making the offer if disclosure document condition not met or disclosure document defective...................................................................................................... 1139

725........ Expiration of disclosure document............................................... 1142

Part 6D.3—Prohibitions, liabilities and remedies                                           1143

Division 1—Prohibitions and liabilities                                    1143

726........ Offering securities in a body that does not exist.......................... 1143

727........ Offering securities without a current disclosure document.......... 1143

728........ Misstatement in, or omission from, disclosure document............ 1144

729........ Right to recover for loss or damage resulting from contravention 1146

730........ People liable on disclosure document to inform person making the offer about deficiencies in the disclosure document...................................................................................................... 1147

731........ Due diligence defence for prospectuses........................................ 1147

732........ Lack of knowledge defence for offer information statements and profile statements             1148

733........ General defences for all disclosure documents............................. 1149

734........ Restrictions on advertising and publicity..................................... 1150

735........ Obligation to keep consents and other documents....................... 1153

736........ Securities hawking prohibited....................................................... 1154

Division 2—Remedies                                                                                 1155

737........ Remedies for investors................................................................. 1155

738........ Securities may be returned and refund obtained........................... 1155

Part 6D.4—ASIC’s powers                                                                                          1156

739........ ASIC stop orders.......................................................................... 1156

740........ Anti‑avoidance determinations..................................................... 1157

741........ ASIC’s power to exempt and modify.......................................... 1157

Chapter 7—Securities                                                                                         1159

Part 7.1—Interpretation                                                                                                1159

760........ Effect of this Part......................................................................... 1159

761........ Definitions.................................................................................... 1159

762........ Conduct........................................................................................ 1161

763........ Odd lot.......................................................................................... 1162

764........ References to doing acts............................................................... 1163

765........ Misleading representation............................................................ 1163

766........ Trading in securities...................................................................... 1163

Part 7.1A—The Australian Stock Exchange Limited                                   1164

Division 2—Limitations on holding shares in the Exchange        1164

766E...... Unacceptable ownership situation............................................... 1164

766F...... Causing an unacceptable ownership situation.............................. 1164

766G..... Exchange’s obligation to avoid unacceptable ownership situation 1164

766H..... Remedial orders............................................................................ 1165

766I....... This Division extends to things outside Australia etc.................. 1166

Part 7.2—Securities exchanges and stock markets                                      1167

767........ Conducting unauthorised stock markets....................................... 1167

769........ Approval of stock exchange......................................................... 1167

769A..... Ongoing requirements to be observed by securities exchange...... 1168

769B..... Minister’s directions to comply with ongoing requirements....... 1169

769C..... Annual report by securities exchange about compliance with ongoing requirements              1169

769D..... Special report by securities exchange about compliance with ongoing requirements              1170

770........ Approval of approved securities organisation............................. 1170

770A..... Approval of special stock markets for unquoted prescribed interests 1172

770B..... Section 770A stock markets—separate markets exist in relation to different kinds of prescribed interests           1173

770C..... Section 770A stock markets—regulations may make additional provision             1174

771........ Exempt stock market.................................................................... 1174

772........ Publication of instruments executed under section 769, 770, 770A or 771             1174

772A..... Business rules bind securities exchange and its members............. 1175

772B..... Self‑listing by securities exchanges............................................... 1175

773........ Auction, by licensed auctioneer, of forfeited shares..................... 1177

774........ ASIC to be notified of amendments to rules................................ 1177

775........ ASIC’s power to prohibit trading in particular securities............ 1178

776........ Securities exchanges to provide assistance to ASIC..................... 1179

777........ Power of Court to order compliance with or enforcement of business rules or listing rules of securities exchange...................................................................................................... 1180

778........ Gaming and wagering laws not applicable to certain contracts and relevant agreements         1181

779........ Qualified privilege......................................................................... 1182

Part 7.2A—The Securities Clearing House                                                       1185

779A..... Interpretation................................................................................ 1185

779B..... Approval of securities clearing house........................................... 1185

779C..... ASIC to be notified of amendments of business rules.................. 1186

779D..... Securities clearing house to assist ASIC....................................... 1187

779E...... Securities clearing house to notify ASIC of disciplinary action... 1187

779F...... SCH business rules have effect as contract.................................. 1187

779G..... Power of Court to order compliance with provisions of SCH business rules         1188

779H..... Qualified privilege in respect of disciplinary proceedings............ 1188

779J...... Provision of settlement facilities not a securities business etc..... 1189

Part 7.3—Participants in the securities industry                                             1190

Division 1—Dealers, investment advisers and operators of managed investment schemes                                                                                           1190

780........ Dealers.......................................................................................... 1190

781........ Investment advisers...................................................................... 1190

782........ Application for a licence............................................................... 1190

783........ Grant of licence to natural person................................................ 1191

784........ Grant of licence to body corporate............................................... 1191

785........ Effect of certain provisions.......................................................... 1193

786........ Conditions of licence.................................................................... 1193

787........ Licensee to notify breach of licence condition.............................. 1195

788........ Giving information and statements to ASIC................................ 1196

789........ Register of Licence Holders.......................................................... 1196

790........ Notifying change in particulars..................................................... 1197

791........ Annual statement of licensee........................................................ 1197

792........ Time for lodging annual statement................................................ 1198

793........ ASIC may extend period for lodging statement............................ 1198

Division 2—Agreements with unlicensed persons         1199

Subdivision A—Agreements affected                                                                1199

794........ Certain persons not clients........................................................... 1199

795........ Agreements with unlicensed persons........................................... 1199

Subdivision B—Effect on agreements                                                               1200

798........ Client may give notice of rescission............................................. 1200

799........ Effect of notice under section 798................................................ 1201

799A..... Client may apply to Court for partial rescission......................... 1201

800........ Court may make consequential orders.......................................... 1202

801........ Agreement unenforceable against client........................................ 1202

802........ Non‑licensee not entitled to recover commission......................... 1203

803........ Onus of establishing non‑application of section 801 or 802........ 1203

804........ Client may recover commission paid to non‑licensee................... 1203

805........ Remedies under this Division additional to other remedies.......... 1204

Division 3—Representatives                                                                1205

806........ Representatives of dealers............................................................ 1205

807........ Representatives of investment advisers....................................... 1205

808........ Defence......................................................................................... 1205

809........ Body corporate not to act as representative................................ 1206

810........ Licensee to keep register of holders of proper authorities........... 1206

811........ Licensee to notify ASIC of location and contents of register....... 1207

812........ Inspection and copying of register............................................... 1208

813........ Disclosure to non‑dealer............................................................... 1209

814........ ASIC may require production of authority.................................. 1209

815........ ASIC may give licensee information about representative........... 1209

816........ Holder of authority may be required to return it.......................... 1211

Division 4—Liability of principals for representatives’ conduct              1213

817........ Conduct engaged in as a representative........................................ 1213

818........ Liability where identity of principal unknown............................ 1213

819........ Liability of principals where act done in reliance on representative’s conduct       1213

820........ Presumptions about certain matters............................................. 1215

821........ No contracting out of liability for representative’s conduct........ 1216

822........ Effect of Division......................................................................... 1217

Division 5—Excluding persons from the securities industry        1218

824........ Power to revoke, without a hearing, licence held by natural person 1218

825........ Power to revoke, without a hearing, licence held by body corporate 1218

825A..... Power to revoke responsible entity’s licence without a hearing.. 1218

826........ Power to revoke licence after a hearing......................................... 1219

827........ Power to suspend licence instead of revoking it........................... 1220

828........ Power to make banning order where licence revoked or suspended 1221

829........ Power to make banning order against unlicensed person.............. 1221

830........ Nature of banning order................................................................ 1222

831........ Exceptions to banning order......................................................... 1222

832........ Variation or revocation of banning order on application.............. 1223

833........ Revocation of banning order in certain cases................................ 1223

834........ Effect and publication of orders under this Division.................... 1224

835........ Contravention of banning order.................................................... 1224

836........ Banned person ineligible for licence.............................................. 1224

837........ Opportunity for hearing............................................................... 1225

838........ Disqualification by the Court....................................................... 1225

839........ Effect of orders under section 838................................................ 1226

Part 7.4—Conduct of securities business                                                            1227

Division 1—Regulation of certain activities                        1227

841........ Certain representations prohibited............................................... 1227

842........ Issue of contract notes.................................................................. 1227

843........ Dealings and transactions on a dealer’s own account................... 1229

844........ Dealer to give priority to clients’ orders...................................... 1230

845........ Dealings by employees of holders of licences.............................. 1231

Division 2—Short selling of securities                                       1233

846........ Short selling.................................................................................. 1233

847........ ASIC’s power to prohibit short selling in certain cases............... 1235

Division 3—Recommendations about securities             1237

848........ Recommendation made by partner or officer............................... 1237

849........ Client to be told if adviser’s interests may influence recommendation 1237

850........ Defences to alleged breach of subsection 849(2).......................... 1238

851........ Adviser must have reasonable basis for recommendation............ 1240

852........ Adviser who breaches this Division liable to compensate client.. 1240

853........ Qualified privilege for adviser when complying with this Division 1241

Part 7.5—Dealers’ financial statements and audit                                        1242

854........ Interpretation................................................................................ 1242

855........ Application of Part....................................................................... 1242

856........ Dealers’ financial records.............................................................. 1242

857........ Appointment of auditor by dealer................................................ 1245

858........ Removal and resignation of auditors............................................. 1250

859........ Fees and expenses of auditors...................................................... 1251

860........ Dealer’s accounts.......................................................................... 1251

861........ Auditor to report to ASIC on certain matters.............................. 1252

862........ Securities exchange to report to ASIC on certain matters............ 1253

863........ Qualified privilege for auditor....................................................... 1253

864........ Securities exchange may impose additional obligations on members 1254

Part 7.6—Money and scrip of dealers’ clients                                                 1255

865........ Interpretation................................................................................ 1255

865A..... Application of Part....................................................................... 1255

866........ Dealer to keep trust account......................................................... 1255

867........ What is to be paid into dealer’s trust account.............................. 1256

868........ When money to be paid into trust account.................................. 1256

869........ Withdrawals from trust account................................................... 1257

870........ Withdrawal against uncleared cheque........................................... 1257

871........ Trust money not available in respect of dealer’s own debts........ 1258

872........ Money lent to dealer.................................................................... 1258

873........ Scrip in dealer’s custody.............................................................. 1259

874........ Court may freeze certain bank accounts of dealers and former dealers 1260

875........ Interim order freezing bank accounts............................................ 1261

876........ Duty of banker to make full disclosure........................................ 1261

877........ Further orders and directions........................................................ 1262

878........ Power of Court to make order relating to payment of money..... 1262

Part 7.7—Registers of interests in securities                                                   1264

879........ Interpretation................................................................................ 1264

880........ Application of Part....................................................................... 1265

881........ Register to be maintained.............................................................. 1265

882........ ASIC to be notified of certain matters on establishment of Register 1266

883........ ASIC to be notified of changes in certain matters........................ 1267

884........ Defences....................................................................................... 1268

885........ ASIC’s power to require production of Register......................... 1268

886........ ASIC’s power to require certain information............................... 1269

887........ ASIC’s power to supply copy of Register.................................. 1269

Part 7.8—Deposits with stock exchanges                                                           1270

888........ Interpretation................................................................................ 1270

889........ Deposits to be lodged by member organisations.......................... 1270

890........ Deposit to be proportion of trust account balance...................... 1271

891........ Deposits to be invested by stock exchange.................................. 1272

892........ Accounts in respect of deposits................................................... 1273

893........ Claims not affected by this Part................................................... 1273

Part 7.9—Fidelity funds                                                                                                 1274

894........ Interpretation................................................................................ 1274

895........ Fidelity funds............................................................................... 1274

896........ Money constituting fidelity fund................................................. 1274

897........ Fund to be kept in separate ADI account.................................... 1275

898........ Payments out of fund................................................................... 1275

899........ Payment to the credit of the fidelity fund of a futures exchange or futures association          1276

900........ Accounts of fund.......................................................................... 1276

901........ Management sub‑committee......................................................... 1277

902........ Contributions to fund................................................................... 1277

903........ Provisions where fund exceeds $2,000,000.................................. 1279

904........ Levy in addition to annual contributions...................................... 1280

905........ Power of securities exchange to make advances to fund............... 1282

906........ Investment of fund....................................................................... 1282

907........ Application of fund...................................................................... 1282

908........ Claims against the fund................................................................. 1286

909........ Rights of innocent partner in relation to fund.............................. 1287

910........ Notice calling for claims against fund........................................... 1288

911........ Power of board to settle claims.................................................... 1288

912........ Form of order of Court establishing claim.................................... 1290

913........ Power of securities exchange to require production of securities. 1290

914........ Subrogation of securities exchange to rights etc. of claimant on payment from fund              1291

915........ Payment of claims only from fund............................................... 1291

916........ Provision where fund insufficient to meet claims or where claims exceed total amount payable            1291

917........ Power of securities exchange to enter into contracts of insurance or indemnity     1292

918........ Application of insurance money.................................................. 1292

Part 7.10—The National Guarantee Fund                                                          1293

Division 1—Interpretation                                                                     1293

920........ Interpretation................................................................................ 1293

921........ Excluded persons.......................................................................... 1296

922........ Becoming insolvent....................................................................... 1298

923........ Permitted investments.................................................................. 1299

924........ Transfer of securities etc. and payment of money....................... 1299

924A..... Novation of agreements................................................................ 1300

924B..... Attributing securities and payments to transactions.................... 1301

925A..... Minister to nominate SEGC......................................................... 1301

926........ SEGC’s functions and powers under this Part............................. 1302

927........ Management sub‑committee......................................................... 1303

927A..... Sub‑delegation by management sub‑committee............................ 1303

928........ ASIC to be notified of amendments to business rules.................. 1304

Division 3—The National Guarantee Fund                         1306

928A..... Interpretation—borrowing........................................................... 1306

928B..... Continuation of National Guarantee Fund................................... 1306

929........ SEGC to keep Fund...................................................................... 1306

930........ Property constituting Fund.......................................................... 1306

930A..... Power to borrow etc. for purposes of the Fund........................... 1307

930B..... Money borrowed and paid to SEGC............................................ 1308

930C..... Money borrowed and not paid to SEGC..................................... 1308

931........ Fund to be kept in separate ADI account.................................... 1308

932........ Payments out of Fund.................................................................. 1308

933........ Accounts of Fund......................................................................... 1310

934........ Investment of Fund...................................................................... 1310

935........ Interest and profits from investment of Fund.............................. 1311

936........ Minimum amount of Fund........................................................... 1311

Division 4—Levies where Fund less than minimum amount        1313

937........ Definition...................................................................................... 1313

938........ Levy on transactions.................................................................... 1313

939........ Revocation of levy on transactions.............................................. 1316

940........ Levy on participating exchanges................................................... 1316

941........ Levy by participating exchange on members or member organisations 1318

Division 5—Securities industry development accounts 1320

943........ Interpretation................................................................................ 1320

944........ Payments where Fund exceeds minimum amount........................ 1320

945........ Payments into and out of development account.......................... 1321

946........ Investment.................................................................................... 1322

947........ Accounts....................................................................................... 1322

Division 6—Contract guarantees                                                   1324

948........ Definitions.................................................................................... 1324

948A..... Effect of using a transfer delivery service..................................... 1325

949........ Claim by selling dealer in respect of default by buying dealer..... 1325

950........ Claim by buying dealer in respect of default by selling dealer..... 1328

950A..... Effect of novation, under business rules, of agreement for purchase 1329

951........ Claim by selling client in respect of default by selling dealer....... 1330

952........ Claim by buying client in respect of default by buying dealer..... 1332

952A..... Cash settlement of claims—SCH‑regulated transfers................... 1334

953........ Cash settlement of claims—transfers other than SCH‑regulated transfers              1335

954........ Making of claims.......................................................................... 1336

Division 6A—Securities loans guarantees                            1338

954A..... Interpretation—general definitions............................................... 1338

954B..... Interpretation—guaranteed securities loan and related concepts. 1339

954C..... Effect of using a transfer delivery service..................................... 1340

954D..... Claim by lender in respect of borrower’s failure to discharge obligation 1340

954E...... Effect of novation, under business rules, of guaranteed securities loan 1341

954F...... How and when claim to be made.................................................. 1342

954G..... How claim in respect of securities or non‑money security benefits is to be satisfied             1342

954H..... How claim in respect of an amount of money is to be satisfied... 1343

Division 6B—Claims in respect of net obligations       1345

954L...... Interpretation................................................................................ 1345

954M.... Effect of using a transfer delivery service..................................... 1345

954N..... Claim in respect of failure to pay net amount in respect of transactions                1346

954P...... Claim in respect of failure to transfer net number of securities in respect of transactions      1347

954Q..... How and when claim to be made.................................................. 1348

954R..... How claim under subsection 954N(1) is to be satisfied............... 1348

954S...... How claim under subsection 954P(2) is to be satisfied................ 1349

954T..... How claim under subsection 954P(3) is to be satisfied................ 1350

Division 6C—Transfer delivery service guarantees   1351

954W.... Interpretation................................................................................ 1351

954X..... Claims in respect of default by TDS nominee.............................. 1351

954Y..... How and when claim to be made.................................................. 1353

954Z..... How claim under subsection 954X(2) is to be satisfied............... 1353

954ZA.. How claim under subsection 954X(3) is to be satisfied............... 1354

Division 7—Unauthorised transfer                                               1356

955........ Interpretation................................................................................ 1356

955A..... Extended application of Division to non‑marketable securities... 1356

956........ Situations to which Division applies............................................ 1357

957........ Claim by transferor....................................................................... 1358

958........ Claim by transferee or sub‑transferee........................................... 1358

959........ How and when claim may be made.............................................. 1358

960........ How claim is to be satisfied.......................................................... 1360

961........ Discretionary further compensation to transferor........................ 1361

Division 7A—Contraventions of SCH certificate cancellation provisions     1362

961C..... Interpretation................................................................................ 1362

961D..... Claim in respect of contravention of SCH certificate cancellation provisions         1362

961E...... How and when claim may be made.............................................. 1362

961F...... How claim is to be satisfied.......................................................... 1364

961G..... Discretionary further compensation............................................. 1364

Division 8—Claims in respect of insolvent members 1365

962........ Interpretation................................................................................ 1365

963........ Claim in respect of property entrusted to, or received by, dealer before dealer became insolvent         1365

964........ Cash settlement of claims where property unobtainable............. 1367

965........ Ordering of alternative claims and prevention of double recovery 1368

966........ No claim in respect of money lent to dealer................................. 1370

967........ No claim in certain other cases..................................................... 1370

968........ Limits of compensation................................................................ 1371

969........ Making of claims.......................................................................... 1372

Division 9—General provisions relating to claims       1374

970........ Power of SEGC to allow and settle claim..................................... 1374

970A..... Claimant may be required to exercise right of set‑off................... 1374

970B..... Effect of set‑off on claim.............................................................. 1374

971........ Successful claimant entitled to costs and disbursements.............. 1376

972........ Interest.......................................................................................... 1376

972A..... Discretion to pay amounts not received etc. because of failure to transfer securities             1377

973........ Application of Fund in respect of certain claims......................... 1378

974........ Allowing of claim not to constitute admission............................. 1379

975........ SEGC to notify claimant where claim disallowed........................ 1379

976........ Proceedings in the Court............................................................... 1380

977........ Arbitration of amount of cash settlement of certain claims.......... 1380

978........ Form of order of Court establishing claim.................................... 1381

979........ Power of Board to require production of securities etc................ 1381

980........ Subrogation of SEGC to claimant’s rights etc.............................. 1382

981........ Payment of claims only from Fund.............................................. 1384

982........ SEGC may enter into contracts of insurance or indemnity.......... 1384

983........ Instalment payments.................................................................... 1385

983A..... ASIC’s power to modify effect of claims Divisions.................... 1385

Division 10—Transitional                                                                       1387

984........ Definitions.................................................................................... 1387

985........ Assets and liabilities of joining exchange’s fidelity fund.............. 1388

986........ Final accounts in respect of joining exchange’s fidelity fund....... 1389

987........ Application of liability provisions in relation to transferred claims 1390

Part 7.11—Conduct in relation to securities                                                      1391

Division 2—Prohibited conduct                                                        1391

995........ Misleading or deceptive conduct.................................................. 1391

995A..... Application of State Fair Trading Acts provisions...................... 1392

997........ Stock market manipulation........................................................... 1392

998........ False trading and market rigging transactions............................... 1393

999........ False or misleading statements in relation to securities................ 1394

1000...... Fraudulently inducing persons to deal in securities...................... 1395

1001...... Dissemination of information about illegal transactions............... 1395

1001A... Continuous disclosure—listed disclosing entities........................ 1396

1001B... Continuous disclosure—unlisted disclosing entities.................... 1396

1001C... Sections 1001A and 1001B—when information is generally available 1397

1001D... Sections 1001A and 1001B—material effect on price or value.... 1398

Division 2A—Insider trading                                                              1399

1002...... Application of Division................................................................ 1399

1002A... Securities....................................................................................... 1399

1002B... Information generally available..................................................... 1400

1002C... Material effect on price or value of securities.............................. 1401

1002D... Trading, and procuring trading, in securities................................. 1401

1002E.... Information in possession of officer of body corporate............... 1402

1002F.... Information in possession of partner or employee of partnership 1402

1002G... Prohibited conduct by person in possession of inside information 1402

1002H... Exception for withdrawal from registered scheme........................ 1403

1002J.... Exception for underwriters........................................................... 1404

1002K... Exception for purchase pursuant to legal requirement................. 1404

1002L.... Exception for information communicated pursuant to a legal requirement              1404

1002M.. Chinese wall arrangements by bodies corporate........................... 1405

1002N... Chinese wall arrangements by partnerships etc........................... 1405

1002P.... Exception for knowledge of person’s own intentions or activities 1406

1002Q... Exception for bodies corporate..................................................... 1406

1002R... Exception for officers or agents of body corporate...................... 1407

1002S.... Transactions by holder of dealers licence or a representative of the holder of such a licence 1407

1002T... Prosecutions and defences............................................................ 1408

1002U... Powers of court............................................................................ 1409

Division 4—Civil liability                                                                         1411

Subdivision A—General                                                                                       1411

1005...... Civil liability for contravention of this Part................................. 1411

Subdivision C—Liability in respect of unlawful market activity                  1411

1013...... Liability for insider trading........................................................... 1411

1014...... Liability for other unlawful market activity................................. 1415

1015...... Amount recoverable...................................................................... 1415

Part 7.13—Title to, and transfer of, securities                                                 1417

Division 1—Title to securities                                                            1417

1085...... Nature of shares and other interests............................................. 1417

1086...... Numbering shares......................................................................... 1417

1087...... Certificate to be evidence of title.................................................. 1418

1089...... Loss or destruction of certificates................................................ 1418

Division 2—Transfer of securities                                                 1421

1090...... Definition...................................................................................... 1421

1091...... Instrument of transfer................................................................... 1421

1091AA Transmission of shares on death (replaceable rule—see section 135) 1423

1091AB Transmission of shares on bankruptcy (replaceable rule—see section 135)           1424

1091A... Rights of trustee of estate of bankrupt shareholder..................... 1424

1091B... Transmission of shares on mental incapacity (replaceable rule—see section 135) 1426

1091C... Trustee etc. may be registered as owner of shares....................... 1427

1091D... Registration of transfers (replaceable rule—see section 135)...... 1429

1091E.... Additional general discretion for directors of proprietary companies to refuse to register transfers (replaceable rule—see section 135)............................................................................. 1430

1092...... Registration of transfer at request of transferor........................... 1430

1093...... Notice of refusal to register transfer............................................. 1431

1094...... Remedy for refusal to register transfer or transmission............... 1431

1095...... Certification of transfers............................................................... 1432

1096...... Duties of company with respect to issue of certificates.............. 1433

1096A... Notices relating to non‑beneficial and beneficial ownership of shares 1435

Division 3—Transfer of marketable securities and marketable rights             1439

Subdivision A—Interpretation                                                                            1439

1097...... Interpretation................................................................................ 1439

1097A... Quoted securities and rights......................................................... 1442

1097B... SCH business rules may extend meaning of quoted securities or quoted rights      1443

1097C... ASIC may declare that Act applies to securities as if they were quoted securities or rights  1443

1097D... Transfer that substantially complies with SCH business rules.... 1444

1098...... Document duly completed in accordance with a particular form. 1444

1099...... Stamping of documents................................................................ 1445

Subdivision B—Sufficient transfers (transfers other than SCH‑regulated transfers)     1446

1099A... Subdivision does not apply to SCH‑regulated transfers.............. 1446

1100...... Sufficient transfers........................................................................ 1446

1101...... What is a sufficient transfer of marketable securities or marketable rights: generally             1446

1102...... What is a sufficient transfer by an authorised trustee corporation 1447

1103...... Transferee’s execution of transfer of marketable securities.......... 1447

1104...... Transferee’s execution of transfer of marketable rights................ 1448

1105...... Effect where document purports to bear transferor’s broker’s stamp 1448

1106...... Warranties by securities exchange where document purports to bear its stamp     1449

1107...... Indemnities by securities exchange and broker where documents purport to bear their stamps             1450

1108...... Joint and several warranties and liabilities.................................... 1451

1109...... Registration of certain instruments............................................... 1451

Subdivision C—SCH‑regulated transfers                                                        1452

1109A... Member organisation’s authority to enter into transaction continues despite client’s death  1452

1109B... Authority to enter into transaction gives authority to transfer.... 1453

1109C... Effect of proper SCH transfer...................................................... 1453

1109D... Effect of proper SCH transfer on transferee................................ 1453

1109E.... Warranties by member organisation whose identification code is included in transfer document           1454

1109F.... Indemnities in respect of warranted matters................................ 1455

1109G... Joint and several warranties and liabilities.................................... 1457

1109J.... Securities clearing house entitled to assume its business rules complied with        1457

1109K... SCH‑regulated transfer not to be registered unless proper SCH transfer                1458

1109L.... Issuing body not to refuse to register proper SCH transfer......... 1458

1109M.. Trustees and legal representatives may be SCH participants etc. 1459

1109N... Determination of who holds quoted securities for the purposes of a meeting        1459

1109P.... Determination of who holds quoted securities for the purposes of conferring security benefits            1460

Subdivision D—Miscellaneous                                                                           1461

1110...... Operation of Division................................................................... 1461

1111...... Occupation need not appear in transfer document, register etc... 1462

1112...... Offences: stamping of broker’s stamp on sufficient transfer....... 1462

1112A... Offences: inclusion of identification codes in proper SCH transfers 1464

1112B... Offences: contravention by broker of the SCH certificate cancellation provisions relating to use of cancellation stamps...................................................................................................... 1464

1112C... Civil liability: contravention by broker of the SCH certificate cancellation provisions          1465

1112D... Issuer protected from civil liability for broker’s contravention of SCH certificate cancellation provisions           1465

Division 4—Exemptions and modifications                          1466

1113...... ASIC’s general powers................................................................. 1466

1113A... ASIC’s power to extend application of Division 3...................... 1467

Part 7.14—Miscellaneous                                                                                            1468

1114...... Power of Court to make certain orders......................................... 1468

1115...... Restrictions on use of titles “stockbroker”,sharebroker” and “stock exchange”  1471

1116...... Preservation and disposal of records etc...................................... 1472

1117...... Concealing etc. of books relating to securities.............................. 1472

1118...... Falsification of records................................................................. 1473

1119...... Precautions against falsification of records................................... 1474

Chapter 8—The Futures Industry                                                          1475

Part 8.1—Interpretation                                                                                                1475

1120...... Business rules: futures association............................................... 1475

1121...... Business rules: clearing house....................................................... 1475

1122...... Business rules: futures exchange................................................... 1475

Part 8.2—Futures exchanges, clearing houses and futures associations 1476

Division 1—Futures exchanges and exempt futures markets     1476

1123...... Conducting unauthorised futures markets.................................... 1476

1126...... Approval of futures exchange....................................................... 1476

1127...... Exempt futures market................................................................. 1479

Division 2—Clearing houses                                                               1480

1128...... When a person may provide clearing house facilities................... 1480

1131...... Approval of clearing house........................................................... 1480

Division 3—Futures associations                                                   1482

1132...... Approval of futures association................................................... 1482

1133...... Suspension or cancellation of approval........................................ 1485

Division 4—General                                                                                     1486

1134...... Publication of certain instruments................................................ 1486

1135...... Appeal to the Court against certain decisions of futures exchanges and futures associations 1486

1136...... ASIC to be notified of amendments of business rules.................. 1488

1137...... Orderly markets in futures contracts—functions and powers of futures exchanges and clearing houses               1489

1138...... Orderly markets in futures contracts—ASIC’s powers............... 1489

1139...... Futures exchanges and others to assist ASIC............................... 1492

1140...... Power of Court to order observance or enforcement of business rules of futures exchange, clearing house or futures association.................................................................................... 1494

1141...... Gaming and wagering laws not applicable to certain futures contracts and Chapter 8 agreements         1494

1141A... Qualified privilege in respect of disciplinary proceedings............ 1495

Part 8.3—Participants in the futures industry                                                   1496

Division 1—Futures brokers and futures advisers       1496

1142...... Futures brokers............................................................................. 1496

1143...... Futures advisers............................................................................ 1496

1144...... Application for a licence............................................................... 1496

1144A... Grant of licence to natural person................................................ 1496

1145...... Grant of licence to body corporate............................................... 1497

1145A... Effect of certain provisions.......................................................... 1498

1147...... Conditions of licence: general....................................................... 1498

1148...... Conditions of futures brokers licence: membership of futures organisation            1498

1149...... Conditions of futures brokers licence: assets and liabilities......... 1499

1150...... Conditions of licence: supervision of representatives.................. 1500

1151...... Revocation and variation of licence conditions............................. 1500

1152...... Futures organisations to be informed about conditions of futures brokers licence  1501

1153...... Licensee to notify breach of licence condition.............................. 1501

1154...... ASIC may require licensed futures broker to give information.... 1501

1155...... Register of Futures Licensees....................................................... 1502

1156...... Notifying change in particulars..................................................... 1503

1157...... Annual statement of licensee........................................................ 1503

1158...... Time for lodging annual statement................................................ 1504

Division 2—Agreements with unlicensed persons         1505

Subdivision A—Agreements affected                                                                1505

1159...... Excluded clients............................................................................ 1505

1160...... Agreement about a dealing in breach of section 1142................... 1505

1161...... Agreement with corporation acting in breach of section 1143..... 1505

Subdivision B—Effect on agreements                                                               1506

1164...... Client may give notice of rescission............................................. 1506

1165...... Effect of notice under section 1164.............................................. 1507

1165A... Client may apply to Court for partial rescission......................... 1507

1166...... Court may make consequential orders.......................................... 1508

1167...... Agreement unenforceable against client........................................ 1508

1168...... Non‑licensee not entitled to recover commission......................... 1509

1169...... Onus of establishing non‑application of section 1167 or 1168.... 1509

1170...... Client may recover commission paid to non‑licensee................... 1509

1171...... Remedies under this Division additional to other remedies.......... 1510

(Volume 4)

Division 3—Futures representatives                                           1511

1172...... Representatives of futures brokers............................................... 1511

1173...... Representatives of futures advisers.............................................. 1511

1174...... Defence......................................................................................... 1511

1175...... Body corporate not to act as representative................................ 1512

1176...... Licensee to keep register of holders of proper authorities........... 1512

1177...... Licensee to notify ASIC of location and contents of register....... 1513

1178...... Inspection and copying of register............................................... 1514

1180...... ASIC may require production of authority.................................. 1514

1181...... ASIC may give licensee information about representative........... 1515

1182...... Holder of authority may be required to return it.......................... 1517

Division 4—Liability of principals for representatives’ conduct              1518

1183...... Conduct engaged in as a representative........................................ 1518

1184...... Liability where identity of principal unknown............................ 1518

1185...... Liability of principals where act done in reliance on representative’s conduct       1518

1186...... Presumptions about certain matters............................................. 1520

1187...... No contracting out of liability for representative’s conduct........ 1521

1188...... Effect of Division......................................................................... 1522

Division 5—Excluding persons from the futures industry               1523

1189A... Power to revoke, without a hearing, licence held by natural person 1523

1190...... Power to revoke, without a hearing, licence held by body corporate 1523

1191...... Power to revoke licence after a hearing......................................... 1523

1192...... Power to suspend licence instead of revoking it........................... 1525

1192A... Power to make banning order where licence revoked or suspended 1525

1193...... Power to make banning order against unlicensed person.............. 1526

1194...... Nature of banning order................................................................ 1526

1195...... Exceptions to banning order......................................................... 1527

1196...... Variation or revocation of banning order on application.............. 1527

1197...... Revocation of banning order in certain cases................................ 1528

1198...... Effect and publication of orders under this Division.................... 1528

1199...... Contravention of banning order.................................................... 1529

1199A... Banned person ineligible for licence.............................................. 1529

1200...... Opportunity for hearing............................................................... 1529

1201...... Disqualification by the Court....................................................... 1530

1202...... Effect of orders under section 1201.............................................. 1531

Part 8.4—Conduct of futures business                                                                  1532

1204...... Certain representations prohibited............................................... 1532

1205...... Undesirable advertising................................................................. 1532

1205A... Application of sections 1206 and 1207: exempt brokers............. 1533

1206...... Issue of contract notes.................................................................. 1533

1207...... Futures broker to give monthly statement to client..................... 1537

1208...... Dealings by futures broker on own account................................. 1538

1209...... Segregation of client money and property.................................... 1539

1210...... Futures broker to give certain information to prospective clients 1547

Part 8.5—Financial statements and audit                                                            1548

1211...... Interpretation................................................................................ 1548

1212...... Application of Part....................................................................... 1548

1213...... Accounts to be kept by futures brokers....................................... 1548

1214...... Property in custody of futures broker......................................... 1551

1215...... Appointment of auditor by futures broker.................................. 1553

1216...... Removal and resignation of auditors............................................. 1557

1217...... Fees and expenses of auditors...................................................... 1559

1218...... Futures brokers’ accounts............................................................ 1559

1219...... Auditor’s right of access to records, information etc................... 1560

1220...... Auditor to report to ASIC in certain cases................................... 1560

1221...... Certain matters to be reported to ASIC....................................... 1561

1222...... Defamation................................................................................... 1562

1223...... This Part not to affect right of futures exchange or futures association to impose obligations etc. on members    1563

1224...... Power of Court to restrain dealings with futures broker’s bank accounts               1563

1225...... Duty of banker or body corporate to make full disclosure.......... 1564

1226...... Power of Court to make further orders and give directions.......... 1565

1227...... Power of Court to make order relating to payment of money..... 1565

Part 8.6—Fidelity funds                                                                                                 1567

1228...... Establishment of fidelity funds.................................................... 1567

1229...... Money constituting fidelity fund................................................. 1567

1230...... Fund to be kept in separate ADI account.................................... 1568

1231...... Payments out of fund................................................................... 1568

1232...... Accounts of fund.......................................................................... 1569

1233...... Management sub‑committee......................................................... 1569

1234...... Contributions to fund................................................................... 1570

1235...... Levy in addition to annual contributions...................................... 1572

1236...... Levy not payable in certain cases................................................. 1573

1237...... Power of futures organisation to make advances to fund............. 1574

1238...... Investment of fund....................................................................... 1574

1239...... Application of fund...................................................................... 1574

1240...... Claims against fund....................................................................... 1578

1241...... Rights of innocent partner in relation to fund.............................. 1579

1242...... Notice calling for claims against fund........................................... 1580

1243...... Power of board to settle claims.................................................... 1581

1244...... Form of order of Court establishing claim.................................... 1582

1245...... Power of Board to require production of documents etc............. 1583

1246...... Subrogation of futures organisation to rights etc. of claimant on payment from fund            1583

1247...... Payment of claims only from fund............................................... 1583

1248...... Provisions where fund insufficient to meet claims or where claims exceed total amount payable          1583

1249...... Power of futures organisation to enter into contracts of insurance or indemnity    1584

1250...... Application of insurance money.................................................. 1585

Part 8.7—Offences                                                                                                           1586

Division 1—Insider dealing                                                                   1586

1251...... Futures contract concerning a body corporate............................. 1586

1252...... Person connected with a body corporate..................................... 1586

1253...... Persons precluded from dealing.................................................... 1587

1254...... Body corporate precluded from dealing when officer precluded.. 1588

1255...... Exceptions: licensed futures brokers............................................ 1589

1256...... Prohibitions where dealing precluded........................................... 1589

1257...... Defence where other party to dealing also had the inside information 1589

Division 2—General                                                                                     1590

1258...... Dealings by futures broker on behalf of others............................ 1590

1259...... Futures market manipulation........................................................ 1590

1260...... False trading and market rigging.................................................... 1590

1261...... False or misleading statements etc................................................ 1591

1262...... Fraudulently inducing person to deal in futures contracts........... 1591

1263...... Dissemination of information about illegal transactions............... 1592

1264...... Fraud in connection with dealings in futures contracts................ 1593

1265...... Compensation for loss etc............................................................ 1593

1266...... Sequence of transmission and execution of orders........................ 1595

1267...... Dealings by employees of futures brokers and futures advisers.. 1597

Part 8.8—Miscellaneous                                                                                               1600

1268...... Power of Court to make certain orders......................................... 1600

1269...... Restrictions on use of titles “futures broker”, “futures exchange” etc. 1602

1270...... Preservation and disposal of records etc...................................... 1603

1271...... Concealing etc. books relating to futures contracts...................... 1604

1272...... Falsification of records................................................................. 1604

1273...... Precautions against falsification of records................................... 1605

Chapter 9—Miscellaneous                                                                             1606

Part 9.1—Registers and registration of documents                                      1606

1274...... Registers....................................................................................... 1606

1274AA Register of disqualified company directors and other officers..... 1611

1274A... Obtaining information from certain registers................................ 1611

1274B... Use, in court proceedings, of information from ASIC’s national database              1612

1274C... ASIC certificate............................................................................ 1612

1275...... Relodging of lost registered documents........................................ 1613

Part 9.2—Registration of auditors and liquidators                                        1614

Division 1—Interpretation                                                                     1614

1276...... Definitions.................................................................................... 1614

Division 2—Registration                                                                         1615

1279...... Application for registration as auditor or liquidator..................... 1615

1280...... Registration of auditors................................................................ 1615

1281...... Auditor‑General taken to be registered as auditor........................ 1616

1282...... Registration of liquidators............................................................ 1617

1283...... Registration of official liquidators................................................ 1619

1284...... Security to be given by liquidators............................................... 1619

1285...... Register of Auditors..................................................................... 1620

1286...... Registers of Liquidators and Official Liquidators......................... 1621

1287...... Notification of certain matters...................................................... 1622

1288...... Triennial statements by registered auditors and liquidators......... 1623

1289...... Auditors and other persons to enjoy qualified privilege in certain circumstances   1624

Division 3—Cancellation or suspension of registration 1625

1290...... Cancellation at request of registered person................................. 1625

1291...... Official liquidators........................................................................ 1625

1292...... Powers of Board in relation to auditors and liquidators............... 1626

1294...... Board to give opportunity for hearing etc.................................... 1629

1295...... Board may remove suspension..................................................... 1630

1296...... Notice of Board’s decision........................................................... 1630

1297...... Time when Board’s decision comes into effect............................ 1631

1298...... Effect of suspension..................................................................... 1631

Part 9.3—Books                                                                                                                 1633

1300...... Inspection of books...................................................................... 1633

1301...... Location of books on computers.................................................. 1633

1302...... Location of registers..................................................................... 1634

1303...... Court may compel compliance..................................................... 1635

1304...... Translations of instruments.......................................................... 1636

1305...... Admissibility of books in evidence.............................................. 1636

1306...... Form and evidentiary value of books........................................... 1636

1307...... Falsification of books................................................................... 1637

Part 9.4—Offences                                                                                                           1639

Division 1—Specific offences                                                              1639

1308...... False or misleading statements..................................................... 1639

1309...... False information etc.................................................................... 1641

1310...... Obstructing or hindering ASIC etc............................................... 1643

Division 2—Offences generally                                                        1644

1311...... General penalty provisions.......................................................... 1644

1312...... Penalties for bodies corporate...................................................... 1645

1313...... Penalty notices............................................................................. 1645

1313A... Offences committed partly in and partly out of the jurisdiction. 1649

1314...... Continuing offences...................................................................... 1649

1315...... Proceedings: how taken................................................................ 1653

1316...... Time for instituting criminal proceedings..................................... 1653

1316A... Privilege against self‑incrimination not available to bodies corporate in Corporations Act criminal proceedings   1654

1317...... Certain persons to assist in prosecutions..................................... 1654

Part 9.4A—Review by Administrative Appeals Tribunal of certain decisions         1656

1317A... Definitions.................................................................................... 1656

1317B... Applications for review................................................................ 1656

1317C... Excluded decisions........................................................................ 1656

1317D... Notice of reviewable decision and review rights........................... 1657

Part 9.4B—Civil consequences of contravening civil penalty provisions 1659

1317E.... Declarations of contravention....................................................... 1659

1317F.... Declaration of contravention is conclusive evidence.................... 1660

1317G... Pecuniary penalty orders.............................................................. 1660

1317H... Compensation orders.................................................................... 1660

1317J.... Who may apply for a declaration or order................................... 1661

1317K... Time limit for application for a declaration or order.................... 1662

1317L.... Civil evidence and procedure rules for declarations of contravention and civil penalty orders               1662

1317M.. Civil proceedings after criminal proceedings................................ 1662

1317N... Criminal proceedings during civil proceedings.............................. 1662

1317P.... Criminal proceedings after civil proceedings................................ 1663

1317Q... Evidence given in proceedings for penalty not admissible in criminal proceedings 1663

1317R... ASIC requiring person to assist.................................................... 1664

1317S.... Relief from liability for contravention of civil penalty provision 1665

Part 9.5—Powers of Courts                                                                                         1667

1318...... Power to grant relief..................................................................... 1667

1319...... Power of Court to give directions with respect to meetings ordered by the Court 1668

1321...... Appeals from decisions of receivers, liquidators etc.................... 1668

1322...... Irregularities.................................................................................. 1669

1323...... Power of Court to prohibit payment or transfer of money, securities, futures contracts or property   1671

1324...... Injunctions.................................................................................... 1674

1324A... Provisions relating to prosecutions.............................................. 1677

1324B... Order to disclose information or publish advertisements............. 1678

1325...... Other orders.................................................................................. 1678

1325A... Orders if contravention of Chapter 6, 6A, 6B or 6C.................... 1680

1325B... Court may order bidder to make offers........................................ 1681

1325C... Unfair or unconscionable agreements, payments or benefits....... 1682

1325D... Contravention due to inadvertence etc......................................... 1683

1325E.... Orders to secure compliance......................................................... 1684

1326...... Effect of sections 1323, 1324 and 1325....................................... 1684

1327...... Power of Court to punish for contempt of Court........................ 1684

Part 9.6—Proceedings                                                                                                    1685

1330...... ASIC’s power to intervene in proceedings................................... 1685

1331...... Civil proceedings not to be stayed............................................... 1685

1332...... Standard of proof.......................................................................... 1685

1333...... Evidence of contravention............................................................ 1686

1335...... Costs............................................................................................. 1686

1336...... Vesting of property...................................................................... 1687

Part 9.6A—Jurisdiction and procedure of Courts                                           1689

Division 1—Civil jurisdiction                                                              1689

Subdivision A—Preliminary                                                                               1689

1337A... Operation of Division................................................................... 1689

Subdivision B—Conferral of jurisdiction                                                         1690

1337B... Jurisdiction of Federal Court and State and Territory Supreme Courts  1690

1337C... Jurisdiction of Family Court and State Family Courts................ 1691

1337D... Jurisdiction of courts (decisions to prosecute and related criminal justice process decisions made by Commonwealth officers)......................................................................................... 1691

1337E.... Jurisdiction of lower courts.......................................................... 1693

1337F.... Appeals........................................................................................ 1694

1337G... Courts to act in aid of each other.................................................. 1695

Subdivision C—Transfer of proceedings                                                          1695

1337H... Transfer of proceedings by the Federal Court and State and Territory Supreme Courts        1695

1337J.... Transfer of proceedings by Family Court and State Family Courts 1697

1337K... Transfer of proceedings in lower courts....................................... 1699

1337L.... Further matters for a court to consider when deciding whether to transfer a proceeding        1700

1337M.. Transfer may be made at any stage.............................................. 1700

1337N... Transfer of documents.................................................................. 1700

1337P.... Conduct of proceedings................................................................ 1701

1337Q... Rights of appearance.................................................................... 1702

1337R... Limitation on appeals................................................................... 1702

Subdivision D—Rules of court                                                                            1702

1337S.... Rules of the Federal Court............................................................ 1702

1337T... Rules of the Supreme Court......................................................... 1703

1337U... Rules of the Family Court............................................................ 1704

Division 2—Vesting and cross‑vesting of criminal jurisdiction  1705

1338A... Operation of Division................................................................... 1705

1338B... Jurisdiction of courts.................................................................... 1705

1338C... Laws to be applied....................................................................... 1708

Part 9.7—Unclaimed property                                                                                   1709

1339...... ASIC to deal with unclaimed property........................................ 1709

1340...... ASIC not liable to pay calls on shares etc.................................... 1709

1341...... Disposition of money in unclaimed money account.................... 1710

1342...... Commonwealth or ASIC not liable for loss or damage................. 1711

1343...... Disposal of securities if whereabouts of holder unknown........... 1711

1343A... Disposal of interests in registered scheme if whereabouts of member unknown    1711

Part 9.9—Miscellaneous                                                                                               1713

1345A... Minister may delegate prescribed functions and powers under this Act                1713

1346...... Non‑application of rule against perpetuities to certain schemes.. 1713

1348...... Operation of Life Insurance Act................................................... 1714

1350...... Compensation for compulsory acquisition.................................. 1714

Part 9.10—Fees for chargeable matters                                                              1715

1351...... Fees for chargeable matters........................................................... 1715

1354...... Lodgment of document without payment of fee.......................... 1715

1355...... Doing act without payment of fee................................................ 1715

1356...... Effect of sections 1354 and 1355................................................. 1715

1359...... Waiver and refund of fees............................................................. 1715

1360...... Debts due to the Commonwealth................................................. 1716

1362...... Payment of fee does not give right to inspect or search............... 1716

Part 9.12—Regulations                                                                                                  1717

1363...... Definitions.................................................................................... 1717

1364...... Power to make regulations............................................................ 1717

1365...... Scope of particular regulations..................................................... 1719

1366...... Verifying or certifying documents................................................ 1719

1367...... Documents lodged by an agent..................................................... 1720

1368...... Exemptions from Chapter 6D, 7 or 8........................................... 1720

1369...... Penalty notices............................................................................. 1720

1369A... State termination of reference....................................................... 1721

Chapter 10—Transitional provisions                                                  1722

Part 10.1—Transition from the old corporations legislation                     1722

Division 1—Preliminary                                                                           1722

1370...... Object of Part............................................................................... 1722

1371...... Definitions.................................................................................... 1723

1372...... Relationship of Part with State validation Acts........................... 1727

1373...... References to things taken or deemed to be the case etc.............. 1729

1374...... Existence of several versions of old corporations legislation does not result in this Part operating to take same thing to be done several times under new corporations legislation etc...... 1729

1375...... Penalty units in respect of pre‑commencement conduct remain at $100                1730

1376...... Ceasing to be a referring State does not affect previous operation of this Part       1731

Division 2—Carrying over registration of companies 1732

1377...... Division has effect subject to Division 7 regulations................... 1732

1378...... Existing registered companies continue to be registered............... 1732

Division 3—Carrying over the old Corporations Regulations   1734

1379...... Division has effect subject to Division 7 regulations................... 1734

1380...... Old Corporations Regulations continue to have effect................. 1734

Division 4—Court proceedings and orders                          1735

1381...... Division has effect subject to Division 7 regulations................... 1735

1382...... Definitions.................................................................................... 1735

1383...... Treatment of court proceedings under or related to the old corporations legislation—proceedings other than federal corporations proceedings.............................................................. 1736

1384...... Treatment of court proceedings under or related to the old corporations legislation—federal corporations proceedings...................................................................................................... 1739

1385...... References to proceedings and orders in the new corporations legislation              1740

Division 5—Other specific transitional provisions       1743

1386...... Division has effect subject to Division 7 regulations................... 1743

1387...... Certain applications lapse on the commencement........................ 1743

1388...... Carrying over the Partnerships and Associations Application Order 1743

1389...... Evidentiary certificates................................................................. 1743

1390...... Preservation of nomination of body corporate as SEGC............. 1744

1391...... Preservation of identification of satisfactory records................... 1744

1392...... Retention of information obtained under old corporations legislation of non‑referring State  1745

1393...... Transitional provisions relating to section 1351 fees................... 1745

1394...... Transitional provisions relating to securities exchange fidelity fund levies             1745

1395...... Transitional provisions relating to National Guarantee Fund levies 1747

1396...... Transitional provisions relating to futures organisation fidelity fund levies           1748

Division 6—General transitional provisions relating to other things done etc. under the old corporations legislation                              1749

1397...... Limitations on scope of this Division.......................................... 1749

1398...... Provisions of this Division may have an overlapping effect........ 1750

1399...... Things done by etc. carried over provisions continue to have effect 1750

1400...... Creation of equivalent rights and liabilities to those that existed before the commencement under carried over provisions of the old corporations legislation.............................. 1752

1401...... Creation of equivalent rights and liabilities to those that existed before the commencement under repealed provisions of the old corporations legislation..................................................... 1754

1402...... Old corporations legislation time limits etc.................................. 1755

1403...... Preservation of significance etc. of events or circumstances........ 1756

1404...... References in the new corporations legislation generally include references to events, circumstances or things that happened or arose before the commencement.............................. 1757

1405...... References in the new corporations legislation to that legislation or the new ASIC legislation generally include references to corresponding provisions of the old corporations legislation or old ASIC legislation       1758

1406...... Carrying over references to corresponding previous laws............ 1759

1407...... References to old corporations legislation in instruments............ 1759

1408...... Old transitional provisions continue to have their effect............. 1760

Division 7—Regulations dealing with transitional matters           1764

1409...... Regulations may deal with transitional matters............................ 1764

Schedule 2—Forms of Transfer of Marketable Securities and Marketable Rights     1766

Schedule 3—Penalties                                                                                         1782

Schedule 4—Transfer of financial institutions and friendly societies           1801

Part 1—Preliminary                                                                                                         1801

1............ Definitions.................................................................................... 1801

Part 2—Financial institutions that became companies                                1805

Division 1—Registration and its consequences               1805

3............ Background (registration of transferring financial institution as company)             1805

4............ Rules applied to transferring institution that was registered as a company under the transfer provisions             1805

11.......... Transferring financial institution under external administration... 1806

Division 2—Membership                                                                         1809

12.......... Institution that became a company limited by shares.................. 1809

13.......... Institution that became a company limited by guarantee............. 1810

14.......... Institution becoming a company limited by shares and guarantee 1811

15.......... Redeemable preference shares that were withdrawable shares..... 1812

16.......... Liability of members on winding up............................................. 1812

Division 3—Share capital                                                                       1814

17.......... Share capital.................................................................................. 1814

18.......... Application of no par value rule................................................... 1814

19.......... Calls on partly‑paid shares........................................................... 1815

20.......... References in contracts and other documents to par value........... 1815

Part 4—The transition period                                                                                     1817

25.......... ASIC may direct directors of a company to modify its constitution 1817

27.......... When certain modifications of a company’s constitution under an exemption or declaration take effect               1818

Part 5—Demutualisations                                                                                            1820

29.......... Disclosure for proposed demutualisation..................................... 1820

30.......... ASIC’s exemption power............................................................. 1822

31.......... Coverage of disclosure statement................................................. 1823

32.......... Registration of disclosure statement............................................. 1823

33.......... Expert’s report............................................................................. 1825

34.......... Unconscionable conduct in relation to demutualisations.............. 1826

35.......... Orders the Court may make......................................................... 1826

Part 6—Continued application of fundraising provisions of the Friendly Societies Code  1829

36.......... Friendly Societies Code to apply to offers of interests in benefit funds 1829

Part 7—Transitional provisions                                                                                1831

37.......... Unclaimed money......................................................................... 1831

38.......... Modification by regulations......................................................... 1832

39.......... Regulations may deal with transitional, saving or application matters 1833


A Bill for an Act to make provision in relation to corporations, securities, the futures industry and financial products and services, and for other purposes

The Parliament of Australia enacts:

Chapter 1Introductory

Part 1.1Preliminary

  

1  Short title

                   This Act may be cited as the Corporations Act 2001.

2  Commencement

                   This Act commences on a day to be fixed by Proclamation.

3  Constitutional basis for this Act

             (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.

4  Referring States

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.

5  General territorial application of Act

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).

5A  Application to the Crown

             (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.

5B  ASIC has general administration of this Act

                   Subject to the ASIC Act, ASIC has the general administration of this Act.

5C  Application of Acts Interpretation Act 1901

             (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.


 

Part 1.1AInteraction between Corporations legislation and State and Territory laws

  

5D  Coverage of Part

             (1)  This Part applies only to laws of a State or Territory that is in this jurisdiction.

             (2)  This Part applies only to the following Corporations legislation:

                     (a)  this Act (including the regulations made under this Act); and

                     (b)  Part 3 of the ASIC Act; and

                     (c)  regulations made under the ASIC Act for the purposes of Part 3 of that Act.

             (3)  This Part does not apply to Part 3 of the ASIC Act, or regulations made under that Act for the purposes of Part 3 of that Act, to the extent to which they operate in relation to a contravention of Division 2 of Part 2 of that Act.

5E  Concurrent operation intended

             (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.

5F  Corporations legislation does not apply to matters declared by State or Territory law to be an excluded matter

             (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.

5G  Avoiding direct inconsistency arising between the Corporations legislation and State and Territory laws

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.

5H  Registration of body as company on basis of State or Territory law

             (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.

5I  Regulations may modify operation of the Corporations legislation to deal with interaction between that legislation and State and Territory laws

             (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.


 

Part 1.2Interpretation

Division 1General

6  Effect of this Part

             (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.

7  Location of other interpretation provisions

             (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.

9  Dictionary

                   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 6Cdirects 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.


 

Division 2Associates

10  Effect of Division

             (1)  This Division has effect for the purposes of interpreting a reference (in this Division called the associate reference), in relation to a person (in this Division called the primary person), to an associate.

             (2)  A person is not an associate of the primary person except as provided in this Division.

             (3)  Nothing in this Division limits the generality of anything else in it.

11  Associates of bodies corporate

                   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.

12  Matters relating to voting shares

             (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.

13  References in Chapter 7

                   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.

14  References in Chapter 8

                   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.

15  General

             (1)  The associate reference includes a reference to:

                     (a)  a person in concert with whom the primary person is acting, or proposes to act; and

                     (b)  a person who, under the regulations, is, for the purposes of the provision in which the associate reference occurs, an associate of the primary person; and

                     (c)  a person with whom the primary person is, or proposes to become, associated, whether formally or informally, in any other way;

in respect of the matter to which the associate reference relates.

             (2)  If the primary person has entered, or proposes to enter, into a transaction, or has done, or proposes to do, any act or thing, in order to become associated with another person as mentioned in an applicable provision of this Division, the associate reference includes a reference to that other person.

16  Exclusions

             (1)  A person is not an associate of another person by virtue of section 12 or subsection 15(1), or by virtue of subsection 15(2) as it applies in relation to section 12 or subsection 15(1), merely because of one or more of the following:

                     (a)  one gives advice to the other, or acts on the other’s behalf, in the proper performance of the functions attaching to a professional capacity or a business relationship;

                     (b)  one, a client, gives specific instructions to the other, whose ordinary business includes dealing in 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.

17  Associates of composite persons

                   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.


 

Division 3Carrying on business

18  Carrying on business: otherwise than for profit

                   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.

19  Businesses of a particular kind

                   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.

20  Carrying on a business: alone or together with others

                   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.

21  Carrying on business in Australia or a State or Territory

             (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.


 

Division 4Dealing in futures contracts

23  Acquiring a futures contract

             (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.

24  Disposing of a futures contract

             (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.

25  Dealing in futures contracts: general

             (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.

26  Dealing in futures contracts through intermediaries: first step

                   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.

27  Dealing in futures contracts through intermediaries: second and later steps

             (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.

28  Dealing in futures contracts, through intermediaries, on futures markets

             (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.

29  Own account dealings and transactions: futures contracts

             (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.


 

Division 5ATypes of company

45A  Proprietary companies

             (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).


 

Division 6Subsidiaries and related bodies corporate

46  What is a subsidiary

                   A body corporate (in this section called the first body) is a subsidiary of another body corporate if, and only if:

                     (a)  the other body:

                              (i)  controls the composition of the first body’s board; or

                             (ii)  is in a position to cast, or control the casting of, more than one‑half of the maximum number of votes that might be cast at a general meeting of the first body; or

                            (iii)  holds more than one‑half of the issued share capital of the first body (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or

                     (b)  the first body is a subsidiary of a subsidiary of the other body.

47  Control of a body corporate’s board

                   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.

48  Matters to be disregarded

             (1)  This section applies for the purposes of determining whether a body corporate (in this section called the first body) is a subsidiary of another body corporate.

             (2)  Any shares held, or power exercisable, by the other body in a fiduciary capacity are treated as not held or exercisable by it.

             (3)  Subject to subsections (4) and (5), any shares held, or power exercisable:

                     (a)  by a person as a nominee for the other body (except where the other body is concerned only in a fiduciary capacity); or

                     (b)  by, or by a nominee for, a subsidiary of the other body (not being a subsidiary that is concerned only in a fiduciary capacity);

are treated as held or exercisable by the other body.

             (4)  Any shares held, or power exercisable, by a person by virtue of the provisions of debentures of the first body, or of a trust deed for securing an issue of such debentures, are to be disregarded.

             (5)  Any shares held, or power exercisable, otherwise than as mentioned in subsection (4), by, or by a nominee for, the other body or a subsidiary of it are to be treated as not held or exercisable by the other body if:

                     (a)  the ordinary business of the other body or that subsidiary, as the case may be, includes lending money; and

                     (b)  the shares are held, or the power is exercisable, only by way of security given for the purposes of a transaction entered into in the ordinary course of business in connection with lending money, not being a transaction entered into with an associate of the other body, or of that subsidiary, as the case may be.

49  References in this Division to a subsidiary

                   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.

50  Related bodies corporate

                   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.

50AA  Control

             (1)  For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.

             (2)  In determining whether the first entity has this capacity:

                     (a)  the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and

                     (b)  any practice or pattern of behaviour affecting the second entity’s financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

             (3)  The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.

             (4)  If the first entity:

                     (a)  has the capacity to influence decisions about the second entity’s financial and operating policies; and

                     (b)  is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity’s members;

the first entity is taken not to control the second entity.


 

Division 7Interpretation of other expressions

51  Acquisition and disposal of shares

                   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.

52  Doing acts

                   A reference to doing an act or thing includes a reference to causing or authorising the act or thing to be done.

52A  Signing

                   Without affecting the law on agency, if this Act requires that something be signed, it can be signed by an individual using a power of attorney from the person required to sign.

53  Affairs of a body corporate

                   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.

53AA  Business affairs of a body corporate

                   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.

53AB  Business affairs of a natural person

                   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.

53AC  Business affairs of a partnership

                   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.

53AD  Business affairs of a trust

                   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.

54  Chapter 8 agreements of the same kind

                   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.

55  Chapter 8 obligations and rights

             (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.

56  Classes of futures organisation membership

                   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.

57  Classes of shares or interests in managed investment schemes

             (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.

57A  Meaning of corporation

             (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.

58AA  Meaning of court and Court

             (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.

58B  Discharge of obligations under this Act

             (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.

59  Debentures as consideration for acquisition of shares

                   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.

61  Discretionary accounts

                   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.

64  Entering into a transaction in relation to shares or securities

                   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.

64A  Entities

                   Except in Chapter 2E, a reference to an entity:

                     (a)  is a reference to a natural person, a body corporate (other than an exempt public authority), a partnership or a trust; and

                     (b)  includes, in the case of a trust, a reference to the trustee of the trust.

64B  Entities connected with a corporation

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.

65  Eligible money market dealer

                   ASIC may declare a body corporate to be an authorised dealer in the short term money market by notice published in the Gazette.

66A  Exempt bodies

                   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.

67  Exempt brokers and exempt futures advisers

             (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.

68  Exempt dealers and exempt investment advisers

             (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.

70  Extension of period for doing an act

                   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.

71  Futures advice business

             (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.

72  Futures contract

             (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.

72A  Act applies to certain Chapter 8 agreements as if they were futures contracts

             (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.

73  Futures representatives

             (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.

73A  When a court is taken to find a person guilty of an offence

                   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.

75  Inclusion in official list

                   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.

77  Investment advice business

             (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.

79  Involvement in contraventions

                   A person is involved in a contravention if, and only if, the person:

                     (a)  has aided, abetted, counselled or procured the contravention; or

                     (b)  has induced, whether by threats or promises or otherwise, the contravention; or

                     (c)  has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention; or

                     (d)  has conspired with others to effect the contravention.

80  Jervis Bay Territory taken to be part of the Australian Capital Territory

                   The Jervis Bay Territory is taken to be part of the Australian Capital Territory.

82  Offers and invitations to the public

                   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.

82A  Officers of bodies corporate and other entities

             (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.

83  Officers, and other persons, in default

                   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.

84  Own account dealings and transactions: securities

                   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.

86  Possession

                   A thing that is in a person’s custody or under a person’s control is in the person’s possession.

87  Proper authority from futures licensee; invalid futures authority

             (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.

88  Proper authority from securities licensee; invalid securities authority

             (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.

88A  Public document of a body corporate

             (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.

89  Qualified privilege

             (1)  Where this Act provides that a person has qualified privilege in respect of an act, matter or thing, the person:

                     (a)  has qualified privilege in proceedings for defamation; or

                     (b)  is not, in the absence of malice on the person’s part, liable to an action for defamation at the suit of a person;

as the case requires, in respect of that act, matter or thing.

             (2)  In subsection (1):

malice includes ill will to the person concerned or any other improper motive.

             (3)  Neither this section nor a provision of this Act that provides as mentioned in subsection (1) limits or affects any right, privilege or immunity that a person has, apart from this section or such a provision, as defendant in proceedings, or an action, for defamation.

90  Receivers and managers

                   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.

91  Being or becoming subject to a section 206B prohibition, a section 206D or 206E order, a section 206F notice

             (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.

92  Securities

             (1)  Subject to this section, securities means:

                     (a)  debentures, stocks or bonds issued or proposed to be issued by a government; or

                     (b)  shares in, or debentures of, a body; or

                     (c)  interests in a managed investment scheme; or

                    (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.

92A  Act applies to certain relevant agreements as if they were securities

             (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.

93  Securities business

             (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.

94  Securities representatives

             (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.

95A  Solvency and insolvency

             (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.

97  Stock market not to include futures market

                   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.


 

Division 8Miscellaneous interpretation rules

100  Address of registered office etc.

             (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.

100A  Operation of certain laws relating to instruments on which stamp duty has not been paid

                   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.

101  Amount of stock representing a number of shares

                   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.

102  Applications to be in writing

                   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.

102C  In Australia

                   In Australia means in Australia (whether in this jurisdiction or not).

Note:          This definition is needed if there is a State that is not a referring State. If all the States are referring States, every place in Australia will also be in this jurisdiction.

103  Effect of certain contraventions of this Act

             (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.

104  Effect of provisions empowering a person to require or prohibit conduct

                   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.

105  Calculation of time

                   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.

106  Performance of functions by Commission delegate

                   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.

108  Parts of dollar to be disregarded in determining majority in value of creditors etc.

                   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.

109  References to persons, things and matters

             (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.

109X  Service of documents

             (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”.


 

Part 1.2ADisclosing entities

Division 1Object of Part

111AA  Object of Part

                   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).


 

Division 2Definitions

111AB  Terms defined in Division

                   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)).

111AC  Disclosing entity

             (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.

111AD  ED securities

             (1)  Securities of a body are ED securities (short for “enhanced disclosure securities”) for the purposes of this Act if, and only if:

                     (a)  they are ED securities under section 111AE, 111AF, 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.

111AE  Securities quoted on a stock market

             (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.

111AF  Securities to which lodged or deemed prospectus relates

                   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).

111AG  Securities issued as consideration for an acquisition under an off‑market takeover bid or Part 5.1 compromise or arrangement

             (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).

111AH  When a person holds securities for the purposes of sections 111AF and 111AG

             (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.

111AI  Debentures that need trustee appointed under section 283AA

                   Debentures of a borrower are ED securities if section 283AA requires the borrower to appoint a trustee.

111AJ  Regulations may declare securities not to be ED securities

             (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.

111AK  ED securities of a disclosing entity

                   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.

111AL  Listed or unlisted disclosing 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.

111AM  Quoted ED securities

                   For the purposes of this Act, ED securities are quoted ED securities if they are ED securities because of section 111AE.


 

Division 3Significance of being a disclosing entity

111AN  Division contains outline of significance of being a disclosing entity

                   This Division outlines the significance for this Act of being a disclosing entity.

111AO  Accounting requirements

                   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.

111AP  Continuous disclosure requirements

             (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.

111AQ  Prospectus relief

                   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.


 

Division 4Exemptions and modifications

111AR  Meaning of disclosing entity provisions

             (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.

111AS  Exemptions by regulations

             (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.

111AT  Exemptions by ASIC

             (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.

111AU  Enforcing conditions of exemptions

             (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.

111AV  Modifications by regulations

             (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.

111AW  Exemptions and modifications have effect

                   Exemptions and modifications under this Division have effect accordingly.

111AX  Effect of Division

                   Nothing in this Division limits, or is limited by, any other exemption or modification power (for example, section 340, 341 or 741).


 

Part 1.4Technical provisions about aids for readers

  

111J  Small business guide

             (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.


 

Part 1.5Small business 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  What registration means

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  The company structure for small business

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]

3  Setting up a new company

                   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]

4  Continuing obligations after the company is set up

                   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  Company directors and company secretaries

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]

6  Shares and shareholders

                   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]

7  Signing company documents

                   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)]

8  Funding the company’s operations

                   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]

9  Returns to shareholders

                   Shareholders can take money out of the company in a number of ways, but only if the company complies with its constitution (if any), the Corporations Act and all other relevant laws. If a company pays out money in a way that results in the company being unable to pay its debts as they fall due, its directors may be liable:

•    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  Annual financial reports and audit

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  Disagreements within the company

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  Companies in financial trouble

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]


 


Chapter 2ARegistering a company

Part 2A.1What companies can be registered

  

112  Types of companies

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).

113  Proprietary companies

             (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).

114  Minimum of 1 member

                   A company needs to have at least 1 member.

115  Restrictions on size of partnerships and associations

             (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.

116  Trade unions cannot be registered

                   A trade union cannot be registered under this Act.


 

Part 2A.2How a company is registered

  

117  Applying for registration

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.

118  ASIC gives company ACN, registers company and issues certificate

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.

119  Company comes into existence on registration

                   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).

119A  Jurisdiction of incorporation and jurisdiction of registration

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.

120  Members, directors and company secretary of a company

             (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).

121  Registered office

                   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.

122  Expenses incurred in promoting and setting up company

                   The expenses incurred before registration in promoting and setting up a company may be paid out of the company’s assets.

123  Company may have common seal

             (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).


 

Chapter 2BBasic features of a company

Part 2B.1Company powers and how they are exercised

  

124  Legal capacity and powers of a company

             (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.

125  Constitution may limit powers and set out objects

             (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.

126  Agent exercising a company’s power to make contracts

             (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.

127  Execution of documents (including deeds) by the company itself

             (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).


 

Part 2B.2Assumptions people dealing with companies are entitled to make

  

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.

129  Assumptions that can be made under section 128

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.

130  Information available to the public from ASIC does not constitute constructive notice

             (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.


 

Part 2B.3Contracts before registration

  

131  Contracts before registration

             (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.

132  Person may be released from liability but is not entitled to indemnity

             (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.

133  This Part replaces other rights and liabilities

                   This Part replaces any rights or liabilities anyone would otherwise have on the pre—registration contract.


 

Part 2B.4Replaceable rules and constitution

  

134  Internal management of companies

                   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.

135  Replaceable rules

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).

136  Constitution of a company

             (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.

137  Date of effect of adoption, modification or repeal of constitution

                   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.

138  ASIC may direct company to lodge consolidated constitution

                   ASIC may direct a company to lodge a consolidated copy of its constitution with ASIC.

139  Company must send copy of constitution to member

                   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.

140  Effect of constitution and replaceable rules

             (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.

141  Table of replaceable rules

                   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


 

Part 2B.5Registered office and places of business

  

142  Registered office

             (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.

143  ASIC may change address of registered office to a director’s address

             (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.

144  Company’s name must be displayed at registered office etc.

             (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.

145  Opening hours of registered office of public company

             (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.

146  Change of address of principal place of business

                   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.


 

Part 2B.6Names

Division 1Selecting and using a name

147  When a name is available

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.

148  A company’s name

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.

149  Acceptable abbreviations

             (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.

150  Exception to requirement for using “Limited” in name

             (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.

151  Exception to requirement for using “Limited” in name—pre‑existing licences

             (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).

152  Reserving a name

             (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.

153  Using a name and ACN on documents

             (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”.

154  Exception to requirement to have ACN on receipts

                   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.

155  Regulations may exempt from requirement to set out information on documents

                   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.

156  Carrying on business using “Limited”, “No Liability” or “Proprietary” in name

                   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.


 

Division 2Changing a company’s name

157  Company changing its name

             (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.

159  ASIC’s power to include “Limited” in company’s name

             (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.

160  ASIC must issue new certificate if company’s name changes

                   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).

161  Effect of name change

             (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.


 

Part 2B.7Changing company type

  

162  Changing company type

             (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.

163  Applying for change of type

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.

164  ASIC changes type of company

             (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: