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Corporations Act 2001

  • - C2011C00173
  • In force - Superseded Version
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Act No. 50 of 2001 as amended, taking into account amendments up to Statute Law Revision Act 2011
An Act to make provision in relation to corporations and financial products and services, and for other purposes
Administered by: Attorney-General's; Treasury
General Comments: General Comments: This compilation is affected by a retrospective amendment, please see Corporations and Other Legislation Amendment (Trustee Companies and Other Measures) Act 2011 [Act No. 24 of 2011], for details.
Registered 04 Apr 2011
Start Date 22 Mar 2011
End Date 12 Apr 2011
Table of contents.

Corporations Act 2001

Act No. 50 of 2001 as amended

This compilation was prepared on 31 March 2011
taking into account amendments up to Act No. 5 of 2011

Volume 1 includes:     Table of Contents
                                    Chapters 1–2K (ss. 1 – 282)

The text of any of those amendments not in force
on that date is appended in the Notes section

The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section

Volume 2 includes:      Table of Contents
                                    Chapters 2L–5B (ss. 283AA – 601DJ)

Volume 3 includes:      Table of Contents
                                    Chapters 5C–6D (ss. 601EA – 742)

Volume 4 includes:      Table of Contents
                                    Chapters 7 and 8 (ss. 760A – 1200U)

Volume 5 includes:      Table of Contents
                                    Chapters 9 and 10 (ss. 1274 – 1516)
                                    Schedules 3 and 4
                                    Note 1

         Table of Acts
         Act Notes
         Table of Amendments
         Note 2
         Table A

Prepared by the Office of Legislative Drafting and Publishing,
Attorney‑General’s Department, Canberra

  

  

  


Contents

Chapter 1—Introductory                                                                                                  1

Part 1.1—Preliminary                                                                                                         1

1............ Short title [see Note 1]........................................................................ 1

2............ Commencement [see Note 1].............................................................. 1

3............ Constitutional basis for this Act.......................................................... 1

4............ Referring States................................................................................... 2

5............ General territorial application of Act................................................... 4

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

5B......... ASIC has general administration of this Act....................................... 7

5C......... Application of the Acts Interpretation Act 1901.................................. 7

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

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

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

5F.......... Corporations legislation does not apply to matters declared by State or Territory law to be an excluded matter       10

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

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

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

9AA...... Certain family relationships............................................................... 86

9A......... Meaning of rights issue.................................................................... 86

Division 2—Associates                                                                                               89

10.......... Effect of Division.............................................................................. 89

11.......... Associates of bodies corporate.......................................................... 89

12.......... References in Chapters 6 to 6C, and other references relating to voting power and takeovers etc.           89

13.......... References in Chapter 7.................................................................... 91

15.......... General.............................................................................................. 91

16.......... Exclusions......................................................................................... 92

17.......... Associates of composite person that carries on a financial services business           93

Division 3—Carrying on business                                                                        94

18.......... Carrying on business: otherwise than for profit................................ 94

19.......... Businesses of a particular kind.......................................................... 94

20.......... Carrying on a business: alone or together with others....................... 94

21.......... Carrying on business in Australia or a State or Territory.................. 94

Division 5A—Types of company                                                                          96

45A....... Proprietary companies....................................................................... 96

45B....... Small companies limited by guarantee............................................... 97

Division 6—Subsidiaries and related bodies corporate                            99

46.......... What is a subsidiary.......................................................................... 99

47.......... Control of a body corporate’s board................................................. 99

48.......... Matters to be disregarded................................................................ 100

49.......... References in this Division to a subsidiary..................................... 100

50.......... Related bodies corporate................................................................. 101

50AAA. Associated entities........................................................................... 101

50AA.... Control............................................................................................ 102

Division 7—Interpretation of other expressions                                        103

52.......... Doing acts....................................................................................... 103

52A....... Signing............................................................................................ 103

53.......... Affairs of a body corporate............................................................. 103

53AA.... Business affairs of a body corporate............................................... 105

53AB.... Business affairs of a natural person................................................ 105

53AC.... Business affairs of a partnership..................................................... 106

53AD.... Business affairs of a trust................................................................ 106

57.......... Classes of shares or interests in managed investment schemes....... 107

57A....... Meaning of corporation.................................................................. 107

58AA.... Meaning of court and Court........................................................... 107

58B....... Discharge of obligations under this Act.......................................... 108

59.......... Debentures as consideration for acquisition of shares..................... 108

60.......... Declaration of relevant relationships............................................... 108

64.......... Entering into a transaction in relation to shares or securities........... 110

64A....... Entities............................................................................................ 110

64B....... Entities connected with a corporation.............................................. 110

65.......... Eligible money market dealer.......................................................... 112

66A....... Exempt bodies................................................................................. 112

70.......... Extension of period for doing an act............................................... 112

73A....... When a court is taken to find a person guilty of an offence............. 112

75.......... Inclusion in official list.................................................................... 112

79.......... Involvement in contraventions........................................................ 113

80.......... Jervis Bay Territory taken to be part of the Australian Capital Territory  113

82.......... Offers and invitations to the public................................................. 113

83.......... Officers, and other persons, in default............................................ 114

86.......... Possession...................................................................................... 114

88A....... Public document of a body corporate.............................................. 114

88B....... Qualified accountants...................................................................... 115

89.......... Qualified privilege........................................................................... 116

90.......... Receivers and managers.................................................................. 116

92.......... Securities......................................................................................... 116

95A....... Solvency and insolvency................................................................. 118

Division 8—Miscellaneous interpretation rules                                          119

100........ Address of registered office etc....................................................... 119

100A..... Operation of certain laws relating to instruments on which stamp duty has not been paid       119

101........ Amount of stock representing a number of shares.......................... 120

102........ Applications to be in writing........................................................... 120

102B..... In Australia or elsewhere, in this jurisdiction or elsewhere etc...... 120

102C..... In Australia..................................................................................... 120

103........ Effect of certain contraventions of this Act..................................... 120

104........ Effect of provisions empowering a person to require or prohibit conduct                121

105........ Calculation of time.......................................................................... 121

106........ Performance of functions by Commission delegate........................ 121

107........ Notice in relation to top 20 members of a class............................... 121

108........ Parts of dollar to be disregarded in determining majority in value of creditors etc.   122

109........ References to persons, things and matters....................................... 122

109X..... Service of documents...................................................................... 122

Part 1.2A—Disclosing entities                                                                                     124

Division 1—Object of Part                                                                                    124

111AA.. Object of Part.................................................................................. 124

Division 2—Definitions                                                                                            125

111AB.. Terms defined in Division............................................................... 125

111AC.. Disclosing entity............................................................................. 125

111AD.. ED securities................................................................................... 125

111AE... Securities of body or undertaking that is included in a licensed market’s official list               126

111AF... Securities (except debentures and managed investment products) held by 100 or more persons              127

111AFA Managed investment products held by 100 or more persons.......... 127

111AG.. Securities issued as consideration for an acquisition under an off‑market takeover bid or Part 5.1 compromise or arrangement..................................................................................... 128

111AH.. When a person holds securities for the purposes of sections 111AF, 111AFA and 111AG   128

111AI.... Debentures...................................................................................... 129

111AJ... Regulations may declare securities not to be ED securities............. 129

111AK.. ED securities of a disclosing entity................................................. 129

111AL... Listed or unlisted disclosing entity.................................................. 129

111AM. Quoted ED securities...................................................................... 129

Division 3—Significance of being a disclosing entity                               130

111AN.. Division contains outline of significance of being a disclosing entity 130

111AO.. Accounting requirements................................................................ 130

111AP... Continuous disclosure requirements............................................... 130

111AQ.. Prospectus relief.............................................................................. 130

111AQA  Product Disclosure Statement relief.............................................. 130

Division 4—Exemptions and modifications                                                   131

111AR.. Meaning of disclosing entity provisions.......................................... 131

111AS... Exemptions by regulations.............................................................. 131

111AT... Exemptions by ASIC...................................................................... 131

111AU.. Enforcing conditions of exemptions................................................ 131

111AV.. Modifications by regulations........................................................... 132

111AW. Exemptions and modifications have effect...................................... 132

111AX.. Effect of Division............................................................................ 132

Part 1.4—Technical provisions about aids for readers                               133

111J...... Small business guide....................................................................... 133

Part 1.5—Small business guide                                                                                  134

1............ What registration means.................................................................. 134

2............ The company structure for small business...................................... 139

3............ Setting up a new company.............................................................. 139

4............ Continuing obligations after the company is set up......................... 142

5............ Company directors and company secretaries................................... 145

6............ Shares and shareholders.................................................................. 148

7............ Signing company documents.......................................................... 149

8............ Funding the company’s operations................................................. 150

9............ Returns to shareholders................................................................... 150

10.......... Annual financial reports and audit................................................... 151

11.......... Disagreements within the company................................................. 153

12.......... Companies in financial trouble........................................................ 154

Chapter 2A—Registering a company                                                                    156

Part 2A.1—What companies can be registered                                               156

112........ Types of companies........................................................................ 156

113........ Proprietary companies..................................................................... 157

114........ Minimum of 1 member................................................................... 158

115........ Restrictions on size of partnerships and associations...................... 158

116........ Trade unions cannot be registered................................................... 159

Part 2A.2—How a company is registered                                                           160

117........ Applying for registration................................................................. 160

118........ ASIC gives company ACN, registers company and issues certificate 162

119........ Company comes into existence on registration................................ 163

119A..... Jurisdiction of incorporation and jurisdiction of registration........... 163

120........ Members, directors and company secretary of a company.............. 164

121........ Registered office............................................................................. 164

122........ Expenses incurred in promoting and setting up company............... 164

123........ Company may have common seal................................................... 165

Chapter 2B—Basic features of a company                                                        166

Part 2B.1—Company powers and how they are exercised                      166

124........ Legal capacity and powers of a company........................................ 166

125........ Constitution may limit powers and set out objects.......................... 167

126........ Agent exercising a company’s power to make contracts................. 167

127........ Execution of documents (including deeds) by the company itself... 167

Part 2B.2—Assumptions people dealing with companies are entitled to make    169

128........ Entitlement to make assumptions.................................................... 169

129........ Assumptions that can be made under section 128........................... 169

130........ Information available to the public from ASIC does not constitute constructive notice            171

Part 2B.3—Contracts before registration                                                           172

131........ Contracts before registration........................................................... 172

132........ Person may be released from liability but is not entitled to indemnity 173

133........ This Part replaces other rights and liabilities................................... 173

Part 2B.4—Replaceable rules and constitution                                               174

134........ Internal management of companies................................................. 174

135........ Replaceable rules............................................................................. 174

136........ Constitution of a company.............................................................. 175

137........ Date of effect of adoption, modification or repeal of constitution.... 176

138........ ASIC may direct company to lodge consolidated constitution........ 177

139........ Company must send copy of constitution to member...................... 177

140........ Effect of constitution and replaceable rules..................................... 177

141........ Table of replaceable rules................................................................ 178

Part 2B.5—Registered office and places of business                                    180

142........ Registered office............................................................................. 180

143........ ASIC may change address of registered office to a director’s address 180

144........ Company’s name must be displayed at registered office etc............ 181

145........ Opening hours of registered office of public company................... 181

146........ Change of address of principal place of business............................ 182

146A..... Contact address............................................................................... 182

Part 2B.6—Names                                                                                                             183

Division 1—Selecting and using a name                                                         183

147........ When a name is available................................................................ 183

148........ A company’s name......................................................................... 184

149........ Acceptable abbreviations................................................................. 185

150........ Exception to requirement for using “Limited” in name.................... 186

151........ Exception to requirement for using “Limited” in name—pre‑existing licences         186

152........ Reserving a name............................................................................ 187

153........ Using a name and ACN on documents........................................... 188

154........ Exception to requirement to have ACN on receipts......................... 188

155........ Regulations may exempt from requirement to set out information on documents     189

156........ Carrying on business using “Limited”, “No Liability” or “Proprietary” in name      189

Division 2—Changing a company’s name                                                     190

157........ Company changing its name........................................................... 190

157A..... Change of name of company under external administration............ 190

158........ ASIC’s power to direct company to change its name...................... 192

159........ ASIC’s power to include “Limited” in company’s name................ 192

160........ ASIC must issue new certificate if company’s name changes......... 193

161........ Effect of name change..................................................................... 193

161A..... Company under external administration—former name to be used on documents   193

Part 2B.7—Changing company type                                                                     196

162........ Changing company type.................................................................. 196

163........ Applying for change of type........................................................... 198

164........ ASIC changes type of company...................................................... 201

165........ ASIC may direct a proprietary company to change to a public company in certain circumstances           202

166........ Effect of change of type.................................................................. 203

167........ Issue of shares by company or holding company—company limited by guarantee changing to company limited by shares........................................................................................................ 203

167AA.. Application of Part to company limited both by shares and by guarantee 204

Chapter 2C—Registers                                                                                                   205

Part 2C.1—Registers generally                                                                                  205

167A..... Who is covered by this Chapter...................................................... 205

168........ Registers to be maintained............................................................... 205

169........ Register of members....................................................................... 206

170........ Register of option holders and copies of options documents.......... 208

171........ Register of debenture holders.......................................................... 209

172........ Location of registers........................................................................ 209

173........ Right to inspect and get copies........................................................ 210

174........ Agent’s obligations......................................................................... 212

175........ Correction of registers..................................................................... 213

176........ Evidentiary value of registers.......................................................... 213

177........ Use of information on registers....................................................... 213

178........ Overseas branch registers............................................................... 214

Part 2C.2—Notice by proprietary companies of changes to member register     216

178A..... Notice of change to member register............................................... 216

178B..... Top 20 only..................................................................................... 217

178C..... Notice of change to share structure................................................. 217

178D..... Time within which ASIC must be notified...................................... 217

Chapter 2D—Officers and employees                                                                   219

Part 2D.1—Duties and powers                                                                                  219

179........ Background to duties of directors, other officers and employees.... 219

Division 1—General duties                                                                                    220

180........ Care and diligence—civil obligation only........................................ 220

181........ Good faith—civil obligations.......................................................... 221

182........ Use of position—civil obligations................................................... 221

183........ Use of information—civil obligations............................................. 222

184........ Good faith, use of position and use of information—criminal offences 222

185........ Interaction of sections 180 to 184 with other laws etc..................... 223

186........ Territorial application of sections 180 to 184.................................. 223

187........ Directors of wholly‑owned subsidiaries......................................... 224

188........ Responsibility of secretaries and directors for certain contraventions 224

189........ Reliance on information or advice provided by others.................... 225

190........ Responsibility for actions of delegate.............................................. 226

190A..... Limited application of Division to registrable Australian bodies..... 226

190B..... Division does not apply to Aboriginal and Torres Strait Islander corporations        227

Division 2—Disclosure of, and voting on matters involving, material personal interests           228

191........ Material personal interest—director’s duty to disclose.................... 228

192........ Director may give other directors standing notice about an interest. 230

193........ Interaction of sections 191 and 192 with other laws etc.................. 231

194........ Voting and completion of transactions—directors of proprietary companies (replaceable rule—see section 135)  232

195........ Restrictions on voting—directors of public companies only........... 232

196........ ASIC power to make declarations and class orders........................ 234

Division 3—Duty to discharge certain trust liabilities                            235

197........ Directors liable for debts and other obligations incurred by corporation as trustee   235

Division 4—Powers                                                                                                    236

198A..... Powers of directors (replaceable rule—see section 135)................ 236

198B..... Negotiable instruments (replaceable rule—see section 135)........... 236

198C..... Managing director (replaceable rule—see section 135).................. 236

198D..... Delegation....................................................................................... 236

198E...... Single director/shareholder proprietary companies.......................... 237

198F...... Right of access to company books.................................................. 237

Part 2D.2—Restrictions on indemnities, insurance and termination payments   239

Division 1—Indemnities and insurance for officers and auditors     239

199A..... Indemnification and exemption of officer or auditor....................... 239

199B..... Insurance premiums for certain liabilities of director, secretary, other officer or auditor          240

199C..... Certain indemnities, exemptions, payments and agreements not authorised and certain documents void 241

Division 2—Termination payments                                                                   242

200........ Interpreting this Division................................................................ 242

200AA.. Meaning of managerial or executive office..................................... 242

200AB.. Meaning of benefit.......................................................................... 243

200A..... When benefit given in connection with retirement from an office or position           243

200B..... Retirement benefits generally need membership approval............... 245

200C..... Benefits on transfer of undertaking or property need membership approval            246

200D..... Contravention to receive benefit without member approval............. 247

200E...... Approval by members..................................................................... 247

200F...... Exempt benefits and benefits given in certain circumstances........... 249

200G..... Genuine payments of pension and lump sum.................................. 251

200H..... Benefits required by law................................................................. 254

200J...... Benefits to be held on trust and repaid............................................ 254

Part 2D.3—Appointment, remuneration and cessation of appointment of directors      255

Division 1—Appointment of directors                                                             255

201A..... Minimum number of directors........................................................ 255

201B..... Who can be a director...................................................................... 255

201D..... Consent to act as director................................................................ 255

201E...... Special rules for the appointment of public company directors....... 256

201F...... Special rules for the appointment of directors for single director/single shareholder proprietary companies            256

201G..... Company may appoint a director (replaceable rule—see section 135) 257

201H..... Directors may appoint other directors (replaceable rule—see section 135)              257

201J...... Appointment of managing directors (replaceable rule—see section 135)                258

201K..... Alternate directors (replaceable rule—see section 135).................. 258

201L...... Signpost—ASIC to be notified of appointment.............................. 258

201M.... Effectiveness of acts by directors.................................................... 259

Division 2—Remuneration of directors                                                          260

202A..... Remuneration of directors (replaceable rule—see section 135)...... 260

202B..... Members may obtain information about directors’ remuneration.... 260

202C..... Special rule for single director/single shareholder proprietary companies                261

Division 3—Resignation, retirement or removal of directors            262

203A..... Director may resign by giving written notice to company (replaceable rule—see section 135)               262

203B..... Signpost to consequences of disqualification from managing corporations              262

203C..... Removal by members—proprietary companies (replaceable rule—see section 135)               262

203D..... Removal by members—public companies...................................... 262

203E...... Director cannot be removed by other directors—public companies 264

203F...... Termination of appointment of managing director (replaceable rule—see section 135)           264

Part 2D.4—Appointment of secretaries                                                               265

204A..... Minimum number of secretaries...................................................... 265

204B..... Who can be a secretary.................................................................... 265

204C..... Consent to act as secretary.............................................................. 265

204D..... How a secretary is appointed.......................................................... 266

204E...... Effectiveness of acts by secretaries................................................. 266

204F...... Terms and conditions of office for secretaries (replaceable rule—see section 135) 266

204G..... Signpost to consequences of disqualification from managing corporations              266

Part 2D.5—Public information about directors and secretaries           267

205A..... Director, secretary or alternate director may notify ASIC of resignation or retirement             267

205B..... Notice of name and address of directors and secretaries to ASIC... 267

205C..... Director and secretary must give information to company.............. 269

205D..... Address for officers........................................................................ 269

205E...... ASIC’s power to ask for information about person’s position as director or secretary            270

205F...... Director must give information to company.................................... 270

205G..... Listed company—director to notify market operator of shareholdings etc.               271

Part 2D.6—Disqualification from managing corporations                      273

206A..... Disqualified person not to manage corporations............................. 273

206B..... Automatic disqualification............................................................... 274

206BA.. Extension of period of automatic disqualification............................ 275

206C..... Court power of disqualification—contravention of civil penalty provision              276

206D..... Court power of disqualification—insolvency and non‑payment of debts 277

206E...... Court power of disqualification—repeated contraventions of Act... 278

206EAA Court power of disqualification—disqualification under a law of a foreign jurisdiction           279

206EA... Disqualification under the Competition and Consumer Act 2010 etc. 280

206EB... Disqualification under the ASIC Act.............................................. 280

206F...... ASIC’s power of disqualification................................................... 280

206G..... Court power to grant leave.............................................................. 282

206GA.. Involvement of ACCC—leave orders under section 206G............. 283

206H..... Territorial application of this Part.................................................... 283

206HA.. Limited application of Part to registrable Australian bodies............ 284

206HB.. Part does not apply to Aboriginal and Torres Strait Islander corporations               284

Chapter 2E—Related party transactions                                                            285

207........ Purpose........................................................................................... 285

Part 2E.1—Member approval needed for related party benefit          286

Division 1—Need for member approval                                                         286

208........ Need for member approval for financial benefit.............................. 286

209........ Consequences of breach.................................................................. 286

Division 2—Exceptions to the requirement for member approval  288

210........ Arm’s length terms......................................................................... 288

211........ Remuneration and reimbursement for officer or employee.............. 288

212........ Indemnities, exemptions, insurance premiums and payment for legal costs for officers           289

213........ Small amounts given to related entity.............................................. 290

214........ Benefit to or by closely‑held subsidiary.......................................... 291

215........ Benefits to members that do not discriminate unfairly..................... 291

216........ Court order...................................................................................... 292

Division 3—Procedure for obtaining member approval                       293

217........ Resolution may specify matters by class or kind............................. 293

218........ Company must lodge material that will be put to members with ASIC 293

219........ Requirements for explanatory statement to members...................... 294

220........ ASIC may comment on proposed resolution.................................. 295

221........ Requirements for notice of meeting................................................. 295

222........ Other material put to members........................................................ 295

223........ Proposed resolution cannot be varied.............................................. 296

224........ Voting by or on behalf of related party interested in proposed resolution                296

225........ Voting on the resolution.................................................................. 297

226........ Notice of resolution to be lodged.................................................... 298

227........ Declaration by court of substantial compliance............................... 298

Part 2E.2—Related parties and financial benefits                                         299

228........ Related parties................................................................................. 299

229........ Giving a financial benefit................................................................ 300

Part 2E.3—Interaction with other rules                                                               302

230........ General duties still apply................................................................. 302

Chapter 2F—Members’ rights and remedies                                                   303

231........ Membership of a company.............................................................. 303

Part 2F.1—Oppressive conduct of affairs                                                          304

232........ Grounds for Court order................................................................. 304

233........ Orders the Court can make.............................................................. 304

234........ Who can apply for order................................................................. 305

235........ Requirement for person to lodge order............................................ 306

Part 2F.1A—Proceedings on behalf of a company by members and others         307

236........ Bringing, or intervening in, proceedings on behalf of a company... 307

237........ Applying for and granting leave...................................................... 307

238........ Substitution of another person for the person granted leave............ 309

239........ Effect of ratification by members.................................................... 309

240........ Leave to discontinue, compromise or settle proceedings brought, or intervened in, with leave                310

241........ General powers of the Court........................................................... 310

242........ Power of the Court to make costs orders........................................ 311

Part 2F.2—Class rights                                                                                                   312

246B..... Varying and cancelling class rights................................................. 312

246C..... Certain actions taken to vary rights etc............................................ 313

246D..... Variation, cancellation or modification without unanimous support of class            314

246E...... Variation, cancellation or modification with unanimous support of class 315

246F...... Company must lodge documents and resolutions with ASIC......... 315

246G..... Member’s copies of documents and resolutions............................. 316

Part 2F.3—Inspection of books                                                                                 318

247A..... Order for inspection of books of company or registered managed investment scheme            318

247B..... Ancillary orders.............................................................................. 319

247C..... Disclosure of information acquired in inspection............................ 319

247D..... Company or directors may allow member to inspect books (replaceable rule see section 135)               319

Part 2F.4—Proceedings against a company by members and others 320

247E...... Shareholding does not prevent compensation claim........................ 320

Chapter 2G—Meetings                                                                                                   321

Part 2G.1—Directors’ meetings                                                                                321

Division 1—Resolutions and declarations without meetings               321

248A..... Circulating resolutions of companies with more than 1 director (replaceable rule see section 135)         321

248B..... Resolutions and declarations of 1 director proprietary companies... 321

Division 2—Directors’ meetings                                                                         323

248C..... Calling directors’ meetings (replaceable rule see section 135)....... 323

248D..... Use of technology........................................................................... 323

248E...... Chairing directors’ meetings (replaceable rule see section 135)..... 323

248F...... Quorum at directors’ meetings (replaceable rule see section 135).. 323

248G..... Passing of directors’ resolutions (replaceable rule see section 135) 324

Part 2G.2—Meetings of members of companies                                             325

Division 1—Resolutions without meetings                                                     325

249A..... Circulating resolutions of proprietary companies with more than 1 member            325

249B..... Resolutions of 1 member companies............................................... 326

Division 2—Who may call meetings of members                                       327

249C..... Calling of meetings of members by a director (replaceable rule—see section 135) 327

249CA.. Calling of meetings of members of a listed company by a director. 327

249D..... Calling of general meeting by directors when requested by members 327

249E...... Failure of directors to call general meeting...................................... 328

249F...... Calling of general meetings by members......................................... 329

249G..... Calling of meetings of members by the Court................................. 329

Division 3—How to call meetings of members                                            330

249H..... Amount of notice of meetings......................................................... 330

249HA.. Amount of notice of meetings of listed company............................ 330

249J...... Notice of meetings of members to members and directors.............. 331

249K..... Auditor entitled to notice and other communications....................... 332

249L...... Contents of notice of meetings of members.................................... 332

249LA... Notice of meeting not required to contain certain information......... 333

249M.... Notice of adjourned meetings (replaceable rule—see section 135). 334

Division 4—Members’ rights to put resolutions etc. at general meetings            335

249N..... Members’ resolutions..................................................................... 335

249O..... Company giving notice of members’ resolutions............................ 335

249P...... Members’ statements to be distributed............................................ 336

Division 5—Holding meetings of members                                                   338

249Q..... Purpose........................................................................................... 338

249R..... Time and place for meetings of members........................................ 338

249S...... Technology..................................................................................... 338

249T...... Quorum (replaceable rule—see section 135).................................. 338

249U..... Chairing meetings of members (replaceable rule—see section 135) 339

249V..... Auditor’s right to be heard at general meetings............................... 339

249W.... Adjourned meetings........................................................................ 340

Division 6—Proxies and body corporate representatives                    341

249X..... Who can appoint a proxy (replaceable rule for proprietary companies and mandatory rule for public companies—see section 135)..................................................................................... 341

249Y..... Rights of proxies............................................................................. 341

249Z...... Company sending appointment forms or lists of proxies must send to all members                342

250A..... Appointing a proxy......................................................................... 342

250B..... Proxy documents............................................................................ 344

250BA.. Proxy documents—listed companies.............................................. 345

250C..... Validity of proxy vote..................................................................... 345

250D..... Body corporate representative......................................................... 346

Division 7—Voting at meetings of members                                                347

250E...... How many votes a member has (replaceable rule—see section 135) 347

250F...... Jointly held shares (replaceable rule—see section 135).................. 347

250G..... Objections to right to vote (replaceable rule—see section 135)...... 347

250H..... Votes need not all be cast in the same way...................................... 348

250J...... How voting is carried out (replaceable rule—see section 135)....... 348

250K..... Matters on which a poll may be demanded..................................... 348

250L...... When a poll is effectively demanded............................................... 348

250M.... When and how polls must be taken (replaceable rule—see section 135) 349

Division 8—AGMs of public companies                                                         350

250N..... Public company must hold AGM................................................... 350

250P...... Extension of time for holding AGM............................................... 350

250PAA Exemptions by ASIC—class orders relating to externally‑administered companies 351

250PAB Exemptions by ASIC—individual externally‑administered companies 351

250PA... Written questions to auditor submitted by members of listed company before AGM              352

250R..... Business of AGM........................................................................... 354

250RA.. Auditor required to attend listed company’s AGM......................... 354

250S...... Questions and comments by members on company management at AGM              355

250SA... Listed company—remuneration report............................................ 355

250T...... Questions by members of auditors at AGM................................... 355

Part 2G.3—Minutes and members’ access to minutes                                357

251A..... Minutes........................................................................................... 357

251AA.. Disclosure of proxy votes—listed companies................................. 358

251B..... Members’ access to minutes........................................................... 358

Part 2G.4—Meetings of members of registered managed investment schemes   360

Division 1—Who may call meetings of members                                       360

252A..... Calling of meetings of members by responsible entity.................... 360

252B..... Calling of meetings of members by responsible entity when requested by members               360

252C..... Failure of responsible entity to call meeting of the scheme’s members 361

252D..... Calling of meetings of members by members................................. 362

252E...... Calling of meetings of members by the Court................................. 362

Division 2—How to call meetings of members                                            363

252F...... Amount of notice of meetings......................................................... 363

252G..... Notice of meetings of members to members, directors and auditors 363

252H..... Auditors entitled to other communications...................................... 364

252J...... Contents of notice of meetings of members.................................... 364

252K..... Notice of adjourned meetings.......................................................... 365

Division 3—Members’ rights to put resolutions etc. at meetings of members   366

252L...... Members’ resolutions..................................................................... 366

252M.... Responsible entity giving notice of members’ resolutions.............. 367

252N..... Members’ statements to be distributed............................................ 367

Division 4—Holding meetings of members                                                   370

252P...... Time and place for meetings of members........................................ 370

252Q..... Technology..................................................................................... 370

252R..... Quorum........................................................................................... 370

252S...... Chairing meetings of members........................................................ 371

252T...... Auditors’ right to be heard at meetings of members........................ 371

252U..... Adjourned meetings........................................................................ 371

Division 5—Proxies and body corporate representatives                    373

252V..... Who can appoint a proxy................................................................ 373

252W.... Rights of proxies............................................................................. 373

252X..... Responsible entity sending appointment forms or lists of proxies must send to all members   374

252Y..... Appointing a proxy......................................................................... 374

252Z...... Proxy documents............................................................................ 375

253A..... Validity of proxy vote..................................................................... 377

253B..... Body corporate representative......................................................... 377

Division 6—Voting at meetings of members                                                379

253C..... How many votes a member has...................................................... 379

253D..... Jointly held interests........................................................................ 379

253E...... Responsible entity and associates cannot vote if interested in resolution  379

253F...... How to work out the value of an interest........................................ 379

253G..... Objections to a right to vote............................................................ 380

253H..... Votes need not all be cast in the same way...................................... 380

253J...... How voting is carried out................................................................ 380

253K..... Matters on which a poll may be demanded..................................... 381

253L...... When a poll is effectively demanded............................................... 381

Division 7—Minutes and members’ access to minutes                            382

253M.... Minutes........................................................................................... 382

253N..... Members’ access to minutes........................................................... 382

Chapter 2H—Shares                                                                                                        384

Part 2H.1—Issuing and converting shares                                                         384

254A..... Power to issue bonus, partly‑paid, preference and redeemable preference shares    384

254B..... Terms of issue................................................................................. 385

254C..... No par value shares......................................................................... 386

254D..... Pre‑emption for existing shareholders on issue of shares in proprietary company (replaceable rule—see section 135)........................................................................................................ 386

254E...... Court validation of issue................................................................. 387

254F...... Bearer shares and stock must not be issued.................................... 387

254G..... Conversion of shares...................................................................... 387

254H..... Resolution to convert shares into larger or smaller number............. 388

Part 2H.2—Redemption of redeemable preference shares                      389

254J...... Redemption must be in accordance with terms of issue.................. 389

254K..... Other requirements about redemption............................................. 389

254L...... Consequences of contravening section 254J or 254K..................... 389

Part 2H.3—Partly‑paid shares                                                                                   391

254M.... Liability on partly‑paid shares......................................................... 391

254N..... Calls may be limited to when company is externally‑administered.. 391

254P...... No liability companies—calls on shares.......................................... 391

254Q..... No liability companies—forfeiture and sale of shares for failure to meet call           392

254R..... No liability companies—redemption of forfeited shares................. 395

Part 2H.4—Capitalisation of profits                                                                       396

254S...... Capitalisation of profits................................................................... 396

Part 2H.5—Dividends                                                                                                      397

254SA... Companies limited by guarantee not to pay dividends..................... 397

254T...... Circumstances in which a dividend may be paid............................. 397

254U..... Other provisions about paying dividends (replaceable rule—see section 135)        397

254V..... When does the company incur a debt?............................................ 398

254W.... Dividend rights............................................................................... 398

Part 2H.6—Notice requirements                                                                               399

254X..... Notice to ASIC of share issue......................................................... 399

254Y..... Notice to ASIC of share cancellation.............................................. 400

Chapter 2J—Transactions affecting share capital                                        401

Part 2J.1—Share capital reductions and share buy‑backs                       401

256A..... Purpose........................................................................................... 401

Division 1—Reductions in share capital not otherwise authorised by law           402

256B..... Company may make reduction not otherwise authorised................ 402

256C..... Shareholder approval...................................................................... 403

256D..... Consequences of failing to comply with section 256B.................... 404

256E...... Signposts to other relevant provisions............................................ 404

Division 2—Share buy‑backs                                                                                406

257A..... The company’s power to buy back its own shares.......................... 406

257B..... Buy‑back procedure—general......................................................... 406

257C..... Buy‑back procedure—shareholder approval if the 10/12 limit exceeded  408

257D..... Buy‑back procedure—special shareholder approval for selective buy‑back             409

257E...... Buy‑back procedure—lodgment of offer documents with ASIC.... 410

257F...... Notice of intended buy‑back........................................................... 410

257G..... Buy‑back procedure—disclosure of relevant information when offer made             411

257H..... Acceptance of offer and transfer of shares to the company............. 411

257J...... Signposts to other relevant provisions............................................ 411

Division 3—Other share capital reductions                                                 414

258A..... Unlimited companies....................................................................... 414

258B..... Right to occupy or use real property............................................... 414

258C..... Brokerage or commission............................................................... 414

258D..... Cancellation of forfeited shares....................................................... 414

258E...... Other share cancellations................................................................. 415

258F...... Reductions because of lost capital................................................... 415

Part 2J.2—Self‑acquisition and control of shares                                          416

259A..... Directly acquiring own shares......................................................... 416

259B..... Taking security over own shares or shares in holding company..... 416

259C..... Issuing or transferring shares to controlled entity........................... 417

259D..... Company controlling entity that holds shares in it........................... 418

259E...... When a company controls an entity................................................. 419

259F...... Consequences of failing to comply with section 259A or 259B..... 420

Part 2J.3—Financial assistance                                                                                 421

260A..... Financial assistance by a company for acquiring shares in the company or a holding company               421

260B..... Shareholder approval...................................................................... 421

260C..... Exempted financial assistance......................................................... 423

260D..... Consequences of failing to comply with section 260A................... 424

Part 2J.4—Interaction with general directors’ duties                                  426

260E...... General duties still apply................................................................. 426

Chapter 2K—Charges                                                                                                    427

Part 2K.1—Preliminary                                                                                                 427

261........ Interpretation and application.......................................................... 427

Part 2K.2—Registration                                                                                                429

262........ Charges required to be registered.................................................... 429

263........ Lodgment of notice of charge and copy of instrument.................... 432

264........ Acquisition of property subject to charge........................................ 435

265........ Registration of documents relating to charges................................. 436

265A..... Standard time for the purposes of section 265................................ 439

266........ Certain charges void against liquidator or administrator.................. 440

267........ Charges in favour of certain persons void in certain cases.............. 443

268........ Assignment and variation of charges.............................................. 445

269........ Satisfaction of, and release of property from, charges..................... 446

270........ Lodgment of notices, offences etc................................................... 446

271........ Company to keep documents relating to charges and register of charges 447

272........ Certificates...................................................................................... 448

273A..... Application of State and Territory laws to charges required to be registered under this Part    449

273B..... Application of State and Territory laws to transfers, assignments or giving of charges registered under this Part   450

273C..... Application of specified State and Territory laws to crop liens, wool liens and stock mortgages registered under this Part........................................................................................................ 451

273D..... Sections 273A to 273C do not apply to charges given by company jointly with person who is not a company      453

274........ Power of Court to rectify Register.................................................. 453

277........ Power to exempt from compliance with certain requirements of Division                453

Part 2K.3—Order of priority                                                                                     455

278........ Definitions...................................................................................... 455

279........ Priorities of charges........................................................................ 456

280........ General priority rules in relation to registered charges.................... 457

281........ General priority rule in relation to unregistered charges.................. 458

282........ Special priority rules....................................................................... 458


An Act to make provision in relation to corporations and financial products and services, and for other purposes

Chapter 1Introductory

Part 1.1Preliminary

  

1  Short title [see Note 1]

                   This Act may be cited as the Corporations Act 2001.

2  Commencement [see Note 1]

                   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); and

                     (d)  also, for the purposes of the application of a provision of Chapter 7 or an associated provision (see subsection (10))—any external Territory in which the provision applies because of subsection (9) (but only to the extent provided for in that subsection).

             (2)  Throughout this Act, this jurisdiction therefore consists of:

                     (a)  either:

                              (i)  the whole of Australia (if all the States are referring States); or

                             (ii)  Australia (other than any State that is not a referring State) if one or more States are not referring States; and

                     (b)  also, when used in or in relation to a provision of Chapter 7 or an associated provision (see subsection (10))—any external Territory in which the provision applies because of subsection (9) (but only to the extent provided for in that subsection).

Operation in this jurisdiction

             (3)  Each provision of this Act applies in this jurisdiction.

Operation outside this jurisdiction

             (4)  Subject to subsection (8), each provision of this Act also applies, according to its tenor, in relation to acts and omissions outside this jurisdiction.

Residence, place of formation etc.

             (7)  Each provision of 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).

Expanded application of provisions of Chapter 7 and associated provisions

             (9)  The regulations may provide that, in specified circumstances, a specified external Territory is included in this jurisdiction for the purposes of a specified provision of Chapter 7 (the applicable provision). If the regulations do so:

                     (a)  the applicable provision applies in that external Territory in those circumstances; and

                     (b)  the associated provisions (see subsection (10)) in relation to the applicable provision apply in that external Territory in relation to the applicable provision as so applying.

Meaning of associated provisions

           (10)  For the purposes of this section, the associated provisions in relation to a provision of Chapter 7 are:

                     (a)  the provisions of Chapters 1, 9 (including the provisions of Division 2 of Part 9.4 that create offences and of Part 9.4B that allow for pecuniary penalty orders) and 10 as they apply or have effect in relation to, or for the purposes of, the provision; and

                     (b)  any regulations or other instruments (including any that create offences or allow for pecuniary penalty orders) made under this Act for the purposes of any of the provisions covered by paragraph (a); and

                     (c)  if regulations made for the purposes of subsection (9) have been made in relation to the provision—any other provisions of this Act, or any regulations or other instruments made under this Act (including any that create offences or allow for pecuniary penalty orders), specified in those regulations.

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)  A provision of Chapter 5D, 6CA or 7 only binds the Crown in a particular capacity in circumstances (if any) specified in the regulations.

             (5)  Nothing in this Act makes the Crown in any right liable to a pecuniary penalty or 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 the Acts Interpretation Act 1901

             (1)  Until the date of commencement of section 4 of the Legislative Instruments (Transitional and Consequential Amendments) Act 2003 (the Legislative Instruments commencement day), the Acts Interpretation Act 1901 as in force on 1 November 2000 applies to this Act.

             (2)  On and after the Legislative Instruments commencement day, the Acts Interpretation Act 1901 as in force on that day applies to this Act.

             (3)  Amendments of the Acts Interpretation Act 1901 made after the Legislative Instruments commencement day 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.

Note:          This Part does not apply in relation to the trustee company provisions: see section 601RAE.

             (3)  This Part does not apply to Part 3 of the ASIC Act, or regulations made under that Act for the purposes of Part 3 of that Act, to the extent to which they operate in relation to a contravention of Division 2 of Part 2 of that Act.

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.

             (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 Chapter 7 are to be found at the beginning of that Chapter.

             (3)  Also, interpretation provisions relevant to a particular Part, Division or Subdivision may be found at the beginning of that Part, Division or Subdivision.

             (4)  Occasionally, an individual section contains its own interpretation provisions, not necessarily at the beginning.

9  Dictionary

                   Unless the contrary intention appears:

AASB means the Australian Accounting Standards Board.

ABN (short for “Australian Business Number”) has the meaning given by section 41 of the A New Tax System (Australian Business Number) Act 1999.

Aboriginal and Torres Strait Islander corporation means a corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006.

accounting standard means:

                     (a)  an instrument in force under section 334; or

                     (b)  a provision of such an instrument as it so has effect.

ACN (short for “Australian Company Number”) is the number given by ASIC to a company on registration (see sections 118 and 601BD).

acquire, in relation to financial products, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

act includes thing.

administration, in relation to a company, has the meaning given by section 435C.

administrator:

                     (a)  in relation to a body corporate but not in relation to a deed of company arrangement:

                              (i)  means an administrator of the body or entity appointed under Part 5.3A; and

                            (iii)  if 2 or more persons are appointed under that Part as administrators of the body or entity—has a meaning affected by paragraph 451A(2)(b); or

                     (b)  in relation to a deed of company arrangement:

                              (i)  means an administrator of the deed appointed under Part 5.3A; and

                             (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: financial products are admitted to quotation on a market if the market operator has given unconditional permission for quotation of the financial products on the market.

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, in Chapter 6 or 7, means a relevant 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.

APRA means the Australian Prudential Regulation Authority.

arbitrage transaction means a purchase or sale of financial products effected in the ordinary course of trading on a financial market together with an offsetting sale or purchase of those financial products effected at the same time, or at as nearly the same time as practicable, in the ordinary course of trading on another financial market for the purpose of obtaining a profit from the difference between the prices of those financial products in the 2 financial 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, in relation to a financial services licensee, means all the licensee’s assets (whether or not used in connection with the licensee’s Australian financial services licence).

associate has the meaning given by sections 10 to 17.

associated entity has the meaning given by section 50AAA.

AUASB means the Auditing and Assurance Standards Board.

audit means an audit conducted for the purposes of this Act and includes a review of a financial report for a financial year or a half‑year conducted for the purposes of this Act.

audit activity: see the definition of engage in audit activity.

audit company means a company that consents to be appointed, or is appointed, as auditor of a company or registered scheme.

audit‑critical employee, in relation to a company, or the responsible entity for a registered scheme, that is the audited body for an audit, means a person who:

                     (a)  is an employee of the company or of the responsible entity for the registered scheme; and

                     (b)  is able, because of the position in which the person is employed, to exercise significant influence over:

                              (i)  a material aspect of the contents of the financial report being audited; or

                             (ii)  the conduct or efficacy of the audit.

audited body, in relation to an audit of a company or registered scheme, means the company or registered scheme in relation to which the audit is, or is to be, conducted.

audit firm means a firm that consents to be appointed, or is appointed, as auditor of a company or registered scheme.

auditing standard means:

                     (a)  a standard in force under section 336; or

                     (b)  a provision of such a standard as it so has effect.

auditor independence requirements of this Act means the requirements of Divisions 3, 4 and 5 of Part 2M.4.

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 CS facility licence, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

Australian financial services licence, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

Australian law means a law of the Commonwealth or of a State or Territory.

Australian market licence, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

Australian register of a foreign company means a branch register of members kept under section 601CM.

authorised audit company means a company registered under Part 9.2A.

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.

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).

base salary has the meaning specified in regulations made for the purposes of this definition.

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 200 to 200J)—has the meaning given by section 200AB.

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:          A person who announces a bid on behalf of another person is not making the bid, the other person is making the bid.

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 financial market and ends at the end of the offer period.

Board, when used in Part 9.2, means the Companies Auditors and Liquidators Disciplinary Board.

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.

body regulated by APRA has the meaning given by subsection 3(2) of the Australian Prudential Regulation Authority Act 1998.

books includes:

                     (a)  a register; and

                     (b)  any other record of information; and

                     (c)  financial reports or financial records, however compiled, recorded or stored; and

                     (d)  a document;

but does not include an index or recording made under Subdivision D of Division 5 of Part 6.5.

borrower, in relation to a debenture, means the body that is or will be liable to repay money under the debenture.

business affairs, in relation to an entity, has a meaning affected by sections 53AA, 53AB, 53AC and 53AD.

business day means a day that is not a Saturday, a Sunday or a public holiday or bank holiday in the place concerned.

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.

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.

child: without limiting who is a child of a person for the purposes of this Act, someone is the child of a person if he or she is a child of the person within the meaning of the Family Law Act 1975.

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 1317E;

                     (b)  a pecuniary penalty order under section 1317G;

                     (c)  a compensation order under section 1317H, 1317HA or 1317HB;

                     (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:

                     (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 and settlement facility, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

close associate of a director means:

                     (a)  a relative of the director; or

                     (b)  a relative of a spouse of the director.

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 1 to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 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.

Commonwealth authority means an authority or other body (whether incorporated or not) that is established or continued in existence by or under an Act.

Companies and Unclaimed Moneys Special Account means the Account established under section 133 of the Australian Securities and Investments Commission Act 2001.

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.

compliance period for an infringement notice has the meaning given by section 1317DAA.

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.

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 market operator of information relating to a body under provisions of the market’s listing rules referred to in subsection 674(1); or

                     (b)  a document under section 675 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 3 months before the date of the prospectus or Product Disclosure Statement; and

                     (b)  are securities of an entity in relation to which the following subparagraphs are satisfied during the shorter of the period during which the class of securities were quoted, and the period of 12 months before the date of the prospectus or Product Disclosure Statement:

                              (i)  no exemption under section 111AS or 111AT, or modification under section 111AV, covered the entity, or any person as director or auditor of the entity;

                             (ii)  no exemption under paragraph 741(1)(a), or 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 covered the entity, or any person as director or auditor of the entity;

                            (iii)  no order under section 340 or 341 covered the entity, or any person as director or auditor of the entity;

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.

contribution plan means a plan in respect of which the following conditions are met:

                     (a)  regular deductions are made from the wages or salary of an employee or director (the contributor) to acquire financial products that are offered for issue or sale to the contributor under an eligible employee share scheme;

                     (b)  the deductions are authorised by the contributor in a form which is included in, or accompanies, the disclosure document or the Product Disclosure Statement for the scheme;

                     (c)  before acquiring the financial products under the scheme, the deductions are held on trust in an account with an Australian ADI that is kept solely for that purpose;

                     (d)  the contributor may elect to discontinue the deductions at any time;

                     (e)  if the contributor so elects, the amount of the deductions standing, at that time, to the credit of the account for the contributor, and any interest on that amount, is repaid to the contributor;

                      (f)  the scheme does not involve the offer to the contributor of a loan or similar financial assistance for the purpose of, or in connection with, the acquisition of the financial products that are offered under the scheme.

contributory means:

                     (a)  in relation to a company (other than a no liability company):

                              (i)  a person liable as a member or past member to contribute to the property of the company if it is wound up; and

                             (ii)  for a company with share capital—a holder of fully paid shares in the company; and

                            (iii)  before the final determination of the persons who are contributories because of subparagraphs (i) and (ii)—a person alleged to be such a contributory; and

                     (b)  in relation to a Part 5.7 body:

                              (i)  a person who is a contributory by virtue of section 586; and

                             (ii)  before the final determination of the persons who are contributories by virtue of that section—a person alleged to be such a contributory; and

                     (c)  in relation to a no liability company—subject to subsection 254M(2), 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;

and has a meaning affected by paragraph 434F(b) (which deals with 2 or more persons appointed as controllers).

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.

corporation/scheme civil penalty provision has the meaning given by section 1317DA.

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, or by the Supreme Court of the Northern Territory 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 financial market.

deal:

                     (a)  in relation to a futures contract—has the meaning given by Division 4; and

                     (b)  in relation to securities—subject to subsection 93(4), means (whether as principal or agent) acquire, dispose of, subscribe for or underwrite the securities, or make or offer to make, or induce or attempt to induce a person to make or to offer to make, an agreement:

                              (i)  for or with respect to acquiring, disposing of, subscribing for or underwriting the securities; or

                             (ii)  the purpose or purported purpose of which is to secure a profit or gain to a person who acquires, disposes of, subscribes for or underwrites the securities or to any of the parties to the agreement in relation to the securities.

dealing, in relation to financial products, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

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

Note:       This paragraph has an extended meaning in relation to Chapter 8 (see subsection 1200A(2)).

                     (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

                     (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 thirteenth business day after that day.

declaration of indemnities, in relation to an administrator of a company under administration, means a written declaration:

                     (a)  stating whether the administrator has, to any extent, been indemnified (otherwise than under section 443D), in relation to that administration, for:

                              (i)  any debts for which the administrator is, or may become, liable under Subdivision A of Division 9 of Part 5.3A; or

                             (ii)  any debts for which the administrator is, or may become, liable under a remittance provision as defined in section 443BA; or

                            (iii)  his or her remuneration as determined under section 449E; and

                     (b)  if so, stating:

                              (i)  the identity of each indemnifier; and

                             (ii)  the extent and nature of each indemnity.

declaration of relevant relationships has the meaning given by section 60.

deductible gift recipient has the same meaning as in the Income Tax Assessment Act 1997.

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.

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.

derivative, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

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.

dispose has a meaning affected by the following paragraphs:

                     (a)  when used in relation to financial products in a provision outside Chapter 7, otherwise than in a situation to which paragraph (b) applies, dispose has the same meaning as it has in Chapter 7;

                     (b)  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.

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 employee creditor, in relation to a company, means a creditor whose debt or claim would, in a winding up of the company, be payable in priority to other unsecured debts and claims in accordance with paragraph 556(1)(e), (g) or (h) or section 560 or 561.

eligible employee share scheme means an employee share scheme for a body corporate in respect of which the following conditions are met:

                     (a)  the scheme is offered only to employees or directors mentioned in paragraph (a) of the definition of employee share scheme;

                     (b)  the financial products that are offered under the scheme are offered:

                              (i)  under a disclosure document or Product Disclosure Statement; or

                             (ii)  without disclosure under Part 6D.2 in accordance with subsection 708(12);

                     (c)  the financial products which may be acquired under the scheme are the following:

                              (i)  fully paid ordinary shares;

                             (ii)  options, offered for no more than nominal consideration, for the issue or transfer of fully paid ordinary shares;

                            (iii)  units in fully paid ordinary shares.

eligible money market dealer means a body corporate in respect of which a declaration is in force under section 65.

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 or options to acquire unissued 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.

engage in audit activity: an individual auditor, audit firm or audit company engages in audit activity in relation to an audited body for an audit if the individual auditor, audit firm or audit company:

                     (a)  consents to be appointed as auditor of the audited body for a financial year; or

                     (b)  acts as the auditor of the audited body for a financial year; or

                     (c)  prepares a report in relation to the audited body that is required by this Act to be prepared by:

                              (i)  a registered company auditor; or

                             (ii)  an auditor of the audited body in relation to a financial year or half‑year.

engage in conduct means:

                     (a)  do an act; or

                     (b)  omit to perform an act.

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.

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 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.

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.

exempt body has the meaning given by section 66A.

exempt foreign company means a foreign company of a kind referred to in subsection 601CK(8), whether or not Division 2 of Part 5B.2 applies to it.

exempt public authority means a body corporate that is incorporated within Australia or an external Territory and is:

                     (a)  a public authority; or

                     (b)  an instrumentality or agency of the Crown in right of the Commonwealth, in right of a State or in right of a Territory.

expert, in relation to a matter, means a person whose profession or reputation gives authority to a statement made by him or her in relation to that matter.

extend, in relation to a period:

                     (a)  includes further extend; and

                     (b)  has a meaning affected by section 70.

externally‑administered body corporate means a body corporate:

                     (a)  that is being wound up; or

                     (b)  in respect of property of which a receiver, or a receiver and manager, has been appointed (whether or not by a court) and is acting; or

                     (c)  that is under administration; or

                    (ca)  that has executed a deed of company arrangement that has not yet terminated; or

                     (d)  that has entered into a compromise or arrangement with another person the administration of which has not been concluded.

extract of particulars for a company or a registered scheme means a statement given by ASIC that contains either or both of the following:

                     (a)  some or all of the particulars in relation to the company or scheme that are recorded in the register or registers maintained by ASIC under subsection 1274(1);

                     (b)  a requirement to provide a particular under section 346B.

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.

FHSA product when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

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 market, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

financial product, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

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 reporting requirements for a financial report means the requirements imposed under:

                     (a)  section 296 or 297 if the financial report is an annual financial report; or

                     (b)  section 304 or 305 if the financial report is a half‑year financial report.

financial service, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

financial services business, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

financial services civil penalty provision has the meaning given by section 1317DA.

financial services licensee, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

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.

firm, in relation to an administrator or liquidator, means:

                     (a)  if the administrator or liquidator is a partner or employee of a partnership (the partnership firm) that provides advice or other services in relation to externally‑administered bodies corporate—the partnership firm; or

                     (b)  if the administrator or liquidator is an officer or employee of a body corporate (the body corporate firm) that provides advice or other services in relation to externally‑administered bodies corporate—the body corporate firm.

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.

Gazette notice means a notice published in the Gazette.

general law means the principles and rules of the common law and equity.

group executives for a consolidated entity means:

                     (a)  the directors of the companies or bodies within the consolidated entity; and

                     (b)  the secretaries of the companies or bodies within the consolidated entity; and

                     (c)  the senior managers of any corporation within the consolidated entity; and

                     (d)  the partners, and senior managers, of any partnership within the consolidated entity; and

                     (e)  the trustees, and senior managers, of any trusts within the consolidated entity; and

                      (f)  the senior managers of any joint venture within the consolidated entity.

guarantor, in relation to a debenture, means a body that has guaranteed, or has agreed to guarantee, the repayment of any money deposited or lent to the borrower under the debenture.

guilty, in the case of a reference to a court finding a person guilty of an offence, has a meaning affected by section 73A.

half‑year has the meaning given by subsection 323D(5).

have, in relation to information, includes be in possession of the information.

highest outside purchase price for a takeover bid is the highest amount paid or payable by the bidder for a security in the bid class under a purchase made outside the bid and during the bid period.

hold, in relation to a person, in relation to a document that is, or purports to be, a copy of a licence, means have in the person’s possession.

holding company, in relation to a body corporate, means a body corporate of which the first body corporate is a subsidiary.

immediate family member for a person means:

                     (a)  the person’s spouse; or

                     (b)  a person who is wholly or partly dependent on the person for financial support.

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).

individual auditor means an individual who consents to be appointed, or is appointed, as auditor of a company or registered scheme.

industrial instrument means:

                     (a)  a contract of employment; or

                     (b)  a law, award, determination or agreement relating to terms or conditions of employment.

information includes complaint.

infringement notice has the meaning given by section 1317DAA.

injury compensation means compensation payable under any law relating to workers compensation.

insolvent has the meaning given by subsection 95A(2).

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 personal insolvency agreement 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 agreement have not been fully complied with.

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).

investment in a company, disclosing entity or other body means:

                     (a)  a share in the company, disclosing entity or body; or

                     (b)  a debenture of the company, disclosing entity or body; or

                     (c)  a legal or equitable interest in:

                              (i)  a share in the company, disclosing entity or body; or

                             (ii)  a debenture of the company, disclosing entity or body; or

                     (d)  an option to acquire (whether by way of issue or transfer) an investment in the company, disclosing entity or body covered by paragraph (a), (b) or (c); or

                     (e)  an option to dispose of an investment in the company, disclosing entity or body covered by paragraph (a), (b) or (c); or

                      (f)  an interest a person holds under an arrangement that is a derivative if:

                              (i)  the consideration to be provided under the arrangement; or

                             (ii)  the value of the arrangement;

                            is ultimately determined, derived from or varies by reference to an investment in the company, disclosing entity or body covered by paragraph (a), (b), (c), (d) or (e).

To avoid doubt, the consideration to be provided under, or the value of, an arrangement in relation to an index is not ultimately determined, derived from or varies by reference to an investment in the company merely because the investment is taken into account in determining the value of the index.

investment in a registered scheme means:

                     (a)  an interest in the scheme; or

                     (b)  a legal or equitable interest in an interest in the scheme; or

                     (c)  an option to acquire (whether by way of issue or transfer) an investment in the scheme covered by paragraph (a) or (b); or

                     (d)  an option to dispose of an investment in the scheme covered by paragraph (a) or (b); or

                     (e)  an interest a person holds under an arrangement that is a derivative if:

                              (i)  the consideration to be provided under the arrangement; or

                             (ii)  the value of the arrangement;

                            is ultimately determined, derived from or varies by reference to an investment in the scheme covered by paragraph (a), (b), (c) or (d); or

                      (f)  an investment in the responsible entity of the scheme.

To avoid doubt, the consideration to be provided under, or the value of, an arrangement in relation to an index is taken not to be ultimately determined, derived from or vary by reference to an investment in the scheme merely because the investment is taken into account in determining the value of the index.

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.

Note:          When issue is used in Chapter 7 in relation to a financial product it has a meaning affected by section 761E.

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.

lead auditor has the meaning given by section 324AF.

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.

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).

liquidator:

                     (a)  has a meaning affected by paragraph 530(b) (which deals with 2 or more persons appointed as liquidators); and

                     (b)  in Chapter 7, includes a provisional liquidator.

listed: a company, managed investment scheme or other body is listed if it is included in the official list of a prescribed financial market operated in this jurisdiction.

listed corporation means a body corporate that is included in an official list of a prescribed financial market.

listed disclosing entity has the meaning given by subsection 111AL(1).

listing market, in relation to a listed disclosing entity, has the meaning given by subsection 111AE(1) or (1A).

listing rules of a financial market, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

local agent, in relation to a foreign company, means a person who is a local agent of the foreign company by virtue of subsection 601CG(5).

lodge means lodge with ASIC in this jurisdiction.

lodging entity has the meaning given by subsection 323EA(2).

lower court means a court of a State or Territory that is not a superior court.

machine‑copy, in relation to a document, means a copy made of the document by any machine in which, or process by which, an image of the contents of the document is reproduced.

managed investment product, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

managed investment scheme means:

                     (a)  a scheme that has the following features:

                              (i)  people contribute money or money’s worth as consideration to acquire rights (interests) to benefits produced by the scheme (whether the rights are actual, 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);

Note:       This paragraph has an extended meaning in relation to Chapter 8 (see subsection 1200A(3)).

                     (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;

                   (ha)  an FHSA trust, within the meaning of the First Home Saver Accounts Act 2008;

                      (i)  a scheme operated by an Australian ADI in the ordinary course of its banking business;

Note:       This paragraph has an extended meaning in relation to Chapter 8 (see subsection 1200A(3)).

                      (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;

                  (ma)  a contribution plan;

                     (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.

managerial or executive office has the meaning given by section 200AA.

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;

and has a meaning affected by paragraph 434G(b) (which deals with 2 or more persons appointed as managing controllers).

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 interest in a managed investment scheme.

market bid means a takeover bid made under Chapter 6 as a market bid (see section 616).

market integrity rules, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

market traded option means an option declared by an operator of a prescribed financial market to be a market traded option.

member:

                     (a)  in relation to a managed investment scheme¾means a person who holds an interest in the scheme; or

                     (e)  in relation to a company—a person who is a member under section 231.

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 financial market.

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.

negative solvency resolution means a resolution by the directors of a company that, in their opinion, there are not reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

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)).

non‑audit services provider for an auditor conducting an audit means a person who:

                     (a)  is not a professional member of the audit team conducting the audit of the audited body; and

                     (b)  is either:

                              (i)  if the auditor is an individual auditor—an employee of the individual auditor (or of an entity acting for, or on behalf of, the individual auditor); or

                             (ii)  if the auditor is an audit firm—a member of the audit firm or senior manager of the audit firm (or of an entity acting for, or on behalf of, the audit firm); or

                            (iii)  if the auditor is an audit company—a director of the audit company or a senior manager of the audit company (or of an entity acting for, or on behalf of, the audit company); and

                     (c)  provides, or has provided, services (other than services related to the conduct of an audit) to the audited body.

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 financial products, 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.

offence based on a particular provision of this Act means, unless a contrary intention appears:

                     (a)  if that provision creates an offence—an offence against that provision, or an offence against section 1314 that relates to that provision; or

                     (b)  if section 1311 creates an offence relating to that provision—an offence against section 1311 or 1314 that relates to that provision.

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 an entity that is neither an individual nor a corporation means:

                     (a)  a partner in the partnership if the entity is a partnership; or

                     (b)  an office holder of the unincorporated association if the entity is an unincorporated association; or

                     (c)  a person:

                              (i)  who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the entity; or

                             (ii)  who has the capacity to affect significantly the entity’s financial standing.

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.

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 10.1.

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 financial 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 prescribed financial market and is:

                     (a)  an on‑market transaction as defined in the rules governing the operation of the market; or

                     (b)  if those rules do not define on‑market transactions—effected in the ordinary course of trading on the market.

on‑market buy‑back means a buy‑back by a listed corporation on a prescribed financial market in the ordinary course of trading on that market.

operated in this jurisdiction, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

operating rules, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

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.

Panel means the Takeovers Panel.

parent: without limiting who is a parent of a person for the purposes of this Act, someone is the parent of a person if the person is his or her child because of the definition of child in this section.

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;

but does not include an Aboriginal and Torres Strait Islander corporation.

Note:          The winding up of Aboriginal and Torres Strait Islander corporations is dealt with in Part 11‑5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006.

Part 10.1 transitionals means the provisions of Part 10.1 and of regulations for the purposes of those provisions.

participant, when used in a provision (the relevant provision) outside Chapter 7 in relation to a clearing and settlement facility or a financial market, has the same meaning as it has in Chapter 7 in relation to a clearing and settlement facility or a financial market, except that it does not include a reference to a recognised affiliate (within the meaning of that Chapter) in relation to such a facility or market unless regulations for the purposes of this definition provide that, in the relevant provision, it does include a recognised affiliate.

party, in relation to a transaction that has been completed, given effect to, or terminated, includes a person who was a party to the transaction.

payment (when used in Division 2 of Part 2D.2 (sections 200 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, when used in Division 2 of Part 2D.2 (sections 200 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.

play a significant role: a person plays a significant role in the audit of a company or a registered scheme for a financial year if:

                     (a)  the person is appointed as an individual auditor of the company or scheme for that financial year and:

                              (i)  acts as an auditor for the company or scheme for that financial year; or

                             (ii)  prepares an audit report for the company or the scheme in relation to a financial report of the company or scheme for that financial year or for a half‑year falling within that financial year; or

                     (b)  a firm or company is appointed as an auditor of the company or scheme for that financial year and the person:

                              (i)  is a registered company auditor; and

                             (ii)  acts, on behalf of the firm or company, as a lead auditor, or review auditor, in relation to an audit of the company or scheme for that financial year or for a half‑year falling within that financial year.

pooling determination means a determination under subsection 571(1).

pooling order means an order under subsection 579E(1).

positive solvency resolution means a resolution by the directors of a company that, in their opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

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.

prescribed financial market means a financial market that is prescribed by regulations made for the purposes of this definition.

printed includes type‑written, lithographed or reproduced by any mechanical means.

procure includes cause.

Product Disclosure Statement, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

Note:          For the effect of the lodgment of a Replacement Product Disclosure Statement, see section 1014J.

professional accounting body has the same meaning as in the ASIC Act.

professional employee of an individual auditor, audit firm or audit company means an employee of the auditor, firm or company who participates in the conduct of the audits on behalf of the auditor, firm or company and, in the course of doing so, exercises professional judgment in relation to the application of or compliance with:

                     (a)  accounting standards; or

                     (b)  auditing standards; or

                     (c)  the provisions of this Act dealing with financial reporting and the conduct of audits.

professional investor means a person in relation to whom one or more of the following paragraphs apply:

                     (a)  the person is a financial services licensee;

                     (b)  the person is a body regulated by APRA, other than a trustee of any of the following (within the meaning of the Superannuation Industry (Supervision) Act 1993):

                              (i)  a superannuation fund;

                             (ii)  an approved deposit fund;

                            (iii)  a pooled superannuation trust;

                            (iv)  a public sector superannuation scheme;

                     (c)  the person is a body registered under the Financial Corporations Act 1974;

                     (d)  the person is the trustee of:

                              (i)  a superannuation fund; or

                             (ii)  an approved deposit fund; or

                            (iii)  a pooled superannuation trust; or

                            (iv)  a public sector superannuation scheme;

                            within the meaning of the Superannuation Industry (Supervision) Act 1993 and the fund, trust or scheme has net assets of at least $10 million;

                     (e)  the person controls at least $10 million (including any amount held by an associate or under a trust that the person manages);

                      (f)  the person is a listed entity, or a related body corporate of a listed entity;

                     (g)  the person is an exempt public authority;

                     (h)  the person is a body corporate, or an unincorporated body, that:

                              (i)  carries on a business of investment in financial products, interests in land or other investments; and

                             (ii)  for those purposes, invests funds received (directly or indirectly) following an offer or invitation to the public, within the meaning of section 82, the terms of which provided for the funds subscribed to be invested for those purposes;

                      (i)  the person is a foreign entity that, if established or incorporated in Australia, would be covered by one of the preceding paragraphs.

professional member of an audit team has the meaning given by section 324AE.

profile statement means a profile statement that is lodged with ASIC.

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.

provisional liquidator has a meaning affected by paragraph 530AA(b) (which deals with 2 or more persons appointed as provisional liquidators).

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 prescribed financial market; 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, on the internet, by broadcasting or televising or in a cinematograph film; and

                     (b)  in any case—includes issue.

qualified accountant has the meaning given by section 88B.

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 financial products or in relation to a financial market, includes the displaying or providing, on a financial market, of information concerning:

                     (a)  if offers to dispose of, purchase or exchange the financial product at particular prices, or for particular consideration, are made or accepted on that financial market—those prices or that consideration; or

                     (b)  if offers or invitations are made on that financial market, being offers or invitations that are intended, or may reasonably be expected, to result in the making or acceptance of offers to dispose of, purchase or exchange the financial products 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 dispose of, purchase or exchange the financial products.

quoted ED securities has the meaning given by section 111AM.

quoted security means a security that is quoted on a prescribed financial market.

receiver has a meaning affected by paragraph 434D(b) (which deals with 2 or more persons appointed as receivers).

receiver and manager has a meaning affected by section 90 and has a meaning affected by paragraph 434E(b) (which deals with 2 or more persons appointed as receivers and managers).

recognised offer has the meaning given by section 1200B.

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 of such a promoter;

                     (c)  a relative of a spouse of such a promoter;

                     (d)  a director or member of the body or of a related body corporate;

                     (e)  a relative of such a director or member;

                      (f)  a relative of a 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 of such a beneficiary;

                      (j)  a relative of a 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, child 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 financial market, for a listed company, or listed registered scheme, means:

                     (a)  the prescribed financial market on which the company or scheme is listed; or

                     (b)  if the company or scheme is listed on 2 or more prescribed financial markets—each of those markets.

relevant interest, in relation to securities, has a meaning given by sections 608 and 609.

relevant market operator, for a listed company, or listed registered scheme, means:

                     (a)  if there is only one relevant financial market for the company or scheme—the operator of that relevant financial market; or

                     (b)  if there is 2 or more relevant financial markets for the company or scheme—each of the operators of each of those relevant financial markets.

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 directors’ remuneration. 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.

remuneration report means the section of the directors’ report for a financial year for a listed public company that is included under subsection 300A(1).

renounceable option means an assignable option to have an allotment of shares in a body corporate made to the holder of the option.

Replacement Product Disclosure Statement, when used in a provision outside Chapter 7, has the same meaning it has in Chapter 7.

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, in relation to a body corporate that applies for an Australian financial services licence, means 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.

retention of title clause: if:

                     (a)  a contract for the sale of property contains a provision the effect of which is that the seller retains title in the property until the purchase price, or other amount, has been paid in full; and

                     (b)  the purchase price, or the other amount, as the case may be, has not been paid in full;

the property is subject to a retention of title clause under that contract.

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.

return of particulars for a company or a registered scheme means a statement given by ASIC that contains any or all of the following:

                     (a)  some or all of the particulars in relation to the company or scheme that are recorded in the register or registers maintained by ASIC under subsection 1274(1);

                     (b)  a requirement to provide a particular under section 348B;

                     (c)  a requirement to comply with a subsection of section 348C (and, if applicable, pass a resolution).

review auditor has the meaning given by section 324AF.

review date has the meaning given by section 345A.

review fee has the meaning given by section 5 of the Corporations (Review Fees) Act 2003.

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.

rights issue has the meaning given by subsections 9A(1) and (2).

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.

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.

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.

securities has the meaning given by section 92.

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.

senior manager:

                     (a)  in relation to a corporation—means a person (other than a director or secretary of the corporation) who:

                              (i)  makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or

                             (ii)  has the capacity to affect significantly the corporation’s financial standing; and

                     (b)  in relation to a partnership—means a person (other than a partner) who:

                              (i)  makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the partnership; or

                             (ii)  has the capacity to affect significantly the partnership’s financial standing; and

                     (c)  in relation to a trust—means a person (other than a trustee) who:

                              (i)  makes, or participates in making, decisions that affect the whole, or a substantial part, of the business or affairs of the trust; or

                             (ii)  has the capacity to affect significantly the financial standing of the trust; and

                     (d)  in relation to a joint venture—means a person (other than a director or secretary of a corporation participating in the joint venture) who:

                              (i)  makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the joint venture; or

                             (ii)  has the capacity to affect significantly the financial standing of the joint venture.

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 company limited by guarantee has the meaning given by section 45B.

small proprietary company has the meaning given by subsection 45A(2).

solvency resolution means a resolution by the directors of a company as to whether or not, in their opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

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(1)(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.

spouse of a person includes a de facto partner of the person within the meaning of the Acts Interpretation Act 1901.

staff member, in relation to ASIC, means a person who is a staff member for the purposes of the ASIC Act.

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 1989

4

South Australia

Fair Trading Act 1987

5

Western Australia

Fair Trading Act 1987

6

Tasmania

Fair Trading Act 1990

7

Northern Territory

Consumer Affairs and 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.

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) (market 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 bid period has started and not yet ended.

Note:          For relevant interest, see section 608.

substantial interest has a meaning affected by section 602A.

substantial part, in relation to activities, includes the whole of those activities.

superannuation guarantee charge has the same meaning as in the Superannuation Guarantee (Administration) Act 1992.

superannuation guarantee shortfall has the same meaning as in the Superannuation Guarantee (Administration) Act 1992.

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.

Supplementary Product Disclosure Statement, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7.

takeover bid means an off‑market bid or market bid made under Chapter 6.

takeover contract means a contract that results from the acceptance of an offer made under a takeover bid.

target for a takeover bid means the company, listed body or managed investment scheme whose securities are to be acquired under the bid.

target’s statement means a target’s statement under sections 638 to 640 as supplemented.

territorial sea has the same meaning as in the Seas and Submerged Lands Act 1973.

Territory means:

                     (a)  the Capital Territory; or

                     (b)  the Northern Territory; or

                     (c)  an external Territory;

and, when used in a geographical sense, includes the coastal sea of the Territory.

this Act includes the regulations.

this jurisdiction means the geographical area that consists of:

                     (a)  each referring State (including its coastal sea); and

                     (b)  the Capital Territory (including the coastal sea of the Jervis Bay Territory); and

                     (c)  the Northern Territory (including its coastal sea); and

                     (d)  also, for the purposes of the application of a provision of Chapter 7 or an associated provision (as defined in section 5)—any external Territory in which the provision applies because of subsection 5(9) (but only to the extent provided for in that subsection).

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 financial products, in relation to a financial market, includes:

                     (a)  make or accept on that financial market an offer to dispose of, acquire or exchange the financial products; and

                     (b)  make on that financial market an offer or invitation that is intended, or may reasonably be expected, to result in the making or acceptance of an offer to dispose of, acquire or exchange the financial products.

trading day of a financial market means a day on which the market is open for trading in financial products.

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.

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), amounts credited to the Companies and Unclaimed Moneys Special Account under paragraph 1339(2)(b).

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).

unreasonable director‑related transaction has the meaning given by section 588FDA.

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 body or managed investment scheme 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.

9AA  Certain family relationships

                   For the purposes of this Act, relationships (including the relationship of being family) are taken to include:

                     (a)  relationships between de facto partners (within the meaning of the Acts Interpretation Act 1901); and

                     (b)  relationships of child and parent that arise:

                              (i)  if someone is an exnuptial or adoptive child of a person; or

                             (ii)  if someone is the child of a person because of the definition of child in this Act; and

                     (c)  relationships traced through relationships referred to in paragraphs (a) and (b).

9A  Meaning of rights issue

             (1)  A rights issue is an offer of a body’s securities for issue in respect of which the following conditions are met:

                     (a)  the securities being offered for issue are in a particular class;

                     (b)  either:

                              (i)  the offer is made to every person who holds securities in that class to issue them, or their assignee, with the percentage of the securities to be issued that is the same as the percentage of the securities in that class that they hold before the offer; or

                             (ii)  if the conditions in subsection (3) are met—such an offer is made to every person with a registered address in Australia or New Zealand who holds securities in that class;

                     (c)  the terms of each offer are the same.

             (2)  A rights issue is an offer of interests in a managed investment scheme for issue in respect of which the following conditions are met:

                     (a)  the interests being offered for issue are in a particular class;

                     (b)  either:

                              (i)  the offer is made to every person who holds interests in that class to issue them, or their assignee, with the percentage of the interests to be issued that is the same as the percentage of the interests in that class that they hold before the offer; or

                             (ii)  if the conditions in subsection (3) are met—such an offer is made to every person with a registered address in Australia or New Zealand who holds interests in that class;

                     (c)  the terms of each offer are the same.

             (3)  The conditions in this subsection are met if:

                     (a)  the body or responsible entity (as the case requires) decides that it is unreasonable to offer securities or interests (as the case requires) for issue to persons (the non‑residents) with a registered address in a place outside Australia or New Zealand, after taking into account the following matters:

                              (i)  the number of non‑residents, in that place, to whom offers would otherwise be made;

                             (ii)  the number and value of the securities or interests that would otherwise be offered for issue;

                            (iii)  the cost of complying with the laws, and any requirements of any regulatory authority, of the place where the securities or interests would otherwise be offered for issue; and

                     (b)  the body or responsible entity:

                              (i)  sends details of the offer to each non‑resident in that place; and

                             (ii)  advises each non‑resident in that place that the non‑resident will not be offered the securities or interests; and

                     (c)  if the invitation to apply for, or the right to be issued with, the securities or interests is able to be assigned—the body or responsible entity:

                              (i)  advises each non‑resident in that place that a nominee will be appointed to sell the invitation or right that would otherwise have been offered to the non‑resident; and

                             (ii)  advises each non‑resident that the nominee will send the non‑resident any net proceeds from the sale of that invitation or those rights; and

                            (iii)  appoints a nominee in Australia to carry out the obligations referred to in subparagraphs (i) and (ii).

             (4)  For the purposes of this section, a reference to an offer of securities includes a reference to an invitation to apply for the issue of securities.


 

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  References in Chapters 6 to 6C, and other references relating to voting power and takeovers etc.

             (1)  Subject to subsection 16(1), but despite anything else in this Part, this section applies for the purposes of interpreting a reference to an associate (the associate reference), in relation to a designated body, if:

                     (a)  the reference occurs in a provision of Chapter 6, 6A, 6B or 6C; or

                     (b)  the reference occurs in a provision outside those Chapters that relates to any of the following matters:

                              (i)  the extent, or restriction, of a power to exercise, or to control the exercise of, the votes attached to voting shares in the designated body;

                             (ii)  the primary person’s voting power in the designated body;

                            (iii)  relevant interests in securities in the designated body;

                            (iv)  a substantial holding in the designated body;

                             (v)  a takeover bid for securities in the designated body;

                            (vi)  the compulsory acquisition, or compulsory buy‑out, of securities in the designated body.

             (2)  For the purposes of the application of the associate reference in relation to the designated body, a person (the second person) is an associate of the primary person if, and only if, one or more of the following paragraphs applies:

                     (a)  the primary person is a body corporate and the second person is:

                              (i)  a body corporate the primary person controls; or

                             (ii)  a body corporate that controls the primary person; or

                            (iii)  a body corporate that is controlled by an entity that controls the primary person;

                     (b)  the second person is a person with whom the primary person has, or proposes to enter into, a relevant agreement for the purpose of controlling or influencing the composition of the designated body’s board or the conduct of the designated body’s affairs;

                     (c)  the second person is a person with whom the primary person is acting, or proposing to act, in concert in relation to the designated body’s affairs.

             (3)  For the purposes of the application of this section in relation to a designated body that is a managed investment scheme:

                     (a)  a reference to controlling or influencing the composition of the designated body’s board is taken to be a reference to controlling or influencing:

                              (i)  if the scheme is a registered scheme—whether a particular company becomes or remains the scheme’s responsible entity; or

                             (ii)  if the scheme is not a registered scheme—whether a particular person is appointed, or remains appointed, to the office (by whatever name it is known) in relation to the scheme that corresponds most closely to the office of responsible entity of a registered scheme; and

                     (b)  a reference to voting shares in the designated body is taken to be a reference to voting interests in the managed investment scheme.

             (4)  In relation to a matter relating to securities in a designated body, a person may be an associate of the body and the body may be an associate of the person.

             (5)  In this section:

designated body means:

                     (a)  a body; or

                     (b)  a managed investment scheme.

13  References in Chapter 7

                   If the associate reference occurs in Chapter 7, it includes a reference to:

                     (a)  a person in partnership with whom the primary person carries on a financial services business; and

                     (b)  subject to subsection 16(2), a person who is a partner of the primary person otherwise than because of carrying on a financial services business in partnership with the primary person; and

                     (c)  a trustee of a trust in relation to which the primary person benefits, or is capable of benefiting, otherwise than because of transactions entered into in the ordinary course of business in connection with the lending of money; and

                     (d)  a director of a body corporate of which the primary person is also a director and that carries on a financial services business; and

                     (e)  subject to subsection 16(2), a director of a body corporate of which the primary person is also a director and that does not carry on a financial services business.

15  General

             (1)  The associate reference includes a reference to:

                     (a)  a person in concert with whom the primary person is acting, or proposes to act; and

                     (b)  a person who, under the regulations, is, for the purposes of the provision in which the associate reference occurs, an associate of the primary person; and

                     (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 financial products, to acquire financial products on the client’s behalf in the ordinary course of that business;

                     (c)  one had sent, or proposes to send, to the other an offer under a takeover bid for shares held by the other;

                     (d)  one has appointed the other, otherwise than for valuable consideration given by the other or by an associate of the other, to vote as a proxy or representative at a meeting of members, or of a class of members, of a body corporate.

             (2)  For the purposes of proceedings under this Act in which it is alleged that a person was an associate of another person by virtue of paragraph 13(b) or (e), the first‑mentioned person is not taken to have been an associate of the other person in relation to a matter by virtue of that paragraph unless it is proved that the first‑mentioned person knew, or ought to have known, at that time, the material particulars of that matter.

17  Associates of composite person that carries on a financial services business

                   A reference to an associate, in relation to an entity (other than a body corporate) that carries on a financial services business, is, if 2 or more persons constitute the entity, 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 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 revenue for the financial year of the company and the entities it controls (if any) is less than $25 million, or any other amount prescribed by the regulations for the purposes of this paragraph;

                     (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 $12.5 million, or any other amount prescribed by the regulations for the purposes of this paragraph;

                     (c)  the company and the entities it controls (if any) have fewer than 50, or any other number prescribed by the regulations for the purposes of this paragraph, 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 revenue for the financial year of the company and the entities it controls (if any) is $25 million, or any other amount prescribed by the regulations for the purposes of paragraph (2)(a), 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 $12.5 million, or any other amount prescribed by the regulations for the purposes of paragraph (2)(b), or more;

                     (c)  the company and the entities it controls (if any) have 50, or any other number prescribed by the regulations for the purposes of paragraph (2)(c), 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)(b) (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 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).

45B  Small companies limited by guarantee

             (1)  A company is a small company limited by guarantee in a particular financial year if:

                     (a)  it is a company limited by guarantee for the whole of the financial year; and

                     (b)  it is not a deductible gift recipient at any time during the financial year; and

                     (c)  either:

                              (i)  where the company is not required by the accounting standards to be included in consolidated financial statements—the revenue of the company for the financial year is less than the threshold amount; or

                             (ii)  where the company is required by the accounting standards to be included in consolidated financial statements—the consolidated revenue of the consolidated entity for the financial year is less than the threshold amount; and

                     (d)  it is not one of the following:

                              (i)  a Commonwealth company for the purposes of the Commonwealth Authorities and Companies Act 1997;

                             (ii)  a subsidiary of a Commonwealth company for the purposes of that Act;

                            (iii)  a subsidiary of a Commonwealth authority for the purposes of that Act; and

                     (e)  it has not been a transferring financial institution of a State or Territory within the meaning of clause 1 of Schedule 4 to this Act; and

                      (f)  it is not a company that is permitted to use the expression building society, credit society or credit union under section 66 of the Banking Act 1959 at any time during the financial year.

             (2)  The threshold amount, for the purposes of subparagraphs (1)(c)(i) and (ii), is $250,000, or any other amount prescribed by the regulations for the purposes of this subsection.

             (3)  Revenue and consolidated revenue 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.

50AAA  Associated entities

             (1)  One entity (the associate) is an associated entity of another entity (the principal) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.

             (2)  This subsection is satisfied if the associate and the principal are related bodies corporate.

             (3)  This subsection is satisfied if the principal controls the associate.

             (4)  This subsection is satisfied if:

                     (a)  the associate controls the principal; and

                     (b)  the operations, resources or affairs of the principal are material to the associate.

             (5)  This subsection is satisfied if:

                     (a)  the associate has a qualifying investment (see subsection (8)) in the principal; and

                     (b)  the associate has significant influence over the principal; and

                     (c)  the interest is material to the associate.

             (6)  This subsection is satisfied if:

                     (a)  the principal has a qualifying investment (see subsection (8)) in the associate; and

                     (b)  the principal has significant influence over the associate; and

                     (c)  the interest is material to the principal.

             (7)  This subsection is satisfied if:

                     (a)  an entity (the third entity) controls both the principal and the associate; and

                     (b)  the operations, resources or affairs of the principal and the associate are both material to the third entity.

             (8)  For the purposes of this section, one entity (the first entity) has a qualifying investment in another entity (the second entity) if the first entity:

                     (a)  has an asset that is an investment in the second entity; or

                     (b)  has an asset that is the beneficial interest in an investment in the second entity and has control over that asset.

50AA  Control

             (1)  For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.

             (2)  In determining whether the first entity has this capacity:

                     (a)  the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and

                     (b)  any practice or pattern of behaviour affecting the second entity’s financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

             (3)  The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.

             (4)  If the first entity:

                     (a)  has the capacity to influence decisions about the second entity’s financial and operating policies; and

                     (b)  is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity’s members;

the first entity is taken not to control the second entity.


 

Division 7Interpretation of other expressions

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 personal insolvency agreement 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 personal insolvency agreement or a person acting under such an authority; 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.

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 office holder 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.

             (3)  To avoid doubt, an Aboriginal and Torres Strait Islander corporation is taken to be a corporation for the purposes of this Act.

Note:          Various provisions of this Act that generally apply to corporations do not apply to Aboriginal and Torres Strait Islander corporations because of express provisions to that effect: see section 190B, subsection 197(5), section 206HB and subsections 1309(6), 1318(5), 1321(2) and 1335(3).

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 9.6A, be brought in any court.

Note:          The matters dealt with in Part 9.6A 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.

60  Declaration of relevant relationships

Administrator

             (1)  In this Act, a declaration of relevant relationships, in relation to an administrator of a company under administration, means a written declaration:

                     (a)  stating whether any of the following:

                              (i)  the administrator;

                             (ii)  if the administrator’s firm (if any) is a partnership—a partner in that partnership;

                            (iii)  if the administrator’s firm (if any) is a body corporate—that body corporate or an associate of that body corporate;

                            has, or has had within the preceding 24 months, a relationship with:

                            (iv)  the company; or

                             (v)  an associate of the company; or

                            (vi)  a former liquidator, or former provisional liquidator, of the company; or

                           (vii)  a person who is entitled to enforce a charge on the whole, or substantially the whole, of the company’s property; and

                     (b)  if so, stating the administrator’s reasons for believing that none of the relevant relationships result in the administrator having a conflict of interest or duty.

Liquidator

             (2)  In this Act, a declaration of relevant relationships, in relation to a liquidator of a company, means a written declaration:

                     (a)  stating whether any of the following:

                              (i)  the liquidator;

                             (ii)  if the liquidator’s firm (if any) is a partnership—a partner in that partnership;

                            (iii)  if the liquidator’s firm (if any) is a body corporate—that body corporate or an associate of that body corporate;

                            has, or has had within the preceding 24 months, a relationship with:

                            (iv)  the company; or

                             (v)  an associate of the company; or

                            (vi)  a former liquidator, or former provisional liquidator, of the company; or

                           (vii)  a former administrator of the company; or

                          (viii)  a former administrator of a deed of company arrangement executed by the company; and

                     (b)  if so, stating the liquidator’s reasons for believing that none of the relevant relationships result in the liquidator having a conflict of interest or duty.

64  Entering into a transaction in relation to shares or securities

                   A reference in 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.

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.

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.

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.

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.

86  Possession

                   A thing that is in a person’s custody or under a person’s control is in the person’s possession.

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.

88B  Qualified accountants

             (1)  For the purposes of this Act, a qualified accountant is a person covered by a declaration in force under subsection (2).

             (2)  ASIC may, in writing, declare that all members of a specified professional body, or all persons in a specified class of members of a specified professional body, are qualified accountants for the purposes of this Act.

             (3)  ASIC may, in writing, vary or revoke a declaration made under subsection (2).

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.

92  Securities

             (1)  Subject to this section, securities means:

                     (a)  debentures, stocks or bonds issued or proposed to be issued by a government; or

                     (b)  shares in, or debentures of, a body; or

                     (c)  interests in a managed investment scheme; or

                     (d)  units of such shares;

but does not include:

                      (f)  a derivative (as defined in Chapter 7), other than an option to acquire by way of transfer a security covered by paragraph (a), (b), (c) or (d); or

                     (g)  an excluded security.

Note:          A derivative does not include an option to acquire a security by way of issue (see the combined effect of paragraph 761D(3)(c), paragraph 764A(1)(a) and paragraph (d) of the definition of security in section 761A).

             (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

                     (d)  units of such shares;

but does not include:

                     (e)  a derivative (as defined in Chapter 7), other than an option to acquire by way of transfer a security covered by paragraph (a), (b), (c) or (d); or

                      (f)  an excluded security.

Note:          A derivative does not include an option to acquire a security by way of issue (see the note to subsection (1)).

             (3)  In Chapters 6 to 6CA (inclusive) and Part 1.2A:

securities means:

                     (a)  shares in a body; or

                     (b)  debentures of a body; or

                     (c)  interests in a registered managed investment scheme; or

                     (d)  legal or equitable rights or interests in:

                              (i)  shares; or

                             (ii)  debentures; or

                            (iii)  interests in a registered managed investment scheme;

                     (e)  options to acquire (whether by way of issue or transfer) a security covered by paragraph (a), (b), (c) or (d).

It does not cover:

                      (f)  a derivative (as defined in Chapter 7), other than an option to acquire by way of transfer a security covered by paragraph (a), (b), (c) or (d); or

                     (g)  a market traded option.

Note:          A derivative does not include an option to acquire a security by way of issue (see the note to subsection (1)).

Note:          Section 9 defines body.

             (4)  In Chapter 6D securities has the meaning given by section 700 and in Chapter 7 security has the meaning given by section 761A.

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.


 

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 or 601CD; 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.

Note:          Section 1101H provides that a failure to comply with requirements of Chapter 7 generally does not affect the validity or enforceability of any transaction, contract or other arrangement.

             (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.

107  Notice in relation to top 20 members of a class

                   For the purposes of subsection 163(3B), section 178B and paragraph 601BC(2)(lc), if 2 or more members in the top 20 members of a class of shares each hold the same number of shares, details of each of those members must be included in any notice given in relation to those provisions.

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 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:

                     (a)  any other provision of this Act, or any provision of another law, that permits; or

                     (b)  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, 111AFA, 111AG or 111AI; and

                     (b)  they are not declared under section 111AJ not to be ED securities.

             (2)  For the purposes of sections 111AE, 111AF, 111AG and 111AI, a class of shares or debentures is taken to include units of shares or debentures in that class.

111AE  Securities of body or undertaking that is included in a licensed market’s official list

             (1)  If:

                     (a)  a body corporate is, with its agreement, consent or acquiescence, included in the official list of a prescribed financial market; and

                     (b)  the market’s listing rules (according to their terms) apply to the body in relation to a class (which may be some or all) of securities issued by the body;

securities issued by the body in that class are ED securities, and that market is a listing market in relation to that body.

          (1A)  If:

                     (a)  an undertaking to which interests in a registered scheme relates is, with the agreement, consent or acquiescence of the responsible entity, included in the official list of a prescribed financial market; and

                     (b)  the market’s listing rules (according to their terms) apply to the undertaking in relation to a class (which may be some or all) of managed investment products that relate to the scheme;

managed investment products in that class that relate to the scheme are ED securities, and that market is a listing market in relation to the undertaking.

             (2)  Subsections (1) and (1A) do not apply to securities of a body if:

                     (a)  the body is a public authority of the Commonwealth or an instrumentality or agency of the Crown in right of the Commonwealth; and

                     (b)  the only securities issued by the body that would otherwise be ED securities because of subsection (1) or (1A) are debentures; and

                     (c)  both the repayment of principal, and the payment of interest, in respect of those debentures is guaranteed by the Commonwealth.

             (3)  Subsections (1) and (1A) do not apply to securities of a body that is:

                     (a)  a public authority of a State or Territory; or

                     (b)  an instrumentality or agency of the Crown in right of a State or Territory.

111AF  Securities (except debentures and managed investment products) held by 100 or more persons

             (1)  Securities (except debentures or managed investment products) 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; and

                     (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).

             (2)  Securities (except debentures and managed investment products) in a class of securities of a body are ED securities if securities in that class have been issued under a recognised offer and the offeror’s records indicate that 100 or more people who reside in this jurisdiction have held securities in that class (whether or not as a result of the recognised offer) at all times since the issue.

111AFA  Managed investment products held by 100 or more persons

             (1)  Managed investment products in a class of managed investment products issued by a body are ED securities if 100 or more people hold managed investment products in that class as a result of offers that gave rise to obligations to give Product Disclosure Statements (whether or not all in the same terms) under Chapter 7.

             (2)  Interests in a class of interests in a managed investment scheme issued by a body are ED securities if interests in that class have been issued under a recognised offer and the offeror’s records indicate that 100 or more people who reside in this jurisdiction have held interests in that class (whether or not as a result of the recognised offer) at all times since the issue.

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, 111AFA and 111AG

             (1)  For the purposes of sections 111AF, 111AFA and 111AG, a person holds securities if, and only if:

                     (a)  the person is registered as the holder of the securities in a register under section 169, 170, 171 or 601CZB; or

                     (b)  the person is entitled to be so registered.

             (2)  For the purposes of sections 111AF, 111AFA and 111AG, joint holders of securities count as one person.

111AI  Debentures

                   Debentures of a borrower are ED securities if:

                     (a)  section 283AA requires the borrower to appoint a trustee; or

                     (b)  section 283AA does not apply to the borrower only because the offer of the debentures to which section 283AA would otherwise have applied is a recognised offer.

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 incorporated or formed in Australia 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 674 and 675.

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.

111AQA  Product Disclosure Statement relief

                   Obligations that apply to disclosing entities can be taken into account in deciding what information should be included in a Product Disclosure Statement—see section 1013FA and paragraph 1013F(2)(d).


 

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 674 and 675.

             (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 and 198E]

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 198A, 198E, 202C, subsection 202F(1), sections 248A‑248G, 251A]

1.9 Shareholders

                   The shareholders of a company own the company, but the company has a separate legal existence and the company’s assets belong to the company.

                   Shareholders can make decisions about the company by passing a resolution, usually at a meeting. A “special resolution” usually 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 Australia 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.

[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 or ABN (if the last 9 digits are the same, and in the same order, as the last 9 digits of its ACN) must appear:

•    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 Extract of particulars

                   Each year, ASIC issues each company with an extract of particulars within 2 weeks of the company’s review date (which is generally the anniversary of the company’s registration). The extract includes details recorded on ASIC’s database such as:

•    names and addresses of each director and company secretary;

•    issued shares and options granted;

•    details of its shareholders;

•    address of its registered office;

•    address of its principal place of business.

                   If any of the details are not correct as at the date the extract is received, the company must correct those details.

                   The correction may be lodged with ASIC on a printed form or, if an agreement is in place to lodge electronically, in accordance with the agreement.

[Sections 346A and 346C, 352]

4.3 Review fee

                   A company must pay a review fee to ASIC each year.

[Corporations (Review Fees) Act 2003]

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...

see section...

1

a company issues shares

within 28 days after the issue

254X

2

a company changes the location of a register

within 7 days after the change

172, 1302

3

a company changes the address of its registered office or principal place of business

within 28 days after the change

142, 146

4

a company changes its directors or company secretary

within 28 days after the change (unless the director or company secretary has notified ASIC of the change)

205B

5

there is a change in the name or address of the company’s directors or secretary

within 28 days after the change

205B

6

a company creates certain kinds of charges

within 45 days after the charge is created

263

7

a company has a new ultimate holding company, or details about the ultimate holding company change

within 28 days after the change happens

349A

8

any of the changes in items 1 to 7 means that:

(a) the company must add or alter particulars in its member register kept under section 169; or

(b) the company must add or alter particulars in its member register kept under section 169, and as a result, details about the number and class of shares on issue, or the amount paid and unpaid on the shares, alter.

within the time determined under the table in section 178D

178A

178C

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. A director who resigns may notify ASIC of the resignation. If the director does not do so, the company must notify ASIC of the director’s resignation.

[sections 9, 201A, 201B, 201D, 205A, 205B and 206A‑206G, 228‑230 and 242 and subsection 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 201G]

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 other than a proprietary company must have a company secretary. However, a proprietary company may choose to 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. A company secretary who resigns may notify ASIC of the resignation. If the company secretary does not do so, the company must notify ASIC of the company secretary’s 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

•    notifies ASIC about changes to the register of members; and

•    notifies ASIC about changes to any ultimate holding company; and

•    responds, if necessary, to an extract of particulars that it receives and that it responds to any return of particulars that it receives.

                   A company secretary’s obligations may continue even after the company has been deregistered.

[sections 83, 142, 178A, 178C, 188, 204A‑204G, 205A, 205B, 346C, 348D, 349A, 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]

                   A company is not required to have a common seal. If it does, the seal must show the company’s name and its ACN or ABN (if the last 9 digits are the same, and in the same order, as the last 9 digits of its ACN). 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, 1317E, 1317G, 1317H, 1317P]

9.1 Dividends

                   Dividends are payments to shareholders. They can only be paid if:

•    the company’s assets are sufficiently in excess of its liabilities immediately before the dividend is declared; and

•    the payment of the dividend is fair and reasonable to the company’s shareholders as a whole and does not materially prejudice the company’s ability to pay its creditors.

                   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 232‑235, 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 707, 1041H, 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.

[Parts 5.4, 5.4B, 5.5].

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, 5.6]

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

601BA

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.

          (3A)  An offence based on subsection (3) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

             (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.

             (3)  An offence based on subsection (1) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

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;

                           (iia)  whether the shares each member agrees in writing to take up will be fully paid on registration;

                            (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;

                            (iv)  whether or not the shares each member agrees in writing to take up will be beneficially owned by the member on registration;

                      (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;

                  (ma)  whether or not, on registration, the company will have an ultimate holding company;

                  (mb)  if, on registration, the company will have an ultimate holding company—the following:

                              (i)  the name of the ultimate holding company;

                             (ii)  if the ultimate holding company is registered in Australia—its ABN, ACN or ARBN;

                            (iii)  if the ultimate holding company is not registered in Australia—the place at which it was incorporated or formed;

                     (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.

             (6)  An offence based on subsection (5) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

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 and either:

                              (i)  the expression “Australian Company Number” and the company’s ACN; or

                             (ii)  if the last 9 digits of the company’s ABN are the same, and in the same order, as the last 9 digits of its ACN—the expression “Australian Business Number” and the company’s ABN.

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).

             (4)  An offence based on subsection (3) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.


 

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.

             (6)  An offence based on subsection (5) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

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

             (1)  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.

             (2)  An offence based on subsection (1) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

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)

22A

When notice under paragraph 249J(3)(cb) is given

249J(5)

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

 

33A

Pre‑emption for existing shareholders on issue of shares

in proprietary company

254D

33B

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

1072A

36

Transmission of shares on bankruptcy

1072B

37

Transmission of shares on mental incapacity

1072D

38

Registration of transfers

1072F

39

Additional general discretion for directors of proprietary companies to refuse to register transfers

1072G


 

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 1:       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)).

Note 2:       Communications and notices from ASIC may also be addressed to the company’s contact address (see section 146A).

             (2)  A company must lodge notice of a change of address of its registered office with ASIC not later than 28 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).

          (2A)  An offence based on subsection (1) or (2) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

             (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).

          (1A)  An offence based on subsection (1) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

             (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 28 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.

             (3)  An offence based on subsection (1) or (2) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

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.

             (4)  An offence based on subsection (1) or (3) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

146  Change of address of principal place of business

             (1)  A company must lodge with ASIC notice of a change of the address of its principal place of business not later than 28 days after the date on which the change occurs. The notice must be in the prescribed form.

             (2)  An offence based on subsection (1) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

146A  Contact address

             (1)  A company may have a contact address (whether or not in this jurisdiction). Communications and notices from ASIC to the company may be addressed to its contact address.

             (2)  If a company is to have a contact address, the company must lodge notice of the address 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.

             (6)  An offence based on subsection (2), (3), (4) or (5) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

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

9

Australian Business Number

ABN

             (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.

             (3)  An offence based on subsection (2) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

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