NOTE: Section 82 of the Corporations Act 1989 contains the Corporations Law. The material in this volume is a continuation of section 82 of the Corporations Act 1989 and the Corporations Law from the previous volume.
Chapter 2—Constitution of companies
Part 2.1—Restrictions on forming certain entities
112 Outsize partnerships and associations
(1) An outsize partnership or association must not be formed unless it is incorporated or formed under:
(a) a law of the Commonwealth or of this or another jurisdiction; or
(b) letters patent.
(2) A person must not participate in the formation of an outsize partnership or association unless it is incorporated or formed under:
(a) a law of the Commonwealth or of this or another jurisdiction; or
(b) letters patent.
(3) For the purposes of this section, a partnership or association is outsize if, and only if, it:
(a) has for one or more of its objects the acquisition of gain by the partnership or association or any of its members; and
(b) consists of more than:
(i) if the partnership or association is formed to carry on a profession or calling of a kind specified in an application order—the number of persons specified in the application order in relation to that kind of profession or calling; or
(ii) in any other case—20 persons.
Part 2.2—Registration of companies
Division 1—Incorporation by registration
114 Formation of companies
(1) Proprietary companies
One or more persons may form a proprietary company by:
(a) subscribing their name to a memorandum; and
(b) complying with the registration requirements for proprietary companies set out in this Division.
(2) Public companies
Five or more persons may form a public company by:
(a) subscribing their names to a memorandum; and
(b) complying with the registration requirements for public companies set out in this Division.
115 Classes of companies
(1) A company registered under this Division may be:
(a) a company limited by shares;
(b) a company limited by guarantee;
(c) a company limited both by shares and by guarantee; or
(d) an unlimited company.
(2) A mining company registered under this Division may be a no liability company.
116 Proprietary companies
(1) A company must comply with subsection (2) if it is to:
(a) be registered as a proprietary company; or
(b) convert to a proprietary company; or
(c) remain registered as a proprietary company.
(2) A proprietary company:
(a) must be either:
(i) limited by shares; or
(ii) an unlimited company that has a share capital; and
(b) must have no more than 50 non‑employee shareholders.
A company limited both by shares and by guarantee cannot be a proprietary company. A no liability company cannot be a proprietary company.
Note 1: If a proprietary company contravenes this subsection, one consequence is that the ASC may require it to convert to a public company (see section 170).
Note 2: See section 1407 for the application of subparagraph (2)(a)(i) to proprietary companies that are limited both by shares and by guarantee under this Law as in force immediately before the commencement of this section.
(3) In applying paragraph (2)(b):
(a) count joint holders of a particular parcel of shares as one 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.
(4) Subject to subsection (5), a proprietary company must not engage in any activity that would require the lodgment of a prospectus under Part 7.12 or a corresponding law.
Note: If a proprietary company contravenes this subsection, one consequence is that the ASC may require it to convert to a public company (see section 170).
(5) Subsection (4) does not apply to an offer of shares to:
(a) existing shareholders of the company; or
(b) employees of the company or a subsidiary of the company.
(6) Effect of breaching prospectus limitations
An act or transaction is not invalid merely because of a contravention of subsection (4).
117 Requirements as to memorandum
(1) The memorandum of a company shall be printed, divided into numbered paragraphs, dated, and signed by the persons desiring the formation of the company, and shall, in addition to other requirements, state:
(a) the name of the company or that the company’s name on registration is to be its registration number;
(b) unless the company is an unlimited company—the amount of share capital (if any) with which the company proposes to be registered and the division of that share capital into shares of a fixed amount;
(c) if the company is a company limited by shares—that the liability of the members is limited;
(d) if the company is a company limited by guarantee or a company limited both by shares and by guarantee—that the liability of the members is limited and that each member undertakes to contribute to the company’s property if the company is wound up while he, she or it is a member or within one year after he, she or it ceases to be a member, for payment of the company’s debts and liabilities contracted before he, she or it ceases to be a member and of the costs, charges and expenses of winding up and for adjustment of the rights of the contributories among themselves, such amount as may be required not exceeding a specified amount in addition to the amount (if any) unpaid on any shares held by him, her or it;
(e) if the company is an unlimited company—that the liability of the members is unlimited;
(f) if the company is a no liability company—that the acceptance of shares in the company does not constitute a contract to pay calls in respect of the shares or to make any contribution towards the company’s debts and liabilities;
(g) the full names, addresses and occupations of the subscribers to the memorandum being natural persons, and the corporate names, and the addresses of the registered or principal offices, of the subscribers to the memorandum being bodies corporate; and
(h) that those subscribers wish to form a company pursuant to the memorandum and (if the company is to have a share capital) respectively agree to take the number of shares in the capital of the company set out opposite their respective names.
(2) The memorandum of a company may state the objects of the company.
(3) Each subscriber to the memorandum shall:
(a) if the company is to have a share capital—state in words:
(i) the number of shares (being at least one) that the subscriber agrees to take; and
(ii) if the shares in the company are divided into classes—the class or the respective classes in which the shares that the subscriber agrees to take are included; and
(b) in any case—sign the memorandum in the presence of at least one witness (not being another subscriber).
(4) A witness to the signature of a subscriber to the memorandum shall attest the signature and add his or her address.
(5) A statement in the memorandum of a company limited by shares that the liability of members is limited means that the liability of the members is limited to the amount (if any) unpaid on the shares respectively held by them.
118 Registration application
(1) Persons desiring the incorporation of a company may lodge an application in the prescribed form for the registration of the company under this Division.
(2) The application must:
(a) state that it is desired to incorporate the company under the Corporations Law of this jurisdiction; and
(b) contain the prescribed information and matters; and
(c) be accompanied by:
(i) in any case—the prescribed documents (if any); and
(ii) unless subsection (3) applies—the memorandum, and the articles (if any), of the proposed company.
(3) If:
(a) the proposed company’s memorandum states the matters that are required to be stated under paragraphs 117(1)(a), (b), (c) and (g); and
(b) the company is to be registered as a proprietary company;
the application must also set out those matters.
(4) The application shall be signed by:
(a) if subsection (3) applies—each subscriber; or
(b) otherwise—at least one subscriber;
to the proposed company’s memorandum, in the presence of at least one witness (not being another subscriber).
(5) A witness to a signature that is required by this section shall attest the signature and add his or her address.
119 Power to require production of unlodged memorandum
(1) Where an application under section 118:
(a) is not accompanied by the proposed company’s memorandum; and
(b) purports to comply with subsection 118(3);
the Commission may, even if it has no reason to suspect that the application was not made in accordance with that section, refuse to register the company under this Division unless and until the memorandum has been lodged.
(2) Where:
(a) a memorandum is lodged under subsection (1); and
(b) the Commission registers the company but is not required to register the memorandum;
the Commission shall, when it issues a certificate to the company under section 121, give the memorandum to the company.
120 Registration
(1) Subject to this Law, where the Commission is satisfied that an application has been made in accordance with section 118, it shall:
(a) register the company by registering:
(i) in any case—the application; and
(ii) unless the company is registered as a company limited by shares and as a proprietary company—the company’s memorandum and articles (if any); and
(b) allot to the company a registration number distinct from the registration number of each body corporate (other than the company) already registered under this Part, Part 4.1 or a law corresponding to this Part or Part 4.1.
(2) The Commission must not register a company under this Division by a particular name unless that name is available within the meaning of section 367.
(3) Where an application under section 118:
(a) is not accompanied by the proposed company’s memorandum; and
(b) purports to comply with subsection 118(3);
the Commission may, unless it has reason to suspect to the contrary, assume without inquiry that:
(c) the application does so comply; and
(d) the persons who signed the application are the subscribers to the memorandum.
121 Certificate of registration
(1) On registering a company under this Division, the Commission shall prepare a certificate under its common seal that complies with this section and shall issue the certificate to the company.
(2) The certificate shall state that the company:
(a) is registered as a company under this Division of the Corporations Law of this jurisdiction; and
(b) because of that registration, is an incorporated company;
and shall specify the day of commencement of the registration.
(3) The certificate shall state that the company is:
(a) a company limited by shares;
(b) a company limited by guarantee;
(c) a company limited both by shares and by guarantee;
(d) an unlimited company; or
(e) a no liability company;
as the case requires.
(4) The certificate shall state that the company is a proprietary company or a public company, as the case requires.
(5) The Commission shall keep a copy of a certificate issued under this section, and subsections 1274(2) and (5) apply in relation to that copy as if it were a document lodged with the Commission.
122 Evidentiary certificates
A certificate under the Commission’s common seal stating that a specified body corporate has been registered under Division 1 of Part 2.2 of the Corporations Law of this or another jurisdiction is conclusive evidence that:
(a) all requirements of that Law in respect of:
(i) registration of the body corporate as a company under that Division; and
(ii) matters preceding or incidental to the registration;
have been complied with; and
(b) the body corporate is duly registered as a company under that Division; and
(c) the day of commencement of the registration is the day (if any) specified as such in the certificate.
123 Incorporation
(1) Subject to this Law, on and from the day specified in a certificate under section 121 as the day of commencement of a company’s registration under this Division, the subscribers to the company’s memorandum, together with such other persons as from time to time become members of the company, are an incorporated company by the name stated in the memorandum.
(2) A company registered under this Division:
(a) is capable of performing all the functions of a body corporate;
(b) is capable of suing and being sued;
(c) has perpetual succession;
(d) shall have a common seal; and
(e) has power to acquire, hold and dispose of property.
124 Members
(1) The subscribers to a Division 1 company’s memorandum shall be deemed to have agreed to become members of the company and, on the company’s incorporation:
(a) each becomes such a member; and
(b) the name of each shall be entered in the company’s register of members.
(2) A Division 1 company’s members are, as such, liable to contribute in accordance with this Law to the company’s property in a winding up of the company.
125 Articles of association
(1) There may, in the case of a company limited by shares (other than a Table A proprietary company) or a no liability company, and there shall, in the case of a company limited by guarantee, a company limited both by shares and by guarantee or an unlimited company, be registered with the memorandum, articles signed by the subscribers to the memorandum prescribing regulations for the company.
(2) At any time before the registration under this Division of a Table A proprietary company, the subscribers to the company’s memorandum may sign articles prescribing regulations for the company.
(3) Where, as at the registration under this Division of a Table A proprietary company, no articles prescribing regulations for the company have been signed under subsection (2), the company may, at any time after that registration, make such articles by special resolution.
(4) Articles shall be:
(a) printed;
(b) divided into numbered paragraphs; and
(c) unless made under subsection (3)—signed by each subscriber to the memorandum in the presence of at least one witness (not being another subscriber).
(5) A witness to a signature to the articles of a subscriber to the memorandum shall attest the signature and add the address of the witness.
(6) In the case of an unlimited company that has a share capital, the articles shall state the amount of share capital with which the company proposes to be registered and the division of that share capital into shares of a fixed amount.
Division 2—Registration of existing companies
126 Existing companies taken to be registered under this Division
(1) This section applies to each body corporate that was, immediately before the commencement of this Division, incorporated, or taken to be incorporated, under a previous law of this jurisdiction corresponding to this Chapter.
(2) At the commencement of this Division, the body corporate is taken to be registered as a company under this Division.
129 Effect of body corporate being taken to be registered under this Division
(1) This section applies to each body corporate (in this section called the company) that is taken to be registered as a company under this Division.
(2) The Commission must, as soon as practicable after the commencement of this Division, allot to the company a registration number distinct from the registration number of each body corporate (other than the company) already registered under this Part, Part 4.1 or a law corresponding to this Part or Part 4.1.
(2A) If:
(a) before the commencement of this Division, the Commission allotted to the company a number purporting to be a registration number; and
(b) as at that commencement, that number is distinct from each number that purports to be a registration number and that the Commission has allotted to a body corporate (other than the company);
the number referred to in paragraph (a) is taken to have been allotted to the company under subsection (2) at that commencement.
(3) The company is taken to be registered as a company of whichever of the following classes:
(a) a company limited by shares;
(b) a company limited by guarantee;
(c) a company limited both by shares and by guarantee;
(d) an unlimited company;
(e) in the case of a mining company—a no liability company;
most nearly corresponds to the class in which the company was included under the corresponding previous law immediately before the commencement of this Division.
(4) The company is taken to be registered:
(a) if it was a proprietary company under the corresponding previous law—as a proprietary company; or
(b) in any other case—as a public company.
130 Constitution of Division 2 company
(1) This section applies to each body corporate that is taken to be registered as a company under this Division.
(2) The provisions that, at the time immediately before the commencement of this Division, formed part of the company’s memorandum, and any provisions that were at that time taken by a law of this jurisdiction to form part of that memorandum, are taken to be, with such modifications as the circumstances require:
(a) if the company is so registered as a company limited by shares and as a proprietary company—the company’s memorandum; or
(b) otherwise—the company’s registered memorandum;
and shall bind the company and its members accordingly.
(3) The provisions that at that time formed part of the company’s articles, and any provisions that were at that time taken by such a law to form part of those articles, are taken to be, with such modifications as the circumstances require:
(a) if paragraph (2)(a) applies—the company’s articles; or
(b) otherwise—the company’s registered articles;
and shall bind the company and its members accordingly.
131 Application of Law in relation to Division 2 companies
(1) Subject to this Law, a provision of this Law that applies in relation to a company shall be taken to apply in relation to a Division 2 company in relation to:
(a) the doing of an act or thing, an act or thing done, or a matter arising, before the Division 2 company’s registration day; or
(b) acts, things or matters including such an act, thing or matter, as the case may be;
unless:
(c) before that day, an act was done for the purposes of complying with a previous law corresponding to that provision; and
(d) the act would, if the Division 2 company had been a company, and this Law had been in operation, when the act was done, have constituted compliance with that provision as so applying.
(2) A provision applies as mentioned in subsection (1):
(a) as if a reference in the provision to a provision of this Law included a reference to a previous law corresponding to the last‑mentioned provision; and
(b) with such other modifications as the circumstances require.
132 Acts preparatory to external administration of Division 2 company
(1) This section applies where, as at the beginning of a Division 2 company’s registration day, an act or thing has been validly done by or in relation to the company under, or for the purposes of, a previous law corresponding to a provision of Chapter 5(other than Part 5.2).
(2) On and after the registration day, this Law (other than this Division) applies in relation to the company, with such modifications as the circumstances require, as if:
(a) the company had been a company, and this Law had been in operation, at the time when that act or thing was so done; and
(b) that act or thing had been validly done at that time under or for the purposes of that provision of that Chapter.
(3) Nothing in this section makes a person guilty of a contravention of this Law in respect of an act or thing done, or an omission made, before the company’s registration day.
Division 3—Registering non‑companies as companies
133 Non‑company may apply for registration
(1) A non‑company may lodge an application to be registered as a company under this Division.
(2) The Commission shall grant an application under this Division if, and only if:
(a) the Commission is satisfied that neither of sections 134 and 135 disentitles the applicant from being registered under this Division; and
(b) the application was made in accordance with section 136.
134 Externally‑administered body corporate not to be registered
A non‑company is not entitled to be registered under this Division if:
(a) it is an externally‑administered body corporate; or
(b) an application has been made to a court (in Australia or elsewhere):
(i) to wind up the non‑company; or
(ii) for the approval of a compromise or arrangement between the non‑company and another person;
and has not been dealt with.
135 Prerequisites to eligibility
A non‑company is not entitled to be registered under this Division unless:
(a) under the law of its place of origin:
(i) transfer of its incorporation is authorised;
(ii) it is of a class that is the same, or substantially the same, as one of the classes of companies referred to in subsection 137(3);
(iii) if the liability of its members is limited—the extent to which, and the manner in which, that liability is limited is defined in its constitution; and
(iv) if it has a share capital and the liability of its members is limited—its capital is of a fixed amount and is divided into shares of a fixed amount; and
(b) it has complied with the requirements (if any) of that law in relation to transfer of its incorporation; and
(c) if that law does not require its members, or a specified proportion of them, to consent to transfer of its incorporation—transfer of its incorporation has been consented to by at least three‑quarters of such of its members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at a meeting of which at least 21 days notice is given specifying the intention to apply for the transfer.
136 Form and content of application
(1) An application by a non‑company under section 133 shall be in writing in the prescribed form and shall be accompanied by:
(a) a certified copy of a current certificate of its incorporation in its place of origin or a document of similar effect;
(b) evidence acceptable to the Commission that neither of sections 134 and 135 disentitles it from being registered under this Division;
(c) a certified printed copy of its constitution;
(d) if it is applying to be registered as a company having a share capital—a statement specifying:
(i) its nominal share capital and the number and classes into which the share capital is divided;
(ii) the number of shares taken up and the amount paid on each; and
(iii) subject to subsection (3), the full name, or the surname together with at least one given name and any other initials, and the address, of each shareholder and the number and class of shares held by each;
(e) unless it is a registered foreign company—in relation to each existing charge on its property that would be a registrable charge within the meaning of Part 3.5 if it were a company, the documents that subsection 263(3) requires to be lodged; and
(f) such other documents and information (if any) as are prescribed or as the Commission requires by written notice given to the non‑company.
(2) Where a document is required by or under subsection (1) to be lodged and:
(a) the document has previously been lodged under Part 4.1 or a corresponding law; or
(b) the document has previously been lodged with a person under the foreign companies law of a jurisdiction and the Commission now has the document;
the Commission may dispense with the requirement.
(3) Subparagraph (1)(d)(iii) does not apply in relation to a non‑company that has more than 500 members and satisfies the Commission that it will:
(a) keep its principal Australian register at a place within 25 kilometres of an office of the Commission; and
(b) provide reasonable accommodation and facilities for persons to inspect, and take copies of, its list of members and its particulars of shares transferred.
(4) The application may ask for registration as a proprietary company.
137 Registration of applicant as a company
(1) This section has effect where the Commission grants an application under this Division.
(2) The Commission shall register the applicant as a company by registering the application, and shall allot to the company a registration number distinct from the registration number of each body corporate (other than the company) already registered under this Part, Part 4.1 or a law corresponding to this Part or Part 4.1.
(3) The Commission shall register the applicant as a company of whichever of the following classes:
(a) a company limited by shares;
(b) a company limited by guarantee;
(c) a company limited both by shares and by guarantee;
(d) an unlimited company;
(e) in the case of a mining company—a no liability company;
most nearly corresponds to the class in which the applicant is included under the law of its place of origin.
(4) The Commission must register the applicant as a proprietary company if:
(a) it is limited by shares or is an unlimited company that has a share capital; and
(b) it has no more than 50 non‑employee shareholders; and
(c) its application asks for registration as a proprietary company.
(4A) In applying paragraph (4)(b):
(a) count joint holders of a particular parcel of shares as one 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.
(5) Otherwise, the Commission shall register the applicant as a public company.
138 Registered body
Where a registered body becomes registered under this Division or a corresponding law, the Commission must remove the body’s name from the register kept for the purposes of Division 1 or 2, as the case requires, of Part 4.1 and of each law corresponding to that Division, but may keep any or all of the documents that were lodged or registered under that Division and relate to the body.
139 Constitution of Division 3 company
(1) This section applies where a non‑company is registered as a company under this Division.
(2) Such provisions of the non‑company’s constitution as this Law would, if the non‑company had originally been incorporated under Division 1 on its registration day, have required its memorandum to include shall be deemed to be the company’s registered memorandum and bind the company and its members accordingly.
(3) The other provisions of the constitution shall be deemed to be the company’s registered articles and bind the company and its members accordingly.
(4) If the constitution, or a part of it, is in a language other than English, the translation of the constitution or part into English that was lodged with the application for registration shall, even if incorrect, be deemed for the purposes of subsections (2) and (3) to be the constitution or part, to the exclusion of the constitution or part itself.
140 Alterations of constitution
(1) A non‑company that is registered under this Division as a company of a particular class shall, within 90 days after its registration day, make by special resolution such alterations (if any) of its constitution as:
(a) are necessary to express in Australian currency any amounts of money specified in the constitution;
(b) are necessary to ensure that the constitution complies with the requirements of this Law relating to the constitutions of Division 1 companies in that class; and
(c) are necessary or expedient to give effect to, or are incidental to giving effect to, this Part.
(2) Where a company is required by virtue of paragraph (1)(a) to alter its constitution, the alterations shall all be made on the basis of a single rate fixed by a resolution of the company passed before the resolution making the alterations, and the resolution fixing the rate, when passed under this subsection, shall be deemed, for the purposes of section 256, to be a special resolution.
(3) A company that subsection (1) requires to alter its constitution shall, if the Commission so directs, apply to the Court, within a period specified by the Commission, for an order approving the constitution as altered under that subsection.
(4) On an application under subsection (3), the Court may, if satisfied that the resolution altering the company’s constitution has been duly passed and that the alterations comply with subsection (1), make an order approving the constitution as altered under subsection (1), or approving it with specified modifications.
(5) Subject to subsection (6), section 171 applies in relation to a resolution under subsection (1), or an order under subsection (4), of this section, as if a reference in subsection 171(2), (3), (5) or (9) to the memorandum of a company were a reference to the altered constitution.
(6) Where, but for this subsection, subsection (5) and section 171 would require a company to lodge a printed copy of its constitution as altered by a resolution under subsection (1), or an order under subsection (4), of this section, the company may instead lodge a copy of the resolution or an office copy of the order, as the case may be, and, if its memorandum has been altered by the resolution or order, a printed copy of the memorandum as so altered.
(7) As from the time when alterations under this section of the constitution of a company having a share capital take effect:
(a) the amount of the nominal share capital, and the nominal value of each share, shall be taken to be the amount and value respectively specified in the altered constitution;
(b) a person who, immediately before that time, held shares in the company in a particular class holds the same number of shares in that class as immediately before that time; and
(c) the amount paid up on a share in the company shall be deemed to be an amount in Australian currency that bears to the nominal value of the share under the altered constitution the same proportion as, immediately before that time, the amount paid up on the share bore to the share’s nominal value, and the amount of the share capital paid up shall be calculated accordingly.
141 Share warrants
(1) The bearer of a share warrant issued by a Division 3 company before its registration day is entitled, on surrendering the share warrant to the company for cancellation, to have the bearer’s name entered as a member in the company’s register of members.
(2) A Division 3 company is liable to compensate a person for any loss incurred by the person because of the company entering in its register of members the name of the bearer of a share warrant issued by the company, before its registration day, in respect of shares specified in the share warrant, without the share warrant being surrendered and cancelled.
(3) Subject to this section, the articles of a Division 3 company may provide that the bearer of a share warrant in relation to shares in the company is to be deemed to be a member of the company for all purposes or for specified purposes.
Division 4—Registering recognised companies as companies
142 Recognised company may apply for registration
(1) A recognised company may lodge an application to be registered as a company under this Division.
(2) The Commission must grant an application under this Division if, and only if:
(a) the Commission is satisfied that section 143 does not disentitle the applicant from being registered under this Division; and
(b) the application was made in accordance with section 144.
143 Externally‑administered body corporate not to be registered
A recognised company is not entitled to be registered under this Division if:
(a) it is an externally‑administered body corporate; or
(b) an application has been made to a court (in Australia or elsewhere):
(i) to wind up the recognised company; or
(ii) for the approval of a compromise or arrangement between the recognised company and another person;
and has not been dealt with.
144 Form and content of application
(1) An application by a recognised company under section 142 must be in writing in the prescribed form and must be accompanied by:
(a) a certificate issued to the recognised company, not earlier than one month before the date when the application is lodged, under the provisions of the Corporations Law of the recognised company’s place of origin that correspond to Division 4A; and
(b) evidence acceptable to the Commission that section 143 does not disentitle it from being registered under this Division; and
(c) such other documents and information (if any) as are prescribed or as the Commission requires by written notice given to the recognised company.
(2) Where:
(a) a document is required by or under subsection (1) to be lodged; and
(b) the document has previously been lodged with the NCSC or the Commission; and
(c) the Commission now has the document;
the Commission may dispense with the requirement.
145 Registration of applicant as a company
(1) This section has effect where the Commission grants an application under this Division.
(2) The Commission must register the applicant as a company by registering the application and must allot to the company a registration number distinct from the registration number of each body corporate (other than the company) already registered under this Part, Part 4.1 or a law corresponding to this Part or Part 4.1.
(3) The Commission must register the applicant as a company of whichever of the following classes:
(a) a company limited by shares;
(b) a company limited by guarantee;
(c) a company limited both by shares and by guarantee;
(d) an unlimited company;
(e) in the case of a mining company—a no liability company;
corresponds to the class in which the applicant is included under the law of its place of origin.
(4) The Commission must register the applicant:
(a) if the applicant was registered as a proprietary company in its place of origin—as a proprietary company; or
(b) if the applicant was registered as a public company in its place of origin—as a public company.
146 Constitution of Division 4 company
(1) This section applies where a recognised company is registered as a company under this Division.
(2) Such provisions of the recognised company’s constitution as this Law would, if the recognised company had originally been incorporated under Division 1 on its registration day, have required its memorandum to include are taken to be the company’s registered memorandum and bind the company and its members accordingly.
(3) The other provisions of the constitution are taken to be the company’s registered articles and bind the company and its members accordingly.
(4) Where any of the documents making up a recognised company’s constitution is or are in a language other than English:
(a) a reference in this section to the constitution is a reference to the translation of the document or documents concerned into the English language that was lodged with the application for registration under this Division, irrespective of the correctness of the translation; but
(b) nothing in this subsection affects any liability of the recognised company or its members existing immediately before the registration of the recognised company under this Division.
Division 4A—Transfer of company’s incorporation to another jurisdiction
147 Certificate authorising application for transfer of incorporation
(1) A company may apply to the Commission for a certificate authorising it to apply for registration as a company under the Corporations Law of another jurisdiction.
(2) An application under subsection (1) must be in the prescribed form and must be accompanied by:
(a) a declaration in writing signed by the directors of the company or, if the company has more than 2 directors, a majority of the directors, to the effect that they have made an inquiry into the affairs of the company and that at a meeting of directors have formed an opinion that the company will be able to pay its debts as they fall due; and
(b) a report in the prescribed form as to affairs of the company, made up to the latest practicable date before the making of the application, showing the assets and liabilities of the company.
(3) On application under subsection (1), the Commission must issue a certificate if and only if:
(a) the company has passed a special resolution approving the application for the certificate; and
(b) the company has given to its creditors, in a manner approved by the Commission, notice of its intention to apply for such a certificate; and
(c) the Commission is not aware of any failure of the company to comply with any applicable requirement of this Law; and
(d) the Commission is not aware of any other reason why the certificate should not be granted; and
(e) both the Minister, and the Minister for this jurisdiction, have consented to the issuing of the certificate.
(4) A certificate may be issued under subsection (3) subject to such conditions as are specified in the certificate.
(5) With such modifications as are necessary, subsections 172(6) to (10) (inclusive) and section 173 apply to and in respect of the proposal, passing and lodging, and the cancellation or confirmation by the Court, of a special resolution relating to an application for a certificate under this section as if it were a special resolution under section 172.
147A Effect of registration of company under Corporations Law of another jurisdiction
Where, under the provisions of the Corporations Law of another jurisdiction that correspond to Division 4, the Commission registers a company as a company under that Corporations Law, the company ceases to be incorporated under this Law from the time at which it is taken, under the provision of that Corporations Law that corresponds to section 150, to be a company duly incorporated under that Corporations Law.
Division 5—Companies registered under Division 2, 3 or 4
148 Certificate of registration
(1) On registering a body corporate as a company under Division 3 or 4, the Commission shall prepare a certificate under its common seal that complies with this section and shall issue the certificate to the body.
(2) The certificate shall state that the body:
(a) is registered as a company under that Division of the Corporations Law of this jurisdiction; and
(b) because of that registration, is an incorporated company;
and shall specify the day of commencement of the registration.
(3) The certificate shall state that the body is:
(a) a company limited by shares;
(b) a company limited by guarantee;
(c) a company limited both by shares and by guarantee;
(d) an unlimited company; or
(e) a no liability company;
as the case requires.
(4) The certificate shall state that the body is a proprietary company or a public company, as the case requires.
(5) The Commission shall keep a copy of a certificate issued under this section, and subsections 1274(2) and (5) apply in relation to that copy as if it were a document lodged with the Commission.
149 Evidentiary certificates
A certificate under the Commission’s common seal stating that a specified body corporate has been registered under Division 3 or Division 4 of Part 2.2 of the Corporations Law of this or another jurisdiction is conclusive evidence that:
(a) all the requirements of that Law in respect of:
(i) registration of the body corporate as a company under that Division; and
(ii) matters preceding or incidental to the registration;
have been complied with; and
(b) the body corporate is duly registered as a company under that Division; and
(c) the day of commencement of the registration is the day (if any) specified as such in the certificate.
149A Effect of certificate issued under previous law
A certificate purporting to be issued, under a corresponding previous law, by the authority responsible for administering that law stating that a specified body corporate has been registered as a company under that or another corresponding previous law is conclusive evidence:
(a) that:
(i) all the requirements of the law concerned in respect of registration of the body corporate under that law; and
(ii) all matters precedent and incidental to the registration of the body corporate under that law;
have been complied with; and
(b) that the body corporate referred to in the certificate was duly registered as a company under that law and was taken to be a company duly incorporated under that law.
150 Effect of registration under Division 2, 3 or 4
(1) Where a body corporate is registered or taken to be registered under Division 2, 3 or 4, this section has effect during the period beginning at the start of the body’s registration day and ending when the body ceases to be registered under that Division.
(2) The body continues in existence, as a body corporate.
(3) The body is taken to be a company duly incorporated under this Law.
(6) The body:
(a) is capable of performing all the functions of a body corporate;
(b) is capable of suing and being sued;
(c) has perpetual succession;
(d) shall have a common seal; and
(e) has power to acquire, hold and dispose of property.
(7) The body’s members have such liability to contribute to the body’s property if the body is wound up under this Law as is provided for by this Law as it applies in relation to the body by virtue of this Division.
(8) Nothing in this section:
(a) creates a new legal entity;
(b) prejudices or affects the body’s identity or its continuity as a body corporate; or
(c) changes the body’s membership.
(9) Nothing in this section affects any act or thing done (including, for example, an appointment made or a resolution passed) before the body’s registration day under a power conferred by:
(a) the body’s constitution; or
(b) a law under which the body was incorporated or registered before that day.
(10) Nothing in this section or in subsection 139(4):
(a) affects the body’s property; or
(b) affects, except as provided by this Part (other than this section and that subsection), any rights, privileges, powers, authorities, duties, functions, liabilities (including liabilities in respect of offences) or obligations of the body, or of any other person, existing immediately before the body’s registration day.
(11) Nothing in this section:
(a) renders defective any legal proceedings; or
(b) prevents legal proceedings from being begun or continued by or against the body.
151 Application of Act to Division 2, 3 or 4 company
(1) Subsection 175(1) does not apply in relation to a Division 2 or 3 company unless its members, by special resolution, resolve that the subsection should apply to the company.
(2) Section 244 does not apply in relation to a Division 2, 3 or 4 company.
(3) Section 245 applies in relation to a Division 2, 3 or 4 company as if:
(a) subsection 245(2) were omitted; and
(b) there were omitted from paragraph 245(5)(b) “or (2)”.
(4) Section 290 applies in relation to a Division 2 or 3 company in relation to the bodies corporate that were its subsidiaries at the start of its registration day and, despite subsection 290(2), subsection 290(1) shall be complied with in relation to those bodies corporate within 12 months after that day.
(5) Division 2 of Part 5.6 applies in relation to a Division 3 or 4 company as if a reference in that Division to a past member of the company included a reference to a person who had been a member of the company but had ceased to be such a member before the company’s registration day, but such a person is liable to contribute to the company’s property only to an amount sufficient for:
(a) payment of debts and liabilities contracted by the company before that day;
(b) payment of the costs, charges and expenses of winding up the company, in so far as those costs, charges and expenses relate to the debts and liabilities referred to in paragraph (a); and
(c) the adjustment of the rights of the contributories among themselves, in so far as the adjustment relates to the debts and liabilities referred to in paragraph (a).
(6) The regulations may make modifications of this Act (other than this Part) as it applies in relation to a Division 3 or 4 company.
152 Establishment of registers and minute books
(1) Within 14 days after its registration day, a Division 2, 3 or 4 company shall:
(a) establish the registers that sections 216A, 271, 1047 and 1070 require to be kept;
(b) include in those registers such of the information that this Law requires to be included in those registers as is available to the company at that day;
(c) establish books to be used for the entry of minutes of proceedings of meetings for the purpose of compliance with section 258; and
(d) comply with subsection 259(1) in relation to those books.
(2) A Division 2 company that, immediately before its registration day:
(a) kept a register in accordance with a previous law corresponding to a provision referred to in paragraph (1)(a); or
(b) kept books for the purpose of complying with a previous law corresponding to section 258;
shall be deemed to have complied with paragraph (1)(a) or (c) in relation to that register or those books, as the case may be.
(3) Without limiting the generality of paragraph (1)(b), a Division 2 company that, immediately before its registration day:
(a) kept a register as mentioned in paragraph (2)(a); and
(b) was required by a previous law corresponding to a provision of this Law to include particular information in that register;
shall so include the information within 14 days after that day.
(3A) A Division 4 company that, immediately before its registration day:
(a) kept a register in accordance with a law corresponding to a provision referred to in paragraph (1)(a); or
(b) kept books for the purpose of complying with a law corresponding to section 258;
is taken to have complied with paragraph (1)(a) or (c) in relation to that register or those books, as the case may be.
(3B) Without limiting the generality of paragraph (1)(b), a Division 4 company that, immediately before its registration day:
(a) kept a register as mentioned in paragraph (3A)(a); and
(b) was required by a law corresponding to a provision of this Law to include particular information in that register;
must so include the information within 14 days after that day.
(4) Where, before the end of the period of 14 days referred to in subsection (1):
(a) under subsection 216F(1), 216F(3), 271(4), 1047(5) or 1070(2), a person requests a Division 2, 3 or 4 company to give to the person, or to make available for inspection by the person, a copy of, or of a part of, a register kept under this Law; or
(b) under subsection 259(2), a person requests a Division 2, 3 or 4 company to give to the person a copy of minutes of a general meeting;
the period within which the company is required to comply with the request shall be deemed to begin at the end of that period of 14 days.
Part 2.3—Legal capacity, powers and status
Division 1—Legal capacity and powers
159 Interpretation
In sections 160, 161 and 162:
(a) a reference to the doing of an act by a company includes a reference to the making of an agreement by the company and a reference to a transfer of property to or by the company; and
(b) a reference to legal capacity includes a reference to powers.
160 Object of sections 161 and 162
The object of sections 161 and 162 is:
(a) to abolish the doctrine of ultra vires in its application to companies; and
(b) without affecting the validity of a company’s dealings with outsiders, to ensure that the company’s officers and members give effect to provisions of the company’s constitution relating to objects or powers of the company;
and those sections shall be construed, and have effect, accordingly.
161 Legal capacity
(1) A company has, both within and outside this jurisdiction, the legal capacity of a natural person and, without limiting the generality of the foregoing, has, both within and outside this jurisdiction, power:
(a) to issue and allot fully or partly paid shares in the company;
(b) to issue debentures of the company;
(c) to distribute any of the property of the company among the members, in kind or otherwise;
(d) to give security by charging uncalled capital;
(e) to grant a floating charge on property of the company;
(f) to procure the company to be registered or recognised as a body corporate in any place outside this jurisdiction; and
(g) to do any other act that it is authorised to do by any other law (including a law of a foreign country).
(2) Subsection (1) has effect in relation to a company:
(a) subject to this Law (other than subsection 162(2));
(b) in a case where the company’s constitution contains an express or implied restriction on, or an express or implied prohibition of, the exercise by the company of any of its powers—despite any such restriction or prohibition;
(c) in a case where the memorandum of the company contains a provision stating the objects of the company—despite that fact; and
(d) despite subsection 162(2).
(3) The fact that the doing of an act by a company would not be, or is not, in its best interests does not affect its legal capacity to do the act.
162 Restrictions on companies
(1) A company’s constitution may contain an express restriction on, or an express prohibition of, the exercise by the company of a power of the company.
(2) Where:
(a) a company exercises a power contrary to an express restriction on, or an express prohibition of, the exercise of that power, being a restriction or prohibition contained in the company’s constitution; or
(b) the memorandum of a company contains a provision stating the objects of the company and the company does an act otherwise than in pursuance of those objects;
the company contravenes this subsection.
(3) An officer of a company who is involved in a contravention by the company of subsection (2) contravenes this subsection.
(4) A person who contravenes subsection (2) or (3) is not guilty of an offence.
(5) Where, by exercising a power as mentioned in paragraph (2)(a), or by doing an act as mentioned in paragraph (2)(b), a company contravenes subsection (2), the exercise of the power, or the act, as the case may be, is not invalid merely because of the contravention.
(6) An act of an officer of a company is not invalid merely because, by doing the act, the officer contravenes subsection (3).
(7) The fact that:
(a) by exercising a power as mentioned in paragraph (2)(a), or by doing an act as mentioned in paragraph (2)(b), a company contravened, or would contravene, subsection (2); or
(b) by doing a particular act, an officer of a company contravened, or would contravene, subsection (3);
may be asserted or relied on only in:
(c) a prosecution of a person for an offence against this Law;
(d) an application for an order under section 230;
(e) an application for an order under section 260;
(f) an application for an injunction under section 1324 to restrain the company from entering into an agreement;
(g) proceedings (other than an application for an injunction) by the company, or by a member of the company, against the present or former officers of the company; or
(h) an application by the Commission or by a member of the company for the winding up of the company.
(8) Where, if subsection (7) had not been enacted, the Court would have power under section 1324 to grant, on the application of a person, an injunction restraining a company, or an officer of a company, from engaging in particular conduct constituting a contravention of subsection (2) or (3), as the case may be, the Court may, on the application of that person, order the first‑mentioned company, or the officer, as the case may be, to pay damages to that person or any other person.
164 Persons having dealings with companies etc
(1) A person having dealings with a company is, subject to subsection (4), entitled to make, in relation to those dealings, the assumptions referred to in subsection (3) and, in any proceedings in relation to those dealings, any assertion by the company that the matters that the person is so entitled to assume were not correct shall be disregarded.
(2) A person having dealings with a person who has acquired or purports to have acquired title to property from a company (whether directly or indirectly) is, subject to subsection (5), entitled to make, in relation to the acquisition or purported acquisition of title from the company, the assumptions referred to in subsection (3) and, in any proceedings in relation to those dealings, any assertion by the company or by the second‑mentioned person that the matters that the first‑mentioned person is so entitled to assume were not correct shall be disregarded.
(3) The assumptions that a person is, by virtue of subsection (1) or (2), entitled to make in relation to dealings with a company, or in relation to an acquisition or purported acquisition from a company of title to property, as the case may be, are:
(a) that, at all relevant times, the company’s constitution has been complied with;
(b) that a person who appears, from notices or returns lodged under section 242 or 335 or with a person under a previous law corresponding to section 242 or 335, to be a director or a secretary of the company has been duly appointed and has authority to exercise the powers and perform the duties customarily exercised or performed by a director or by a secretary, as the case may be, of a company carrying on a business of the kind carried on by the company;
(c) that a person who is held out by the company to be an officer or agent of the company has been duly appointed and has authority to exercise the powers and perform the duties customarily exercised or performed by an officer of the kind concerned;
(d) that an officer or agent of the company who has authority to issue a document on behalf of the company has authority to warrant that the document is genuine and that an officer or agent of the company who has authority to issue a certified copy of a document on behalf of the company has authority to warrant that the copy is a true copy;
(e) that a document has been duly sealed by the company if it bears what appears to be an impression of the company’s seal and either:
(i) the sealing of the document appears to be witnessed by 2 people, one of whom may be assumed to be a director of the company because of paragraph (b) or (c) and the other of whom may be assumed to be a director or a secretary of the company because of those paragraphs; or
(ii) the sealing of the document appears to be witnessed by one person who may be assumed to be a director and a secretary of the company because of paragraph (b) or (c) but only if it is stated next to the signature that the person witnesses the sealing in the capacity of sole director and sole secretary of the company; and
(f) that the directors, the secretaries, the employees and the agents of the company properly perform their duties to the company.
(4) Despite subsection (1), a person is not entitled to make an assumption referred to in subsection (3) in relation to dealings with a company if:
(a) the person has actual knowledge that the matter that, but for this subsection, the person would be entitled to assume is not correct; or
(b) the person’s connection or relationship with the company is such that the person ought to know that the matter that, but for this subsection, the person would be entitled to assume is not correct;
and where, by virtue of this subsection, a person is not entitled to make a particular assumption in relation to dealings with a company, subsection (1) has no effect in relation to any assertion by the company in relation to the assumption.
(5) Despite subsection (2), a person is not entitled to make an assumption referred to in subsection (3) in relation to an acquisition or purported acquisition from a company of title to property if:
(a) the person has actual knowledge that the matter that, but for this subsection, the person would be entitled to assume is not correct; or
(b) the person’s connection or relationship with the company is such that the person ought to know that the matter that, but for this subsection, the person would be entitled to assume is not correct;
and where, by virtue of this subsection, a person is not entitled to make a particular assumption in relation to dealings with a company, subsection (2) has no effect in relation to any assertion by the company or by any other person in relation to the assumption.
165 Lodgment of documents etc not to constitute constructive notice
(1) Subject to subsection (2), a person shall not be taken to have knowledge of:
(a) a company’s memorandum or articles or any of the contents of a company’s memorandum or articles;
(b) a document or the contents of a document; or
(c) any particulars;
merely because of either or both of the following:
(d) the memorandum, the articles, the document or the particulars has or have been lodged with the Commission, or lodged with a person under a previous law corresponding to a provision of this Law;
(e) the memorandum, the articles, the document or the particulars is or are referred to in any other document that has been lodged with the Commission, or lodged with a person under a previous law corresponding to a provision of this Law.
(2) Subsection (1) does not apply in relation to a document, or in relation to the contents of a document, that has been lodged under Division 2 of Part 3.5, or with a person under a previous law corresponding to that Division, to the extent that the document relates to a charge that is registrable under that Division or law.
166 Effect of fraud
Section 164 operates:
(a) to entitle a person to make the assumptions referred to in subsection (3) of that section in relation to dealings with a company; or
(b) to entitle a person to make the assumptions referred to in subsection (3) of that section in relation to an acquisition or purported acquisition (whether direct or indirect) of title to property from a company;
even if a person referred to in paragraph 164(3)(b), (c) or (e) or an officer, agent or employee of the company referred to in paragraph 164(3)(d) or (f):
(c) has acted or is acting fraudulently in relation to the dealings, or in relation to the acquisition or purported acquisition of title to property from the company, as the case may be; or
(d) has forged a document that appears to have been sealed on behalf of the company;
unless the person referred to in paragraph (a) or (b) of this section has actual knowledge that the person referred to in paragraph 164(3)(b), (c) or (e), or the officer, agent or employee of the company referred to in paragraph 164(3)(d) or (f), has acted or is acting fraudulently, or has forged a document, as mentioned in paragraph (c) or (d) of this section.
166A Recognition of companies from other jurisdictions
(1) A recognised company has in this jurisdiction the same legal personality, capacity, powers and status as if it were a company.
(2) Without limiting the generality of subsection (1), a recognised company has power to hold land in this jurisdiction.
(3) Subsection (1) does not impose on a recognised company an obligation that it would not have if that subsection had not been enacted.
Division 2—Changes of status
167 Change of status
(1) Subject to this section:
(a) an unlimited company may convert to a limited company if:
(i) in any case—it was not, within the previous 3 years, a limited company that became an unlimited company under paragraph (e); and
(ii) in the case of a Division 2 company—it was not, within the previous 3 years, a limited company within the meaning of a previous law corresponding to paragraph (e) that became under that law an unlimited company within the meaning of that law; and
(b) a no liability company all the issued shares in which are fully paid up may convert to a company limited by shares; and
(c) a company limited by shares may convert to a company limited both by shares and by guarantee; and
(d) a company limited by guarantee may convert to a company limited both by shares and by guarantee; and
(e) a limited company may convert to an unlimited company; and
(f) a limited company that is a mining company may convert to a no liability company if all the shares in the company are fully paid up.
(2) Where a company lodges a written application for a change of status as provided by subsection (1) and, subject to subsections 173(1), (2) and (3) as applied by subsection (7) of this section, lodges with the application the necessary documents, the Commission shall issue to the company a certificate of registration:
(a) appropriate to the change of status applied for; and
(b) specifying, in addition to the particulars prescribed in respect of a certificate of registration of a company of that status, that the certificate is issued under this section;
and, on the issue of such a certificate, the company is a company having the status specified in the certificate.
(3) In subsections (2) and (5), necessary documents, in relation to an application under that subsection, means:
(a) a printed copy of a special resolution of the company:
(i) resolving to change the status of the company and specifying the status sought;
(ii) making such alterations to the memorandum of the company as are necessary to bring the memorandum into conformity with the requirements of this Law relating to the memorandum of a Division 1 company of the status sought;
(iii) if the company has articles otherwise than by virtue of subsection 175(2)—making such alterations and additions (if any) to the articles as are necessary to bring the articles into conformity with the requirements of this Law relating to the articles of a Division 1 company of the status sought;
(iv) otherwise—adopting such articles (if any) as are required by this Law to be registered in respect of a Division 1 company of the status sought or are proposed by the company as the registered articles of the company upon the change in its status; and
(v) changing the name of the company to a name by which it could be registered as a Division 1 company of the status sought;
(b) if, by a special resolution of a kind referred to in paragraph (a), the memorandum of the company is altered or the articles of the company are altered or added to, or articles are adopted by the company—a printed copy of the memorandum as altered, the articles as altered or added to, or the articles adopted, as the case may be;
(c) if the application is by a Table A proprietary company and:
(i) the articles of the company are neither altered nor added to; and
(ii) no articles are adopted;
by a special resolution of a kind referred to in paragraph (a)—a printed copy of the company’s articles; and
(d) in the case of an application by a limited company to convert to an unlimited company:
(i) the prescribed form of assent to the application subscribed by or on behalf of all the members of the company; and
(ii) a statement in writing by a director or secretary of the company verifying that the persons by whom or on whose behalf such a form of assent is subscribed constitute the whole membership of the company and, if a member has not subscribed the form in person, that the director or secretary making the statement has taken all reasonable steps to satisfy himself or herself that each person who subscribed the form was lawfully empowered so to do.
(4) Where the status of a company is changed under this section, notice of the change of status shall be published by the company in such manner (if any) as the Commission directs.
(5) The provisions of subsections 171(2) to (13), inclusive, do not apply in relation to an application under this section or in relation to necessary documents in relation to such an application.
(6) A special resolution passed for the purposes of an application under this section takes effect only on the issue under this section of a certificate of registration of the company to which the resolution relates.
(7) With such modifications as are necessary, subsections 172(6) to (10), inclusive, and section 173 apply to and in respect of the proposal, passing and lodging, and the cancellation or confirmation by the Court, of a special resolution relating to a change of status as if it were a special resolution under section 172.
(8) A change in the status of a company under this section does not operate:
(a) to create a new legal entity;
(b) to prejudice or affect the identity of the body corporate constituted by the company or its continuity as a body corporate;
(c) to affect the property, or the rights or obligations, of the company; or
(d) to render defective any legal proceedings by or against the company;
and any legal proceedings that could have been continued or commenced by or against the company before the change in its status may, notwithstanding the change in its status, be continued or commenced by or against it after the change in its status.
168 Change from public to proprietary company or vice versa
(1) A public company may convert to a proprietary company if it:
(a) lodges with the ASC a copy of a special resolution determining to convert to a proprietary company and specifying an appropriate alteration to its name; and
(b) complies with subsection 116(2).
(2) A proprietary company may convert to a public company by lodging with the ASC:
(a) a copy of a special resolution determining to convert to a public company and specifying an appropriate alteration to its name; and
(b) in the case of a Table A proprietary company—a copy of its memorandum and its articles (if any).
(3) On compliance by a company with subsection (1) or (2) and on the issue of a certificate of registration of the company altered accordingly, the company is a proprietary company or a public company, as the case requires.
(4) With such modifications as are necessary, subsections 172(6) to (10), inclusive, and section 173 apply in respect of the proposal, passing and lodging, and the cancellation or confirmation by the Court, of a special resolution relating to the conversion of a company under subsection (1) or (2) of this section as if it were a special resolution under section 172.
(5) A conversion of a company under subsection (1) or (2) does not operate:
(a) to create a new legal entity;
(b) to prejudice or affect the identity of the body corporate constituted by the company or its continuity as a body corporate;
(c) to affect the property, or the rights or obligations, of the company; or
(d) to render defective any legal proceedings by or against the company;
and any legal proceedings that could have been continued or commenced by or against the company before the conversion may, despite the conversion, be continued or commenced by or against it after the conversion.
169 Registration of Table A proprietary company’s constitution after change of status
Where a Table A proprietary company changes its status under section 167 or 168, the Commission shall register the memorandum, and the articles, of the company that were lodged under that section.
170 ASC may order a proprietary company to convert to a public company in certain circumstances
(1) The ASC may order a proprietary company to convert to a public company under section 168 if it is satisfied that the company has contravened subsection 116(2) or (4).
(2) The order:
(a) must be in writing; and
(b) must be given to the company; and
(c) must specify that the company must comply with the order within 2 months after the date on which the order is given to the company.
(3) A company must comply with an order given to it under subsection (1) within 2 months after the date on which the order is given to the company.
170A ASC may determine that a proprietary company is a public company in certain circumstances
(1) If a proprietary company contravenes subsection 170(3), the ASC may determine that the company ceases to be a proprietary company on the date specified in the determination.
(2) A determination:
(a) must be in writing; and
(b) must be given to the company; and
(c) must specify the date on which the company ceases to be a proprietary company.
(3) The effects of a determination are:
(a) the company is a public company on and from the date specified in the determination; and
(b) the company is taken to have omitted “Proprietary” or “Pty.”, as the case requires, from its name on and from that date.
Division 3—Memorandum and articles
171 General provisions as to alteration of memorandum
(1) The memorandum of a company may be altered to the extent, and in the manner, provided by this Law but not otherwise.
(2) Subject to any other provision of this Law requiring a resolution of a company, an order of the Court, or any other document, affecting the memorandum of a company to be lodged, the company shall, within 14 days after the passing of any such resolution, the making of any such order or the execution of any such document, lodge a copy of the resolution, an office copy of the order or a copy of the document, as the case may be.
(3) Subsection (2) does not apply in relation to a Table A proprietary company in relation to a resolution, order or document unless it affects the company’s memorandum in relation to the company’s name or share capital.
(4) On being required by the Commission to do so, a Table A proprietary company shall lodge a printed copy of its memorandum, even if the memorandum has not been altered.
(5) Where an alteration or alterations in the memorandum of a company has or have been made, the company shall, on being required by the Commission to do so, lodge a printed copy of the memorandum as altered by the alteration or alterations.
(6) In subsection (5):
alteration, in relation to a company’s memorandum, includes, in the case of a Division 2 or 3 company, an alteration made before the company’s registration day.
(7) The Commission shall register a resolution, order or other document lodged under this Law that affects the memorandum of a company.
(8) Subject to this Law, where a resolution of a company, an order of the Court, or any other document, affects a company’s memorandum, the alteration of the memorandum to which the resolution, order or document relates shall take effect:
(a) if this Law requires the resolution, order or document to be lodged—on, and not before, the registration of the resolution, order or document under subsection (7); or
(b) otherwise—on the day on which the resolution is passed, the order is made or the document is executed, as the case may be, or on such later day as the resolution, order or document specifies.
(9) Where a resolution, order or other document has been registered by the Commission under subsection (7), the Commission shall:
(a) in the case of an order—certify the registration of the order; and
(b) in the case of a resolution or other document—if so requested by the company, certify the registration of the resolution or document.
(10) A certificate of the Commission as to the registration of an order is conclusive evidence that all the requirements of this Law with respect to the alteration to which the order relates and any confirmation of that alteration have been complied with.
(11) Notice of the registration shall be published in such manner (if any) as the Court or the Commission directs.
(12) The Commission shall, where appropriate, issue a certificate of registration of the company in accordance with the alteration made to the memorandum.
(13) The Commission shall keep a copy of a certificate issued under subsection (12), and subsections 1274(2) and (5) apply to that copy as if it were a document lodged with the Commission.
172 Alterations of memorandum
(1) Subject to this section, a company may, by special resolution, alter the memorandum of the company:
(a) if the memorandum contains a provision stating the objects of the company—by altering or omitting that provision;
(b) if the memorandum does not contain a provision stating the objects of the company—by inserting in the memorandum a provision stating the objects of the company; or
(c) in any case—by altering, omitting or inserting any other provision with respect to the objects of the company or any provision with respect to the powers of the company.
(2) Subject to this section, subsection 180(3) and section 260, if a provision of the memorandum of a company could lawfully have been contained in the articles of the company, the company may, by special resolution, alter the memorandum:
(a) unless the memorandum prohibits the alteration of that provision—by altering that provision; or
(b) unless the memorandum prohibits the omission of that provision—by omitting that provision.
(3) The memorandum of a company may provide that a special resolution altering, adding to or omitting a provision contained in the memorandum, being a provision that could lawfully have been contained in the articles of the company, does not have any effect unless and until a further requirement specified in the memorandum has been complied with.
(4) Without limiting the generality of subsection (3), the further requirement referred to in that subsection may be a requirement:
(a) that the relevant special resolution be passed by a majority consisting of a greater number of members than is required to constitute the resolution as a special resolution;
(b) that the consent or approval of a particular person be obtained; or
(c) that a particular condition be fulfilled.
(5) Nothing in subsection (2) permits the alteration or omission of a provision of the memorandum of a company that relates to rights to which only members in a particular class of members are entitled.
(6) Notice of a general meeting specifying the intention to propose, as a special resolution, a resolution for the alteration of the memorandum of a company, being an alteration provided for by subsection (1), shall be given:
(a) to all members;
(b) to all trustees for debenture holders; and
(c) if there are no trustees for, or for a particular class of, debenture holders—to all debenture holders, or all debenture holders in that class, as the case may be, whose names are, at the time of the posting of the notice, known to the company.
(7) The Court may, in the case of any person or class of persons, for such reasons as seem sufficient to the Court, dispense with the notice referred to in subsection (6).
(8) If an application for the cancellation of an alteration of the memorandum of a company is made to the Court in accordance with this section by:
(a) in the case of an alteration provided for by subsection (1)—the holders of not less than 10% in nominal value of the company’s debentures; or
(b) in any case—the holders of not less, in the aggregate, than 10% in nominal value of the company’s issued share capital or any class of that capital or, if the company is not limited by shares, not less than 10% of the company’s members;
the alteration does not have any effect except so far as it is confirmed by the Court.
(9) The application shall be made within 21 days after the date on which the resolution altering the memorandum of the company was passed, and may be made, on behalf of the persons entitled to make the application, by such one or more of their number as they appoint in writing for the purpose.
(10) On the application, the Court shall have regard to the rights and interests of the members of the company or of any class of them as well as to the rights and interests of the creditors and may do any or all of the following:
(a) adjourn the proceedings so that an arrangement may be made to the satisfaction of the Court for the purchase (otherwise than by the company or a subsidiary of the company) of the interests of dissentient members;
(b) give directions and make orders for facilitating or carrying into effect any such arrangement;
(c) make an order cancelling the alteration or confirming the alteration either wholly or in part and on specified terms and conditions.
(11) A reference in this section to a provision of the memorandum of a company that could lawfully have been contained in the articles of the company is, in the case of a memorandum of a Division 2 or 3 company, a reference to a provision of the memorandum of the company that could lawfully have been contained in the articles of the company if the memorandum and articles of the company had originally been registered under this Law.
173 Lodging, and taking effect, of resolutions passed under section 172
(1) Where a resolution altering a company’s memorandum as provided by subsection 172(1) or (2) is passed, this section has effect despite any other provision of this Law.
(2) If this Law requires a copy of the resolution to be lodged, the company shall:
(a) if no application is made to the Court in accordance with section 172—lodge such a copy within 14 days after the end of the period of 21 days after the day on which the resolution is passed; or
(b) otherwise—lodge such a copy, together with an office copy of the order of the Court, within 14 days after:
(i) the end of that period of 21 days; or
(ii) the Court determines the application;
whichever happens later.
(3) Otherwise, the resolution shall not take effect before the end of 21 days after the day on which the resolution is passed.
174 Effect of memorandums of certain Division 2 companies
(1) In this section:
entrenchable provision, in relation to the memorandum of a body corporate, means a provision of the memorandum that could lawfully have been contained in the body’s articles;
translation day, in relation to a company, means the prescribed day.
(2) Where, throughout the period beginning immediately before a Division 2 company’s translation day and ending immediately before its registration day, the company’s memorandum:
(a) prohibited the alteration of an entrenchable provision; or
(b) provided as mentioned in a previous law corresponding to subsection 172(3) in respect of a special resolution altering or adding to an entrenchable provision;
then, so long as it continues so to prohibit, or so to provide, the company’s memorandum is taken:
(c) also to prohibit the omission of the entrenchable provision; or
(d) also to provide to the same effect in respect of a special resolution omitting the entrenchable provision;
as the case may be.
(3) Subsection (2) has effect in relation to a memorandum except so far as the memorandum expressly provides to the contrary.
175 Articles adopting Table A or B
(1) Articles may:
(a) in the case of a company other than a no liability company—adopt all or any of the regulations contained in Table A; or
(b) in the case of a no liability company—adopt all or any of the regulations contained in Table B.
(2) Where a Division 1 company is a company limited by shares, the regulations contained in Table A, except in so far as they are excluded or modified by articles of the company that are registered, or signed or made, as the case requires, under section 125, shall be, so far as applicable, the company’s articles in the same manner, and to the same extent, as if they were contained in registered articles.
(3) Except in so far as the regulations contained in Table A are excluded or modified by, or are otherwise inconsistent with, provisions that are proved for the purposes of a proceeding in an Australian court to be included (otherwise than by virtue of subsection (2)) at a particular time in the articles of a Table A proprietary company, those regulations shall be deemed for the purposes of that proceeding to have been included in the company’s articles at that time.
(4) In the case of a Division 1 company that is a no liability company, if articles are not registered, or if articles are registered then in so far as they do not exclude or modify the regulations contained in Table B, those regulations shall, so far as applicable, be the articles of the company in the same manner, and to the same extent, as if they were contained in registered articles.
176 Alteration of articles
(1) Subject to this Law, a company may by special resolution alter or add to its articles.
(2) The memorandum of a company may provide that a special resolution altering or adding to the articles of the company does not have any effect unless and until a further requirement specified in the memorandum has been complied with.
(3) Without limiting the generality of subsection (2), the further requirement referred to in that subsection may be a requirement:
(a) that the relevant special resolution be passed by a majority consisting of a greater number of members than is required to constitute the resolution as a special resolution;
(b) that the consent or approval of a particular person be obtained; or
(c) that a particular condition be fulfilled.
(4) Subject to this Law, an alteration or addition so made in the articles is, on and from the date of the special resolution or such later date as is specified in the resolution, as valid as if originally contained in the articles and is subject in like manner to alteration by special resolution.
(5) Subject to this section, a company has the power, and shall be deemed always to have had the power, to amend its articles:
(a) unless it is a no liability company—by the adoption of all or any of the regulations contained in Table A; or
(b) if it is a no liability company—by the adoption of all or any of the regulations contained in Table B;
by reference only to the regulations in the Table or to the numbers of particular regulations contained in the Table, without being required in the special resolution effecting the amendment to set out the text of the regulations so adopted.
179 Constitution of companies limited by guarantee
(1) In the case of a company limited by guarantee and not having a share capital, a provision in the constitution, or in a resolution, of the company purporting to give a person a right to participate in the divisible profits of the company otherwise than as a member is void.
(2) For the purposes of the provisions of this Law relating to the memorandum of a company limited by guarantee and of this section, a provision in the constitution, or in a resolution, of a company limited by guarantee purporting to divide the undertaking of the company into shares or interests shall be treated as a provision for a share capital even if the nominal amount or number of the shares or interests is not specified.
(3) This section does not apply in relation to a Division 2 company that was originally incorporated:
(a) before 1 October 1954 under the company law of the Capital Territory;
(b) before 1 January 1937 under the company law of New South Wales;
(c) before 31 January 1911 under the company law of Victoria;
(d) before 21 March 1932 under the company law of Queensland;
(e) before 1 March 1935 under the company law of South Australia;
(f) before 5 October 1962 under the company law of Western Australia;
(g) before 1 February 1921 under the company law of Tasmania; or
(h) before 1 March 1935 under the company law of the Northern Territory;
180 Operation of memorandum and articles
(1) Subject to this Law, the constitution of a company has the effect of a contract under seal:
(a) between the company and each member;
(b) between the company and each eligible officer; and
(c) between a member and each other member;
under which each of the above‑mentioned persons agrees to observe and perform the provisions of the constitution as in force for the time being so far as those provisions are applicable to that person.
(2) Subject to section 385, any money payable by a member of a company to the company under the company’s constitution is a debt from the member to the company and is of the nature of a specialty debt.
(3) A member of a company, unless either before or after the alteration is made the member agrees in writing to be bound by it, is not bound by an alteration of the constitution made after the date on which the member became a member so far as the alteration:
(a) requires the member to take or subscribe for more shares than the number held by the member at the date of the alteration;
(b) in any way increases the member’s liability as at the date of the alteration to contribute to the share capital of, or otherwise to pay money to, the company; or
(c) increases, or imposes, restrictions on the right to transfer the shares held by the member at the date of the alteration.
(5) In this section, eligible officer, in relation to a company, means a director or a secretary of the company.
181 Copies of memorandum and articles
(1) A company shall, on being so required by a member, send to the member a copy of the memorandum and of the articles (if any) of the company:
(a) if the company requires the payment of an amount not exceeding the prescribed amount—within the period of 21 days after the payment is received by the company; or
(b) otherwise—within the period of 21 days after the request was made;
or within that period as extended by the Commission.
(2) On being required by the Commission to do so, a Table A proprietary company shall lodge a printed copy of its articles (if any), even if they have not been altered.
(3) Where an alteration of the memorandum or articles of a company has been made, the company shall not issue a copy of the memorandum or articles after the date of alteration unless:
(a) the copy is in accordance with the memorandum or articles as altered by the alteration; or
(b) a printed copy of the order or resolution making the alteration is annexed to the copy of the memorandum or articles and the particular clauses or articles affected are indicated in ink.
(4) Where an alteration or alterations in the articles of a company has or have been made, the company shall, on being required by the Commission to do so, lodge a printed copy of the articles as altered by the alteration or alterations.
(5) In subsections (3) and (4):
alteration, in relation to a company’s memorandum or articles, includes, in the case of a Division 2 or 3 company, an alteration made before the company’s registration day.
(6) Where an agreement a copy of which:
(a) is required, or would but for subsection 256(2) be required, to be lodged under section 256; or
(b) was required to be lodged with a person under a previous law corresponding to section 256;
affects the memorandum or articles of a company, the company shall not, after the agreement is entered into, issue or lodge a copy of the memorandum or articles unless a copy of the agreement is annexed to the copy of the memorandum or articles.
Division 4—Transactions on a company’s behalf
182 Confirmation of contracts and authentication and execution of documents
(1) So far as concerns the formalities of making, varying or discharging a contract, a person acting under the express or implied authority of a company may make, vary or discharge a contract in the name of, or on behalf of, the company in the same manner as if that contract were made, varied or discharged by a natural person.
(2) The making, variation or discharging of a contract in accordance with subsection (1) is effectual in law and binds the company and other parties to the contract.
(3) A contract or other document executed, or purporting to have been executed, under the common seal of a company is not invalid merely because a person attesting the affixing of the common seal was in any way, whether directly or indirectly, interested in that contract or other document or in the matter to which that contract or other document relates.
(4) This section does not prevent a company from making, varying or discharging a contract under its common seal.
(5) This section does not apply in relation to a Division 2, 3 or 4 company in relation to the making, variation or discharging of a contract before the company’s registration day, but applies otherwise in relation to such a company whether it gives its authority before, on or after that day.
(6) This section does not affect the operation of a law that requires some consent or sanction to be obtained, or some procedure to be complied with, in relation to the making, variation or discharge of a contract.
(7) A document or proceeding requiring authentication by a company may be authenticated by the signature of an officer of the company and need not be authenticated under the common seal of the company.
(8) A company may, by writing under its common seal, empower a person, either generally or in respect of a specified matter or specified matters, as its agent or attorney to execute deeds on its behalf, and a deed signed by such an agent or attorney on behalf of the company and under his, her or its seal or, subject to subsections (10) and (11), under the appropriate official seal of the company, binds the company and has the same effect as if it were under the common seal of the company.
(9) The authority of an agent or attorney empowered under subsection (8), as between the company and a person dealing with him, her or it, continues during the period (if any) mentioned in the instrument conferring the authority or, if no period is so mentioned, until notice of the revocation or termination of his, her or its authority has been given to the person dealing with him, her or it.
(10) A company may, if authorised by its articles, have for use in place of its common seal outside the State or Territory where its common seal is kept one or more official seals, each of which shall be a facsimile of the common seal of the company with the addition on its face of the name of every place where it is to be used.
(11) The person affixing such an official seal shall, in writing signed by the person, certify on the instrument to which it is affixed the date on which and the place at which it is affixed.
(12) A document sealed with such an official seal shall be deemed to be sealed with the common seal of the company.
183 Ratification of contracts made before formation of company
(1) In this section:
(a) a reference to a non‑existent company purporting to enter into a contract is a reference to:
(i) a person executing a contract in the name of a company, where no such company exists; or
(ii) a person purporting to enter into a contract as agent or trustee for a proposed company;
(b) a reference to a person who purports to execute a contract on behalf of a non‑existent company shall be construed as a reference to a person who executes a contract or purports to enter into a contract as mentioned in subparagraph (a)(i) or (ii);
(c) a reference, in relation to the purported entry into a contract by a non‑existent company, to the formation of the company is a reference to:
(i) if a person has executed a contract in the name of a company and no such company exists—the registration, under Division 1 of Part 2.2, of a company that, having regard to all the circumstances, is reasonably identifiable with the company in the name of which the person executed the contract; or
(ii) if a person has purported to enter into a contract as agent or trustee for a proposed company—the registration, under Division 1 of Part 2.2, of a company that, having regard to all the circumstances, is reasonably identifiable with the proposed company.
(2) Where:
(a) a non‑existent company purports to enter into a contract; and
(b) the company is formed within a reasonable time after the contract is purported to be entered into;
the company may, within a reasonable time after it is formed, ratify the contract.
(3) Where a company ratifies a contract as provided by subsection (2), the company is bound by, and entitled to the benefit of, that contract as if the company had been formed before the contract was entered into and had been a party to that contract.
(4) Where a non‑existent company purports to enter into a contract and:
(a) the company is not formed within a reasonable time after the contract is purported to be entered into; or
(b) the company is formed within such a reasonable time but does not ratify the contract within a reasonable time after the company is formed;
the other party or each of the other parties to the contract may, subject to subsection (6) and (9), recover from the person or any one or more of the persons who purported to execute the contract on behalf of the non‑existent company an amount of damages equivalent to the amount of damages for which that party could have obtained a judgment against the company if:
(c) where the company has not been formed as mentioned in paragraph (a)—the company had been formed, and had ratified the contract as provided by subsection (2); or
(d) where the company has been formed as mentioned in paragraph (b)—the company had ratified the contract as provided by subsection (2);
and the contract had been discharged by a breach constituted by the refusal or failure of the company to perform any obligations under the contract.
(5) Where:
(a) proceedings are brought to recover damages under subsection (4) in relation to a contract purported to be entered into by a nonexistent company; and
(b) the company has been formed;
the court in which the proceedings are brought may, if it thinks it just and equitable to do so, make either or both of the following:
(c) an order directing the company to transfer or pay to a specified party to the contract a specified property, or specified amount not exceeding the value of any benefit, received by the company as a result of the contract;
(d) an order that the company pay the whole or a specified portion of any damages that, in those proceedings, the defendant has been, or is, found liable to pay.
(6) Where, in proceedings to recover damages under subsection (4) in relation to a contract purported to be entered into by a non‑existent company, the court in which the proceedings are brought makes an order under paragraph (5)(c), the court may refuse to award any damages in the proceedings or may award an amount of damages that is less than the amount that the court would have awarded if the order had not been made.
(7) Where:
(a) a non‑existent company purports to enter into a contract;
(b) the company is formed, and ratifies the contract as provided by subsection (2);
(c) the contract is discharged by a breach of the contract constituted by a refusal or failure of the company to perform all or any of its obligations under the contract; and
(d) the other party or any one or more of the other parties to the contract brings or bring proceedings against the company for damages for breach of the contract;
the court in which the proceedings are brought may, subject to subsection (9), if it thinks it just and equitable to do so, order the person or any one or more of the persons who purported to execute the contract on behalf of the company to pay to the person or persons by whom the proceedings are brought the whole or a specified portion of any damages that the company has been, or is, found liable to pay to the person or persons by whom the proceedings are brought.
(8) Where a person purports, whether alone or together with another person or other persons, to execute a contract on behalf of a non‑existent company, the other party to the contract, or any of the other parties to the contract, may, by writing signed by that party, release the first‑mentioned person from any liability in relation to the contract.
(9) Where a person has, as provided by subsection (8), released another person from liability in relation to a contract that the other person purported to execute on behalf of a non‑existent company, then:
(a) notwithstanding subsection (4), the first‑mentioned person is not entitled to recover damages from the other person in relation to that contract; and
(b) a court shall not, in proceedings under subsection (7), order the other person to pay to the first‑mentioned person any damages, or any proportion of the damages, that the company has been, or may be, found liable to pay to that first‑mentioned person.
(10) Where:
(a) a non‑existent company purports to enter into a contract;
(b) the company is formed; and
(c) the company and the other party or other parties to the contract enter into a contract in substitution for the first‑mentioned contract;
any liabilities to which the person who purported to execute the first‑mentioned contract on behalf of the company is subject under this section in relation to the first‑mentioned contract (including liabilities under an order made by a court under this section) are, by force of this subsection, discharged.
(11) Any rights or liabilities of a person under this section (including rights or liabilities under an order made by a court under this section) in relation to a contract are in substitution for any rights that the person would have, or any liabilities to which the person would be subject, as the case may be, apart from this section, in relation to the contract.
(12) Where:
(a) a person purports to enter into a contract as trustee for a proposed company; and
(b) the company is formed within a reasonable time after the person purports to enter into the contract but does not ratify the contract within a reasonable time after the company is formed;
then, despite any rule of law or equity, the trustee does not have any right or indemnity against the company in respect of the contract.
(13) For the purposes of this section, a contract may be ratified by a company in the same manner as a contract may be made by a company under section 182, and section 182 has effect as if:
(a) a reference in that section to making a contract were a reference to ratifying a contract; and
(b) the reference in subsection 182(3) to a contract executed, or purporting to have been executed, under the common seal of a company were a reference to a contract ratified, or purporting to have been ratified, under the common seal of a company.
Part 2.4—Membership and share capital
Division 1—Membership generally
184 Membership of company
A person who agrees to become a member of a company and whose name is entered in the company’s register of members becomes a member of the company.
185 Membership of holding company
(1) This section applies where a body corporate (in this section called the subsidiary) is a subsidiary of a company (in this section called the holding company).
(2) The subsidiary cannot be a member of the holding company.
(3) An allotment or transfer to the subsidiary of shares in the holding company is void.
(4) A purported acquisition by the subsidiary of units of shares in the holding company is void.
(5) None of subsections (2), (3) and (4) applies where the subsidiary is concerned as a personal representative.
(6) None of subsections (2), (3) and (4) applies where the subsidiary is concerned as a trustee and neither the holding company nor any of its subsidiaries is beneficially interested under the trust except by way of a security given for the purposes of a transaction entered into in the ordinary course of business in connection with the lending of money, other than a transaction entered into with an associate of the holding company or of any of its subsidiaries.
(7) If:
(a) the holding company is a Division 2 company that was originally incorporated under a corresponding previous law;
(b) the subsidiary was a subsidiary, and a member, of the holding company at the commencement of:
(i) if that Territory is the Capital Territory—the Companies Ordinance 1962 of that Territory;
(ii) if the State is New South Wales—the Companies Act, 1961 of that State;
(iii) if that State is Victoria—the Companies Act 1961 of that State;
(iv) if that State is Queensland—The Companies Act of 1961 of that State;
(v) if that State is South Australia—the Companies Act 1962‑1981 of that State;
(vi) if that State is Western Australia—the Companies Act 1961 of that State;
(vii) if that State is Tasmania—the Companies Act 1962 of that State; or
(viii) if that State is the Northern Territory—the Companies Act 1961 of that State; and
(c) the subsidiary has been a subsidiary, and a member, of the holding company ever since that commencement;
this section does not prevent the subsidiary from continuing to be such a member but, subject to subsections (5) and (6), the subsidiary does not have a right to vote at meetings of the holding company or of a class of members of the holding company.
(8) If subsection (7) does not apply but the subsidiary already held shares in the holding company at the time when it became a subsidiary of the holding company, this section does not prevent it from continuing to be a member of the holding company but, subject to subsections (5) and (6):
(a) the subsidiary does not have a right to vote at meetings of the holding company or of a class of members of the holding company; and
(b) within the period of 12 months after that time or within that period as extended by the Court, the subsidiary shall dispose of all its shares in the holding company.
(9) Subject to subsections (5) and (6), a reference in subsection (2), (3), (4), (7) or (8) to the subsidiary includes a reference to a nominee for the subsidiary.
(10) If the holding company is a company limited by guarantee or an unlimited company, a reference in this section to shares includes a reference to the interest of a member of the holding company as such a member, whatever the form of that interest and whether or not the holding company has a share capital.
186 Consequences for members of public company if the company carries on business with fewer than 5 members
(1) This section applies to a person who is a member of a public company if:
(a) the company carries on business for more than 6 months while it has fewer than 5 members; and
(b) the company incurs a debt after those 6 months; and
(c) the person:
(i) is a member of the company at any time after those 6 months; and
(ii) is aware that the company is carrying on business with fewer than 5 members.
(2) The person:
(a) is individually liable for debts of the company referred to in subsection (1) incurred while the person is a member; and
(b) may be individually sued for payment of those debts; and
(c) contravenes this subsection.
(3) In counting the members of a company for the purposes of subsection (1), count joint holders of a particular parcel of shares as one person.
(4) This section does not apply to a person who is a member of a public company all of whose shares are held by a holding company that is a company or a recognised company.
Division 2—Shares generally
187 Return of allotment
(1) Within one month after making an allotment of its shares, a company must lodge a return of the allotment stating:
(a) the number and nominal amounts of the shares comprised in the allotment;
(b) the amount (if any) paid, deemed to be paid or due and payable on the allotment of each share;
(c) if the capital of the company is divided into shares of different classes—the class of shares to which each share comprised in the allotment belongs; and
(d) subject to subsection (2), the full name, or the surname together with at least one given name and the other initials, and the address of each of the allottees and the number and class of shares allotted to him, her or it.
(2) The particulars mentioned in paragraph (1)(d) need not be included in a return:
(a) where shares have been allotted for cash by a no liability company;
(b) where a company to which subsection 337(1) applies has allotted shares for cash; or
(c) where a company to which subsection 337(1) applies has allotted shares for a consideration other than cash and the number of persons to whom the shares have been allotted exceeds 500.
(3) Where shares in a company are allotted, or deemed to have been allotted, as fully or partly paid up otherwise than in cash and the allotment is made under a contract in writing, the company must:
(a) lodge with the return the contract evidencing the allottee’s entitlement, or a certified copy of that contract; and
(b) lodge:
(i) if the regulations prescribe for the purposes of this paragraph a period ending after the return is lodged—within that period; or
(ii) otherwise—with the return;
a certificate to the effect that the contract referred to in paragraph (a) has been duly stamped as required by any applicable law relating to stamp duty.
(4) If the Commission considers it appropriate to do so in a particular case, the Commission may by writing authorise a company to lodge a certificate under paragraph (3)(b) within a period that is specified in the authorisation and ends after:
(a) if subparagraph (3)(b)(i) applies—the period referred to in that subparagraph; or
(b) otherwise—the return is lodged.
(4A) An authorisation under subsection (4) has effect despite paragraph (3)(b), but the company must lodge the certificate within the period specified in the authorisation.
(5) Where shares in a company are allotted, or are deemed to have been allotted, as fully or partly paid up otherwise than in cash and the allotment is made:
(a) under a contract not reduced to writing;
(b) under a provision of the company’s constitution;
(c) in satisfaction of a dividend declared in favour of, but not payable in cash to, the shareholders; or
(d) pursuant to the application of money held by the company in an account or reserve in paying up or partly paying up unissued shares to which the shareholders have become entitled;
the company shall lodge with the return a statement containing such particulars as are prescribed.
(6) For the purposes of this section, shares in a company that the subscribers to the memorandum have agreed in the memorandum to take are to be disregarded.
188 Differences in calls and payments, reserve liability etc.
(1) A company, if so authorised by its articles, may:
(a) make arrangements on the issue of shares for varying the amounts and times of payment of calls as between shareholders;
(b) accept from a member the whole or a part of the amount remaining unpaid on any shares although no part of that amount has been called up; and
(c) unless it is a no liability company—pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.
(2) A limited company may, by special resolution, determine that any portion of its share capital that has not been already called up is not capable of being called up except in the event, and for the purposes, of the company being wound up, and thereupon that portion of the company’s share capital is not capable of being called up except in the event, and for the purposes, of the company being wound up, but no such resolution prejudices any rights acquired by a person before the passing of the resolution.
189 Share warrants
A company shall not issue a share warrant.
190 Power to issue shares at a discount
(1) A no liability company may issue shares at a discount.
(2) Subject to this section, a company other than a no liability company may issue at a discount shares in a class of shares already issued if:
(a) the issue of the shares at a discount:
(i) is authorised by resolution passed in general meeting of the company; and
(ii) is confirmed by order of the Court;
(b) the resolution specifies the maximum rate of discount at which the shares are to be issued;
(c) the shares are issued within the period of one month after the day on which the issue is confirmed by order of the Court or within that period as extended by the Court; and
(d) the shares are first offered to every holder of shares in that class in proportion to the number of shares in that class already held.
(3) The Court may, if having regard to all the circumstances of the case it thinks proper to do so, make an order confirming the issue on such terms and conditions as it thinks fit.
(4) If there is a prospectus relating to the issue of the shares, the company shall set out in the prospectus particulars of the discount allowed or of so much of that discount as has not been written off as at the day of the issue of the prospectus.
(5) An offer made for the purposes of paragraph (2)(d) shall be made by notice specifying the number of shares to which the member is entitled, and specifying a period, being not less than 21 days from the date of the notice, within which the offer may be accepted.
(6) If an offer in respect of shares made in accordance with subsection (5) is not accepted within the period specified by the notice, the shares may be issued on terms not more favourable than those offered to the shareholders.
191 Issue of shares at a premium
(1) Where a company issues shares for which it receives a premium, whether in cash or in the form of other valuable consideration, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account to be called the share premium account, and the provisions of this Law relating to the reduction of the share capital of a company, other than subsection 195(6) apply, subject to this section, as if the share premium account were paid‑up share capital of the company.
(2) The share premium account may be applied:
(a) in paying up unissued shares to be issued to members of the company as fully paid bonus shares;
(b) in paying up in whole or in part the balance unpaid on shares previously issued to members of the company;
(c) in the payment of dividends, if those dividends are satisfied by the issue of shares to members of the company;
(d) in the case of a company that carries on life insurance business in Australia—by appropriation or transfer to any statutory fund established and maintained under the Life Insurance Act 1995;
(e) in writing off:
(i) the preliminary expenses of the company; or
(ii) the expenses of, or the payment made in respect of or discount allowed on, any issue of shares in, or debentures of, the company;
(ea) in providing for consideration payable by the company on a buy‑back of its shares; or
(f) in providing for the premium payable on redemption of debentures or redeemable preference shares.
192 Redeemable preference shares
(1) Subject to this section, a company having a share capital may, if so authorised by its articles, issue preference shares that are, or at the option of the company are to be, liable to be redeemed.
(2) The redemption shall not be taken to reduce the authorised share capital of the company.
(3) The company shall not redeem the shares:
(a) except on such terms, and in such manner, as are provided by the articles;
(b) except out of profits that would otherwise be available for dividends or out of the proceeds of a fresh issue of shares made for the purposes of the redemption; and
(c) unless they are fully paid‑up.
(4) The premium (if any) payable on redemption shall be provided for out of profits or out of the share premium account.
(5) Where redeemable preference shares are redeemed otherwise than out of the proceeds of a fresh issue of shares, there shall, out of profits that would otherwise have been available for dividends, be transferred to a reserve called the capital redemption reserve a sum equal to the nominal amount of the shares redeemed, and the provisions of this Law relating to the reduction of the share capital of a company, other than subsection 195(6), apply, except as provided by this section, as if the capital redemption reserve were paid‑up share capital of the company.
(6) Where, under this section, a company has redeemed or is about to redeem preference shares, it may issue shares up to the sum of the nominal values of the shares redeemed or to be redeemed as if those preference shares had never been issued.
(7) The capital redemption reserve may be applied in paying up unissued shares of the company to be issued to members of the company as fully‑paid bonus shares.
(8) Where a company redeems any redeemable preference shares, it shall, within 14 days after so doing, lodge a notice in the prescribed form relating to the shares redeemed.
(9) Shares shall be taken to have been redeemed even if a cheque given in payment of the amount payable upon redemption of the shares has not been presented for payment.
(10) If default is made in complying with this section, the company contravenes this subsection.
193 Power of company to alter its share capital
(1) A company may, if so authorised by its articles, by resolution passed in general meeting alter the provisions of its memorandum in any one or more of the following ways:
(a) by increasing its share capital by the creation of new shares of such amount as it thinks expedient;
(b) by consolidating and dividing all or any of its share capital into shares of larger amount than its existing shares;
(c) by converting, or providing for the conversion of, all or any of its paid‑up shares into stock or re‑converting, or providing for the reconversion of, that stock into paid‑up shares of any denomination;
(d) by subdividing its shares or any of them into shares of smaller amount than is fixed by the memorandum, but so that, in the subdivision, the proportion between the amount paid and the amount (if any) unpaid on each share of a smaller amount is the same as it was in the case of the share from which the share of a smaller amount is derived;
(e) by cancelling shares that, at the date of the passing of the resolution to that effect, no person has taken or agreed to take or that have been forfeited and by reducing the amount of the company’s share capital by the amount of the shares so cancelled.
(2) An alteration made in the memorandum in accordance with subsection (1) takes effect on the date of the resolution or such later date as is specified in the resolution.
(3) A cancellation of shares under this section is not a reduction of share capital within the meaning of this Law.
(4) An unlimited company having a share capital may, by any resolution passed for the purposes of subsection 167(1), do either or both of the following:
(a) increase the nominal amount of its share capital by increasing the nominal amount of each of its shares, but subject to the condition that no part of the increased capital may be called up except in the event, and for the purposes, of the company being wound up;
(b) provide that a specified portion of its uncalled share capital may not be called up except in the event, and for the purposes, of the company being wound up.
194 Validation of shares improperly issued
(1) Where a company has purported to issue or allot shares and:
(a) the creation, issue or allotment of those shares is invalid by reason of any provision of this or any other Act or of the memorandum or articles of the company or for any other reason; or
(b) the terms of the purported issue or allotment are inconsistent with or are not authorised by any such provision;
the Court may, on application by the company, by a holder or mortgagee of any of those shares or by a creditor of the company and on being satisfied that in all the circumstances it is just and equitable so to do, make an order:
(c) validating the purported issue or allotment of those shares; or
(d) confirming the terms of the purported issue or allotment of the shares;
or both.
(2) On the lodging of an office copy of an order made under subsection (1), the shares to which the order relates shall be deemed to have been validly issued or allotted on the terms of the issue or allotment of the shares.
195 Special resolution for reduction of share capital
(1) Subject to confirmation by the Court, a company may, if so authorised by its articles, by special resolution reduce its share capital in any way and in particular, without limiting the generality of the foregoing, may do all or any of the following:
(a) extinguish or reduce the liability on any of its shares in respect of share capital not paid up;
(b) cancel any paid‑up share capital that is lost or is not represented by available assets; or
(c) pay off any paid‑up share capital that is in excess of the needs of the company;
and may, so far as necessary, alter its memorandum by reducing the amount of its share capital and of its shares accordingly.
(2) A reduction in the paid‑up share capital of a company does not of itself operate to reduce the nominal share capital of the company.
(3) Where the proposed reduction of share capital involves either diminution of liability in respect of unpaid share capital or the payment to any shareholder of any paid‑up share capital, and in any other case if the Court so directs:
(a) every creditor of the company who, at the date fixed by the Court, is entitled to any debt or claim that, if that date were the date of commencement of the winding up the company, would be admissible in proof against the company, is entitled to object to the reduction;
(b) the Court, unless satisfied on affidavit that there are no such creditors, shall settle a list of the names of creditors entitled to object and, for that purpose, shall ascertain as far as possible, without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims, and may publish notices fixing a final day on or before which creditors whose names are not entered on the list may claim to be so entered; and
(c) where a creditor whose name is entered on the list, and whose debt has not been discharged or whose claim has not determined, does not consent to the reduction, the Court may dispense with the consent of that creditor on the company securing payment of his debt or claim by appropriating as the Court directs:
(i) if the company admits the full amount of the debt or claim or, through not admitting it, is willing to provide for it—the full amount of the debt or claim; or
(ii) if the company does not admit and is not willing to provide for the full amount of the debt or claim or if the amount is contingent or not ascertained—an amount fixed by the Court after the like inquiry and adjudication as if the company were being wound up by the Court.
(4) The Court may, having regard to any special circumstances of any case, direct that all or any of the provisions of subsection (3) shall not apply in respect of creditors included in a class of creditors.
(5) The Court may, if satisfied with respect to each creditor who under subsection (3) is entitled to object, that:
(a) the creditor’s consent to the reduction has been obtained;
(b) the creditor’s debt has been discharged or secured; or
(c) the creditor’s claim has determined or has been secured;
make an order confirming the reduction on such terms and conditions as it thinks fit.
(6) An order made under subsection (5) shall show:
(a) the amount of the share capital of the company as altered by the order;
(b) the number of shares into which the share capital is to be divided;
(c) the amount of each share; and
(d) the amount (if any) that at the date of the order is deemed to be paid up on each share.
(7) A company shall not act upon a resolution for the reduction of share capital before the date on which a certified copy of the resolution and an office copy of the order of the Court have been lodged with the Commission but such a resolution may specify a date, earlier than the first‑mentioned date but not earlier than the date of the resolution, as the date from which the reduction of capital is to have effect.
(8) A certificate of the Commission stating that a certified copy of the resolution and an office copy of the order made under subsection (5) have been registered by the Commission is conclusive evidence that all the requirements of this Law with respect to reduction of share capital have been complied with in respect of the company and that the share capital of the company is such amount as is stated in the order.
(9) Upon lodgment of a copy of an order as mentioned in subsection (7), the particulars shown in the order pursuant to subsection (6) shall be deemed to be substituted for the corresponding particulars in the memorandum and the substitution shall be deemed to be an alteration of the memorandum for the purposes of this Law.
(10) A member of a company, past or present, is not liable in respect of any share in the company to any call or contribution exceeding in amount the difference (if any) between the amount of the share as fixed by an order made under subsection (5) and the amount paid, or the reduced amount (if any) that is deemed to have been paid, on the share (as the case may be) but, where the name of a creditor who is entitled under subsection (3) to object to a reduction is, by reason of his ignorance of the proceedings for reduction or of their nature and effect with respect to his claim, not entered on the list of creditors, and after the reduction the company is unable, within the meaning of the provisions of this Law with respect to winding up by the Court, to pay the amount of his debt or claim:
(a) every person who was a member of the company at the date of the registration of the copy of the order for reduction is liable to contribute for the payment of that debt or claim an amount not exceeding the amount that he would have been liable to contribute if the company had commenced to be wound up on the day before that date; and
(b) if the company is wound up, the Court, on the application of any such creditor and proof of his ignorance of the proceedings for reduction or of their nature and effect with respect to his claim, may, if it thinks fit, settle accordingly a list of the names of persons liable to contribute by reason of paragraph (a) and make and enforce calls and orders on the contributories whose names are included in the list as if they were ordinary contributories in a winding up;
but nothing in this subsection affects the rights of the contributories among themselves.
(11) An officer of a company shall not:
(a) knowingly conceal the name of a creditor entitled to object to a reduction in the share capital of the company; or
(b) knowingly misrepresent the nature or amount of the debt or claim of any creditor of the company.
(12) This section does not apply to an unlimited company, but nothing in this Law precludes an unlimited company from reducing in any way its share capital, including any amount in its share premium account.
(13) The granting by a company to a member of the company of a right to occupy or use land, or a building or a part of a building, owned or held under lease by the company, whether for consideration or not, shall not be regarded as being a reduction of the share capital of the company if it is made pursuant to a provision of the memorandum or articles of the company under which a member of the company may, by virtue of his being such a member, be granted such a right, whether the provision provides for consideration to be given for it or not.
(14) Subsection (13) applies whether the grant is by way of lease, under‑lease, licence or otherwise, and whether or not, in the case of a grant in respect of a building or part of a building, the grant also entitles the member to a right of use of a garage, outbuilding or other structure or of a passage, stairway or convenience of a building or of land appurtenant to the building or part of the building.
(15) This section does not apply in relation to a reduction of capital, or to a cancellation of shares that have been allotted, where the reduction or cancellation results from, or is necessary because of, the operation of:
(a) Chapter 6;
(b) regulations made for the purposes of that Chapter; or
(c) a previous law corresponding to that Chapter or to such regulations;
and nothing in this Law operates to invalidate any such reduction of capital or cancellation of shares.
Division 3—Class rights
196 Commission to be informed of special rights carried by, or division or conversion of, shares
(1) Where a company allots shares to which are attached rights that are not provided for in the memorandum or articles of the company or in a resolution or document to which section 256 applies, the company shall, unless the rights attached to the shares are in all respects the same as the rights attached to shares previously allotted, lodge with the Commission, within one month after the allotment of the shares, a statement in the prescribed form relating to those rights.
(2) Where:
(a) shares in a company that were not previously divided into classes are so divided; or
(b) shares in a company that are of one class are converted into shares of another class;
the company shall, within one month after the division or conversion, lodge with the Commission a return in the prescribed form showing particulars of the division or conversion.
(3) If a company contravenes this section, the company and any officer of the company who is in default each contravene this subsection.
197 Rights of holders of classes of shares
(1) This section applies to a company having a share capital that is divided into classes of shares.
(2) Where:
(a) rights are attached to shares included in a class of shares;
(b) no provision is made by the memorandum or articles for the variation or abrogation of those rights; and
(c) neither the memorandum nor the articles declares or declare those rights to be unalterable;
the company may, with the consent in writing of the holders of three‑quarters of the issued shares included in that class or with the sanction of a special resolution passed at a meeting of the holders of those shares, vary or abrogate those rights or alter the memorandum or articles so as to authorise the variation or abrogation of those rights.
(3) Where:
(a) rights are attached to shares included in a class of shares; and
(b) provision is made by the memorandum or articles authorising the variation or abrogation of those rights with the consent of a specified proportion of the holders of the issued shares included in that class or with the sanction of a resolution of a kind specified in the memorandum or articles passed at a meeting of the holders of those shares;
the memorandum or articles shall not be altered so as to vary or abrogate, or to authorise the variation or abrogation of, those rights, except with the consent of that proportion of the holders of those shares or with the sanction of such a resolution passed at a meeting of the holders of those shares.
(4) Where rights are attached to shares included in a class of shares and:
(a) those rights are at any time varied or abrogated; or
(b) the memorandum or articles is or are altered so as to authorise the variation or abrogation of those rights;
the holders of not less in the aggregate than 10% of the issued shares included in that class may apply to the Court to have the variation or abrogation of the rights, or the alteration of the memorandum or articles, as the case may be, set aside and, if such an application is made, the variation or abrogation, or the alteration, does not have effect until confirmed by the Court.
(5) An application under subsection (4) shall be made within 28 days after the variation, abrogation or alteration referred to in that subsection was made and may be made, on behalf of the shareholders entitled to make the application, by such one or more of their number as they appoint in writing.
(6) On the application, the Court may, after hearing the applicant and any other persons who apply to the Court to be heard and appear to the Court to be interested, if it is satisfied that the variation, abrogation or alteration would unfairly prejudice the members of the class represented by the applicant, set aside the variation, abrogation or alteration, as the case may be, and shall, if not so satisfied, confirm it.
(7) A company shall, within 14 days after the making of an order by the Court on an application under this section, lodge an office copy of the order with the Commission and, if the company fails to comply with this provision, the company and any officer of the company who is in default are each guilty of an offence.
(8) For the purposes of this section, the allotment by a company of preference shares ranking equally with existing preference shares shall be deemed to be a variation of the rights attached to those existing preference shares unless the allotment of the first‑mentioned shares was authorised by the terms of allotment of the existing preference shares or by the memorandum or articles in force at the time when the existing preference shares were allotted.
(9) Nothing in section 172 or 176 affects the operation of this section.
198 Rights of holders of shares
(1) This section applies to a company having a share capital that is not divided into classes of shares.
(2) Where:
(a) rights are attached to shares in a company;
(b) no provision is made by the memorandum or articles for the variation or abrogation of those rights; and
(c) neither the memorandum nor the articles declares or declare those rights to be unalterable;
the company may, with the consent in writing of the holders of three‑quarters of the issued shares in the company or with the sanction of a special resolution passed at a meeting of the holders of those shares, vary or abrogate those rights or alter the memorandum or articles so as to authorise the variation or abrogation of those rights.
(3) Where:
(a) rights are attached to shares in a company; and
(b) provision is made by the memorandum or articles authorising the variation or abrogation of those rights with the consent of a specified proportion of the holders of the issued shares in the company or with the sanction of a resolution of a kind specified in the memorandum or articles passed at a meeting of the holders of those shares;
the memorandum or articles shall not be altered so as to vary or abrogate, or to authorise the variation or abrogation of, those rights, except with the consent of that proportion of the holders of those shares or with the sanction of such a resolution passed at a meeting of the holders of those shares.
(4) Where rights are attached to shares in a company and:
(a) those rights are at any time varied or abrogated; or
(b) the memorandum or articles is or are altered so as to authorise the variation or abrogation of those rights;
the holders of not less in the aggregate than 10% of the issued shares in the company may apply to the Court to have the variation or abrogation of the rights, or the alteration of the memorandum or articles, as the case may be, set aside and, if such an application is made, the variation or abrogation, or the alteration, does not have effect until confirmed by the Court.
(5) An application under subsection (4) shall be made within 28 days after the variation, abrogation or alteration referred to in that subsection was made and may be made, on behalf of the shareholders entitled to make the application, by such one or more of their number as they appoint in writing.
(6) On the application, the Court may, after hearing the applicant and any other persons who apply to the Court to be heard and appear to the Court to be interested, if it is satisfied that the variation, abrogation or alteration would unfairly prejudice the shareholders of the company, set aside the variation, abrogation or alteration, as the case may be, and shall, if not so satisfied, confirm it.
(7) A company shall, within 14 days after the making of an order by the Court on an application under this section, lodge an office copy of the order with the Commission and, if the company fails to comply with this provision, the company and any officer of the company who is in default are each guilty of an offence.
(8) For the purposes of this section:
(a) the allotment by a company of shares to which are attached rights that are not provided for in the memorandum or articles of the company or in a resolution or document to which section 256 applies shall be deemed to be a variation of the rights attached to shares previously issued unless the rights attached to the first‑mentioned shares are in all respects the same as the rights attached to shares previously issued; and
(b) the division of shares in a company into classes of shares shall be deemed to be a variation of the rights attached to those shares unless, in relation to each share in the company, the rights attached to that share are in all respects the same after the division as they were before the division.
(9) Nothing in section 172 or 176 affects the operation of this section.
199 Rights of classes of members
(1) This section applies to a company not having a share capital.
(2) Where:
(a) members of the company included in a class of members have special rights;
(b) no provision is made by the memorandum or articles for the variation or abrogation of those rights; and
(c) neither the memorandum nor the articles declares or declare those rights to be unalterable;
the company may, with the consent in writing of three‑quarters of the members included in that class or with the sanction of a special resolution passed at a meeting of members included in that class, vary or abrogate those rights or alter the memorandum or articles so as to authorise the variation or abrogation of those rights.
(3) Where:
(a) members of the company included in a class of members have special rights; and
(b) provision is made by the memorandum or articles authorising the variation or abrogation of those rights with the consent of a specified proportion of the members included in that class or with the sanction of a resolution of a kind specified in the memorandum or articles passed at a meeting of the members included in that class;
the memorandum or articles shall not be altered so as to vary or abrogate, or to authorise the variation or abrogation of, those rights, except with the consent of that proportion of the members included in that class or with the sanction of such a resolution passed at a meeting of those members.
(4) Where members of the company included in a class of members have special rights and:
(a) those rights are at any time varied or abrogated; or
(b) the memorandum or articles is or are altered so as to authorise the variation or abrogation of those rights;
members included in that class who constitute not less than 10% of the members included in that class may apply to the Court to have the variation or abrogation of the rights, or the alteration of the memorandum or articles, as the case may be, set aside and, if such an application is made, the variation or abrogation, or the alteration, does not have effect until confirmed by the Court.
(5) An application under subsection (4) shall be made within 28 days after the variation, abrogation or alteration referred to in that subsection was made and may be made, on behalf of the members entitled to make the application, by such one or more of their number as they appoint in writing.
(6) On the application, the Court may, after hearing the applicant and any other persons who apply to the Court to be heard and appear to the Court to be interested, if it is satisfied that the variation, abrogation or alteration would unfairly prejudice the members of the class represented by the applicant, set aside the variation, abrogation or alteration, as the case may be, and shall, if not satisfied, confirm it.
(7) A company shall, within 14 days after the making of an order by the Court on an application under this section, lodge an office copy of the order with the Commission and, if the company fails to comply with this provision, the company and any officer of the company who is in default are each guilty of an offence.
(8) Nothing in section 172 or 176 affects the operation of this section.
200 Rights of holders of preference shares to be set out in memorandum or articles
A company shall not allot any preference shares or convert any issued shares into preference shares unless there are set out in the memorandum or articles of the company the rights of the holders of those shares with respect to repayment of capital, participation in surplus assets and profits, cumulative or non‑cumulative dividends, voting, and priority of payment of capital and dividend in relation to other shares or other classes of preference shares.
Division 4—Maintenance of capital
201 Dividends payable from profits only
(1) No dividend shall be payable to a shareholder of a company except out of profits or under section 191.
(2) A director or executive officer of a company who, wilfully pays, or permits to be paid, except under section 191, a dividend out of what he or she knows not to be profits:
(a) without prejudice to any other liability, contravenes this subsection; and
(b) is also liable to the company’s creditors for the amount of the debts due by the company to them respectively to the extent by which the dividends so paid have exceeded the profits;
and the creditors, or the liquidator suing on behalf of the creditors, may recover the amount for which a director or executive officer is liable under this subsection.
(3) If the whole amount is recovered from a particular director or executive officer, he or she may recover contribution against any other person liable who has directed, or consented to, the payment.
(4) A liability imposed by this section on a person does not, on the person’s death, extend or pass to his or her executors or administrators, nor is his or her estate liable under this section.
(5) Proceedings may be brought under subsection (2) for the recovery of an amount even if a person has not been convicted of an offence under that subsection.
(6) In proceedings under subsection (2) for the recovery of an amount, the liability of a person under that subsection in respect of the amount may be established on the balance of probabilities.
(7) In this section:
dividend includes a bonus and a payment by way of bonus.
202 Company may pay interest out of capital in certain cases
Where any shares in a company are issued for the purpose of raising money to defray the expenses of the construction of any works or buildings or the provision of any plant that cannot be made profitable for a long period, the company may pay interest on so much of that share capital as is for the time being paid up and charge the interest so paid to capital as part of the construction or provision, but:
(a) no such payment shall be made unless it is:
(i) authorised by the articles of the company or by special resolution; and
(ii) approved by the Court;
(b) before approving any such payment, the Court may, at the expense of the company, appoint a person to inquire and report as to the circumstances of the case, and may require the company to give security for the payment of the costs of the inquiry;
(c) the payment shall be made for such period only as is determined by the Court, but that period shall not in any case extend beyond a period of 12 months after the works or buildings have been completed or the plant has been provided;
(d) the rate of interest shall not exceed 8% per annum or, if another rate is prescribed, that other rate; and
(e) the payment of the interest does not operate as a reduction of the amount paid up on the shares in respect of which it is paid.
203 Restriction on application of capital of company
(1) Subject to section 204, a company shall not apply any of its shares or capital money either directly or indirectly in making a payment to a person in consideration of the person subscribing or agreeing to subscribe, whether absolutely or conditionally, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for shares in the company, whether the shares are or the money is so applied by being added to the purchase price of property acquired by the company or to the contract price of work to be executed for the company or the money is paid out of the nominal purchase price or contract price or otherwise.
(2) Without limiting the generality of subsection (1), but subject to section 190, a company shall not issue shares at a discount.
(3) A company that contravenes this section is not guilty of an offence by virtue of this section or section 1311, but each officer of the company who is involved in the contravention contravenes this subsection.
(4) Where:
(a) a person is convicted by a court of an offence under this section in relation to a company; and
(b) the court is satisfied that the company has suffered loss or damage as a result of the act that constituted the offence;
the court may, in addition to imposing a penalty, order the person to pay compensation to the company of such amount as the court specifies, and any such order may be enforced as if it were a judgment of that court.
(5) Where a contravention of this section takes place:
(a) if a person other than the company concerned, being a person who was, at the time of the contravention, aware of the matters constituting the contravention, has made a profit as a result of the contravention, the company may, whether or not that person or any other person has been convicted of an offence under subsection (3) in relation to that contravention, recover from the person as a debt due to the company an amount equal to the profit; and
(b) where the company concerned has suffered loss or damage as a result of the contravention—the company may recover an amount equal to the loss or damage from any person involved in the contravention, whether or not that person or any other person has been convicted of an offence under subsection (3) in relation to that contravention, as a debt due to the company.
204 Power to make certain payments
(1) Subject to subsection (2), a company may make a payment by way of brokerage or commission to a person in consideration of the person subscribing or agreeing to subscribe, whether absolutely or conditionally, for shares in the company or procuring or agreeing to procure subscriptions, whether absolute or conditional, for shares in the company if, and only if:
(a) the payment is not prohibited by the constitution;
(b) the amount of the proposed payment, or the rate at which the payment is proposed to be made, is disclosed in the prospectus in respect of the shares or, if there is no such prospectus, in a statement lodged before the company becomes liable to make the payment; and
(c) the number of shares for which persons have agreed, for a payment by way of brokerage or commission, to subscribe absolutely is set out in that prospectus or statement.
(2) Subsection (1) does not permit a company to make a payment by way of brokerage or commission in respect of shares in the company if the amount of the payment, or, if another payment or other payments by way of brokerage or commission has or have been made by the company in respect of those shares, the sum of the amount of the first‑mentioned payment and the other payment or payments, exceeds:
(a) 10% of the total of the amount payable in respect of the shares upon their allotment; or
(b) such amount (if any), or an amount calculated at such rate (if any), as is authorised by the articles;
whichever is the lesser.
(3) A vendor to, promoter of, or person who receives payment in money or shares from, a company may apply any part of the money or shares so received in making any payment that would, if it were made directly by the company, be lawful under this section.
205 Company financing dealings in its shares etc.
(1) Except as otherwise expressly provided by this Law, a company shall not:
(a) whether directly or indirectly, give any financial assistance for the purpose of, or in connection with:
(i) the acquisition by any person, whether before, or at the same time as, the giving of financial assistance, of:
(A) shares or units of shares in the company; or
(B) shares or units of shares in a holding company of the company; or
(ii) the proposed acquisition by any person of:
(A) shares or units of shares in the company; or
(B) shares or units of shares in a holding company of the company;
(b) whether directly or indirectly, in any way:
(i) acquire shares or units of shares in the company; or
(ii) acquire or purport to acquire shares or units of shares in a holding company of the company; or
(c) whether directly or indirectly, in any way, lend money on the security of:
(i) shares or units of shares in the company; or
(ii) shares or units of shares in a holding company of the company.
(1A) A buy‑back authorised by section 206B does not contravene subparagraph (1)(b)(i).
(2) A reference in this section to the giving of financial assistance includes a reference to the giving of financial assistance by means of the making of a loan, the giving of a guarantee, the provision of security, the release of an obligation or the forgiving of a debt or otherwise.
(3) For the purposes of this section, a company shall be taken to have given financial assistance for the purpose of an acquisition or proposed acquisition referred to in paragraph (1)(a)(in this subsection called the relevant purpose) if:
(a) the company gave the financial assistance for purposes that included the relevant purpose; and
(b) the relevant purpose was a substantial purpose of the giving of the financial assistance.
(4) For the purposes of this section, a company shall be taken to have given financial assistance in connection with an acquisition or proposed acquisition referred to in paragraph (1)(a) if, when the financial assistance was given to a person, the company was aware that the financial assistance would financially assist:
(a) the acquisition by a person of shares or units of shares in the company; or
(b) where shares in the company had already been acquired—the payment by a person of any unpaid amount of the subscription payable for the shares or of any premium payable in respect of the shares, or the payment of any calls on the shares.
(5) A company that contravenes this section is not guilty of an offence by virtue of this section or section 1311, but each officer of the company who is involved in the contravention contravenes this subsection.
(6) Where:
(a) a person is convicted by a court of an offence under subsection (5) (including an offence under that subsection that is deemed to have been committed by virtue of section 5 of the Crimes Act 1914 or the corresponding provision of that Act as it applies as a law of this jurisdiction); and
(b) the court is satisfied that the company or another person has suffered loss or damage as a result of the contravention that constituted the offence;
the court may, in addition to imposing a penalty under that subsection, order the convicted person to pay compensation to the company or other person, as the case may be, of such amount as the court specifies, and any such order may be enforced as if it were a judgment of the court.
(7) The power of a court under section 1318 to relieve a person to whom that section applies, wholly or partly and on such terms as the court thinks fit, from a liability referred to in that section extends to relieving a person against whom an order may be made under subsection (6) of this section from the liability to have such an order made against him.
(8) Nothing in subsection (1) prohibits:
(a) the payment of a dividend by a company in good faith and in the ordinary course of commercial dealing;
(b) a payment made by a company pursuant to a reduction of capital in accordance with section 195;
(c) the discharge by a company of a liability of the company that was incurred in good faith as a result of a transaction entered into on ordinary commercial terms;
(d) where a corporation is a borrowing corporation by reason that it is or will be under a liability to repay moneys received or to be received by it:
(i) the giving, in good faith and in the ordinary course of commercial dealing, by a company that is a subsidiary of the borrowing corporation, of a guarantee in relation to the repayment of those moneys, whether or not the guarantee is secured by any charge over the property of that company; or
(ii) the provision, in good faith and in the ordinary course of commercial dealing, by a company that is a subsidiary of the borrowing corporation, of security in relation to the repayment of those moneys;
(e) an aquisition by a company of an interest (other than a legal interest) in fully‑paid shares in the company where no consideration is provided by the company, or by any corporation that is related to the company, for the acquisition;
(f) the purchase by a company of shares in the company pursuant to an order of a court;
(g) the creation or acquisition, in good faith and in the ordinary course of commercial dealing, by a company of a lien on shares in the company (other than fully‑paid shares) for any amount payable to the company in respect of the shares; or
(h) the entering into, in good faith and in the ordinary course of commercial dealing, of an agreement by a company with a subscriber for shares in the company permitting the subscriber to make payments for the shares (including payments in the respect of any premium) by instalments;
but nothing in this subsection:
(j) shall be construed as implying that a particular act of a company would, but for this subsection, be prohibited by subsection (1); or
(k) shall be construed as limiting the operation of any rule of law permitting the giving of financial assistance by a company, the acquisition of shares or units of shares by a company or the lending of money by a company on the security of shares.
(9) Nothing in subsection (1) prohibits:
(a) the making of a loan, the giving of a guarantee or the provision of security by a company in the ordinary course of its ordinary business where:
(i) that business includes the lending of money, or the giving of guarantees or the provision of security in connection with loans made by other persons; and
(ii) the loan that is made by the company, or, where the guarantee is given or the security is provided in respect of a loan, that loan, is made on ordinary commercial terms as to the rate of interest, the terms of repayment of principal and payment of interest, the security to be provided and otherwise; or
(b) the giving by a company of financial assistance for the purpose of, or in connection with, the acquisition or proposed acquisition of fully‑paid shares or units of fully‑paid shares in the company or in a holding company of the company to be held by or for the benefit of participating employees in relation to the company, where:
(i) if the company has an approving holding company or approving holding companies—the company, and that holding company or those holding companies, have each, at a general meeting; or
(ii) otherwise—the company has, at a general meeting;
approved a scheme for providing money for such acquisitions and the financial assistance is given in accordance with the scheme.
(10) Nothing in subsection (1) prohibits the giving by a company of financial assistance for the purpose of, or in connection with, an acquisition or proposed acquisition by a person of shares or units of shares in the company or in a holding company of the company if:
(a) the company, by special resolution, resolves to give financial assistance for the purpose of or in connection with, that acquisition;
(b) where:
(i) the company is a subsidiary of a listed corporation; or
(ii) the company is not a subsidiary of a listed corporation but is a subsidiary whose ultimate holding company is incorporated in Australia or an external Territory;
the listed corporation or the ultimate holding company, as the case may be, has, by special resolution, approved the giving of the financial assistance;
(c) the notice specifying the intention to propose the resolution referred to in paragraph (a) as a special resolution sets out:
(i) particulars of the financial assistance proposed to be given and the reasons for the proposal to give that assistance; and
(ii) the effect that the giving of the financial assistance would have on the financial position of the company and, where the company is included in a group of corporations consisting of a holding company and a subsidiary or subsidiaries, the effect that the giving of the financial assistance would have on the financial position of the group of corporations;
and is accompanied by a copy of a statement made in accordance with a resolution of the directors, setting out the names of any directors who voted against the resolution and the reasons why they so voted, and signed by not less than 2 directors, stating whether, in the opinion of the directors who voted in favour of the resolution, after taking into account the financial position of the company (including future liabilities and contingent liabilities of the company), the giving of the financial assistance would be likely to prejudice materially the interests of the creditors or members of the company or any class of those creditors or members;
(d) the notice specifying the intention to propose the resolution referred to in paragraph (b) as a special resolution is accompanied by a copy of the notice, and a copy of the statement, referred to in paragraph (c);
(e) not later than the day next following the day when the notice referred to in paragraph (c) is dispatched to members of the company there is lodged with the Commission a copy of that notice and a copy of the statement that accompanied that notice;
(f) the notice referred to in paragraph (c) and a copy of the statement referred to in that paragraph are given to:
(i) all members of the company;
(ii) all trustees for debenture holders of the company; and
(iii) if there are no trustees for, or for a particular class of, debenture holders of the company—all debenture holders, or all debenture holders of that class, as the case may be, of the company whose names are, at the time when the notice is dispatched, known to the company;
(g) the notice referred to in paragraph (d) and the accompanying documents are given to:
(i) all members of the listed corporation or of the ultimate holding company;
(ii) all trustees for debenture holders of the listed corporation or of the ultimate holding company; and
(iii) if there are no trustees for, or for a particular class of, debenture holders of the listed corporation or of the ultimate holding company—all debenture holders or debenture holders of that class, as the case may be, of the listed corporation or of the ultimate holding company whose names are, at the time when the notice is dispatched, known to the listed corporation or the ultimate holding company;
(h) within 21 days after the general meeting of the company at which the resolution referred to in paragraph (a) is passed or, in a case to which paragraph (b) applies, the general meeting of the listed corporation or ultimate holding company at which the resolution referred to in that paragraph is passed, whichever is the later, a notice:
(i) setting out the terms of the resolution referred to in paragraph (a); and
(ii) stating that any of the persons referred to in subsection (12) may, within the period referred to in that subsection, make an application to the Court opposing the giving of the financial assistance;
is published, in each State and Territory in which the company is carrying on business, in a daily newspaper circulating generally in that State or Territory;
(j) no application opposing the giving of the financial assistance is made within the periods referred to in subsection (12) or, if such an application or applications has or have been made, the application or each of the applications has been withdrawn or the Court has approved the giving of the financial assistance;
(k) the financial assistance is given in accordance with the terms of the resolution referred to in paragraph (a) and not earlier than:
(i) in a case to which subparagraph (ii) does not apply—the expiration of the period referred to in subsection (12); or
(ii) if an application or applications has or have been made to the Court within that period:
(A) where the application or each of the applications has been withdrawn—the withdrawal of the application or of the last of the applications to be withdrawn; or
(B) in any other case—the decision of the Court on the application or applications; and
(m) none of the following:
(i) the contract or transaction under which the company gives the financial assistance;
(ii) a contract or transaction made or engaged in, or proposed to be made or engaged in, as a result of, by means of, or in relation to, the financial assistance;
was, is, or is proposed to be, made or engaged in by a person for the purpose, or for purposes including the purpose, of enabling the company to avoid the operation of paragraph (1)(b).
(10A) If a company is a proprietary company and has only one director, the signature requirement in paragraph (10)(c) is satisfied if the director signs the statement referred to in that paragraph.
(11) Where, on application to the Court by a company, the Court is satisfied that the provisions of subsection (10) have been substantially complied with in relation to a proposed giving by the company of financial assistance of a kind mentioned in that subsection, the Court may, by order, declare that the provisions of that subsection have been complied with in relation to the proposed giving by the company of financial assistance.
(12) Where a special resolution referred to in paragraph (10)(a) is passed by a company, an application to the Court opposing the giving of the financial assistance to which the special resolution relates may be made, within the period of 21 days after the publication of the notice referred to in paragraph (10)(h), by:
(a) a member of the company;
(b) a trustee for debenture holders of the company;
(c) a debenture holder of the company;
(d) a creditor of the company;
(e) if the company is included in a group of corporations consisting of a holding company and a subsidiary or subsidiaries:
(i) a member of that subsidiary or of any of those subsidiaries;
(ii) a trustee for debenture holders of that subsidiary or of any of those subsidiaries;
(iii) a debenture holder of that subsidiary or of any of those subsidiaries; or
(iv) a creditor of that subsidiary or of any of those subsidiaries;
(f) if paragraph (10)(b) applies:
(i) a member of the listed corporation or ultimate holding company that passed a special resolution referred to in that paragraph;
(ii) a trustee for debenture holders of that listed corporation or ultimate holding company;
(iii) a debenture holder of that listed corporation or ultimate holding company; or
(iv) a creditor of that listed corporation or ultimate holding company; or
(g) the Commission.
(13) Where an application or applications opposing the giving of financial assistance by a company in accordance with a special resolution passed by the company is or are made to the Court under subsection (12), the Court:
(a) shall, in determining what order or orders to make in relation to the application or applications, have regard to the rights and interests of the members of the company or of any class of them as well as to the rights and interests of the creditors of the company or of any class of them; and
(b) shall not make an order approving the giving of the financial assistance unless the Court is satisfied that:
(i) the company has disclosed to the members of the company all material matters relating to the proposed financial assistance; and
(ii) the proposed financial assistance would not, after taking into account the financial position of the company (including any future or contingent liabilities), be likely to prejudice materially the interests of the creditors or members of the company or of any class of those creditors or members;
and may do all or any of the following:
(c) if it thinks fit, make an order for the purchase by the company of the interests of dissentient members of the company and for the reduction accordingly of the capital of the company;
(d) if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the Court for the purchase (otherwise than by the company or by a subsidiary of the company) of the interests of dissentient members;
(e) give such ancillary or consequential directions and make such ancillary or consequential orders as it thinks expedient;
(f) make an order disapproving the giving of the financial assistance or, subject to paragraph (b), an order approving the giving of the financial assistance.
(14) Where the Court makes an order under this section in relation to the giving of financial assistance by a company, the company shall, within 14 days after the order is made, lodge with the Commission an office copy of the order.
(15) The passing of a special resolution by a company for the giving of financial assistance by the company for the purpose of, or in connection with, an acquisition or proposed acquisition of shares or units of shares in the company, and the approval by the Court of the giving of the financial assistance, do not relieve a director of the company of any duty to the company under section 232 or otherwise, and whether of a fiduciary nature or not, in connection with the giving of the financial assistance.
(16) A reference in this section to an acquisition or proposed acquisition of shares or units of shares is a reference to any acquisition or proposed acquisition whether by way of purchase, subscription or otherwise.
(17) This section does not apply in relation to the doing of any act or thing pursuant to a contract entered into before the commencement of this Law if the doing of that act or thing would have been lawful if this Law had not been enacted.
206 Consequences of company financing dealings in its shares etc.
(1) Except as provided by this section, the validity of a contract or transaction is not affected by a contravention of:
(a) paragraph 205(1)(a); or
(b) paragraph 205(1)(b)—unless the contract or transaction effects the acquisition that constitutes the contravention; or
(c) paragraph 205(1)(c)—unless the contract or transaction effects the acquisition that constitutes the contravention.
(1A) If the contract or transaction is constituted by:
(a) a buy‑back of shares by a company; or
(b) the transfer of shares to a company under a buy‑back;
paragraph (1)(b) does not apply and the validity of a contract or transaction is not affected by a contravention of paragraph 205(1)(b) (even if the contract or transaction is the one that effects the acquisition that constitutes the contravention).
(2) Where a company makes or performs a contract, or engages in a transaction, that would, but for subsection (1), be invalid by reason that:
(a) the contract was made or performed, or the transaction was engaged in, in contravention of section 205; or
(b) the contract or transaction is related to a contract that was made or performed, or to a transaction that was engaged in, in contravention of that section;
the first‑mentioned contract or transaction is, subject to the following provisions of this section, voidable at the option of the company by notice in writing given to the other party, or by notices in writing given to each of the other parties, to that contract or transaction.
(3) The Court may, on the application of a member of a company, a holder of debentures of a company, a trustee for the holders of debentures of a company or a director of a company, by order, authorise the member, holder of debentures, trustee or director to give a notice or notices under subsection (2) in the name of the company.
(4) Where:
(a) a company makes or performs a contract, or engages in a transaction;
(b) the contract is made or performed, or the transaction is engaged in, in contravention of section 205 or the contract or transaction is related to a contract that was made or performed, or to a transaction that was engaged in, in contravention of that section; and
(c) the Court is satisfied, on the application of the company or of any other person, that the company or that other person has suffered, or is likely to suffer, loss or damage as a result of:
(i) the making or performance of the contract or the engaging in of the transaction;
(ii) the making or performance of a related contract or the engaging in of a related transaction;
(iii) the contract or transaction being void by reason of section 205 or having become void, or becoming void, under this section; or
(iv) a related contract or transaction being void by reason of section 205 or having become void, or becoming void, under this section;
the Court may make such order or orders as it thinks just and equitable (including, without limiting the generality of the foregoing, all or any of the orders mentioned in subsection (5)) against any party to the contract or transaction or to the related contract or transaction, or against the company or against any person who aided, abetted, counselled or procured, or was, by act or omission, in any way, directly or indirectly, knowingly concerned in or party to the contravention.
(5) The orders that may be made under subsection (4) include:
(a) an order directing a person to refund money or return property to the company or to another person;
(b) an order directing a person to pay to the company or to another person a specified amount not exceeding the amount of the loss or damage suffered by the company or other person; and
(c) an order directing a person to indemnify the company or another person against any loss or damage that the company or other person may suffer as a result of the contract or transaction or as a result of the contract or transaction being or having become void.
(6) If a certificate signed by not less than 2 directors, or by a director and a secretary, of a company stating that the requirements of paragraphs 205(10)(a) to (j), inclusive, have been complied with in relation to the proposed giving by the company of financial assistance for the purposes of an acquisition or proposed acquisition by a person of shares or units of shares in the company or in a holding company of the company is given to a person:
(a) the person to whom the certificate is given is not under any liability to have an order made against him under subsection (4) by reason of any contract made or performed, or any transaction engaged in, by him in reliance on the certificate, and
(b) any such contract or transaction is not invalid, and is not voidable under subsection (2), by reason that the contract is made or performed, or the transaction is engaged in, in contravention of section 205 or is related to a contract that was made or performed, or to a transaction that was engaged in, in contravention of that section.
(7) Subsection (6) does not apply in relation to a person to whom a certificate is given under that subsection in relation to a contract or transaction if the Court, on application by the company concerned or any other person who has suffered, or is likely to suffer, loss or damage as a result of the making or performance of the contract or the engaging in of the transaction, or the making or performance of a related contract or the engaging in of a related transaction, by order, declares that it is satisfied that the person to whom the certificate was given became aware before the contract was made or the transaction was engaged in that the requirements of subsection 205(10) had not been complied with in relation to the financial assistance to which the certificate related.
(8) For the purposes of subsection (7), a person shall, in the absence of proof to the contrary, be deemed to have been aware at a particular time of any matter of which an employee or agent of the person having duties or acting on behalf of the person in relation to the relevant contract or transaction was aware at the time.
(9) In any proceeding, a document purporting to be a certificate given under subsection (6) shall, in the absence of proof to the contrary, be deemed to be such a certificate and to have been duly given.
(10) A person who has possession of a certificate given under subsection (6) shall, in the absence of proof to the contrary, be deemed to be the person to whom the certificate was given.
(11) If a person signs a certificate stating that the requirements of subsection 205(10) have been complied with in relation to the proposed giving by a company of financial assistance and any of those requirements had not been complied with in respect of the proposed giving of that assistance at the time when the certificate was signed by that person, the person is guilty of an offence.
(12) It is a defence to a prosecution for an offence against subsection (11) if the defendant proves that at the time when he or she signed the certificate he or she believed on reasonable grounds that all the requirements of subsection 205(10) had been complied with in respect of the proposed giving of financial assistance to which the certificate related.
(13) The power of a court under section 1318 to relieve a person to whom that section applies, wholly or partly and on such terms as the court thinks fit, from a liability referred to in that section extends to relieving a person against whom an order may be made under subsection (4) of this section from the liability to have such an order made against him.
(14) If a company makes a contract or engages in a transaction under which it gives financial assistance as mentioned in paragraph 205(1)(a) or lends money as mentioned in paragraph 205(1)(c), any contract or transaction made or engaged in as a result of or by means of, or in relation to, that financial assistance or money shall be deemed for the purposes of this section to be related to the first‑mentioned contract or transaction.
(15) Any rights or liabilities of a person under this section (including rights or liabilities under an order made by the Court under this section) are in addition to and not in derogation of any rights or liabilities of that person apart from this section but, where there would be any inconsistency between the rights and liabilities of a person under this section or under an order made by the Court under this section and the rights and liabilities of that person apart from this section, the provisions of this section or of the order made by the Court prevail.
Division 4A—Unacceptable Self‑acquisition Schemes
206AAA Interpretation
(1) In this Division, unless the contrary intention appears:
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;
connected transaction, in relation to a self‑acquisition scheme relating to a company, means a transaction that:
(a) is or will be, or forms or will form part of, the scheme; or
(b) has been, or is proposed to be, entered into in connection with the scheme;
whether or not the company is or will be a party to the transaction;
eligible agreement means:
(a) an agreement; or
(b) a proposed agreement; or
(c) an agreement as varied or as proposed to be varied; or
(d) where an agreement has been varied—the agreement as in force at any time before the variation; or
(e) where an agreement has been discharged—the agreement as in force at any time before its discharge;
enter into includes engage in or become a party to;
in connection with, in relation to a scheme or transaction, includes in the course of carrying out the scheme or transaction;
party, in relation to a scheme or transaction, includes:
(a) in so far as the scheme or transaction consists of an eligible agreement—a party to the eligible agreement; and
(b) in so far as the scheme or transaction consists of a proposed or discharged agreement—a person who would be a party to the agreement if it were in effect; and
(c) otherwise—a person who has entered into or carried out, or proposes to enter into or carry out, the whole or a part of the scheme or transaction;
scheme includes:
(a) a transaction; and
(b) any plan, proposal, action, course of action, or course of conduct, even if unilateral; and
(c) a unilateral scheme;
transaction includes conduct (even if unilateral) and an eligible agreement.
(2) A reference in this Division to a person carrying out a scheme includes a reference to the person carrying out the scheme together with any other person or persons.
206AAB Self‑acquisition scheme
(1) A reference in this Division, in relation to a company, to a self‑acquisition scheme is a reference to a scheme to which the company has become a party for the purpose, or for purposes including the purpose, of doing any of the following, even if only at a future time or in particular circumstances:
(a) obtaining, securing, retaining, increasing the extent of, or exercising, power:
(i) to exercise, or control the exercise of, the right to vote attached to voting shares in the company; or
(ii) to dispose of, or to exercise control over the disposal of, shares in the company;
(b) bringing about a situation where, or ensuring that, a body corporate that has such power is, or the directors of such a body are, accustomed or under an obligation, whether formal or informal, to act in accordance with the company’s directions, instructions or wishes in relation to the exercise of the power;
(c) obtaining, securing, retaining, or increasing the extent of, a controlling interest in such a body;
(d) obtaining, securing, retaining, increasing the extent of, or exercising, the voting power attached to not less than the prescribed percentage of the voting shares in such a body;
(e) otherwise obtaining, securing, or retaining, a relevant interest in a share in itself.
(2) Division 5 of Part 1.2 has effect for the purposes of this section as if without limiting the generality of anything in that Division, a reference in subsection 36(1) to power included a reference to power sought to be obtained.
(3) Without limiting the matters to which regard may be had in determining what constitutes:
(a) a self‑acquisition scheme relating to a company; or
(b) a connected transaction in relation to such a scheme;
regard may be had to the giving, or proposed giving, by the company of financial assistance as mentioned in paragraph 205(1)(a), even if subsection 205(10) permits the giving by the company of the financial assistance.
(4) A transaction permitted by section 206CA or 206CB:
(a) is not to be taken to be a connected transaction in relation to; and
(b) is to be disregarded in determining what constitutes;
a self‑acquisition scheme relating to the company.
206AAC Relevant matters affecting self‑acquisition scheme
(1) For the purposes of this Division, each of the following is a relevant matter affecting a self‑acquisition scheme relating to a company:
(a) to how many shares in the company the scheme relates;
(b) the likely effect of the scheme or a connected transaction on the company’s state of affairs;
(c) what consideration the company has provided, or is to provide, in connection with the scheme or a connected transaction;
(d) how much information about the scheme or a connected transaction the company has given to its members or creditors, or to securities exchanges;
(e) what opportunity the company’s members or creditors have had to consider the likely effects of the scheme or of a connected transaction;
(f) whether or not the company’s members or creditors have been consulted about, or have participated in making, the decision for the company to become a party to the scheme;
(g) whether or not the company’s members have had reasonable and equal opportunities to participate, or to become entitled to participate, in benefits accruing, whether directly or indirectly and whether immediately or in the future, in connection with the scheme or a connected transaction, to a party to the scheme or a connected transaction or to a person associated with such a party;
(h) the effect of the scheme or a connected transaction on:
(i) a takeover bid in relation to shares in the company that a person has made or proposes to make; or
(ii) the likelihood of a person making such a takeover bid;
(j) any other matter that appears to the Commission to be relevant in all the circumstances of the case.
(2) Nothing in subsection (1) limits the generality of anything else in it.
206AAD Declaration by Commission
(1) This section applies where the Commission is satisfied that:
(a) a transaction that has been, or is proposed to be, entered into is a connected transaction in relation to a self‑acquisition scheme relating to a company; and
(b) one or more of the following subparagraphs applies:
(i) both of the following are the case:
(A) as a result of the entering into or carrying out of the scheme or of a connected transaction, the company acquired a relevant interest in voting shares in itself;
(B) immediately after the acquisition, the company had a relevant interest or relevant interests in more than 10% of the voting shares in itself;
(ii) it is reasonable to expect that:
(A) as a result of the entering into or carrying out of the scheme or of a connected transaction, the company will acquire a relevant interest in voting shares in itself; and
(B) immediately after the acquisition, the company will have a relevant interest or relevant interests in more than 10% of the voting shares in itself;
(iii) the scheme or a connected transaction was entered into or carried out at a time when the company had, or it is reasonable to expect that the scheme or a connected transaction will be entered into or carried out at a time when the company has, a relevant interest or relevant interests in more than 10% of the voting shares in itself; and
(c) having regard to the relevant matters affecting the scheme, the entering into or carrying out of the scheme or a connected transaction has prejudiced materially, or is likely to prejudice materially, the rights or interests of the company, of its creditors or members, or of a class of its creditors or members.
(2) The Commission:
(a) if the transaction referred to in paragraph (1)(a) has been entered into—may, within 90 days after the day on which it was entered into, declare the transaction; or
(b) otherwise—may declare the proposed transaction referred to in paragraph (1)(a);
to form part of an unacceptable self‑acquisition scheme relating to the company.
(3) The Commission may make a declaration under this section in relation to the scheme even if it has already become entitled on at least one occasion to make such a declaration.
(4) A declaration under this section is to be in writing.
(5) As soon as practicable after making a declaration under this section, the Commission must:
(a) give a copy of the declaration to the company; and
(b) cause such a copy to be published in the Gazette.
(6) The validity of a declaration is not affected by a contravention of subsection (5).
206AAE Commission may make interim orders
(1) Subject to this section, where the Commission makes a declaration under section 206AAD, it may, even if it has already made at least one order under this section in reliance on the declaration, make, by writing published in the Gazette, one or more of the following:
(a) an order restraining a specified person from disposing of any interest in specified shares in the company;
(b) an order restraining a specified person from acquiring any interest in specified shares in the company;
(c) an order restraining the exercise of voting or other rights attached to specified shares in the company;
(d) an order directing the holder of shares in respect of which an order under this section is in force to give written notice of that order to any person whom the holder knows to be entitled to exercise a right to vote attached to any of those shares;
(e) an order directing the company not to make payment, except in the course of winding up, of a sum due from the company in respect of specified shares;
(f) an order directing the company not to register the transfer or transmission of specified shares;
(g) an order directing the company not to issue to a person who holds shares in the company shares that the company proposed to issue to the person:
(i) because the person holds shares in the company; or
(ii) pursuant to an offer or invitation made or issued to the person because the person holds shares in the company.
(2) The Commission may, by written order published in the Gazette, vary or revoke an order made under subsection (1).
(3) A copy of an order under subsection (1) and of any order by which it is revoked or varied must be served on the company and on any person to whom the order is directed.
(4) Where an order made under subsection (1) is in force, a person aggrieved by the order may apply to the Court for variation or revocation of the order, and the Court may, if it is satisfied that it is reasonable to do so, vary the order or revoke the order and any order by which it has been varied.
(5) A person must not contravene an order under subsection (1).
Penalty: 25 penalty units or imprisonment for 6 months, or both.
(6) Where a body corporate contravenes subsection (5), each officer of the body who is in default contravenes this subsection.
Penalty: 25 penalty units or imprisonment for 6 months, or both.
(7) An order made under subsection (1) ceases to operate at the end of 30 days after it is made or at the end of the day specified in it as the day on which it ceases to operate, whichever is earlier.
(8) The Commission may only make an order under subsection (1) if it has afforded the person to whom the order is directed an opportunity to appear at a hearing before the Commission and to make submissions and give evidence to the Commission in relation to the matter.
(9) The Commission is not empowered to make an order under subsection (1) in reliance on a declaration made by the Commission if:
(a) an application has been made to the Court under section 206AAG in relation to the declaration; or
(b) the Court has revoked under subsection (4) of this section an order made in reliance on the declaration.
206AAF Court may reverse Commission’s declaration
(1) Where the Commission makes a declaration under section 206AAD, the Court may, on an application by the company or on an application made under section 206AAG in relation to the declaration, declare the transaction or proposed transaction not to be part of an unacceptable self‑acquisition scheme.
(2) On the making of a declaration under subsection (1), the Commission’s declaration ceases to have effect.
206AAG Court may act on Commission’s declaration
(1) This section applies where the Commission makes a declaration under section 206AAD.
(2) The Court may make any order it thinks necessary or expedient:
(a) to protect the rights or interests of a person who is affected by the scheme or by a connected transaction; or
(b) to prevent a person from entering into or carrying out the whole or a part of the scheme or of a connected transaction; or
(c) to put a person in the same position as if the whole or a particular part of the scheme or of a connected transaction had not been entered into or carried out.
(3) The Court may make one or more of the following:
(a) an order directing a person to supply specified information to members or creditors of the company;
(b) an order restraining the exercise of any voting or other rights attached to shares in the company;
(c) an order that any exercise of the voting or other rights attached to shares in the company be disregarded;
(d) an order restraining the disposal of, or of any interest in, shares in the company;
(e) an order directing the disposal of, or of any interest in, shares in the company;
(f) an order vesting in the Commission shares, or any interest in shares, in the company;
(g) an order directing the company not to register the transfer or transmission of shares;
(h) an order directing the company not to make payment, or to defer making payment, of any sum or sums due from the company in respect of shares in the company;
(j) an order cancelling, or declaring to be voidable, an arrangement or offer that is a connected transaction in relation to the scheme.
(4) If the Court is satisfied that a person has suffered, or is likely to suffer, loss or damage as a result of the scheme or of a connected transaction, the Court may make, against the company or a person who was in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the company becoming a party to the scheme, or to the scheme or transaction, as the case may be, any order that the Court thinks just and equitable, including, but not limited to, one or more of the following:
(a) an order directing the refunding of money or the return of property;
(b) an order directing the payment to a person of damages in respect of loss or damage so suffered;
(c) an order directing that a person be indemnified against any loss or damage that the person may so suffer.
(5) The Court may, in order to secure compliance with any other order made under this section, make an order directing a person to do or refrain from doing a specified act.
(6) The Court may only make an order under this section on the application of the Commission, the company or a member or creditor of the company.
(7) The power of a court under section 1318 to relieve a person to whom that section applies, wholly or partly and on such terms as the court thinks fit, from a liability referred to in that section extends to relieving a person against whom an order may be made under subsection (4) of this section from the liability to have such an order made against the person.
(8) Section 744 applies in relation to an order under this section in the same way as it applies in relation to an order under section 736.
(9) Nothing in this section limits the generality of anything else in it.
206AAH Effect of Division
Nothing in this Division limits the generality, or affects the operation, of:
(a) section 205 or 206; or
(b) a provision of Chapter 6.
Division 4B—Share buy‑backs
206A Purpose
This Division states the rules to be followed by a company when buying back its own shares. These rules are designed to protect the interests of shareholders and creditors by:
(a) addressing the risk of buy‑back activity leading to the company’s insolvency
(b) seeking to ensure fairness between the company’s shareholders
(c) requiring the company to disclose all material information.
206B The company’s power to buy back its own shares
A company may buy back its own shares (other than redeemable preference shares) if it follows the procedures laid down in this Division.
Note 1: A company may include provisions in its articles that preclude the company buying back its own shares or impose restrictions on the exercise of the company’s power to buy back its own shares.
Note 2: For the redemption of redeemable preference shares see section 192.
206C Buy‑back procedure—general
(1) The following table specifies the steps required for, and the sections that apply to, the different types of buy‑back.
| | employee share scheme | on‑market | equal access scheme | |
Procedures [and sections applied] | odd lot | within 10/12 limit | over 10/12 limit | within 10/12 limit | over 10/12 limit | within 10/12 limit | over 10/12 limit | selective buy‑back |
ordinary resolution
[206D] | ‑ | ‑ | yes | ‑ | yes | ‑ | yes | ‑ |
special/ unanimous resolution
[206E] | ‑ | ‑ | ‑ | ‑ | ‑ | ‑ | ‑ | yes |
lodge offer documents with ASC
[206F] | ‑ | ‑ | ‑ | ‑ | ‑ | yes | yes | yes |
14 days notice
[206G] | ‑ | yes | yes | yes | yes | yes | yes | yes |
disclose relevant information when offer made
[206H] | ‑ | ‑ | ‑ | ‑ | ‑ | yes | yes | yes |
cancel shares
[206I] | yes | yes | yes | yes | yes | yes | yes | yes |
notify ASC of cancellation
[206J] | yes | yes | yes | yes | yes | yes | yes | yes |
Note: Subsections (2) and (3) of this section explain what an equal access scheme is. The 10/12 limit is the 10% in 12 months limit laid down in subsections (4) and (5). See section 9 for definitions of odd lot buy‑back, employee share scheme buy‑back, on‑market buy‑back and selective buy‑back.
Equal access scheme
(2) An equal access buy‑back scheme is a scheme that satisfies all the following conditions:
(a) the offers under the scheme relate only to ordinary shares
(b) offers are to be made to every person who holds ordinary shares to buy back the same percentage of their ordinary shares
(c) all of those persons have a reasonable opportunity to accept the offers made to them
(d) buy‑back agreements are not entered into until a specified time for acceptances of offers has closed
(e) the terms of all the offers are the same.
(3) In applying subsection (2), disregard:
(a) any difference in consideration attributable to the fact that the offers relate to shares having different accrued dividend entitlements
(b) any difference in consideration attributable to the fact that the offers relate to shares on which different amounts are paid up or on which different amounts remain unpaid
(c) any difference in the offers introduced solely for the purpose of avoiding shareholders being left with odd lots
(d) any difference in the exact percentage of shares bought back introduced solely for the purpose of ensuring that only whole numbers of shares are bought back.
10/12 limit
(4) The 10/12 limit for a company proposing to make a buy‑back is 10% of the smallest number, at any time during the last 12 months, of votes attaching to voting shares of the company.
Exceeding the 10/12 limit
(5) A proposed buy‑back would exceed the 10/12 limit if the number of votes attaching to:
(a) all the voting shares in the company that have been bought back during the last 12 months; and
(b) the voting shares that will be bought back if the proposed buy‑back is made;
would exceed the 10/12 limit.
206D Buy‑back procedure—shareholder approval if the 10% in 12 months limit exceeded
Ordinary resolution required
(1) If section 206C applies this section to a buy‑back, the terms of the buy‑back agreement must be approved before it is entered into by a resolution passed at a general meeting of the company, or the agreement must be conditional on such an approval.
Information to accompany the notice of meeting
(2) The company must include with the notice of the meeting a statement setting out all information known to the company that is material to the decision whether to vote in favour of the resolution. However, the company does not have to disclose information if it would be unreasonable to require the company to do so because the company had previously disclosed the information to its shareholders.
Documents to be lodged with the ASC
(3) Before the notice of the meeting is sent to shareholders, the company must lodge with the ASC a copy of:
(a) the notice of the meeting; and
(b) any document relating to the buy‑back that will accompany the notice of the meeting sent to shareholders.
206E Buy‑back procedure—special shareholder approval for selective buy‑back
Selective buy‑back requires special or unanimous resolution
(1) If section 206C applies this section to a buy‑back, the terms of the buy‑back agreement must be approved before it is entered into by either:
(a) a special resolution passed at a general meeting of the company with no votes being cast in favour of the resolution by any person whose shares are proposed to be bought back or their associates; or
(b) a resolution agreed to by all ordinary shareholders at a general meeting;
or the agreement must be conditional on such an approval.
Information to accompany the notice of meeting
(2) The company must include with the notice of the meeting a statement setting out all information known to the company that is material to the decision whether to vote in favour of the resolution. However, the company does not have to disclose information if it would be unreasonable to require the company to do so because the company had previously disclosed the information to its shareholders.
Documents to be lodged with the ASC
(3) Before the notice of the meeting is sent to shareholders, the company must lodge with the ASC a copy of:
(a) the notice of the meeting; and
(b) any document relating to the buy‑back that will accompany the notice of the meeting sent to shareholders.
(4) The ASC may exempt a company from the operation of this section. The exemption:
(a) must be in writing; and
(b) must be granted before the buy‑back agreement is entered into; and
(c) may be granted subject to conditions.
206F Buy‑back procedure—lodgment of offer documents with the ASC
If section 206C applies this section to a buy‑back, the company must lodge with the ASC, before the buy‑back agreement is entered into, a copy of:
(a) a document setting out the terms of the offer; and
(b) any document that is to accompany the offer.
206G Notice of intended buy‑back
(1) If section 206C applies this section to a buy‑back, the company must satisfy the lodgment requirement in subsection (2) at least 14 days before:
(a) if the buy‑back agreement is conditional on the passing of a resolution under subsection 206D(1) or 206E(1)—the resolution is passed; or
(b) if it is not—the agreement is entered into.
(2) The company satisfies the lodgment requirement when it lodges with the ASC:
(a) documents under subsection 206D(3) or 206E(3) or section 206F; or
(b) a notice that the company intends to carry out the buy‑back.
Note 1: A company that has to lodge documents under section 206D, 206E or 206F needs to lodge a notice under paragraph (2)(b) only if it wants for some reason to have less than 14 days between lodging the section 206D, 206E or 206F documents and entering into the buy‑back agreement or the passing of the resolution.
Note 2: The company may specify a buy‑back under paragraph (2)(b) in any way. It may, for instance, choose to lodge a notice covering buy‑backs to be carried out:
* under a particular scheme; or
* as part of particular on‑market buy‑back activity.
206H Buy‑back procedure—disclosure of relevant information when offer made
If section 206C applies this section to a buy‑back, the company must include with the offer to buy back shares a statement setting out all information known to the company that is material to a shareholder’s decision whether to accept the offer.
206I Acceptance of offer and transfer of shares to the company
Effect of acceptance of the buy‑back offer on share rights
(1) Once a company has entered into an agreement to buy back shares, all rights attaching to the shares are suspended. The suspension is lifted if the agreement is terminated.
Shares transferred to the company and cancelled
(2) A company must not deal in shares it buys back. An agreement entered into in contravention of this subsection is void.
(3) Immediately after the registration of the transfer to the company of the shares bought back, the shares are cancelled. This cancellation does not reduce the company’s nominal share capital.
206J Buy‑back procedure—notice to ASC of cancellation of shares
Within 1 month after registering the transfer, the company must lodge with the ASC a notice that states:
(a) the number of shares transferred; and
(b) the class of shares transferred; and
(c) the consideration paid for the shares.
206K Signposts to other relevant provisions
The following table sets out other provisions of the Law that are relevant to buy‑backs.
section 588G
section 1317HA | liability of directors on insolvency Under the combined operation of these sections, the directors may have to compensate the company if the company is, or becomes, insolvent when the company enters into the buy‑back agreement. |
section 1324 | injunctions to restrain contravention Under this section, the Court may grant an injunction against conduct that constitutes or would constitute a contravention of the Law. |
section 733 | ASC intervention (application to the Panel) Under this section, the ASC may apply to the Corporations and Securities Panel for a declaration if it appears to the ASC that unacceptable circumstances have or may have occurred in relation to a share buy‑back. If the Panel makes a declaration it may exercise a range of powers under section 734. |
section 42A
section 632A | application of takeover provisions These sections deal with the application of Chapter 6 to buy‑backs. |
section 205 | consequences of failure to follow procedures—the company and the officers If a company fails to follow the procedures in the buy‑backs Division, the company contravenes this section and the officers who are involved in the contravention commit an offence. |
subsection 206(1A) | consequences of failure to follow procedures—the transaction This subsection provides that a failure to follow the procedures does not affect the validity of the buy‑back transaction itself. |
sections 1001A‑1001D | continuous disclosure provisions Under these sections, a disclosing entity is required to disclose information about its securities that is material and not generally available. |
Part 3.2A | benefits to related parties to be disclosed Under this Part, a financial benefit to a director or other related party, that could adversely affect the interests of members of a public company or diminish or endanger its resources, must be approved by a general meeting before it is given. |
section 162 | provisions in articles This section deals with the way in which a company’s articles may restrict the exercise of the company’s powers and the consequences of a failure to observe these restrictions. |
section 197 | variation of class rights This section deals with the variation of rights attached to a class of shares. This variation may be governed by the provisions of the company’s memorandum and articles. |
Division 5—Beneficial and non‑beneficial interests in shares
208 Notices relating to non‑beneficial and beneficial ownership of shares
(1) Where, at a particular time:
(a) an instrument of transfer of shares in a company is lodged, by or on behalf of the transferee, with the company for registration of the transfer;
(b) having regard to all relevant circumstances, it may reasonably be expected that, upon registration of the transfer, the transferee will hold non‑beneficially particular shares (in this subsection called the relevant shares), being any of the shares to which the instrument of transfer relates; and
(c) the instrument of transfer does not include a notice that:
(i) contains a statement to the effect that, upon registration of the transfer, the transferee will hold the relevant shares non‑beneficially;
(ii) sets out particulars of the relevant shares; and
(iii) is signed by or on behalf of the transferee,
the transferee contravenes this subsection.
(2) The fact that a person has contravened subsection (1) does not affect the validity of the registration of a transfer of shares in a company.
(3) Where:
(a) an instrument of transfer of shares in a company includes a notice of the kind referred to in paragraph (1)(c) and is lodged with the company for registration of the transfer; and
(b) upon registration of the transfer, the transferee holds beneficially particular shares (in this subsection called the relevant shares), being any of the shares particulars of which are set out in the notice;
then, before the end of the period of 14 days beginning on registration of the transfer, the transferee shall, whether or not the transferee begins before the end of that period to hold any of the relevant shares non‑benefically, give to the company a notice that:
(c) sets out the name and address of the transferee;
(d) contains a statement to the effect that, as from registration of the transfer, the transferee holds the relevant shares beneficially;
(e) sets out particulars of the relevant shares; and
(f) is signed by or on behalf of the transferee.
(4) Where:
(a) an instrument of transfer of shares in a company is lodged with the company for registration of the transfer; and
(b) upon registration of the transfer, the transferee holds non‑beneficially particular shares (in this subsection called the relevant shares), being any of the shares to which the instrument of transfer relates (other than, in a case where the instrument of transfer includes a notice of the kind referred to in paragraph (1)(c), the shares particulars of which are set out in the notice);
then, before the end of the period of 14 days beginning on registration of the transfer, the transferee shall, whether or not the transferee begins before the end of that period to hold any of the relevant shares beneficially, give to the company a notice that:
(c) sets out the name and address of the transferee;
(d) contains a statement to the effect that, as from registration of the transfer, the transferee holds the relevant shares non‑beneficially;
(e) sets out particulars of the relevant shares; and
(f) is signed by or on behalf of the transferee.
(5) Where:
(a) at a particular time, a person holds beneficially shares in a company; and
(b) immediately after that time, the person holds non‑beneficially particular shares (in this subsection called the relevant shares), being any of the shares referred to in paragraph (a);
then, before the end of the period of 14 days beginning at that time, the person shall, whether or not the person recommences before the end of that period to hold any of the relevant shares beneficially, give to the company a notice that:
(c) sets out the name and address of the person;
(d) contains a statement to the effect that, after that time, the person holds the relevant shares non‑beneficially;
(e) specifies that time and sets out particulars of the relevant shares; and
(f) is signed by or on behalf of the person.
(6) Where:
(a) at a particular time, a person holds non‑beneficially shares in a company; and
(b) immediately after that time, the person holds beneficially particular shares (in this subsection called the relevant shares), being any of the shares referred to in paragraph (a);
then, before the end of the period of 14 days beginning at that time, the person shall, whether or not the person recommences before the end of that period to hold any of the relevant shares non‑beneficially, give to the company a notice that:
(c) sets out the name and address of the person;
(d) contains a statement to the effect that, after that time, the person holds the relevant shares beneficially;
(e) specifies that time and sets out particulars of the relevant shares; and
(f) is signed by or on behalf of the person.
(7) In proceedings under this section, a person shall, unless the contrary is established, be presumed to have been aware at a particular time of a circumstance of which an employee or agent of the person, being an employee or agent having duties or acting in relation to the transfer to, or ownership by, the person of a share or shares in the company concerned, was aware at that time.
(8) In this section, unless the contrary intention appears:
any includes all;
company means a company as defined in section 9, but does not include a body corporate that is a company for the purposes of Part 6.7.
(9) For the purposes of this section and of section 216B:
(a) where, at a particular time, a person:
(i) holds shares in a capacity other than that of sole beneficial owner; or
(ii) without limiting the generality of subparagraph (i), holds shares as trustee for, as nominee for, or otherwise on behalf of or on account of, another person;
the first‑mentioned person shall be taken to hold the shares non‑beneficially at that time; and
(b) a person who holds shares at a particular time shall be taken to hold the shares beneficially at that time unless the person holds the shares non‑beneficially at that time.
213 Trustee etc. may be registered as owner of shares
(1) In this section:
share, in relation to a body corporate, means a share in the body that is registered in a register kept in Australia.
(2) A trustee, executor or administrator of the estate of a dead person who was the registered holder of a share in a corporation may be registered as the holder of that share as trustee, executor or administrator of that estate.
(3) A trustee, executor or administrator of the estate of a dead person who was entitled in equity to a share in a corporation may, with the consent of the corporation and of the registered holder of that share, be registered as the holder of that share as trustee, executor or administrator of that estate.
(4) Where:
(a) a person is appointed, under a law of a State or Territory relating to the administration of the estates of persons who, through mental or physical infirmity, are incapable of managing their affairs, to administer the estate of a person who is so incapable; and
(b) the incapable person is the registered holder of a share in a corporation;
the first‑mentioned person may be registered as the holder of that share as administrator of that estate.
(5) Where:
(a) a person is appointed, under a law of a State or Territory relating to the administration of the estates of a person who, through mental or physical infirmity, are incapable of managing their affairs, to administer the estate of a person who is so incapable; and
(b) the incapable person is entitled in equity to a share in a corporation;
the first‑mentioned person may, with the consent of the corporation and of the registered holder of that share, be registered as the holder of the share as administrator of that estate.
(6) Where:
(a) by virtue of the Bankruptcy Act 1966, a share in a body corporate, being the property of a bankrupt, vests in the Official Trustee in Bankruptcy; and
(b) the bankrupt is the registered holder of that share;
the Official Trustee may be registered as the holder of that share as the Official Trustee in Bankruptcy.
(7) Where:
(a) by virtue of the Bankruptcy Act 1966, a share in a body corporate, being the property of a bankrupt, vests in the Official Trustee in Bankruptcy; and
(b) the bankrupt is entitled in equity to that share;
the Official Trustee may, with the consent of the body and of the registered holder of that share, be registered as the holder of that share as the Official Trustee in Bankruptcy.
(8) A person registered under subsection (2), (3), (4), (5), (6) or (7), is, while registered as mentioned in that subsection, subject:
(a) to the same liabilities in respect of the share as those to which he, she or it would have been subject if the share had remained, or had been, as the case requires, registered in the name of the dead person, the incapable person or the bankrupt, as the case may be; and
(b) to no other liabilities in respect of the share.
(9) Shares in a corporation registered in a register and held by a trustee in respect of a particular trust may, with the consent of the corporation, be marked in the register in such a way as to identify them as being held in respect of the trust.
(10) Except as provided in this section and section 216B:
(a) no notice of a trust, whether express, implied or constructive, shall be entered on a register kept in Australia or be receivable by the Commission;
(b) no liabilities are affected by anything done under a preceding subsection of this section or under section 216B; and
(c) nothing so done affects the body corporate concerned with notice of a trust.
(11) A person shall, within one month after beginning to hold shares in a proprietary company as trustee for, or otherwise on behalf of or on account of, a body corporate, serve on the company notice in writing that the person so hold the shares.
Division 6—Options
216 Options over unissued shares
(1) An option granted after the commencement of this section by a public company that enables any person to take up unissued shares in the company after a period of 5 years has elapsed from the date on which the option was granted is void.
(2) Subsection (1) does not apply in a case where the holders of debentures of a company have an option to take up shares in the company by way of redemption of the debentures.
Part 2.5—Company registers
216A Registers to be maintained
(1) A company must set up and maintain:
(a) a register of members (see section 216B); and
(b) if the company grants options over unissued shares—a register of option holders and copies of options documents (see section 216C); and
(c) if the company issues debentures—a register of debenture holders (see section 216D).
Note 1: See also section 271 (register of charges) and section 702 (register of unclaimed property of dissenting shareholders).
Note 2: The registers may be kept on computer (see section 1306).
(2) Extended reach of debenture concept
For the purposes of this Part, documents that fall into one of the exceptions in paragraphs (a), (b), (c) and (f) of the definition of debenture in section 9 are treated as if they were debentures.
216B Register of members
(1) General requirements
The register of members must contain the following information about each member:
(a) the member’s name and address
(b) the date on which the entry of the member’s name in the register is made.
(2) Index to register
If the company has more than 50 members, the company must include in the register an up‑to‑date index of members’ names. The index must be convenient to use and allow a member’s entry in the register to be readily found. A separate index need not be included if the register itself is kept in a form that operates effectively as an index.
(3) Companies with share capital
If the company has a share capital, the register must also show:
(a) the date on which every allotment of shares takes place; and
(b) the number of shares in each allotment; and
(c) the shares held by each member; and
(d) the class of shares; and
(e) the share numbers (if any), or share certificate numbers (if any), of the shares; and
(f) the amount paid, or agreed to be considered as paid, on the shares.
Note 1: Transfers of shares are entered in the register under section 1092. Section 213 deals with the registration of trustees etc. on the death, incapacity or bankruptcy of the shareholder.
Note 2: For the treatment of joint holders see subsection (8).
(4) Companies with stock
If the company converts shares to stock, the register must show the amount of stock, or the number of stock units, held by each member who holds stock.
(5) Non‑beneficial ownership—companies other than listed companies
The register of a company that:
(a) has a share capital; and
(b) is neither a listed company (within the meaning of section 603) nor a company covered by an order under section 707;
must indicate any shares or stock that a member does not hold beneficially.
Note: See also section 208 (in particular, subsection 208(9) which contains relevant presumptions about beneficial ownership).
(6) In deciding for the purposes of subsection (5) whether a member holds shares beneficially or non‑beneficially, the company is to have regard only to information in notices given to the company under section 208, 720 or 722.
(7) Former members
A register of members must also show:
(a) the name and details of each person who stopped being a member of the company within the last 7 years; and
(b) the date on which the person stopped being a member.
The company may keep these entries separately from the rest of the register.
(8) Joint holders
For the purposes of this section, 2 or more persons who jointly hold shares in the company are taken to be a single member of the company in relation to those shares. They may also be members of the company because of shares that they hold in their own right or jointly with others.
216C Register of option holders and copies of options documents
(1) The register of option holders must contain the following information about each holder of options over unissued shares in the company:
(a) the option holder’s name and address
(b) the date on which the entry of the option holder’s name in the register is made
(c) the date of grant of the options
(d) the number and description of the shares over which the options were granted
(e) either:
(i) the period during which the options may be exercised; or
(ii) the time at which the options may be exercised
(f) any event that must happen before the options can be exercised
(g) any consideration for the grant of the options
(h) any consideration for the exercise of the options or the method by which that consideration is to be determined.
Because it is a register of the holders of options that are still exercisable, the register must be updated whenever options are exercised or expire.
(2) Information about the grant of an option must be entered in the register within 14 days after the grant of the option.
(3) Copies of options documents
The company must keep with the register a copy of every document that grants an option over unissued shares in the company unless the option has been granted official quotation by a securities exchange.
(4) The company must change the register to reflect the transfer of an option over unissued shares in the company only if the person transferring the option gives the company written notice of the transfer.
(5) A company’s failure to comply with this section in relation to an option does not affect the option itself.
216D Register of debenture holders
(1) The register of debenture holders must contain the following information about each holder of a debenture:
(a) the debenture holder’s name and address
(b) the amount of the debentures held.
Note: See subsection 216A(2) for the coverage of debenture.
(2) A company’s failure to comply with this section in relation to a debenture does not affect the debenture itself.
216E Location of registers
(1) A register kept under this Part must be kept at:
(a) the company’s registered office; or
(b) an office at the company’s principal place of business; or
(c) an office (whether of the company or of someone else) where the work involved in maintaining the register is done; or
(d) another office approved by the ASC.
The office must be in Australia.
(2) Notice to ASC
The company must lodge with the ASC a notice of the address at which the register is kept within 7 days after the register is:
(a) established at an office that is neither the company’s registered office nor at its principal place of business; or
(b) moved from one office to another.
Notice is not required for moving the register between the registered office and an office at the principal place of business.
216F Right to inspect and get copies
(1) Right to inspect
A company must allow anyone to inspect a register kept under this Part. If the register is not kept on a computer, the person inspects the register itself. If the register is kept on a computer, the person inspects a hard copy of the information on the register unless the person and the company agree that the person can access the information by computer.
Note: Other provisions that are relevant to the inspection of registers are:
• section 1300 (place and times for inspection)
• section 1301 (the location of documents that are kept on computers)
• section 1306 (form and evidentiary value).
(2) Inspection fees
A member of a company, a registered option holder or a registered debenture holder may inspect a register kept under this Part without charge. Other people may inspect the register only on payment of any fee (up to the prescribed amount) required by the company.
(3) Right to get copies
The company must give a person a copy of the register (or a part of the register) within 7 days if the person:
(a) asks the company for the copy; and
(b) pays any fee (up to the prescribed amount) required by the company.
The ASC may allow the company a longer period to comply with the request. If the register is kept on a computer and the person asks for the data on floppy disk, the company must give the data to the person on floppy disk. The data must be readable but the floppy disk need not be formatted for the person’s preferred operating system.
(4) A person has the same rights to inspect, and obtain copies of, a company’s options documents kept under subsection 216C(3) as the person has in respect of the register of option holders itself.
(5) The company is not required under subsection (1) or (3) to allow a person to see, or to give a person a copy that contains, share certificate numbers.
(6) ASC power in relation to register of debenture holders
The ASC may exempt a company from complying with subsections (1) and (3) in relation to information in a register of debenture holders about debentures that are not convertible into shares or options over unissued shares.
(7) The exemption:
(a) must be in writing; and
(b) may be general or limited; and
(c) may be subject to conditions specified in the exemption.
(8) The ASC must publish a copy of the exemption in the Gazette.
(9) A person must not contravene a condition of the exemption.
(10) On application by the ASC, the Court may order a person who contravenes a condition of the exemption to comply with the condition.
216G Agent’s obligations
A person who agrees to maintain a register on behalf of a company for the purposes of this Part must:
(a) make the register available for inspection under this Part; and
(b) provide the copies required by this Part.
216H Correction of registers
(1) A company or a person aggrieved may apply to the Court to have a register kept by the company under this Part corrected.
(2) If the Court orders the company to correct the register, it may also order the company to compensate a party to the application for loss or damage suffered.
(3) If:
(a) the Court orders a company to correct its register of members; and
(b) the company has lodged a list of its members with the ASC;
the company must lodge notice of the correction with the ASC.
216I Evidentiary value of registers
In the absence of evidence to the contrary, a register kept under this Part is proof of the matters shown in the register under this Part.
216J Use of information on registers
(1) A person must not:
(a) use information about a person obtained from a register kept under this Part to contact or send material to the person; or
(b) disclose information of that kind knowing that the information is likely to be used to contact or send material to the person;
unless that use or disclosure of the information is:
(c) relevant to the holding of the shares, options or debentures concerned or the exercise of the rights attaching to them; or
(d) approved by the company.
Note: An example of using information to send material to a person is putting a person’s name and address on a mailing list for advertising material.
(2) A person who contravenes subsection (1) is liable to compensate anyone else who suffers loss or damage because of the contravention.
(3) A person who makes a profit from a contravention of subsection (1) owes a debt to the company. The amount of the debt is the amount of the profit.
216K Overseas branch registers
(1) A company may keep a branch register of members at a place outside Australia.
(2) If a company keeps an overseas branch register under subsection (1):
(a) the company must keep the branch register in the same manner as this Law requires the company to keep the register kept under section 216B (the principal register); and
(b) the company must enter in the principal register the details contained in the branch register; and
(c) the company must distinguish shares that are registered in the branch register from the shares registered in the principal register.
Chapter 3—Internal administration
Part 3.1—Registered office and name
217 Registered office of company
A company shall, as from its registration day, have a registered office within Australia to which all communications and notices may be addressed and which shall be open:
(a) where a notice has been lodged by the company under subsection 218(2)—for such hours (being not less than 3) between the hours of 9 a.m. and 5 p.m. of each business day as are specified in the later of that notice or a notice lodged by the company under subsection 218(4); or
(b) otherwise—for not less than 5 hours between 10 a.m. and 4 p.m. of each business day.
218 Notice of address of registered office and office hours
(1) On the lodging of:
(a) an application for the registration of a company under Division 1 of Part 2.2; or
(b) an application for a body corporate to be registered as a company under Division 3 or 4 of Part 2.2;
there shall be lodged a notice in the prescribed form of the address of the proposed registered office of the company.
(2) On the lodging of a notice under subsection (1) or at any later time, notice in the prescribed form of the hours (being not less than 3) between the hours of 9 a.m. and 5 p.m. of each business day during which the company’s registered office is to be open may be lodged.
(3) A company shall lodge notice in the prescribed form of a change in the situation of its registered office not later than 7 days after the day on which the change occurred.
(4) Where a notice has been lodged under subsection (2), the company shall, within 7 days after a change in the hours during which its registered office is open, lodge a notice, in the prescribed form, of the change.
218A Registered office of Division 2 company
(1) Subject to this Part, the registered office of a Division 2 company is taken to be at the place that, immediately before the commencement of Division 2 of Part 2.2, was taken by a previous law of this jurisdiction corresponding to subsection 220(2) to be the situation of the company’s registered office for the purposes of a previous law of this jurisdiction corresponding to subsection 220(1).
(2) Section 217 and subsections 218(4) and 220(2) apply in relation to a Division 2 company as if a reference in them to a provision of this Law included a reference to a previous law of this jurisdiction corresponding to that provision of this Law.
219 Publication of company’s name and registration number
(1) A company shall set out in legible characters on its common seal, and on each of its other seals, its name followed by, unless its registration number is part of its name, the expression “Australian Company Number” and its registration number.
(2) A company shall set out its name, in legible characters, on:
(a) every public document of the company that is signed, issued or published; and
(b) every eligible negotiable instrument of the company that is signed or issued.
(2A) On every public document of a company that, when it is signed, issued or published:
(a) is intended to be lodged; or
(b) is required by or under this Law or the ASC Law to be lodged;
the company must, unless its registration number is part of its name, set out in legible characters, after the company’s name where it first appears, the expression “Australian Company Number” and the company’s registration number.
(3) On:
(a) every public document of a company that is signed, issued or published; and
(b) every eligible negotiable instrument of a company that is signed or issued;
after 31 December 1991, the company must, unless its registration number is part of its name, set out in legible characters, after the company’s name where it first appears, the expression “Australian Company Number” and the company’s registration number.
(3A) Subsection (3) has effect subject to Division 2 of Part 4.2.
(4) A company may comply with subsection (1), (2), (2A) or (3) by setting out:
(a) the abbreviation “Aust.” instead of the word “Australian”;
(b) the abbreviation “Co.” instead of the word “Company”;
(c) the abbreviation “No.” instead of the word “Number”; or
(d) the abbreviation “A.C.N.” instead of the expression “Australian Company Number”.
(5) A person (whether or not an officer of the company) shall not, on a company’s behalf:
(a) use, or authorise the use of, a seal that purports to be a seal of the company but contravenes subsection (1); or
(b) issue, sign or publish a public document of the company that contravenes subsection (2), (2A) or (3).
(6) A person (whether an officer of the company or not) shall not sign or issue, or authorise to be signed or issued, on a company’s behalf, an eligible negotiable instrument of the company that contravenes subsection (2).
(7) A person who contravenes subsection (6) is liable to the holder of the eligible negotiable instrument for the amount due on it unless that amount is paid by the company.
(8) A company shall paint or affix and keep painted or affixed, in a conspicuous position and in letters easily legible, on the outside of its registered office and of every office and place at which its business is carried on and that is open and accessible to the public:
(a) its name; and
(b) in the case of its registered office—the expression “Registered Office”.
220 Service of documents on company
(1) A document may be served on a company by leaving it at, or. by sending it by post to, the registered office of the company.
(2) For the purposes of subsection (1), the situation of the registered office of a company:
(a) in a case to which neither paragraph (b) nor paragraph (c) applies—shall be deemed to be the place notice of the address of which has been lodged under subsection 218(1);
(b) if only one notice of a change in the situation of the registered office has been lodged under subsection 218(3)—shall, on and from:
(i) the day that is 7 days after the day on which the notice was lodged; or
(ii) the day that is specified in the notice as the day from which the change is to take effect;
whichever is later, be deemed to be the place the address of which is specified in the notice; or
(c) if 2 or more notices of a change in the situation of the registered office have been lodged under subsection 218(3)—shall, on and from:
(i) the day that is 7 days after the day on which the later or latest of those notices was lodged; or
(ii) the day that is specified in the later or latest of those notices as the day from which the change is to take effect;
whichever is later, be deemed to be the place the address of which is specified in the relevant notice;
and shall be so deemed to be that place irrespective of whether the address of a different place is shown as the address of the registered office of the company in a return or other document (not being a notice under subsection 218(3)) lodged after the notice referred to in paragraph (a) or (b), or the later or latest of the notices referred to in paragraph (c), was lodged.
(4) Without limiting the operation of subsection (1), a document may be served on a company by delivering a copy of the document personally to each of 2 directors of the company who reside in Australia or an external Territory.
(4A) Without limiting the operation of subsection (1), a document may be served on a proprietary company that has only one director by delivering a copy personally to that director.
(5) Where a liquidator of a company has been appointed, a document may be served on the company by leaving it at, or by sending it by post to, the last address of the office of the liquidator notice of which has been lodged.
(6) Where an official manager of a company has been appointed, a document may be served on the company by leaving it at, or by sending it by post to, the last address of the office of the official manager notice of which has been lodged.
(7) Nothing in this section affects:
(a) the power of the Court to authorise a document to be served on a company in a manner not provided for by this section; or
(b) the operation of an Australian law authorising a document to be served on a company in a manner not provided for by this section.
Part 3.2—Officers
221 Directors
(1) Proprietary companies
A proprietary company must have at least one director. At least one director must ordinarily reside in Australia.
(2) Public companies
A public company must have at least 3 directors. At least 2 of them must ordinarily reside in Australia.
(3) Body corporate cannot be director
A body corporate cannot be appointed as a director.
222 Restrictions on appointment or advertisement of director
(1) A person shall not be named as a director or proposed director in the memorandum or articles of a company, or in a prospectus issued by or on behalf of a company, unless, before the registration of the memorandum or articles or the issue of the prospectus, as the case may be, the person has:
(a) signed the memorandum for a number of shares not less than the person’s qualification (if any);
(b) signed and lodged with the Commission a written undertaking to take from the company, and pay for, the person’s qualification shares (if any);
(c) made and lodged with the Commission a written statement to the effect that a number of shares, not less than the person’s qualification (if any), are registered in the person’s name; or
(d) in the case of a company formed, or intended to be formed, by way of reconstruction of another body corporate or group of bodies corporate or to acquire the shares in another body corporate or group of bodies corporate—made and lodged with the Commission a written statement that the person was a shareholder in that other body corporate or in one or more of the bodies corporate of that group and that, as a shareholder, the person will be entitled to receive and have registered in the person’s name a number of shares not less than the person’s qualification by virtue of the terms of an agreement relating to the reconstruction.
(2) Where a person has signed and lodged an undertaking to take, and pay for, the person’s qualification shares, the person is, as regards those shares, in the same position as if the person had signed the memorandum for that number of shares.
(3) The preceding provisions of this section do not apply to:
(a) a company that does not have a share capital;
(b) a proprietary company; or
(c) a prospectus issued by or on behalf of a company, or the articles adopted by a company, after the end of one year after the date of incorporation of the company.
(4) On the lodging of the memorandum of a company for registration, the persons desiring the incorporation of the company shall also lodge with the Commission a list, certified by one of those persons to be correct, of the persons who have consented to be directors of the company, and, if the list contains the name of any person who has not so consented, the person who certified the list to be correct contravenes this subsection.
222A Consent to act as director or secretary
(1) A company contravenes this subsection if a person does not give the company a signed consent to act as director or secretary of the company before being appointed.
(2) The company must keep the consent.
223 Qualification of director
(1) Without affecting the operation of any of the preceding provisions of this Part, a director of a company who is by the articles required to hold a specified share qualification and is not already qualified shall obtain the qualification within 2 months after the person’s appointment or such shorter period as is fixed by the articles.
(2) Unless otherwise provided by the articles, the qualification of a director of a company must be held by the director solely and not as one of several joint holders.
224 Vacation of office of director
(1) The office of a director of a company is, by force of this section, vacated if the person holding the office:
(a) has not within the period referred to in subsection 223(1) obtained the person’s qualification; or
(b) after so obtaining that qualification ceases at any time to hold the qualification; or
(c) becomes an insolvent under administration; or
(d) is convicted as mentioned in subsection 229(3); or
(e) becomes subject to a section 230 order; or
(f) becomes subject to a section 599 order; or
(g) becomes subject to a section 600 notice; or
(h) becomes subject to a civil penalty disqualification.
(2) A person whose office is vacated because of paragraph (1)(a) or (b) or was vacated because of a corresponding previous law is incapable of being re‑appointed as a director until the person has obtained the person’s qualification.
(3) A person whose office is vacated because of paragraph (1)(c) or was vacated because of a corresponding previous law is incapable, without the leave of the Court, of being re‑appointed as a director until the person ceases to be an insolvent under administration.
(4) A person whose office is vacated because of paragraph (1)(d) or was vacated because of a corresponding previous law is incapable, without the leave of the Court, of being re‑appointed as a director until the end of the period of 5 years referred to in subsection 229(2) or in a corresponding previous law, as the case may be.
(5) A person whose office is vacated because of paragraph (1)(e) or (f) or was vacated because of a corresponding previous law is incapable of being re‑appointed as a director until the end of the period specified in the order referred to in that paragraph or in the order referred to in that corresponding previous law, as the case may be.
(6) A person whose office is vacated because of paragraph (1)(g) or was vacated because of a corresponding previous law is incapable, without the leave of the Court, of being re‑appointed as a director until the end of the period specified in the notice referred to in that paragraph or in the notice referred to in that corresponding previous law, as the case may be.
(6A) A person whose office is vacated because of paragraph (1)(h) cannot, without the leave of the Court granted under section 1317EF, be re‑appointed as a director until the end of the period specified in the disqualification.
(7) A person whose office is vacated because of paragraph (1)(a) or (b) or was vacated because of a corresponding previous law shall not purport to act as a director of the company unless the person has been validly re‑appointed as a director.
224A Appointment of new director on death, mental incapacity or bankruptcy of single director/shareholder of proprietary company
(1) Death or mental incapacity
If a person who is the only director and the only shareholder of a proprietary company:
(a) dies; or
(b) cannot manage the company because of the person’s mental incapacity;
and a personal representative or trustee is appointed to administer the person’s estate or property, the personal representative or trustee may appoint a person as the director of the company.
(2) Bankruptcy
If:
(a) the office of the director of a proprietary company is vacated under paragraph 224(1)(c) because of the bankruptcy of the director; and
(b) the person is the only director and also the only shareholder of the company; and
(c) a trustee in bankruptcy is appointed to the person’s property;
the trustee may appoint a person as the director of the company.
(3) A person who has a power of appointment under this section may appoint themselves as director.
(4) A person appointed as a director of a company under this section holds that office as if they had been properly appointed in accordance with the company’s articles of association.
225 Appointment of directors of public company to be voted on individually
(1) At a general meeting of a public company, a motion for the appointment of 2 or more persons as directors by a single resolution shall not be moved unless a resolution that it be moved has first been agreed to by the meeting without any vote being cast against it.
(2) A resolution passed pursuant to a motion moved in contravention of this section is void, whether or not the moving of the motion was objected to at the time.
(3) Where a resolution pursuant to a motion moved in contravention of this section is passed, no provision for the automatic re‑appointment of retiring directors in default of another appointment applies.
(4) For the purposes of this section, a motion for approving a person’s appointment or for nominating a person for appointment shall be treated as a motion for the person’s appointment.
(5) Nothing in this section applies to a resolution altering the company’s articles.
(6) Nothing in this section prevents the election of 2 or more directors by ballot or poll.
226 Validity of acts of directors and secretaries
(1) The acts of a director or secretary of a company are valid notwithstanding any defect that may afterwards be discovered in his or her appointment or qualification.
(2) Where a person whose office as director of a company is vacated pursuant to subsection 224(1) or was vacated pursuant to a corresponding previous law purports to do an act as a director of the company, that act is as valid, in relation to a person dealing with the company in good faith and for value and without actual knowledge of the matter because of which the office of the first‑mentioned person was vacated, as if that office had not been vacated.
227 Removal of directors
(1) A public company may, by resolution, remove a director before the end of the director’s period of office, notwithstanding anything in its articles or in any agreement between it and the director.
(2) Where a director so removed was appointed to represent the interests of a particular class of shareholders or debenture holders, the resolution to remove the director does not take effect until a successor has been appointed.
(3) Special notice is required of:
(a) a resolution to remove a director under this section; or
(b) a resolution to appoint a person in place of a director so removed at the meeting at which the director is removed.
(4) As soon as practicable after receiving notice of an intended resolution to remove a director under this section, the company shall send a copy of the notice to the director concerned, and the director (whether or not a member of the company) is entitled to be heard on the resolution at the meeting.
(5) Where notice is given in accordance with subsection (3) and the director concerned makes with respect to the notice written representations to the company (not exceeding a reasonable length) and requests that the representations be notified to members of the company, the company shall, unless the representations are received by it too late for it to do so:
(a) state, in any notice of the resolution given to members of the company, that the representations have been made; and
(b) send a copy of the representations to every member of the company to whom notice of the meeting has been or is sent.
(6) If a copy of the representations is not so sent because they were received too late or because of the company’s default, the director may, without prejudice to any right to be heard orally, require that the representations be read out at the meeting.
(7) Notwithstanding the preceding provisions of this section, copies of the representations need not be sent out and the representations need not be read out at the meeting if, on the appliction either of the company or of any other person who claims to be aggrieved, the Court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter.
(8) On an application under subsection (7), the Court may order that the costs of the applicant be paid in whole or in part by the director, even if the director is not a party to the application.
(9) A vacancy created by the removal of a director under this section, if not filled at the meeting at which the director is removed, may be filled as a casual vacancy.
(10) A person appointed as a director in place of a person removed under this section shall be treated, for the purpose of determining the time at which that person or any other director is to retire, as if that person had become a director on the day on which the person in whose place that person is appointed was last appointed a director.
(11) Nothing in the preceding provisions of this section:
(a) deprives a person removed under those provisions of compensation or damages payable to the person in respect of the termination of the person’s appointment as director or of any appointment terminating with that as director; or
(b) derogates from any power to remove a director that may exist apart from this section.
(12) A director of a public company shall not be removed by, or be required to vacate his or her office because of, any resolution, request or notice of the directors or any of them notwithstanding anything in the articles or any agreement.
228 Age of directors
(1) Subject to this section, a person who has obtained the age of 72 years shall not be appointed or act as a director of:
(a) a public company; or
(b) a company that is a subsidiary of a public company.
(2) Nothing in subsection (1) prevents a person from acting as a director of a company during the period beginning on the day on which the person attains the age of 72 years and ending at the conclusion of the annual general meeting beginning next after that day.
(3) The office of a director of a public company or of a subsidiary of a public company becomes vacant at the conclusion of the annual general meeting of that public company or that subsidiary, as the case may be, beginning next after the director attains the age of 72 years.
(3A) If a proprietary company is a subsidiary of a public company:
(a) subsection (3) does not apply to it; and
(b) a person can continue to act as a director of the proprietary company until the next annual general meeting of the public company after the person turns 72; and
(c) the person’s office of director becomes vacant at the end of that meeting.
Note: Proprietary companies do not need to hold annual general meetings (see subsection 245(2A)).
(4) An act done by a person as a director is valid notwithstanding that it is afterwards discovered that he or she had attained the age of 72 years at the time of his or her appointment or that his or her appointment had terminated by virtue of subsection (3) or (3A).
(5) Where the office of a director has become vacant by virtue of subsection (3) or (3A), no provision for the automatic re‑appointment of retiring directors in default of another appointment applies in relation to that director.
(6) If a vacancy created by virtue of subsection (3) or (3A) is not filled at the meeting at which the office became vacant, the office may be filled as a casual vacancy.
(7) Subject to subsections (8) and (8A), a person who has attained the age of 72 years may, by a resolution stating the age of that person, being a resolution:
(a) of which not less than 14 days’ written notice has been given to the members of the company entitled to vote stating that the person is a candidate for election who has attained the age of 72 years and stating the person’s age; and
(b) which is passed by a majority of not less than three‑quarters of such members of the company as, being entitled so to do, vote in person or where proxies are allowed, by proxy, at a general meeting of that company;
be appointed or re‑appointed as a director of that company to hold office until the conclusion of the next annual general meeting of the company.
(8) Where the company is a subsidiary of a public company, the appointment or re‑appointment referred to in subsection (7) does not have effect unless:
(a) the person appointed or re‑appointed is a director of the holding company; or
(b) the appointment or re‑appointment of the person as a director of the company has been approved by a resolution of the holding company:
(i) of which not less than 14 days’ written notice was given to the members of the holding company entitled to vote stating that the person was a candidate for election as a director of the company who had attained the age of 72 years and stating the person’s age; and
(ii) which was passed by a majority of not less than three‑quarters of such members of the holding company as, being entitled so to do, voted in person or, where proxies were allowed, by proxy at a general meeting of the holding company.
(8A) If the subsidiary is a proprietary company:
(a) the person may be appointed or re‑appointed as a director of the subsidiary until the end of the next annual general meeting of the holding company; and
(b) the appointment does not need a resolution under subsection (7); and
(c) the appointment must satisfy either paragraph (8)(a) or paragraph (8)(b).
(9) Where:
(a) the articles of a company limited by guarantee provide for the holding of postal ballots for the election of a director or directors; and
(b) a postal ballot for the election of a director or directors is held, being a postal ballot in which:
(i) the members entitled to vote have been given notice in writing by the company stating that a candidate for election has attained the age of 72 years and stating the age of the candidate; and
(ii) that candidate is elected by a majority of not less than three‑quarters of the members who, being entitled to vote, vote in the ballot;
that candidate may be appointed or re‑appointed as a director to hold office until the conclusion of the next annual general meeting of the company.
(10) Where the articles of a company limited by guarantee provide for the election or appointment of a director or directors otherwise than by members at a general meeting or by postal ballot of members and the Commission declares in writing that this section does not apply to the company or its directors, then, subject to such conditions (if any) as the Commission specifies in the declaration, this section does not so apply.
(11) A vacancy in the office of a director occurring by virtue of subsection (3) or (3A) shall not be taken into account in determining when other directors are to retire.
(12) Nothing in this section limits or affects the operation of any provision of the memorandum or articles of a company preventing any person from being appointed a director or requiring any director to vacate his or her office at any age less than 72 years.
(13) A person is incapable of being appointed as a director of a company unless the person has attained the age of 18 years.
229 Certain persons not to manage corporations
(1) An insolvent under administration must not, without the leave of the Court, manage a corporation.
(3) A person who has, whether before or after the commencement of this Part, been convicted:
(a) on indictment of an offence against an Australian law, or any other law, in connection with the promotion, formation or management of a body corporate or corporation; or
(b) of serious fraud; or
(c) of any offence for a contravention of section 232, 590, 591, 592, 595, 996 or 1307, of Part 6.6, of Division 2 of Part 7.11, or of a previous law corresponding to any of those provisions; or
(d) of an offence of which the person is guilty because of subsection 1317FA(1);
shall not, within 5 years after the conviction or, if the person was sentenced to imprisonment, after release from prison, without the leave of the Court, manage a corporation.
(3A) Section 91A defines what, for the purposes of this section, constitutes managing a corporation.
(4) In any proceeding for a contravention of subsection (3), a certificate by a prescribed authority stating that a person was released from prison on a specified date is prima facie evidence that that person was released from prison on that date.
(5) When granting leave under this section, the Court may impose such conditions or restrictions as it thinks fit and a person shall not contravene any such condition or restriction.
(6) A person intending to apply for leave of the Court under this section shall give to the Commission not less than 21 days notice of the person’s intention so to apply.
(7) The Court may at any time, on the application of the Commission, revoke leave granted by the court under this section.
(8) Any leave granted by a court under a corresponding previous law of this jurisdiction before the commencement of this Part has effect for the purposes of this section as if it had been granted by the Court under this section.
230 Court may order person not to manage corporation
(1) Where, on application by the Commission or a person who is a prescribed person in relation to the body corporate concerned, or any of the bodies corporate concerned, the Court is satisfied:
(a) that:
(i) a body corporate has, during a period in which a person (in this subsection called the relevant person) was a relevant officer of the body corporate repeatedly breached relevant legislation; and
(ii) the relevant person failed to take reasonable steps to prevent the body corporate so breaching relevant legislation; or
(b) that:
(i) each of 2 or more bodies corporate has, at a time when a person (in this subsection also called the relevant person) was a relevant officer of the body corporate, breached relevant legislation; and
(ii) in each case the relevant person failed to take relevant steps to prevent the body corporate from breaching relevant legislation; or
(c) that:
(i) a person (in this subsection also called the relevant person) has repeatedly breached relevant legislation; and
(ii) on 2 or more of the occasions when the relevant person breached relevant legislation, the relevant person was a relevant officer of a body corporate (whether or not the relevant person was a relevant officer of the same body corporate on each of those occasions); or
(d) that, at any time during a period in which a person (in this subsection also called the relevant person) has been or was a relevant officer of a body corporate (other than a corporation), the relevant person did an act, or made an omission, that would have constituted a contravention of subsection 232(2) or (4) in relation to the body if the body had been a corporation at that time;
the Court may by order prohibit the relevant person, for such period as is specified in the order, from managing a corporation.
(2) Where an order has been made under subsection (1) on the application of a person other than the Commission, the person shall, within 7 days after the making of the order, lodge an office copy of the order.
(3) A person who is subject to a section 230 order (whether made before or after the commencement of this section) must not manage a corporation.
(3A) Section 91A defines what, for the purposes of this section, constitutes managing a corporation.
(4) In this section, a reference to a period in which a person has been or was a relevant officer of a body corporate includes a reference to such a period that elapsed, or part of which elapsed, before the commencement of this Part.
(5) For the purposes of this section:
(a) a body corporate or other person shall be taken to have breached relevant legislation if the body corporate or other person has contravened a provision of a relevant enactment; and
(b) a body corporate or another person may be taken to have repeatedly breached relevant legislation if the body corporate or the other person has:
(i) on 2 or more occasions, contravened a particular provision of a relevant enactment;
(ii) contravened 2 or more provisions of a relevant enactment; or
(iii) contravened provisions of 2 or more relevant enactments.
(6) In this section:
body corporate includes an unincorporated registrable body;
prescribed person, in relation to a body corporate, means:
(a) a liquidator or provisional liquidator of the body corporate;
(ba) an administrator of the body corporate;
(bb) an administrator of a deed of company arrangement executed by the body corporate;
(b) a member of the body corporate;
(c) a creditor of the body corporate; or
(d) a person who is authorised by the Commission to make applications under this section, or to make an application under this section in relation to the body corporate;
relevant enactment means this Law or a previous law corresponding to provisions of this Law;
relevant officer, in relation to a body corporate, means a director, secretary or executive officer of the body corporate.
231 Directors to disclose certain interests
(1) Subject to this section, a director of a proprietary company who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the company shall, as soon as practicable after the relevant facts have come to the director’s knowledge, declare the nature of the interest at a meeting of the directors.
(2) The requirements of subsection (1) do not apply in respect of an interest of a director of a company that consists only of being a member or creditor of a corporation that is interested in a contract or proposed contract with the company if the interest of the director may properly be regarded as not being a material interest.
(3) A director of a company shall not be taken to be, or to have been at any time, interested in a contract or proposed contract merely because:
(a) where the contract or proposed contract relates to a loan to the company—the director has guaranteed or joined in guaranteeing the repayment of the loan or any part of the loan; or
(b) where the contract or proposed contract has been or will be made with or for the benefit of or on behalf of a body corporate that is related to the company—the director is a director of that body corporate.
(4) Subsection (3) has effect not only for the purposes of this Law but also for the purposes of any rule of law, but does not affect the operation of any provision in the articles of the company.
(5) For the purposes of subsection (1), a general notice given to the directors of a company by a director to the effect that the director is an officer or member of a specified body corporate or a member of a specified firm and is to be regarded as interested in any contract that may, after the date of the notice, be made with that body corporate or firm shall be deemed to be a sufficient declaration of interest in relation to any contract so made or proposed to be made if:
(a) the notice states the nature and extent of the director’s interest in the body corporate or firm;
(b) when the question of confirming or entering into the contract is first taken into consideration, the extent of the director’s interest in the body corporate or firm is not greater than is stated in the notice; and
(c) the notice is given at a meeting of the directors or the director takes reasonable steps to ensure that it is brought up and read at the next meeting of the directors after it is given.
(6) A director of a proprietary company who holds any office or possesses any property whereby, whether directly or indirectly, duties or interests might be created in conflict with his or her duties or interests as director shall, in accordance with subsection (7), declare at a meeting of the directors of the company the fact and the nature, character and extent of the conflict.
(7) A declaration required by subsection (6) in relation to the holding of an office or the possession of any property shall be made by a person:
(a) where the person holds the office or possesses the property as mentioned in subsection (6) when the person becomes a director—at the first meeting of directors held after:
(i) the person becomes a director; or
(ii) the relevant facts as to the holding of the office or the possession of the property come to the person’s knowledge;
whichever is later; or
(b) where the person begins to hold the office or comes into possession of the property as mentioned in subsection (6) after the person becomes a director—at the first meeting of directors held after the relevant facts as to the holding of the office or the possession of the property come to the person’s knowledge.
(8) A secretary of a company shall record every declaration under this section in the minutes of the meeting at which it was made.
(9) Except as provided in subsection (3), this section is in addition to, and not in derogation of, the operation of any rule of law or any provision in the articles restricting a director from having any interest in contracts with the company or from holding offices or possessing properties involving duties or interests in conflict with his or her duties or interests as a director.
(10) This section does not apply to a director of a proprietary company if the director is the only director and only shareholder of that company.
232 Duty and liability of officer of corporation
(1) In this section:
officer, in relation to a corporation, means:
(a) a director, secretary or executive officer of the corporation;
(b) a receiver, or receiver and manager, of property of the corporation, or any other authorised person who enters into possession or assumes control of property of the corporation for the purpose of enforcing any charge;
(c) an administrator of the corporation;
(ca) an administrator of a deed of company arrangement executed by the corporation;
(d) a liquidator of the corporation; and
(e) a trustee or other person administering a compromise or arrangement made between the corporation and another person or other persons;
(2) An officer of a corporation shall at all times act honestly in the exercise of his or her powers and the discharge of the duties of his or her office.
(4) In the exercise of his or her powers and the discharge of his or her duties, an officer of a corporation must exercise the degree of care and diligence that a reasonable person in a like position in a corporation would exercise in the corporation’s circumstances.
(4A) A reference in subsection (2) or (4) to the exercise of powers, or the discharge of duties, of an officer of a corporation is a reference to the exercise of those powers, or the discharge of those duties:
(a) in any case—in this jurisdiction; or
(b) if the body is a local corporation—outside this jurisdiction; or
(c) otherwise—outside this jurisdiction but in connection with:
(i) the corporation carrying on business in this jurisdiction; or
(ii) an act that the corporation does, or proposes to do, in this jurisdiction; or
(iii) a decision by the corporation whether or not to do, or to refrain from doing, an act in this jurisdiction.
(5) An officer or employee of a corporation, or a former officer or employee of a corporation, must not, in relevant circumstances, make improper use of information acquired by virtue of his or her position as such an officer or employee to gain, directly or indirectly, an advantage for himself or herself or for any other person or to cause detriment to the corporation.
(6) An officer or employee of a corporation must not, in relevant circumstances, make improper use of his or her position as such an officer or employee, to gain, directly or indirectly, an advantage for himself or herself or for any other person or to cause detriment to the corporation.
(6A) A reference in subsection (5) or (6), in relation to a corporation, to doing an act in relevant circumstances is a reference to doing the act:
(a) if the body is a local corporation—in this jurisdiction or elsewhere; or
(b) otherwise—in this jurisdiction.
(6B) Subsections (2), (4), (5) and (6) are civil penalty provisions as defined by section 1317DA, so Part 9.4B provides for civil and criminal consequences of contravening any of them, or of being involved in a contravention of any of them.
(11) This section has effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person by reason of the person’s office or employment in relation to a corporation and does not prevent the institution of any civil proceedings in respect of a breach of such a duty or in respect of such a liability.
232A Voting by interested director of public company
(1) A director of a public company who has a material personal interest in a matter that is being considered at a meeting of the board, or of directors, of the company:
(a) must not vote on the matter (or in relation to a proposed resolution under subsection (3) in relation to the matter, whether in relation to that or a different director); and
(b) must not be present while the matter (or a proposed resolution of that kind) is being considered at the meeting.
Note: In this section, public company has an extended meaning: see paragraph (b) of the definition of public company in section 9.
(2) Subsection (1) does not apply to an interest that the director has:
(a) as a member of the company; and
(b) in common with the other members of the company.
(2A) For the purposes of subsection (1), a director does not have an interest in a matter relating to an existing or proposed contract of insurance merely because the contract insures, or would insure, the director against a liability incurred by the director as an officer of the company or of a related body corporate. This subsection does not apply if the company is the insurer.
(3) Subsection (1) does not apply if the board has at any time passed a resolution that:
(a) specifies the director, the interest and the matter; and
(b) states that the directors voting for the resolution are satisfied that the interest should not disqualify the director from considering or voting on the matter.
(4) A quorum is not present during the consideration of a matter at a meeting of the board, or of directors, of a public company unless at least 2 directors are present who are entitled to vote on any motion that may be moved at the meeting in relation to that matter.
(5) A general meeting of a public company may deal with a matter in so far as the board cannot deal with it because of subsection (4).
(6) If:
(a) someone proposes a resolution of a public company’s board in connection with a general meeting of the company dealing with a matter; and
(b) subsection (4) would prevent the proposed resolution from being considered;
subsections (1) and (4) do not apply in relation to a motion that relates to the proposed resolution.
(7) If, because of subsection (6), subsection (4) does not apply in relation to a motion that is considered or voted on at a meeting, the directors present must ensure that the minutes record that fact.
(8) A public company’s constitution may restrict a director’s entitlement to vote, or to be present, at a meeting even if this section would not.
232B Commission may exempt directors from section 232A in appropriate cases
(1) The Commission may by writing declare that, for the purposes of all or specified meetings of the board, or of directors, of a company, subsections 232A(1) and (4) do not apply in relation to a specified matter, but may only do so if satisfied that:
(a) the matter could not otherwise be dealt with at those meetings because of subsection 232A(4); and
(b) because it is urgent or for some other compelling reason, the matter should be dealt with at those meetings and not by a general meeting, even though directors have a material personal interest in the matter.
(2) A declaration may be expressed to apply generally or as otherwise specified, and may be subject to:
(a) a specified condition to be complied with, in relation to the matter, by the company or a director; or
(b) 2 or more such conditions.
(3) A declaration has effect accordingly.
(4) A company or a director must not contravene a condition.
(5) The Commission may by writing vary or revoke a declaration.
233 Liability of directors for debts etc. incurred by body corporate acting as trustee
(1) Where:
(a) a relevant body corporate while acting or purporting to act in the capacity of trustee of a trust, incurs a liability:
(i) in the case of a company—whether within or outside Australia; or
(ii) in the case of a registered foreign company—within Australia; or
(iii) otherwise—within this jurisdiction; and
(b) the relevant body corporate is for any reason not entitled to be fully indemnified out of the assets of the trust in respect of the liability; and
(c) the relevant body corporate has not discharged, and is unable to discharge, the liability or a part of the liability;
the relevant body corporate and the persons who were directors of the relevant body corporate when the liability was incurred and were not innocent directors in relation to the incurring of the liability are jointly and severally liable to discharge the liability or the undischarged part of the liability, as the case may be.
(2) For the purposes of this section, a trustee of a trust shall not, merely because:
(a) the trust has no assets; or
(b) the assets of the trust are insufficient to indemnify the trustee in respect of the liability concerned;
be taken not to be entitled to be fully indemnified out of the assets of the trust in respect of a liability.
(3) In this section:
Australia includes the external Territories;
innocent director, in relation to the incurring of a liability by a relevant body corporate while acting or purporting to act in a capacity of trustee of a trust, means a person who:
(a) was a director of the relevant body corporate at the time when the liability was incurred; and
(b) if the persons who were directors of the relevant body corporate at that time had been at that time the trustees of the trust and had incurred the liability, would have been entitled to be fully indemnified in respect of the liability by one or more of the other trustees;
liability means a debt, liability or other obligation;
relevant body corporate means:
(a) a company; or
(b) a registrable body other than a registrable local body.
235 Listed company—director to notify securities exchange of shareholdings etc.
(1) Notifiable interests
A director of a listed company must notify the relevant securities exchange under subsections (3) and (4) of the following interests of the director:
(a) relevant interests in shares of the company or of a related body corporate
(b) relevant interests in debentures of, or prescribed interests made available by, the company or a related body corporate
(c) rights or options over shares in, debentures of, or prescribed interests made available by, the company or a related body corporate
(d) contracts:
(i) to which the director is a party or under which the director is entitled to a benefit; and
(ii) that confer a right to call for or deliver shares in, debentures of, or prescribed interests made available by, the company or a related body corporate.
(2) A notice of a relevant interest under paragraph (1)(a) or (b) must give details of the nature and extent of the relevant interest.
(3) Occasions for initial notification
The director must notify the exchange within 14 days after each of the following occasions:
(a) the commencement of this section
(b) appointment as a director of the company after that commencement
(c) the listing of the company after that commencement.
Paragraph (b) does not apply to a director who retires and is then re‑appointed at the same meeting.
(4) Updating notices
The director must notify the exchange within 14 days after any change in the director’s interests.
(5) The director need not give the information to the exchange under this section if the director has already given the information to the exchange under Part 6.7.
236 General duty to make disclosure
(1) A director of a company shall give written notice to the company of:
(c) such matters and events affecting or relating to the director as are necessary for the purposes of compliance by the company with any of the provisions of section 242 that are applicable in relation to the director;
(d) such matters and events affecting or relating to the director as are necessary for the purposes of compliance by the company with any of the provisions of Chapter 6; and
(e) the date and place of the director’s birth.
(2) A director required to give a notice under subsection (1) shall give the notice:
(c) in the case of a notice under paragraph (1)(c), within 14 days after the director becomes aware of the matter or the occurrence of the event;
(d) in the case of a notice under paragraph (1)(d), as soon as practicable after becoming aware that the company requires or will require the information for the purposes of compliance with any of the provisions of Chapter 6; and
(e) in the case of a notice under paragraph (1)(e), within 14 days after the date on which the director became a director.
(3) A company shall, within 7 days after the receipt by it of a notice given under subsection (1), send a copy of the notice to each of the other directors of the company.
(4) A person who is a secretary of a company shall give written notice to the company:
(a) of such matters and events affecting or relating to the person as are necessary for the purposes of compliance by the company with any of the provisions of section 242; and
(b) of the date and place of the person’s birth.
(5) A person required to give a notice under subsection (4) shall give the notice:
(a) in the case of a notice under paragraph (4)(a)—within 14 days after the person becomes aware of the matter or the occurrence of the event; and
(b) in the case of a notice under paragraph (4)(b)—within 14 days after the day on which the person becomes a secretary of the company.
(8) Nothing in this section requires a person to give notice to a company of any matter or event of which the person has previously given notice to the company, whether for the purposes of this section or of a corresponding previous law.
237 Benefits for loss of, or retirement from, office
(1) Subject to this section:
(a) a company, an associate of a company (other than a body corporate that is related to the company and is itself a company) or a prescribed superannuation fund in relation to a company shall not give a prescribed benefit to a person in connection with the retirement of a person from a prescribed office in relation to the company; and
(b) a person shall not give a prescribed benefit to a prescribed person in connection with the transfer of the whole or any part of the undertaking or property of a company.
(2) Subsection (1) does not apply if particulars with respect to the prescribed benefit have been disclosed to the members of, and the giving of the proposed prescribed benefit has been approved in general meeting by:
(a) if neither paragraph (b) nor (c) applies—the company;
(b) if the company is a subsidiary of a listed company or listed companies—the company and the listed company or listed companies; or
(c) if the company is not a subsidiary of a listed company but is a subsidiary whose ultimate holding company is incorporated in Australia or an external Territory—the company and the ultimate holding company.
(3) The particulars to be disclosed for the purposes of subsection (2) include:
(a) if the proposed prescribed benefit is a payment:
(i) the amount of the payment; or
(ii) if that amount cannot be ascertained at the time of the disclosure—the manner in which that amount is to be calculated and any matter, event or circumstance that will, or is likely to, affect the calculation of that amount; and
(b) otherwise:
(i) the money value of the proposed prescribed benefit; or
(ii) if that value cannot be ascertained at the time of the disclosure—the manner in which that value is to be calculated and any matter, event or circumstance that will, or is likely to, affect the calculation of that value.
(4) Where, because:
(a) the particulars to be disclosed for the purposes of subsection (2) to the members of a body corporate or bodies corporate in relation to the giving to a person of a proposed prescribed benefit have been so disclosed; and
(b) the giving to the person of the proposed prescribed benefit has been approved by the body corporate or bodies corporate in general meeting;
subsection (1) does not prohibit the giving to the person of the proposed prescribed benefit, that subsection does not prohibit the giving to the person, instead of the proposed prescribed benefit, of a prescribed benefit the amount or money value of which is less than the amount or money value of the proposed prescribed benefit.
(5) Paragraph (1)(a) does not apply in relation to:
(a) the giving of an exempt benefit; or
(b) the giving of a prescribed benefit in prescribed circumstances.
(6) Paragraph (1)(a) does not apply in relation to the giving of a prescribed benefit in connection with the retirement of a person from a prescribed office (in this subsection called the relevant office) in relation to a company, if:
(a) the prescribed benefit is a genuine payment by way of pension or lump sum payment in respect of past services rendered by the person to the company or to a body corporate that is a related body corporate, or that was, when the past services were rendered, a related body corporate, of the company, including any superannuation, retiring allowance, superannuation gratuity or similar payment; and
(b) the value of the pension or lump sum payment, when added to the value of all other pensions (if any) and lump sum payments (if any) already paid or payable in connection with the retirement of the person from a prescribed office in relation to the company (excluding any pensions or payments to which subsection (5) applies), does not exceed:
(i) where, at the time when the person retired from the relevant office, the person was, and had been throughout a period (in this subsection called the relevant period), or throughout periods totalling a period (in this subsection also called the relevant period), of not less than 3 years, an eligible employee in relation to the company—the amount ascertained in accordance with the formula:
;
where:
TE is the amount of the total emoluments of the person during the last 3 years of the relevant period; and
RP is the number of years in the relevant period or 7, whichever is the lesser number; or
(ii) otherwise—the total emoluments of the person during the period of 3 years ending when the person retired from the relevant office.
(7) In determining for the purposes of paragraph (6)(b) the value of a pension or lump sum payment, any part of the pension or lump sum payment that is attributable to a contribution made by the person or by a person other than:
(a) the company;
(b) a body corporate (in this subsection called a relevant body corporate) that is a related body corporate of the company, or that was, when the contribution was made, such a related body corporate; or
(c) an associate of the company, or of a relevant body corporate, in respect of:
(i) the payment of the pension, or the making of the lump sum payment, as the case may be; or
(ii) the making of the contribution;
shall be disregarded.
(8) For the purposes of subparagraph (6)(b)(i), where at a particular time, or throughout a particular period:
(a) a person was a genuine full‑time employee of a company; or
(b) a person was a genuine full‑time employee of a body corporate and the body corporate was related to a company;
the person shall be taken to have been at that time, or throughout that period, as the case may be, an eligible employee in relation to the company.
(9) Paragraph (1)(a) does not apply in relation to the giving of a prescribed benefit by a person to another person if failure by the first‑mentioned person to give the prescribed benefit to the other person would constitute, otherwise than because of breach of contract or breach of trust, a contravention of a law in force in Australia or elsewhere.
(10) A prescribed person shall not receive a prescribed benefit if the giving of the prescribed benefit contravenes subsection (1).
(11) Where the giving of a prescribed benefit to a person contravenes subsection (1), then:
(a) if the benefit is a payment—the amount of the payment; or
(b) otherwise—the money value of the prescribed benefit;
shall be deemed to be received by the person in trust for the company concerned.
(12) Subsection (11) applies in relation to the whole of the amount of a payment or of the money value of a prescribed benefit notwithstanding that, if that amount or value had been less, the giving of the benefit would not have contravened subsection (1).
(13) This section is in addition to, and not in derogation of, any other law that requires disclosure to be made with respect to the giving or receipt of a prescribed benefit.
(14) In this section:
(a) a reference to the giving of a prescribed benefit by a person includes a reference to the giving of a prescribed benefit that the person is obliged under a contract to give;
(b) a reference to the giving of a prescribed benefit, or to a pension or lump sum payment paid or payable, in connection with the retirement of a person from an office is a reference to the giving of a prescribed benefit, or to a pension or lump sum paid or payable, as the case may be:
(i) by way of compensation for, or otherwise in connection with, the loss by the person of the office; or
(ii) in connection with the retirement of the person from the office;
(c) a reference to a payment includes a reference to a payment by way of damages for breach of contract; and
(d) a reference to retirement of a person from an office includes a reference to:
(i) loss by the person of the office;
(ii) resignation by the person from the office; or
(iii) death of the person at a time when the person holds the office.
(15) Without limiting the generality of paragraph (14)(b) where a person gives a prescribed benefit to another person for the purpose, or for purposes including the purpose, of enabling or assisting a person to give to a person a prescribed benefit in connection with the retirement of a person (in this subsection called the relevant person) from an office, the first‑mentioned person shall be taken, for the purposes of this section, to give the first‑mentioned prescribed benefit in connection with the retirement of the relevant person from that office.
(16) Where a company, or an associate of a company, gives a prescribed benefit to a superannuation fund in prescribed circumstances, the superannuation fund shall be taken to be, for the purposes of this section, a prescribed superannuation fund in relation to the company.
(17) Where a prescribed superannuation fund in relation to a company gives a prescribed benefit to another superannuation fund in prescribed circumstances, the other superannuation fund shall be taken to be, for the purposes of this section, a prescribed superannuation fund in relation to the company.
(18) For the purposes of this section, where:
(a) a company, or an associate of a company, gives a prescribed benefit to a superannuation fund solely for the purpose of enabling or assisting the superannuation fund to give to a person a prescribed benefit in connection with the retirement of a person from a prescribed office in relation to the company; or
(b) a superannuation fund gives a prescribed benefit to another superannuation fund solely for the purpose of enabling or assisting the other superannuation fund to give to a person a prescribed benefit in connection with the retirement of a person from a prescribed office in relation to a company;
the prescribed benefit first referred to in paragraph (a) or (b) shall be taken to be given in prescribed circumstances.
(19) In this section:
emoluments, in relation to a person who is a director or other officer of a body corporate, means the amount or value of any money, consideration or benefit given, directly or indirectly, to that person in connection with the management of affairs of the body corporate or of any holding company or subsidiary of the body corporate, whether as a director or officer or otherwise, but does not include amounts in payment or reimbursement of out‑of‑pocket expenses incurred for the benefit of the body corporate;
exempt benefit means a prescribed benefit given in connection with the retirement of a person from a prescribed office in relation to a company, being a prescribed benefit:
(a) given under an agreement entered into before the commencement of this Part where the giving of the prescribed benefit would have been lawful if this Law had not been in force;
(b) given under an agreement where particulars of the terms of that agreement have been disclosed to the members of the company and approved by the company in general meeting;
(c) that is a genuine payment by way of damages for breach of contract;
(d) given to the person under an agreement made between the company and the person before the person became the holder of the prescribed office as the consideration or part of the consideration for the person agreeing to hold the prescribed office; or
(e) that is a payment made in respect of leave of absence to which the person is entitled under an industrial instrument;
give, in relation to a prescribed benefit, includes:
(a) in the case of a prescribed benefit that is a payment—make; and
(b) in the case of a prescribed benefit that is an interest in property—transfer;
person includes a superannuation fund;
prescribed benefit means a payment or other valuable consideration or any other benefit and includes, without limiting the generality of the foregoing, an interest in property of any kind;
prescribed office, in relation to a company, means:
(a) an office of director of the company or of a related body corporate; and
(c) any other office in connection with the management of affairs of the company or of a related body corporate that is held by a person who also holds, or who has, at any time within the 12 months immediately before the loss of, or retirement from, that office, held, an office mentioned in paragraph (a);
prescribed person, in relation to a company, means:
(a) a person who holds, or has at any previous time held, a prescribed office in relation to the company;
(b) the spouse of a person referred to in paragraph (a);
(c) a person who is a relative of a person referred to in paragraph (a) or of the spouse of such a person; or
(d) an associate of a person referred to in paragraph (a) or the spouse of an associate of such a person;
relevant benefit, in relation to a proposal to give a prescribed benefit in connection with the retirement of a person from a prescribed office in relation to a company, being a prescribed benefit in relation to which paragraph (1)(a) would apply, means any other prescribed benefit (including an exempt benefit) given, or proposed to be given, in connection with the retirement of the person from the prescribed office;
superannuation fund means a provident, benefit, superannuation or retirement fund.
(20) The giving of approval by a body corporate for the giving of a prescribed benefit as mentioned in paragraph (1)(b) does not relieve a director of the body corporate of any duty to the body corporate under section 232 or otherwise, and whether of a fiduciary nature or not, in connection with the giving of the prescribed benefit.
238 Assignment of office
(1) If, in the case of a public company, provision is made by the articles or by an agreement entered into between any person and the company for empowering a director of the company to assign his or her office as such to another person, any such assignment of office does not have any effect, notwithstanding anything in the provision of the articles or agreement, until approved by a special resolution of the company.
(2) This section does not prevent the appointment by a director (if authorised by the articles and subject to the articles) of an alternate or substitute director to act for or on behalf of the director during his or her inability for any time to act as director.
239 Powers to require disclosure of directors’ emoluments
If a company is served with a notice sent by or on behalf of:
(a) at least 10% of the total number of members; or
(b) members who together hold not less than 5% in nominal value of the company’s issued share capital;
requiring the emoluments and other benefits received by the directors of the company or of a subsidiary to be disclosed, the company shall:
(c) as soon as practicable prepare and cause to be audited a statement showing the total amount of emoluments and other benefits paid to or received by each of the directors of the company and each director of a subsidiary, including any amount paid by way of salary, for the financial year that ended immediately before the service of the notice;
(d) as soon as practicable after the statement has been audited, send a copy of the statement to each person entitled to receive notice of general meetings of the company; and
(e) lay the statement before the next general meeting of the company held after the statement is audited.
240 Secretary
(1) A company shall have at least one secretary.
(2) A secretary of a company shall be appointed by the directors.
(3) A person is not capable of being a secretary of a company unless the person is a natural person who has attained the age of 18 years.
(4) The secretary, or one of the secretaries, shall be a person who ordinarily resides in Australia.
(5) A secretary shall be present at the registered office of the company in person or by an agent on the days and during the hours when the registered office is required to be open and accessible to the public.
(6) If there is no secretary of a company, or no secretary of the company is capable of acting, any act or thing required or authorised to be done by or in relation to the secretary may be done by or in relation to any assistant or deputy secretary or, if there is no assistant or deputy secretary, or no assistant or deputy secretary is capable of acting, by or in relation to an officer of the company authorised by the directors to act as secretary, either generally or in relation to the doing of that act or thing.
(7) A provision of this Law or of the memorandum or articles requiring or authorising any act or thing to be done by or in relation to a director and a secretary is not satisfied by its being done by or in relation to the same person acting both as director and as, or in place of, a secretary.
(7A) Subject to subsection (7B), subsection (7) does not apply if the only director of a proprietary company is also the only secretary of the company.
(7B) Subsection (7) does not apply to the witnessing of the use of the company seal of a proprietary company if:
(a) the only director of the company is also the only secretary of the company; and
(b) that person witnesses the use of the company seal; and
(c) it is stated next to the signature that the person witnesses the sealing in the capacity of sole director and sole secretary of the company.
(8) Where a preceding provision of this section is contravened, the company and any officer of the company who is involved in the contravention each contravene this subsection.
241 Company not to indemnify officer or auditor
(1) A company or a related body corporate must not:
(a) indemnify a person who is or has been an officer or auditor of the company against a liability incurred by the person as such an officer or auditor; or
(b) exempt such a person from such a liability.
(1A) A memorandum, articles, or any other instrument, or an agreement or arrangement, is void in so far as it provides for a body corporate to do something that subsection (1) prohibits.
(2) Subsection (1) does not prevent a person from being indemnified against a liability to another person (other than the company or a related body corporate) unless the liability arises out of conduct involving a lack of good faith.
(3) Subsection (1) does not prevent a person from being indemnified against a liability for costs and expenses incurred by the person:
(a) in defending proceedings, whether civil or criminal, in which judgment is given in favour of the person or in which the person is acquitted; or
(b) in connection with an application, in relation to such proceedings, in which the Court grants relief to the person under this Law.
(4) In this section:
indemnify includes indemnify indirectly through one or more interposed entities;
officer, in relation to a company, means:
(a) a director, secretary or executive officer of the company;
(b) a receiver, or receiver and manager, of property of the company;
(c) an administrator of the company;
(ca) an administrator of a deed of company arrangement executed by the company;
(d) a liquidator of the company; and
(e) a trustee or other person administering a compromise or arrangement made between the company and another person or other persons.
241A Company not to pay insurance premiums in respect of certain liabilities of officer or auditor
(1) A company or a related body corporate must not pay, or agree to pay, a premium in respect of a contract insuring a person who is or has been an officer or auditor of the company against a liability:
(a) incurred by the person as such an officer or auditor; and
(b) arising out of conduct involving:
(i) a wilful breach of duty in relation to the company; or
(ii) without limiting subparagraph (i), a contravention of subsection 232(5) or (6).
(2) If subsection (1) is contravened, the contract is void in so far as it insures the person against such a liability.
(3) Subsections (1) and (2) do not apply to a liability for costs and expenses incurred by a person in defending proceedings, whether civil or criminal and whatever their outcome.
(4) In this section:
officer has the same meaning as in section 241;
pay includes pay indirectly through one or more interposed entities.
242 Notice of name and address of directors and secretaries
(1) On registration
Within 1 month after it is registered under section 120 or 137, a company must lodge with the ASC a notice of the personal details of each director and secretary. The notice must be in the form prescribed by the regulations.
(2) New directors or secretaries
If a person is appointed as a director or secretary of the company, the company must lodge with the ASC, within 1 month after the appointment, a notice of the personal details of the director or secretary. The notice must be in the form prescribed by the regulations.
(3) Personal details
The personal details of a director or secretary are:
(a) present given and family name; and
(b) all former given and family names; and
(c) date and place of birth; and
(d) address.
(4) Address
Subject to subsection (5), a person’s address must be their usual residential address.
(5) A person is entitled to have an alternative address included in notices under subsections (1), (2) and (8) if:
(a) their name, but not their residential address, is on an electoral roll under the Commonwealth Electoral Act 1918 because of section 104 of that Act; or
(b) their name is not on an electoral roll under that Act and the ASC determines, in writing, that including their residential address in the notices under this section would put at risk their personal safety or the personal safety of members of their family.
This alternative address must be in Australia and be one at which documents can be served on the person. At any particular time, a person is entitled to have only one alternative address under this section.
Note: See subsection 109X(3) on the status of the alternative address as an address for service.
(6) A person who takes advantage of subsection (5) must:
(a) before or at the same time as the alternative address is first included in a notice under this section, lodge with the ASC notice of the person’s usual residential address; and
(b) lodge with the ASC notice of any change in the person’s usual residential address within 14 days after the change.
A notice under this subsection must be in the form prescribed by the regulations.
(7) If a court gives a judgment for payment of a sum of money against a person who is taking advantage of subsection (5), the ASC may give details of the person’s usual residential address to an officer of the court for the purposes of enforcing the judgment debt.
(8) Changes in details
The company must lodge with the ASC notice of any change in the personal details of a director or secretary. The notice must be lodged within 1 month after the change and must be in the form prescribed by the regulations.
(9) Notice of directors or secretaries leaving the company
If a person stops being a director or secretary of the company, the company must lodge with the ASC notice of the fact within 1 month. The notice must be in the form prescribed by the regulations.
242A ASC power to ask for information about person’s position as director or secretary
(1) The ASC may ask a person, in writing, to inform the ASC:
(a) whether the person is a director or secretary of a particular company; and
(b) if the person is no longer a director or secretary of the company—the date on which the person stopped being a director or secretary.
(2) The person must give the information to the ASC in writing by the date specified in the request.
242B ASC certificate
The ASC may certify that a person was a director or secretary of a company at a particular time or during a particular period. In the absence of evidence to the contrary, a certificate is proof of the matters stated in it.
Note: See section 1274B for the evidentiary status of documents prepared by the ASC from the national database.
242C Director or secretary may notify ASC of resignation or retirement
(1) If a director or secretary of a company retires or resigns, they may give the ASC written notice of the retirement or resignation. The notice must be in the form prescribed by the regulations.
(2) To be effective under this section, a notice of resignation must be accompanied by a copy of the letter of resignation given to the company.
(3) Nothing in this section affects the company’s obligations to notify the ASC of the resignation or retirement.
243 Register of disqualified company directors and other officers
(1) The Commission shall cause to be kept for the purposes of this Law a Register of Disqualified Company Directors and Other Officers consisting of:
(a) a copy of each order made under subsection 230(1) or 599(2) or paragraph 1317EA(3)(a); and
(b) a copy of each notice served under subsection 600(3).
(2) Where:
(a) an order has been made under a previous law that corresponds with subsection 230(1) or 599(2); or
(b) a notice has been served under a previous law that corresponds with subsection 600(3);
the Commission may include a copy of the order or notice in the Register of Disqualified Company Directors and Other Officers.
(3) A person may inspect and make copies of, or take extracts from, the Register of Disqualified Company Directors and Other Officers.
Part 3.2A—Financial benefits to related parties of public companies
Division 1—Object and outline of Part
243A Object
The object of this Part is to protect:
(a) a public company’s resources (in particular, those available to pay the company’s creditors); and
(b) the interests of its members as members;
by requiring that, in general, financial benefits to related parties that could diminish or endanger those resources, or that could adversely affect those interests, be disclosed, and approved by a general meeting, before they are given.
243B Outline
(1) Division 2 explains expressions used in this Part.
(2) Division 3 sets out the prohibitions that give effect to the object of this Part.
(3) Division 4 creates general exceptions for financial benefits that are consistent with the object of this Part.
(4) Division 5 enables a public company in general meeting to permit a financial benefit not covered by the general exceptions.
(5) Division 6 enforces the prohibitions (section 243ZE), creates some other offences (sections 243ZF and 243ZH) and describes how this Part interacts with other laws (section 243ZI).
Division 2—The meaning of expressions
243C Entities
(1) Each of the following is an entity:
(a) a body corporate;
(b) a partnership;
(c) an unincorporated body;
(d) an individual;
(e) a trustee of a trust that has only one trustee.
(2) If a trust has 2 or more trustees, those trustees together constitute an entity.
(3) Subject to subsections (1) and (2), if an accounting standard:
(a) deals with disclosure in companies’ financial statements of information about related parties (for example, about transactions between companies and related parties); and
(b) is in force at a particular time (even if the standard does not apply to a financial year of a company in which that time occurs); and
(c) defines the expression entity;
the question of what is or was an entity at that time is to be determined in accordance with the definition in the standard.
243D Parent entities, child entities and sibling entities
(1) An entity is a parent entity of another entity if:
(a) both are bodies corporate and the first entity is a holding company of the other; or
(b) the first entity has control over the other.
(2) An entity is a child entity of another entity if the other is its parent entity, or is one of its parent entities.
(3) An entity is a sibling entity of another entity if they have a parent entity in common and neither is a parent entity of the other.
243E Control
If an accounting standard:
(a) deals with disclosure in companies’ financial statements of information about related parties (for example, about transactions between companies and related parties); and
(b) is in force at a particular time (even if the standard does not apply to a financial year of a company in which that time occurs); and
(c) provides for determining whether an entity has control over another entity;
the question of whether an entity has or had control over another entity at that time is to be determined in accordance with the provision in the standard.
243F Related party of a public company
(1) Each of the following is a related party of a public company:
(a) a director of the public company;
(b) a director of a body corporate that is a parent entity of the public company;
(c) one of the persons constituting an entity (other than a body corporate) that is a parent entity of the public company;
(d) a spouse or de facto spouse of such a director or person;
(e) a parent, son or daughter of such a director, person, spouse or de facto spouse;
(f) an entity (other than a child entity of the public company) over which:
(i) a person of a kind referred to in paragraph (a), (b), (c), (d) or (e) has control; or
(ii) 2 or more such persons together have control;
(g) a parent entity or sibling entity of the public company.
(2) An entity is also a related party of a public company at a particular time if the entity was a related party of the public company because of subsection (1) at any time within the previous 6 months.
(3) An entity is also a related party of a public company at a particular time if:
(a) the entity believes at that time, or has at that time reasonable grounds to believe, that it is likely to become an entity of a particular kind at some future time; and
(b) by becoming an entity of that kind, it would become at that future time a related party of the public company because of subsection (1).
(4) For the purposes of subsection (3), an entity (other than a body corporate) constituted by 2 or more persons is taken to believe, or to have reasonable grounds to believe, something if at least one of those persons believes, or has such grounds to believe, that thing.
(5) If, at a particular time, an entity:
(a) was or is a related party of a public company because of subsection (1), (2) or (3); and
(b) acted, or proposes to act, in concert with another entity (the associate) in respect of the giving or proposed giving of a financial benefit (the primary benefit) by the public company, or by a child entity of the public company, to the associate; and
(c) so acted, or proposes so to act, for the reason, or for reasons including the reason, that a financial benefit has been given to a related party of the public company or is expected to be so given;
the associate is a related party of the public company in relation to the giving or proposed giving of the primary benefit.
243G Giving a financial benefit
(1) A reference to an entity giving a financial benefit:
(a) is intended to operate broadly, even though criminal or civil penalties may be involved; and
(b) includes a reference to giving a financial benefit indirectly (for example, through one or more interposed entities) or by making or giving effect to a relevant agreement (as defined in section 9).
(2) In deciding whether an entity has given a financial benefit:
(a) the economic and commercial substance and effect of what the entity has done is to prevail over its legal form; and
(b) any consideration that has been or may be given for the benefit is to be disregarded, even if it is full or adequate.
(3) A benefit that does not involve the payment of money can still be a financial benefit: for example, if it confers some financial advantage.
(4) A few examples of an entity giving a financial benefit to another entity are:
(a) the first entity lending the other money, guaranteeing a loan to the other, or providing security for a loan to the other;
(b) the first entity forgiving a debt owed by the other, otherwise releasing, or neglecting to enforce, an obligation of the other, or assuming an obligation of the other;
(c) the first entity buying or leasing an asset from the other, or selling or leasing an asset to the other;
(d) the first entity acquiring services from the other, or supplying services to the other;
(e) the first entity issuing securities, or granting an option, to the other;
(f) the first entity giving money or property to the other.
Division 3—The prohibitions
243H Prohibited financial benefits to related parties of public companies
(1) A public company must not give a financial benefit to a related party except as permitted by Division 4 or 5.
(2) A child entity of a public company must not give a financial benefit to a related party of the public company except as permitted by Division 4 or 5.
Definitions:
public company: see the definition in section 9 (note especially paragraph (b) of the definition);
give a financial benefit: see section 243G;
related party: see section 243F;
child entity: see subsection 243D(2).
Division 4—General exceptions
243J Financial benefit under contract made before section 243H begins to apply
(1) Section 243H does not prevent a public company, or a child entity of a public company, from giving a financial benefit to a related party of the public company as required by a contract made before the day on and after which that section applies to the public company because of section 1376.
(2) Subsection (1) does not apply if:
(a) section 234, a corresponding law, or a corresponding previous law, prohibited the making of the contract; or
(b) immediately before that day, section 234 or a corresponding law prohibited the public company or child entity from giving the benefit to the related party.
243K Remunerating officers
(1) A body corporate may pay or provide remuneration to a person in a capacity as an officer of the body if it is reasonable for a body corporate in the body’s circumstances to pay or provide that remuneration to an officer in the person’s circumstances.
(2) A body corporate may pay or provide remuneration to a person in a capacity as an officer of the body if:
(a) the body does so as required by a contract between the body and the person; and
(b) it was reasonable for a body corporate in the body’s circumstances to make that contract with an officer in the person’s circumstances.
(3) An entity may give a financial benefit to a person in the person’s capacity as an officer of a body corporate if subsection (1) or (2) would permit the body itself to give the benefit to the person in that capacity.
(4) Any of the following paid by a body corporate to an officer of the body as such (however the rate or amount is worked out) is remuneration paid by the body to the officer:
(a) salary;
(b) wages;
(c) bonuses;
(d) allowances paid for the sole purpose of meeting expenses incurred in connection with performing services as such an officer.
(5) A benefit that is in the nature of a fringe benefit and is provided by a body corporate to an officer of the body as such is remuneration provided by the body to the officer.
(6) A contribution made by a body corporate to a fund for the purpose of making provision for, or obtaining, superannuation benefits for an officer of the body, or for dependants of such an officer, is remuneration provided by the body to the officer.
(7) A financial benefit given to a person because of the person ceasing to hold an office or employment as an officer or employee of a body corporate is remuneration paid or provided to the person in a capacity as an officer of the body.
(7A) A financial benefit given by a body corporate to a person who is an officer of the body by way of indemnifying the person against a liability incurred by the person as such an officer, or as an officer of a related body corporate, is remuneration paid or provided by the first‑mentioned body to the person in a capacity as an officer of that body.
(7B) A premium paid by a body corporate in respect of a contract insuring a person who is an officer of the body against a liability incurred by the person as such an officer, or as an officer of a related body corporate, is remuneration paid or provided by the first‑mentioned body to the person in a capacity as an officer of that body.
(8) Subsections (4) to (7B), inclusive, have effect for the purposes of subsections (1), (2) and (3), but nothing in them limits the generality of:
(a) the expression remuneration in subsections (1) and (2); or
(b) anything else in subsections (4) to (7B), inclusive.
243L Advances, up to prescribed amount, to director or director’s spouse
(1) A body corporate may advance money to:
(a) a director of the body; or
(b) a spouse or de facto spouse of such a director;
unless the total of the following would exceed $2,000 or such greater amount as is prescribed:
(c) the amount of the advance;
(d) each amount (if any) that is still owing and was advanced to the director, spouse or de facto spouse by the body, or by a parent entity, child entity or sibling entity of the body.
(2) For the purposes of subsection (1), an amount already advanced is to be disregarded if, because of this Division (other than this section) or Division 5, section 243H did not prohibit the advance.
243M Financial benefit given to or by closely‑held subsidiary
(1) A body corporate may give a financial benefit to a closely‑held subsidiary of the body.
(2) A closely‑held subsidiary of a body corporate may give a financial benefit to the body, or to a child entity of the body.
(3) For the purposes of this section, a body corporate is a closely‑held subsidiary of another body corporate if, and only if, no member of the first‑mentioned body is a person other than:
(a) the other body; or
(b) a nominee of the other body; or
(c) a body corporate that is a closely‑held subsidiary of the other body because of any other application or applications of this subsection; or
(d) a nominee of such a body.
(4) For the purposes of subsection (3), disregard shares that are not voting shares.
243N Financial benefit on arm’s length terms
(1) A public company, or a child entity of a public company, may give a financial benefit to a related party of the public company if it does so on terms and conditions no more favourable to the related party than those on which it is reasonable to expect that the company or entity, as the case may be, would give the benefit directly if dealing with the related party at arm’s length in the same circumstances.
(2) In the case of a loan or other financial accommodation, the matters to consider for the purposes of subsection (1) include, for example:
(a) the amount of the loan or the extent of the accommodation;
(b) what interest or charges are payable;
(c) the credit risk;
(d) what security is given;
(e) the timetable for repayments of amounts owing and for payments of interest or charges.
243PA Financial benefits to members as such
A public company, or a body corporate that is a child entity of a public company, may give financial benefits to any of its own members, in their capacity as members, on a basis that does not discriminate unfairly, either directly or indirectly, in favour of one or more related parties of the public company.
243PB Financial benefit under court order
An entity may give a financial benefit to another entity pursuant to an order of a court.
Division 5—Financial benefits approved by general meeting of public company
Subdivision A—Exceptions from the prohibitions
243Q Financial benefit permitted by resolution of members
A public company, or a child entity of a public company, may give a financial benefit to a related party of the public company if:
(a) a resolution of the public company permits the benefit to be given; and
(b) the resolution was passed at a general meeting of the public company held within 15 months before the public company, or the child entity, as the case may be, gives the benefit; and
(c) the conditions prescribed by Subdivision B have been satisfied in relation to the resolution.
243R Financial benefit under contract permitted by resolution of members
(1) A public company, or a child entity of a public company, may give a financial benefit to a related party of the public company as required by a contract with the related party if:
(a) a resolution of the public company permitted the public company, or the child entity, as the case may be, to make the contract; and
(b) the resolution was passed at a general meeting of the public company held within 15 months before the contract was made; and
(c) the conditions prescribed by Subdivision B have been satisfied in relation to the resolution.
(2) A reference in this Division to a resolution or proposed resolution permitting a financial benefit to be given by a public company or entity includes a reference to the resolution or proposed resolution permitting the public company or entity to make a contract to give the benefit.
243S Resolution may specify matters by class or kind
A resolution under this Division may specify anything either in particular or by reference to class or kind.
243T Effect of resolution
(1) A resolution of a public company that permits the company to give a financial benefit to a related party does not affect the application of subsection 243H(2) and this Division to the public company in its capacity as a child entity of another public company.
(2) A resolution of a public company that permits a child entity of the public company to give a financial benefit to a related party of the public company does not affect:
(a) if the child entity is also a public company—the application of subsection 243H(1) and this Division to the child entity in its capacity as a public company; or
(b) in any case—the application of subsection 243H(2) and this Division to the child entity in its capacity as a child entity of another public company.
Example: A Ltd, B Ltd and C Ltd are all public companies. X is a director of A Ltd. A Ltd is a holding company of B Ltd, which is a holding company of C Ltd.
For C Ltd to give to X a financial benefit not covered by an exception in Division 4, all 3 companies must pass resolutions under this Division permitting the benefit.
This is because 3 applications of section 243H prohibit C Ltd from giving the benefit. Subsection 243H(1) prohibits C Ltd as a public company of which X is a related party. Subsection 243H(2) prohibits C Ltd twice: once as a child entity of B Ltd, of which X is a related party, and once as a child entity of A Ltd, of which X is also a related party.
Subdivision B—Conditions to be satisfied
243U Company must lodge material that will be put to members
(1) At least 14 days before the notice convening the relevant meeting is given, the public company must lodge:
(a) a proposed notice of meeting setting out the text of the proposed resolution; and
(b) a proposed explanatory statement satisfying section 243V; and
(c) any other document proposed to accompany the notice convening the meeting; and
(d) any other document that any of the following proposes to give to members of the public company before or at the meeting:
(i) the company;
(ii) a related party of the company to whom the proposed resolution would permit a financial benefit to be given;
(iii) an associate of the company or of such a related party; and can reasonably be expected to be material to a member in deciding how to vote on the proposed resolution.
(2) If, when the notice convening the meeting is given, the Commission:
(a) has approved in writing a period of less than 14 days for the purposes of subsection (1); and
(b) has not revoked the approval by written notice to the public company;
subsection (1) applies as if the reference to 14 days were a reference to the approved period.
(3) The Commission may give and revoke approvals for the purposes of subsection (2).
243V Requirements for explanatory statement to members
(1) The proposed explanatory statement lodged under section 243U must be in writing and set out:
(a) the related parties to whom the proposed resolution would permit financial benefits to be given; and
(b) the nature of the financial benefits; and
(c) in relation to each director of the company:
(i) if the director wanted to make a recommendation to members about the proposed resolution—the recommendation and his or her reasons for it; or
(ii) if not—why not; or
(iii) if the director was not available to consider the proposed resolution—why not;
(d) in relation to each such director:
(i) whether the director had an interest in the outcome of the proposed resolution; and
(ii) if so—what it was; and
(e) all other information that:
(i) is reasonably required by members in order to decide whether or not it is in the company’s interests to pass the proposed resolution; and
(ii) is known to the company or to any of its directors.
(2) An example of the kind of information referred to in paragraph (1)(d) is information about what, from an economic and commercial point of view, are the true potential costs and detriments of, or resulting from, giving financial benefits as permitted by the proposed resolution, including (without limitation):
(a) opportunity costs; and
(b) taxation consequences (such as liability to fringe benefits tax); and
(c) benefits forgone by whoever would give the benefits.
Note: Section 232 requires an officer of a corporation to act honestly and to exercise care and diligence. These duties extend to preparing an explanatory statement under this section. Section 1309 creates offences where false and misleading material relating to a corporation’s affairs is made available or furnished to members.
243W Commission may comment on proposed resolution
(1) Within 14 days after a public company lodges documents under section 243U, the Commission may give to the company written comments on those documents, other than comments about whether the proposed resolution is in the company’s best interests.
(2) The Commission may consult with the Exchange for the purposes of giving comments to a company that is included in the official list of the Exchange or of a securities exchange that is a subsidiary of the Exchange.
(3) Subsection (2) does not limit the persons with whom the Commission may consult.
(4) The Commission must keep a copy of the written comments it gives to a company under subsection (1), and subsections 1274(2) and (5) apply to the copy as if it were a document lodged with the Commission.
(5) The fact that the Commission has given particular comments, or has declined to give comments, under subsection (1) does not in any way affect the performance or exercise of any of the Commission’s functions and powers.
243X Requirements for notice of meeting
The notice convening the meeting:
(a) must be the same, in all material respects, as the proposed notice lodged under section 243U; and
(b) must be accompanied by an explanatory statement that is the same, in all material respects, as the proposed explanatory statement lodged under that section; and
(c) must be accompanied by a document that is, or documents that are, the same, in all material respects, as the document or documents (if any) lodged under paragraph 243U(1)(c); and
(d) if the Commission has given to the public company, in accordance with section 243W, comments on the documents lodged under section 243U—must be accompanied by a copy of those comments; and
(e) must not be accompanied by any other documents.
243Y Other material put to members
Each document (if any) that:
(a) did not accompany the notice convening the meeting; and
(b) was given to members of the public company before or at the meeting by:
(i) the public company; or
(ii) a related party of the public company to whom the proposed resolution would permit a financial benefit to be given; or
(iii) an associate of the public company or of such a related party; and
(c) can reasonably be expected to have been material to a member in deciding how to vote on the proposed resolution;
must be the same, in all material respects, as a document lodged under paragraph 243U(1)(d).
243ZA Proposed resolution cannot be varied
The resolution must be the same as the proposed resolution set out in the proposed notice lodged under section 243U.
243ZB Voting on the resolution
(1) If any votes on the resolution are cast in contravention of subsection 243ZF(1), it must be the case that the resolution would still be passed even if those votes were disregarded.
Note: Section 243ZF prohibits voting by or on behalf of related parties to whom a proposed resolution would permit financial benefits to be given.
(2) If a poll was duly demanded on the question that the resolution be passed, subsections (3) and (4) apply in relation to voting on the poll.
(3) In relation to each member of the public company who voted on the resolution in person, the public company must record in writing:
(a) the member’s name; and
(b) how many votes the member cast for the resolution and how many against.
(4) In relation to each member of the public company who voted on the resolution by proxy, or by a representative authorised under subsection 249(3), the public company must record in writing:
(a) the member’s name; and
(b) in relation to each person who voted as proxy, or as such a representative, for the member:
(i) the person’s name; and
(ii) how many votes the person cast on the resolution as proxy, or as such a representative, for the member; and
(iii) how many of those votes the person cast for the resolution and how many against.
243ZC Notice of resolution to be lodged
Within 14 days after the resolution is passed, the public company must lodge a notice setting out the text of the resolution.
243ZD Declaration by Court of substantial compliance
(1) The Court may declare that the conditions prescribed by this Subdivision have been satisfied if it finds that they have been substantially satisfied.
(2) A declaration may be made only on the application of an interested person.
Division 6—Enforcement
243ZE Consequences of giving financial benefit when not permitted
(1) This section applies if:
(a) a related party of a public company receives a financial benefit from the public company, or from a child entity of the public company; and
(b) the public company contravenes subsection 243H(1), or the child entity contravenes subsection 243H(2), by giving the benefit.
(2) The related party contravenes this subsection.
Note: If the related party is not itself a legal person, see section 243ZG.
(3) Subject to subsection (4), a person contravenes this subsection if the person:
(a) is involved (as defined in section 79) in; or
(b) is, by act or omission, directly or indirectly, recklessly concerned in. or party to;
the contravention of subsection 243H(1) or (2), or the contravention of subsection (2) of this section.
(4) Neither the public company nor the child entity:
(a) is guilty of an offence because of the contravention of subsection 243H(1) or (2); or
(b) is taken to be involved in, or concerned in or party to:
(i) a contravention of subsection (2) of this section by the related party or by any of the persons constituting the related party; or
(ii) a contravention of subsection (3) of this section by a person.
Note: In the case of a contravention of subsection 243H(2) by a child entity (other than a body corporate) constituted by 2 or more persons, subsection (4) of this section does not prevent any of those persons from contravening this section.
(5) Subsections (2) and (3) are civil penalty provisions as defined by section 1317DA, so Part 9.4B provides for civil and criminal consequences of contravening, or of being involved in a contravention of, either of them.
(6) In a proceeding against a person for:
(a) a contravention of subsection (2); or
(b) a contravention of subsection (2) because of section 243ZG, 1317DB, 1317DC or 1317DD;
it is a defence if it is proved that the person was unaware of a fact or circumstance essential to the contravention of subsection 243H(1) or (2), as the case requires.
Note: Section 103 prevents a contravention of section 243H or of this section from invalidating a transaction.
243ZF Voting by or on behalf of related party interested in proposed resolution under Division 5
(1) At a general meeting, a vote on a proposed resolution under Division 5 must not be cast (in any capacity) by or on behalf of:
(a) a related party of the public company to whom the resolution would permit a financial benefit to be given; or
(b) an associate of such a related party.
(2) Subsection (1) does not prevent the casting of a vote if:
(a) it is cast by a person as a proxy appointed by writing that specifies how the proxy is to vote on the proposed resolution; and
(b) it is not cast on behalf of a related party or associate of a kind referred to in subsection (1).
(3) The regulations may prescribe cases where subsection (1) does not apply.
(4) The Commission may by writing declare that:
(a) subsection (1) does not apply to a specified proposed resolution; or
(b) subsection (1) does not prevent the casting of a vote, on a specified proposed resolution, by a specified entity, or on behalf of a specified entity;
but may only do so if satisfied that the declaration will not cause unfair prejudice to the interests of any member of the public company.
(5) A declaration in force under subsection (4) has effect accordingly.
(6) If a vote is cast in contravention of subsection (1), the related party or associate, as the case may be, contravenes this subsection, whether or not the proposed resolution is passed.
Note: If the related party is not itself a legal person, see section 243ZG.
(7) For the purposes of this section, a vote is cast on behalf of an entity if, and only if, it is cast:
(a) as proxy for the entity; or
(b) otherwise on behalf of the entity; or
(c) in respect of a share in respect of which the entity has power to vote as defined in section 30.
(8) Subject to subsection 243ZB(1), a contravention of this section does not affect the validity of a resolution.
243ZG Contraventions by an entity that is not a legal person
If an entity (other than a body corporate) constituted by 2 or more persons contravenes subsection 243ZE(2) or 243ZF(6), then, for the purposes of this Law, each of those persons contravenes that subsection.
243ZH Retaining records made under section 243ZB
For 7 years after the day when a resolution under Division 5 is passed, the public company must retain the records it made under section 243ZB in relation to the resolution.
243ZI Effect of Part
(1) Sections 243H, 243ZE and 243ZF have effect despite anything else in this Law or in any other law of this jurisdiction, or anything in a body corporate’s constitution.
(2) Sections 243J to 243R, inclusive, have effect subject to:
(a) this Law (other than this Part); and
(b) any other law of this jurisdiction or anywhere else; and
(c) the constitution of a body corporate that those sections would otherwise permit to give financial benefits.
(3) Without limiting subsection (2), this Part does not relieve a person of a duty imposed by this Law, by any other law of this jurisdiction or anywhere else, or by a body corporate’s constitution.
(4) Nothing done under this Part relieves a person of such a duty merely because the thing was done under this Part.
(5) In this section:
law includes a rule of common law or equity.
Part 3.3—Meetings and Proceedings
244 Statutory meeting and statutory report
(1) Where a public company that is a limited company and has a share capital or a no liability company:
(a) issues a prospectus (other than an excluded prospectus) in relation to shares in the company; and
(b) the company has not previously issued such a prospectus;
the company shall, within a period of not less than 1 month and not more than 3 months after the day on which the company allots shares pursuant to the prospectus, hold a general meeting of the members of the company, to be called the statutory meeting.
(2) The directors shall at least 7 days before the day on which the meeting is to be held send a copy of a report, to be called the statutory report, to every member of the company.
(3) The statutory report shall be certified by not less than 2 directors of the company and shall state, as at the date of the report:
(a) the total number of shares allotted, distinguishing:
(i) shares allotted as fully paid up in cash;
(ii) shares allotted as partly paid up in cash;
(iii) shares allotted as fully paid up otherwise than in cash; and
(iv) shares allotted as partly paid up otherwise than in cash;
and stating:
(v) in the case of shares partly paid up—the extent to which they are so paid up; and
(vi) in the case of shares allotted as fully or partly paid up otherwise than in cash—the consideration for which they have been allotted;
(b) the total amount of cash received by the company in respect of all the shares allotted and so distinguished;
(c) an abstract of the receipts of the company and of the payments made out of those receipts up to a day within 7 days of the date of the report showing under distinctive headings:
(i) the receipts from shares and debentures and other sources;
(ii) the payments made out of those receipts;
(iii) particulars concerning the balance (if any) remaining in hand; and
(iv) an account or estimate of the preliminary expenses;
(d) the name, address and description of:
(i) each director; and
(ii) each trustee for holders of debentures (if any); and
(iii) each auditor; and
(iv) each secretary;
of the company; and
(e) the particulars of any contract the modification of which is to be submitted to the meeting for its approval together with the particulars of the modification or proposed modification.
(4) The statutory report shall, so far as it relates to the shares allotted and to the cash received in respect of such shares and to the receipts and payments on capital account, be examined and reported upon by the auditors (if any).
(5) The directors shall cause a copy of the statutory report and the auditor’s report (if any) to be lodged at least 7 days before the day of the statutory meeting.
(6) The directors shall cause a list showing the names and addresses of the members, and the numbers of shares held by them respectively, to be produced at the beginning of the meeting and to remain open and accessible to any member throughout the meeting.
(7) The members present at the meeting may discuss any matter relating to the formation of the company or arising out of the statutory report, whether previous notice has been given or not, but a resolution may only be passed if notice of it has been given in accordance with the articles.
(8) The meeting may adjourn from time to time and, at any adjourned meeting, any resolution of which notice has been given in accordance with the articles either before or after the former meeting may be passed and the adjourned meeting has the same powers as an original meeting.
(9) The meeting may by resolution appoint a committee or committees of inquiry, and at any adjourned meeting a special resolution may be passed that the company be wound up if, notwithstanding any other provision of this Act, at least 7 days notice of intention to propose the resolution has been given to every member of the company.
(10) If default is made in complying with this section:
(a) the company; and
(b) any officer of the company who failed to take reasonable steps to ensure compliance;
each contravene this subsection.
245 Annual general meeting
(1) Subject to subsection (2), a company shall, in addition to any other meeting held by the company, hold a general meeting, to be called the annual general meeting, at least once in every calendar year and, in relation to a financial year of the company that ends after the commencement of this Law, within 5 months after the end of that financial year.
(2) A company may hold its first annual general meeting within 18 months after its incorporation but, if the first financial year of the company ends after the commencement of this Law, the company shall hold the meeting not more than 5 months after the end of that financial year.
(2A) Subsections (1) and (2) do not apply to a proprietary company.
(3) A company shall be deemed to have held an annual general meeting if that company has held a general meeting at which resolutions have been passed dealing with all matters required to be dealt with at an annual general meeting, but nothing in this subsection affects an obligation imposed by this Law to hold an annual general meeting at a particular time or within a particular period.
(5) On application made by a company in accordance with a resolution of the directors and signed by a director or secretary, the Commission may, in writing and subject to such conditions as the Commission imposes on the company:
(a) permit the company to hold a meeting in a calendar year other than the one in which subsection (1) requires the meeting to be held; or
(b) extend the period within which subsection (1) or (2) requires the company to hold a meeting.
(6) A company shall comply with conditions imposed on it under subsection (5).
(7) A permission or extension in force under subsection (5) has effect accordingly.
(8) An application by a company for a permission or extension under subsection (5) shall be made before the end of the calendar year in which, or of the period within which, as the case may be, subsection (1) or (2) would otherwise require the company to hold the meeting.
(9) So long as proper notice is given to everyone entitled to receive notice of the meeting, a general meeting may be held at any time and the company may resolve that any meeting held or convened to be held shall be the annual general meeting of the company.
(10) If default is made in holding a meeting under this section or in complying with a condition imposed under subsection (5) the Court may, on the application of a member, order a general meeting to be convened.
246 Convening of general meeting on requisition
(1) The directors of a company, notwithstanding anything in its articles, shall, on the requisition in writing of:
(a) in the case of a company having a share capital—at least 100 members holding shares in the company on which there has been paid up an average sum, per member, of at least $200;
(b) in the case of a company not having a share capital—at least 200 members; or
(c) in either case—a member who is entitled, or members who are together entitled, to at least 5% of the total voting rights of all the members having at the date of the deposit of the requisition a right to vote at general meetings;
as soon as practicable convene a general meeting of the company to be held as soon as practicable but, in any case, not later than 2 months after the date of the deposit of the requisition.
(2) The requisition shall state the objects of the meeting and shall be signed by the requisitioning member or members and deposited at the registered office of the company, and, where there are 2 or more requisitioning members, may consist of several documents in like form each signed by 1 or more of the requisitioning members.
(3) If the directors do not, within 21 days after the date of the deposit of the requisition, proceed to convene a meeting, the requisitioning member, or, where there are 2 or more requisitioning members, those members or any of them representing more than 50% of the total voting rights of all of them:
(a) may, in the same manner as nearly as possible as that in which meetings are to be convened by directors, convene a meeting; and
(b) for the purposes of convening a meeting as provided by paragraph (a), may request the company to supply a written statement setting out the names and addresses (so far as they are known to the company) of the persons who, at the date of the deposit of the requisition, were entitled, under subsection 247(4) or a provision of the articles of the company, to receive notice of general meetings of the company.
(4) Where a request for a statement is made to a company under paragraph (3)(b), the directors of the company shall send the statement to the person or persons who requested the statement within 7 days after the day on which the request is made.
(5) A meeting convened by a requisitioning member or requisitioning members in accordance with subsection (3) shall not be held more than 3 months after the date of the deposit of the requisition.
(6) Any reasonable expenses incurred by the requisitioning member or members by reason of the failure of the directors to convene a meeting shall be paid to that member or those members by the company, and any sum so paid shall be retained by the company out of any sums due or to become due from the company by way of fees or other remuneration in respect of their services to such of the directors as were in default.
(7) A meeting at which a special resolution is to be proposed shall be deemed not to be duly convened by the directors if they do not give such notice of the meeting as is required by this Law in the case of special resolutions.
(8) For the purposes of the application of this section in relation to a Division 2 company:
(a) a reference in this section to a requisition includes a reference to a requisition deposited before the commencement of this Law in accordance with a previous law in force at that time that corresponds to this section; and
(b) where a requisition was so deposited—anything done at such a time, under a previous law corresponding to this section, pursuant to the requisition shall also be deemed to have been done at that time under this section.
247 Convening of meetings
(1) So far as the articles do not make other provision, 2 or more members holding at least 5% of the issued share capital, or, if the company does not have a share capital, at least 5% in number of the members of the company, may convene a meeting of the company.
(2) A meeting of a company or of a class of members, other than a meeting for the passing of a special resolution, shall be convened by notice in writing of at least 14 days or such longer period as is provided in the articles.
(3) A meeting shall, notwithstanding that it is convened by notice shorter than is required by subsection (2), be deemed to be duly convened if it is so agreed:
(a) in the case of a meeting convened as the annual general meeting—by all the members entitled to attend and vote at the meeting; or
(b) in the case of any other meeting—by a majority in number of the members having a right to attend and vote at the meeting, being a majority that together hold at least 95% in nominal value of the shares giving a right to attend and vote or, in the case of a company not having a share capital, are together entitled to at least 95% of the total voting rights of all the members having the right to attend and vote at the meeting.
(4) So far as the articles do not make other provision, notice of every meeting shall be served on every member having a right to attend and vote at the meeting in the manner in which notices are required to be served by Table A.
248 Articles as to right to demand a poll
(1) Any provision contained in a company’s articles is void in so far as it would have the effect:
(a) of excluding the right to demand a poll at a general meeting on any question or matter other than the election of the chairman of the meeting or the adjournment of the meeting;
(b) of making ineffective a demand for a poll on any question or matter, other than the election of the chairman of the meeting or the adjournment of the meeting, that is made:
(i) by at least 5 members having the right to vote at the meeting;
(ii) by a member or members who are together entitled to at least 10% of the total voting rights of all the members having the right to vote at the meeting; or
(iii) by a member or members holding shares in the company conferring a right to vote at the meeting, being shares on which an aggregate sum has been paid up equal to at least 10% of the total sum paid up on all the shares conferring that right; or
(c) of requiring the instrument appointing a proxy, or any other document necessary to show the validity of or otherwise relating to the appointment of a proxy, to be received by the company or any other person more than 48 hours before a meeting or adjourned meeting in order that the appointment may be effective at the meeting.
(2) The instrument appointing a proxy to vote at a meeting of a company shall be deemed to confer authority to demand or join in demanding a poll, and, for the purposes of subsection (1), a demand by a person as proxy for a member of the company shall be deemed to be the same as a demand by the member.
249 Quorum, chairman, voting etc. at meetings
(1) So far as the articles do not make other provision:
(a) a quorum is constituted by:
(i) in the case of a proprietary company with a single member—that member; and
(ii) in the case of a proprietary company with 2 or more members—2 members personally present; and
(iii) in the case of a public company—3 members personally present; and
(b) any member elected by the members present at a meeting may be chairman of the meeting; and
(c) in the case of a company having a share capital, every member has 1 vote in respect of each share or each $20 of stock held by the member, and, in any other case, every member has 1 vote.
(2) On a poll taken at a meeting, a person (including a proxy) entitled to 2 or more votes need not, if the person votes, use all the person’s votes or cast in the same way all the votes the person uses.
(3) A body corporate may, by resolution of its board, authorise a specified person to act as the body’s representative at specified meetings that the body would, if it were a natural person, be entitled to attend as a member or creditor (including debenture holder) of a company.
(4) A person who is authorised under subsection (3) is, in accordance with the authority and until it is revoked, entitled to exercise on the body’s behalf the same powers as the body could, if it were a natural person, exercise as a member or creditor (including debenture holder) of the company.
(5) Where:
(a) a person present at a meeting is authorised to act as the representative of a body corporate at the meeting by virtue of an authority given by the body corporate under subsection (3); and
(b) the person is not otherwise entitled to be present at the meeting, the body corporate shall, for the purposes of subsection (1), be deemed to be personally present at the meeting.
(6) A certificate under the seal of the body corporate is prima facie evidence of the appointment or of the revocation of the appointment, as the case may be, of a representative pursuant to the provisions of subsection (3).
(7) Where a holding company holds the whole of the issued shares in a subsidiary and a minute is signed by a representative of the holding company authorised pursuant to subsection (3) stating that any act, matter or thing, or any ordinary or special resolution, required by this Law or by the memorandum or articles of the subsidiary to be made, performed, or passed by or at a general meeting of the subsidiary has been made, performed, or passed, that act, matter, thing or resolution shall, for all purposes, be deemed to have been duly made, performed or passed by or at a general meeting of the subsidiary.
(8) Where:
(a) by or under any provision of this Law any notice, copy of a resolution or other document relating to any matter is required to be lodged by the company;
(b) a minute referred to in subsection (7) is signed by the representative pursuant to that subsection; and
(c) the minute relates to such a matter;
the company shall, within 1 month after the signing of the minute, lodge a copy of the minute.
250 Proxies
(1) Subject to subsections (2), (3) and (4), a member of a company who is entitled to attend and vote at a meeting of the company, or at a meeting of any class of members of the company, is entitled to appoint:
(a) in the case of a company not having a share capital—another member or, where the articles so provide, another person (whether a member or not); or
(b) in any other case—not more than 2 other persons (whether members or not);
as the first‑mentioned member’s proxy or proxies to attend and vote instead of the member at the meeting.
(2) A proxy appointed to attend and vote instead of a member has the same right as the member to speak at the meeting but, unless the articles otherwise provide, a proxy is not entitled to vote except on a poll.
(3) Where a member appoints 2 proxies, the appointment is of no effect unless each proxy is appointed to represent a specified proportion of the member’s voting rights.
(4) A member of a proprietary company is not entitled to appoint another person as the member’s proxy under subsection (1) except:
(a) in accordance with the articles of the company; or
(b) with the leave of the Court.
(5) In every notice convening a meeting of a public company or of any class of members of a public company, there shall appear with reasonable prominence:
(a) in the case of a public company having a share capital, a statement:
(i) that a member entitled to attend and vote is entitled to appoint not more than 2 proxies;
(ii) that where more than 1 proxy is appointed, each proxy must be appointed to represent a specified proportion of the member’s voting rights; and
(iii) that a proxy need not be a member; or
(b) in the case of a public company not having a share capital, a statement:
(i) that a member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of the member; and
(ii) that a proxy must, or need not, be a member (as the case requires).
(6) If subsection (5) is contravened, an officer of the company who is involved in the contravention contravenes this subsection.
(7) A person shall not authorise or permit an invitation to appoint as proxy a person or 1 of a number of persons specified in the invitation to be issued at the company’s expense to some only of the members entitled to be sent a notice of the meeting and to vote at the meeting by proxy.
(8) A person does not contravene subsection (7) merely because of the issue to a member at the member’s request of a form of appointment naming the proxy or a list of persons willing to act as proxies if the form or list is available on request in writing to every member entitled to vote at the meeting by proxy.
251 Power of Court to order meeting
(1) If for any reason it is impracticable to convene a meeting in any manner in which meetings may be convened or to conduct the meeting in the manner prescribed by the articles or this Law, the Court may, either of its own motion or on the application of any director or of any member who would be entitled to vote at the meeting, order a meeting to be convened, held and conducted in such manner as the Court thinks fit, and may give such ancillary or consequential directions as it thinks expedient, including a direction that 1 member present in person or by proxy shall be deemed to constitute a meeting.
(2) Any meeting convened, held and conducted in accordance with any order made pursuant to this section shall, for all purposes, be deemed to be a meeting duly convened, held and conducted.
(3) For the purposes of an application to the Court or of a meeting held by order of the Court under this section, the personal representative of a dead member of a company shall be deemed to be a member of the company and, notwithstanding anything to the contrary in this Law or the memorandum or articles of the company, to have the same voting rights as the dead member had immediately before his or her death by reason of his or her holding shares that on his or her death were transmitted to his or her personal representative by operation of law.
252 Circulation of members’ resolutions etc.
(1) Subject to this section, a company shall, on the requisition in writing of:
(a) in the case of a company having a share capital—at least 100 members holding shares in the company on which there has been paid up an average sum, per member, of at least $200;
(b) in the case of a company not having a share capital—at least 200 members; or
(c) in either case—a member who is entitled, or members who are together entitled, to at least 5% of the total voting rights of all the members having at the date of the deposit of the requisition a right to vote at general meetings;
and, unless the company otherwise resolves, at the expense of the requisitioning member or members:
(d) give to members of the company entitled to have notice of the next annual general meeting sent to them notice of any resolution that may properly be moved and is intended to be moved at that meeting; and
(e) circulate to members of the company entitled to have notice of any general meeting sent to them any statement of not more than 1,000 words with respect to the matter referred to in any proposed resolution or the business to be dealt with at that meeting.
(2) Notice of a resolution referred to in subsection (1) shall be given to each member of the company:
(a) in the case of a member entitled to have notice of the meeting sent to him, her or it—by serving a copy of the resolution on the member in any manner permitted for service on the member of notice of the meeting; and
(b) in the case of any other member—by giving notice of the general effect of the resolution in any manner permitted for giving the member notice of meetings of the company.
(3) A statement referred to in subsection (1) shall be circulated, to each member of the company entitled to have notice of the meeting sent to him, her or it, by serving a copy of the statement on the member in any manner permitted for service on the member of notice of the meeting.
(4) A copy or notice that subsection (2) or (3) requires to be served or given shall be served or given in the same manner and, so far as practicable, at the same time as notice of the meeting and, if it is not practicable for it to be served or given at that time, it shall be served or given as soon as practicable after that time.
(5) A company is not bound under this section to give notice of any resolution or to circulate any statement unless:
(a) a copy of the requisition signed by the requisitioning member or members (or, where there are 2 or more requisitioning members, 2 or more copies that between them contain the signatures of all the requisitioning members) is deposited at the registered office of the company:
(i) in the case of a requisition requiring notice of a resolution—not less than 6 weeks before the meeting; and
(ii) in the case of any other requisition, not less than one week before the meeting; and
(b) there is deposited or tendered with the requisition a sum reasonably sufficient to meet the company’s expenses in giving effect to the requisition;
but if, after a copy of a requisition requiring notice of a resolution has been deposited at the registered office of the company, an annual general meeting is called for a date 6 weeks or less after the copy has been deposited, the copy though not deposited within the time required by this subsection shall be deemed to have been properly deposited for the purposes of this section.
(6) A company is not bound under this section to circulate any statement if, on the application either of the company or of any other person who claims to be aggrieved, the Court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter, and the Court may order the costs of the company or of the other person on an application under this section to be paid in whole or in part by the requisitioning member or members, notwithstanding that they are not parties to the application.
(7) Despite anything in the company’s articles, the business that may be dealt with at an annual general meeting includes any resolution of which notice is given in accordance with this section, and, for the purposes of this subsection, notice shall be deemed to have been so given notwithstanding the accidental omission to give notice to a member or members.
(8) If default is made in complying with the provisions of this section, the company and any officer of the company who is in default are each guilty of an offence.
253 Special resolutions
(1) A resolution is a special resolution of a company if:
(a) it is passed at a meeting of the company, being a meeting of which at least 21 days written notice specifying the intention to propose the resolution as a special resolution has been duly given; and
(b) it is passed at a meeting referred to in paragraph (a) by a majority of at least three‑quarters of such members of the company as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at that meeting.
(2) A resolution is a special resolution of the holders of shares in a company included in a class of shares if:
(a) it is passed at a meeting of the holders of shares included in that class of shares, being a meeting of which at least 21 days written notice specifying the intention to propose the resolution as a special resolution has been duly given; and
(b) it is passed at a meeting referred to in paragraph (a) by a majority of at least three‑quarters of such holders of shares included in that class of shares as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at that meeting.
(3) A resolution is a special resolution of the members of a company included in a class of members if:
(a) it is passed at a meeting of members included in that class of members, being a meeting of which at least 21 days written notice specifying the intention to propose the resolution as a special resolution has been duly given; and
(b) it is passed at a meeting referred to in paragraph (a) by a majority of at least three‑quarters of such members included in that class of members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at that meeting.
(4) Notwithstanding the provisions of subsection (1), (2) or (3), if it is so agreed by a majority in number of the members having the right to attend and vote at the meeting, being a majority that together hold at least 95% in nominal value of the shares giving that right or, in the case of a company not having a share capital, together represent at least 95% of the total voting rights of all members having the right to attend and vote at the meeting, a resolution may be proposed and passed as a special resolution at a meeting of which less than 21 days notice has been given.
(5) At a meeting at which a special resolution is submitted, a declaration of the chairman that the resolution is carried is, unless a poll is demanded, conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.
(6) At any meeting at which a special resolution is submitted, a poll shall be deemed to be effectively demanded if demanded:
(a) if the articles make provision permitting a specified number of members for the time being entitled under the articles to vote at the meeting to demand a poll:
(i) where the number specified does not exceed 5—by that number of members so entitled; or
(ii) in any other case—by 5 members so entitled; or
(b) if no such provision is made by the articles—by 3 members entitled to vote at the meeting, or by 1 member or 2 members so entitled if that member holds or those 2 members together hold not less than 10% in nominal value of the shares giving the right to attend and vote at the meeting or, where the company does not have a share capital, if that member is entitled, or those 2 members together are entitled, to not less than 10% of the total voting rights of all members having the right to attend and vote at the meeting.
(7) In computing the majority on a poll demanded on the question that a special resolution be passed, reference shall be had to the number of votes cast for and against the resolution and to the number of votes to which each member is entitled by this Law or the articles of the company.
(8) For the purposes of this section, notice of a meeting shall be deemed to be duly given and the meeting shall be deemed to be duly held when the notice is given and the meeting held in the manner provided by this Law or by the articles.
(9) Where, in the case of a company incorporated before the commencement of this section, any matter is required or permitted to be done by extraordinary resolution, that matter may be done by special resolution.
254 Resolution requiring special notice
(1) Where by this Law special notice is required of a resolution to be put at a meeting of a company, the resolution is not effective unless notice of the intention to move the resolution has been given to the company at least 28 days before the meeting at which it is moved, but if, after notice of the intention to move such a resolution has been given to the company, a meeting is convened for a day 28 days or less after the notice has been given, the notice, although not given to the company within the time required by this section, shall be deemed to be properly given.
(2) The company shall give persons entitled to be given notice of a meeting of the company notice of any such resolution at the same time and in the same manner as it gives notice of the meeting or, if that is not practicable, shall give them notice of the resolution in any manner allowed by the articles not less than 14 days before the meeting.
255 Resolutions of proprietary companies
(1) If all the members of a proprietary company have signed a document containing a statement that they are in favour of a prescribed resolution in terms set out in the document, a resolution in those terms shall be deemed to have been passed at a general meeting of the company held on the day on which the document was signed and at the time at which the document was last signed by a member or, if the members signed the document on different days, on the day on which, and at the time at which, the document was last signed by a member and, where a document is so signed:
(a) the company shall be deemed to have held a general meeting at that time on that day; and
(b) the document shall be deemed to constitute a minute of that meeting.
(2) Subsection (1) does not apply in relation to a document unless the document has been signed by each person who was a member of the company at the time when the document was last signed.
(3) For the purposes of this section:
(a) 2 or more separate documents containing statements in identical terms each of which is signed by 1 or more members shall together be deemed to constitute 1 document containing a statement in those terms signed by those members on the respective days on which they signed the separate documents; and
(b) a prescribed resolution is a resolution that is required or permitted by this Law or the memorandum or articles to be passed at a general meeting of a company and includes a resolution appointing an officer or auditor or approving of or agreeing to any act, matter or thing but does not include a resolution of which special notice is required or that is required to be passed by a majority other than a simple majority.
(4) Any document that is attached to a document signed as mentioned in subsection (1) and is signed by the member or members who signed the last‑mentioned document shall, for the purposes of this Law, be deemed to have been laid before the company at the general meeting referred to in that subsection.
(5) Nothing in this section affects or limits any rule of law relating to the effectiveness of the assent of members of a company given to a document, or to any act, matter or thing, otherwise than at a general meeting of the company.
255A Decisions and declarations of single shareholder/single director proprietary companies
(1) If a proprietary company has only one shareholder and the shareholder records the shareholder’s decision to a particular effect, the recording of the decision counts as the passing by the shareholder of a resolution to that effect.
(2) If a proprietary company has only one director and the director records the director’s decision to a particular effect, the recording of the decision counts as the passing by the director of a resolution to that effect.
(3) A record made for the purposes of subsection (1) or (2) also has effect as minutes of the passing of the resolution.
Note: Section 258 deals with minutes.
(4) If a proprietary company has only one director and the director records the director’s declaration to a particular effect, the recording of the declaration counts as the making of a declaration to that effect made at a meeting of the company’s directors.
(5) A declaration has effect as minutes that record the making of the declaration.
Note: Section 258 deals with minutes.
(6) A record made for the purposes of subsection (1), (2) or (4) must be made in writing.
256 Lodgment etc. of copies of certain resolutions and agreements
(1) A printed copy of:
(a) each special resolution;
(b) each resolution or agreement that binds a class of shareholders, whether or not agreed to by all the members of that class; and
(c) each document or resolution that attaches rights to shares (whether or not in substitution for other rights) and is not otherwise required to be lodged under this Law;
shall, except where otherwise expressly provided by this Law, within 1 month after the passing of the resolution or the making of the agreement or document, be lodged by the company.
(2) Subsection (1) does not apply in relation to a Table A proprietary company in relation to a resolution, agreement or document unless it affects the company’s articles in relation to the company’s status as a proprietary company.
(3) Where articles have not been registered, a member may request the company to furnish him, her or it with a printed copy of any resolution, document or agreement to which subsection (1) applies, or would but for subsection (2) apply, and, where such a request is made, the company shall send the copy to that person:
(a) if the company requires payment of an amount not exceeding the prescribed amount—within 21 days after payment of the amount is received by the company or within such longer period as the Commission approves; or
(b) in a case to which paragraph (a) does not apply—within 21 days after the request is made or within such longer period as the Commission approves.
257 Resolutions at adjourned meetings
Where a resolution is passed at an adjourned meeting of a company or of holders of any class of shares or of directors, the resolution shall for all purposes be treated as having been passed on the day on which it was in fact passed and not on any earlier day.
258 Minutes of proceedings
(1) A company shall:
(a) cause minutes of all proceedings of general meetings and of meetings of its directors to be entered, within 1 month after the relevant meeting is held, in books kept for that purpose; and
(b) except in the case of documents that are deemed to constitute minutes by virtue of section 255, cause those minutes to be signed by the chairman of the meeting at which the proceedings took place or by the chairman of the next succeeding meeting.
Note: See section 255A for single shareholder/single director proprietary companies.
(2) Any minute that is so entered and, in a case to which paragraph (1)(b) applies, purports to be signed as provided by that paragraph is prima facie evidence of the proceedings to which it relates.
(3) Where minutes have been so entered and, in a case to which paragraph (1)(b) applies, signed, then, unless the contrary is proved:
(a) the meeting shall be deemed to have been duly held and convened;
(b) all proceedings that are recorded in the minutes as having taken place at the meeting shall be deemed to have duly taken place; and
(c) all appointments of officers or auditors that are recorded in the minutes as having been made at the meeting shall be deemed to have been validly made.
259 Inspection of minute books
(1) A company shall keep the books containing the minutes of proceedings of any general meeting, or of a meeting of the directors, at its registered office, at its principal place of business in Australia, or at such other place in Australia as is approved by the Commission and, in the case of the books containing the minutes of proceedings of general meetings, shall ensure that they are open for inspection by any member without charge.
(2) A member of a company may request the company in writing to furnish him, her or it with a copy of any minutes of a general meeting and, where such a request is made, the company shall send the copy to that person:
(a) if the company requires payment of an amount not exceeding the prescribed amount—within 21 days after payment of the amount is received by the company or within such longer period as the Commission approves; or
(b) in the case to which paragraph (a) does not apply—within 21 days after the request is made or within such longer period as the Commission approves.
Part 3.4—Oppressive conduct of affairs
260 Remedy in cases of oppression or injustice
(1) An application to the Court for an order under this section in relation to a company may be made:
(a) by a member who believes:
(i) that affairs of the company are being conducted in a manner that is oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member or members, or in a manner that is contrary to the interests of the members as a whole; or
(ii) that an act or omission, or a proposed act or omission, by or on behalf of the company, or a resolution, or a proposed resolution, of a class of members, was or would be oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member or members or was or would be contrary to the interests of the members as a whole; or
(b) by the Commission, in a case where it has investigated, under Division 1 of Part 3 of the ASC Law:
(i) matters being, or connected with, affairs of the company; or
(ii) matters including such matters.
(2) If the Court is of the opinion:
(a) that affairs of a company are being conducted in a manner that is oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member or members (in this section called the oppressed member or members) or in a manner that is contrary to the interests of the members as a whole; or
(b) that an act or omission, or a proposed act or omission, by or on behalf of a company, or a resolution, or a proposed resolution, of a class of members of a company, was or would be oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member or members (in this section also called the oppressed member or members) or was or would be contrary to the interests of the members as a whole;
the Court may, subject to subsection (4), make such order or orders as it thinks fit, including, but not limited to, one or more of the following:
(c) an order that the company be wound up;
(d) an order for regulating the conduct of affairs of the company in the future;
(e) an order for the purchase of the shares of any member by other members;
(f) an order for the purchase of the shares of any member by the company and for the reduction accordingly of the company’s capital;
(g) an order directing the company to institute, prosecute, defend or discontinue specified proceedings, or authorising a member or members of the company to institute, prosecute, defend or discontinue specified proceedings in the name and on behalf of the company;
(h) an order appointing a receiver or a receiver and manager of property of the company;
(j) an order restraining a person from engaging in specified conduct or from doing a specified act or thing;
(k) an order requiring a person to do a specified act or thing.
(3) A person shall not contravene an order made under subsection (2) that is applicable to the person.
(4) The Court shall not make an order under subsection (2) for the winding up of a company if it is of the opinion that the winding up of the company would unfairly prejudice the oppressed member or members.
(5) In this section and in paragraphs 461(1)(f), (g) and (h):
(a) a reference to a member, in relation to a company, includes, in the case of a company limited by shares, or a company limited both by shares and by guarantee, a reference to a person to whom a share in the company has been transmitted by will or by operation of law;
(b) a reference to affairs of a company being conducted in a manner that is oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member is a reference to affairs of a company being conducted in a manner that is oppressive or unfairly prejudicial to, or unfairly discriminatory against, a person who is a member, whether in his capacity as a member or in any other capacity; and
(c) a reference to an act or omission by or on behalf of a company or a resolution of a class of members of a company being oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member is a reference to an act or omission by or on behalf of a company or a resolution of a class of members of a company being oppressive or unfairly prejudicial to, or unfairly discriminatory against, a person who is a member, whether in the person’s capacity as a member or in any other capacity.
(6) Where an order that a company be wound up is made under this section, the provisions of this Law relating to the winding up of companies apply, with such adaptations as are necessary, as if the order had been made upon an application duly filed in the Court by the company.
(7) Where an order under this section makes any alteration in or addition to the constitution of a company, then, despite anything else in this Law but subject to the order:
(a) the company does not have power, without the leave of the Court, to make any further alteration in or addition to the memorandum and articles inconsistent with the provisions of the order; and
(b) subject to this subsection, the alteration has effect as if it has been duly made by resolution of the company.
(8) An office copy of any order made under this section pursuant to an application by a member of the company shall be lodged by the applicant with the Commission within 14 days after the making of the order.
(9) If default is made in complying with subsection (8), the applicant is guilty of an offence.
Part 3.5—Charges
Division 1—Preliminary
261 Interpretation and application
(1) In this Part, unless the contrary intention appears:
document of title means a document:
(a) used in the ordinary course of business as proof of possession or control, or of the right to possession or control, of property other than land; or
(b) authorising or purporting to authorise, whether by endorsement or delivery, the possessor of the document to transfer or receive property other than land;
and includes:
(c) a bill of lading;
(d) a warehousekeeper’s certificate;
(e) a wharfinger’s certificate;
(f) a warrant or order for the delivery of goods; and
(g) a document that is, or evidences title to, a marketable security;
present liability, in relation to a charge, means a liability that has arisen, being a liability the extent or amount of which is fixed or capable of being ascertained, whether or not the liability is immediately due to be met;
property, in relation to a company, means property:
(a) in the case of a registrable Australian body—within this jurisdiction; or
(b) in the case of a foreign company—within Australia or an external Territory; or
(c) otherwise—within or outside Australia;
held by the company, whether or not as trustee;
prospective liability, in relation to a charge, means any liability that may arise in the future, or any other liability, but does not include a present liability;
Register means the Australian Register of Company Charges referred to in section 265;
registrable charge means a charge in relation to which, by virtue of section 262, the provisions of this Part mentioned in subsection 262(1) apply.
(2) A charge referred to in subsection 263(3) or section 264 shall, until the charge is registered, be treated for the purposes of this Part as if it were not a registrable charge but, when the charge is so registered, it has the priority accorded to a registered charge as from the time of registration.
(3) The registration of a charge referred to in subsection 263(3) or section 264 does not prejudice any priority that would have been accorded to the charge under any other law (whether an Australian law or not) if the charge had not been registered.
(4) For the purposes of this Part, a notice or other document shall be taken to be lodged when it is received at an office of the Commission (in this jurisdiction or elsewhere) by an officer authorised to receive it.
Division 2—Registration
262 Charges required to be registered
(1) Subject to this section, the provisions of this Part relating to the giving of notice in relation to, the registration of, and the priorities of, charges apply in relation to the following charges (whether legal or equitable) on property of a company and do not apply in relation to any other charges:
(a) a floating charge on the whole or a part of the property, business or undertaking of the company;
(b) a charge on uncalled share capital or uncalled share premiums;
(c) a charge on a call, whether in respect of share capital or share premiums, made but not paid;
(d) a charge on a personal chattel, including a personal chattel that is unascertained or is to be acquired in the future, but not including a ship registered in an official register kept under an Australian law relating to title to ships;
(e) a charge on goodwill, on a patent or licence under a patent, on a trade mark or service mark or a licence to use a trade mark or service mark, on a copyright or a licence under a copyright or on a registered design or a licence to use a registered design;
(f) a charge on a book debt;
(g) a charge on a marketable security, not being:
(i) a charge created in whole or in part by the deposit of a document of title to the marketable security; or
(ii) a mortgage under which the marketable security is registered in the name of the chargee or a person nominated by the chargee;
(h) a lien or charge on a crop, a lien or charge on wool or a stock mortgage;
(j) a charge on a negotiable instrument other than a marketable security.
(2) The provisions of this Part mentioned in subsection (1) do not apply in relation to:
(a) a charge, or a lien over property, arising by operation of law;
(b) a pledge of a personal chattel or of a marketable security;
(c) a charge created in relation to a negotiable instrument or a document of title to goods, being a charge by way of pledge, deposit, letter of hypothecation or trust receipt;
(d) a transfer of goods in the ordinary course of the practice of any profession or the carrying on of any trade or business; or
(e) a dealing, in the ordinary course of the practice of any profession or the carrying on of any trade or business, in respect of goods outside Australia.
(3) The reference in paragraph (1)(d) to a charge on a personal chattel is a reference to a charge on any article capable of complete transfer by delivery, whether at the time of the creation of the charge or at some later time, and includes a reference to a charge on a fixture or a growing crop that is charged separately from the land to which it is affixed or on which it is growing, but does not include a reference to a charge on:
(a) a document evidencing title to land;
(b) a chattel interest in land;
(c) a marketable security;
(d) a document evidencing a thing in action; or
(e) stock or produce on a farm or land that by virtue of a covenant or agreement ought not to be removed from the farm or land where the stock or produce is at the time of the creation of the charge.
(4) The reference in paragraph (1)(f) to a charge on a book debt is a reference to a charge on a debt due or to become due to the company at some future time on account of or in connection with a profession, trade or business carried on by the company, whether entered in a book or not, and includes a reference to a charge on a future debt of the same nature although not incurred or owing at the time of the creation of the charge, but does not include a reference to a charge on a marketable security, on a negotiable instrument or on a debt owing in respect of a mortgage, charge or lease of land.
(5) The reference in paragraph (1)(h) to a lien or charge on a crop, a lien or charge on wool or a stock mortgage includes a reference to a security (however described) that is registrable under a prescribed law of a State or Territory.
(6) For the purposes of this section, a company shall be deemed to have deposited a document of title to property with another person (in this subsection referred to as the chargee) in a case where the document of title is not in the possession of the company if:
(a) the person who holds the document of title acknowledges in writing that the person holds the document of title on behalf of the chargee; or
(b) a government, an authority or a body corporate that proposes to issue a document of title in relation to the property agrees, in writing, to deliver the document of title, when issued, to the chargee.
(7) For the purposes of this section, a charge shall be taken to be a charge on property of a kind to which a particular paragraph of subsection (1) applies even though the instrument of charge also charges other property of the company including other property that is of a kind to which none of the paragraphs of that subsection applies.
(8) The provisions of this Part mentioned in subsection (1) do not apply in relation to a charge on land.
(9) The provisions of this Part mentioned in subsection (1) do not apply in relation to a charge on fixtures given by a charge on the land to which they are affixed.
(10) The provisions of this Part mentioned in subsection (1) do not apply in relation to a charge created by a company in its capacity as legal personal representative of a deceased person or as trustee of the estate of a deceased person.
(11) A charge on property of a company is not invalid merely because of the failure to lodge with the Commission, or give to the company or another person, a notice or other document that is required by this Division to be so lodged or given.
263 Lodgment of notice of charge and copy of instrument
(1) Where a company creates a charge, the company shall ensure that there is lodged, within 45 days after the creation of the charge:
(a) a notice in the prescribed form setting out the following particulars:
(i) the name of the company and the date of the creation of the charge;
(ii) whether the charge is a fixed charge, a floating charge or both a fixed and floating charge;
(iii) if the charge is a floating charge—whether there is any provision in the resolution or instrument creating or evidencing the charge that prohibits or restricts the creation of subsequent charges;
(iv) a short description of the liability (whether present or prospective) secured by the charge;
(v) a short description of the property charged;
(vi) whether the charge is created or evidenced by a resolution, by an instrument or by a deposit or other conduct;
(vii) if the charge is constituted by the issue of a debenture or debentures—the name of the trustee (if any) for debenture holders;
(viii) if the charge is not constituted by the issue of a debenture or debentures or there is no trustee for debenture holders—the name of the chargee;
(ix) such other information as is prescribed;
(b) if, pursuant to a resolution or resolutions passed by the company, the company issues a series of debentures constituting a charge to the benefit of which all the holders of debentures in the series are entitled in equal priority, and the charge is evidenced only by the resolution or resolutions and the debentures—a copy of the resolution or of each of the resolutions verified by a statement in writing to be a true copy, and a copy of the first debenture issued in the series and a statement in writing verifying the execution of that first debenture; and
(c) if, in a case to which paragraph (b) does not apply, the charge was created or evidenced by an instrument or instruments:
(i) the instrument or each of the instruments; or
(ii) a copy of the instrument or of each of the instruments verified by a statement in writing to be a true copy, and a statement in writing verifying the execution of the instrument or of each of the instruments.
(2) In a case to which paragraph (1)(b) applies:
(a) the charge shall, for the purposes of subsection (1), be deemed to be created when the first debenture in the series of debentures is issued; and
(b) if, after the issue of the first debenture in the series, the company passes a further resolution authorising the issue of debentures in the series, the company shall ensure that a copy of that resolution, verified by a statement in writing to be a true copy of that resolution, is lodged within 45 days after the passing of that resolution.
(3) A body that applies for registration as a company under Division 3 of Part 2.2, or for registration under Part 4.1, shall lodge with the application for registration the documents specified in subsection (4) in relation to any charge on property of the body that would be registrable under this Division if the body were a Division 3 company, or a registered body, as the case may be.
(4) The documents required to be lodged under subsection (3) in relation to a charge on property of a body are the following documents:
(a) a notice in the prescribed form:
(i) setting out the name of the body;
(ii) if the charge was created by the body—specifying the date of the creation of the charge;
(iii) if the charge was a charge existing on property acquired by the body—setting out the date on which the property was so acquired; and
(iv) otherwise complying with the requirements of paragraph (1)(a);
(b) if the charge was created or evidenced as mentioned in paragraph (1)(b):
(i) in the case of a charge created by the body—a copy of the resolution or of each of the resolutions referred to in that paragraph verified by a statement in writing to be a true copy and a copy of the first debenture issued in the series referred to in that paragraph and a statement in writing verifying the execution of that first debenture; or
(ii) in the case of a charge that existed on property acquired by the body—the copies referred to in subparagraph (i) verified by statements in writing to be true copies;
(c) if the charge was created or evidenced by an instrument or instruments (otherwise than as mentioned in paragraph (1)(b)):
(i) in the case of a charge created by the body:
(A) the instrument or each of the instruments; or
(B) a copy of the instrument or of each of the instruments verified by a statement in writing to be a true copy, and a statement in writing verifying the execution of the instrument or of each of the instruments; or
(ii) in the case of a charge that existed on property acquired by the body—a copy of the instrument or of each of the instruments verified by a statement in writing to be a true copy;
(d) if the charge was created or evidenced as mentioned in paragraph (1)(b) and, after the issue of the first debenture in the series, the body passed a further resolution or resolutions authorising the issue of debentures in the series—a copy of that resolution or of each of those resolutions verified by a statement in writing to be a true copy.
(5) A notice in relation to a charge, being a charge in relation to which paragraph (1)(b) or (c) or (4)(b) or (c) applies, shall not be taken to have been lodged under subsection (1) or (3) unless the notice is accompanied by the documents specified in that paragraph.
(6) Where a notice with respect to an instrument creating a charge has been lodged under subsection (1) or (3), being a charge in respect of an issue of several debentures the holders of which are entitled under the instrument in equal priority to the benefit of the charge, sections 279 to 282(inclusive) have effect as if any charges constituted by those debentures were registered at the time when the charge to which the notice relates was registered.
(7) Where a payment or discount has been made or allowed, either directly or indirectly, by a company or registrable body to a person in consideration of the person’s subscribing or agreeing to subscribe, whether absolutely or conditionally, for debentures, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for debentures, the notice required to be lodged under subsection (1) or (3) shall include particulars as to the amount or rate per centum of the payment or discount.
(8) Where a company or registrable body issues debentures as security for a debt of the company or registrable body, the company or registrable body shall not thereby be regarded, for the purposes of subsection (7), as having allowed a discount in respect of the debentures.
264 Acquisition of property subject to charge
(1) Where a company acquires property that is subject to a charge, being a charge that would have been registrable when it was created if it had been created by a company, the company shall, within 45 days after the acquisition of the property:
(a) ensure that there is lodged:
(i) a notice in the prescribed form in relation to the charge, setting out the name of the company and the date on which the property was so acquired and otherwise complying with the requirements of paragraph 263(1)(a);
(ii) if the charge was created or evidenced as mentioned in paragraph 263(1)(a)—a copy of the resolution or of each of the resolutions referred to in that paragraph verified by a statement in writing to be a true copy and a copy of the first debenture issued in the series referred to in that paragraph verified by a statement in writing to be a true copy; and
(iii) if the charge was created or evidenced by an instrument or instruments (otherwise than as mentioned in paragraph 263(1)(b)):
(A) the instrument or each of the instruments; or
(B) a copy of the instrument or of each of the instruments verified by a statement in writing to be a true copy; and
(b) give to the chargee notice that it has acquired the property and the date on which it was so acquired.
(2) A notice in relation to a charge, being a charge in relation to which subparagraph (1)(a)(ii) or (iii) applies, shall not be taken to have been lodged under subsection (1) unless it is accompanied by the documents specified in that subparagraph.
265 Registration of documents relating to charges
(1) The Commission shall keep a register to be known as the Australian Register of Company Charges.
(2) Where a notice in respect of a charge on property of a company that is required by section 263 or 264 to be lodged is lodged (whether during or after the period within which the notice was required to be lodged) and the notice contains all the particulars required by the relevant section to be included in the notice, the Commission shall as soon as practicable cause to be entered in the Register the time and date when the notice was lodged and the following particulars in relation to the charge:
(a) if the charge is a charge created by the company, the date of its creation or, if the charge was a charge existing on property acquired by the company, the date on which the property was so acquired;
(b) a short description of the liability (whether present or prospective) secured by the charge;
(c) a short description of the property charged;
(d) the name of the trustee for debenture holders or, if there is no such trustee, the name of the chargee.
(3) Subject to subsection (9), where particulars in respect of a charge are entered in the Register in accordance with subsection (2), the charge shall be deemed to be registered, and to have been registered from and including the time and date entered in the Register under that subsection.
(4) Where:
(a) a notice in respect of a charge on property of a company is lodged under section 263 or 264 (whether during or after the period within which the notice was required to be lodged); and
(b) the notice is not accompanied by a certificate to the effect that all documents accompanying the notice have been duly stamped as required by any applicable law relating to stamp duty;
the Commission must cause to be entered in the Register the time and date when the notice was lodged and the particulars referred to in paragraphs (2)(a), (b), (c) and (d), but must cause the word “provisional” to be entered in the Register in relation to the entry specifying that time and date.
(5) Where:
(a) in accordance with subsection (4), the word “provisional” is entered in the Register in relation to an entry specifying the time and date on which a notice in respect of a charge was lodged; and
(b) within a period of 30 days or such longer period as is prescribed after the notice was lodged, or within such further period as the Commission, if it considers it to be appropriate in a particular case, allows, a certificate to the effect set out in paragraph (4)(b) has been produced to the Commission;
the Commission shall delete the word “provisional” that was so entered in relation to the entry relating to that charge, but if such a certificate is not produced within the period, or the further period, referred to in paragraph (b), the Commission shall delete from the Register all the particulars that were entered in relation to the charge.
(6) Where a document that purports to be a notice in respect of a charge on property of a company for the purposes of section 263 or 264 is lodged (whether during or after the period within which the notice was required to be lodged) and the document contains the name of the company concerned and the particulars referred to in subparagraph 263(1)(a)(vii) or (viii), as the case requires, but does not contain some or all of the other particulars that are required to be included in the notice or is otherwise defective:
(a) the Commission shall cause to be entered in the Register the time and date when the document was lodged and such of the particulars referred to in paragraphs (2)(a), (b), (c) and (d) as are ascertainable from the document, but shall cause the word “provisional” to be entered in the Register in relation to the entry specifying that time and date; and
(b) the Commission shall, by notice in writing to the person who lodged the document, direct the person to ensure that there is lodged, on or before the day specified in the notice, a notice in relation to the charge that complies with the requirements of section 263 or 264, as the case may be, but the giving by the Commission of a direction to the person under this paragraph does not affect any liability that the company may have incurred or may incur by reason of a contravention of section 263 or 264.
(7) Where the Commission gives a direction to a person under paragraph (6)(b) in relation to a charge:
(a) if the direction is complied with on or before the day specified in the notice containing the direction, the Commission shall:
(i) delete from the Register the word “provisional” that was inserted pursuant to paragraph (6)(a); and
(ii) cause to be entered in the Register in relation to the charge any particulars referred to in subsection (2) that have not previously been entered;
(b) if the direction is not complied with on or before that day—the Commission shall delete from the Register all the particulars that were entered in relation to the charge; and
(c) if the direction is complied with after that day—the Commission shall cause to be entered in the Register in relation to the charge the time at which and day on which the direction was complied with and the particulars referred to in paragraphs (2)(a), (b), (c) and (d).
(8) The Commission may enter in the Register in relation to a charge, in addition to the particulars expressly required by this section to be entered, such other particulars as the Commission thinks fit.
(9) If the word “provisional” is entered in the Register in relation to an entry specifying a time and day in relation to a charge, the charge shall be deemed not to have been registered but:
(a) where the word “provisional” is deleted from the Register pursuant to subsection (5) or paragraph (7)(a)—the charge shall be deemed to be registered and to have been registered from and including the time and day specified in the Register pursuant to subsection (4) or paragraph (6)(a), as the case may be; or
(b) where the particulars in relation to the charge are deleted from the Register pursuant to paragraph (7)(b) and those particulars and a time and day are subsequently entered in the Register in relation to the charge pursuant to paragraph (7)(c)—the charge shall be deemed to be registered from and including that last‑mentioned time and day.
(10) Where, pursuant to subsection 263(3), a registrable body lodges notices relating to 2 or more charges on the same property of the registrable body, the time and day that shall be entered in the Register in relation to each of those charges are the time and day when the first notice was lodged.
(11) Where, in accordance with subsection (10), the time and day that are entered in the Register are the same in relation to 2 or more charges on property of a registrable body, those charges shall, as between themselves, have the respective priorities that they would have had if they had not been registered under this Division.
(12) Where, pursuant to section 264, a company lodges notices relating to 2 or more charges on the same property acquired by the company (being charges that are not already registered under this Division), the time and day that shall be entered in the Register in relation to each of those charges are the time and day when the first notice was lodged.
(13) Where, in accordance with subsection (12), the time and day that are entered in the Register are the same in relation to 2 or more charges on property acquired by a company, those charges shall, as between themselves, have the respective priorities that they would have had if they had not been registered under this Division.
(14) Where a notice is lodged under section 268 (whether during or after the period within which it was required to be lodged), the Commission shall as soon as practicable cause to be entered in the Register the time and day when the notice was so lodged and the particulars set out in the notice.
265A Standard time for the purposes of section 265
(1) The Commission may, by Gazette notice, declare a specified standard time to be the standard time for the purposes of section 265 of the Corporations Law.
(2) Where a notice is in force under subsection (1) of this section and each corresponding law, a reference in subsection 265(2) or (4), paragraph 265(6)(a) or (7)(c), or subsection 265(10), (12) or (14), to entering the time when a particular event happened is a reference to entering that time as expressed in terms of the standard time specified in the notice.
266 Certain charges void against liquidator or administrator
(1) Where:
(a) an order is made, or a resolution is passed, for the winding up of a company; or
(b) an administrator of a company is appointed under section 436A, 436B or 436C; or
(ba) a company executes a deed of company arrangement;
a registrable charge on property of the company is void as a security on that property as against the liquidator, the administrator of the company, or the deed’s administrator, as the case may be, unless:
(c) a notice in respect of the charge was lodged under section 263 or 264, as the case requires:
(i) within the relevant period; or
(ii) at least 6 months before the critical day;
(d) in relation to a charge other than a charge to which subsection 263(3) applies—the period within which a notice in respect of the charge (other than a notice under section 268) is required to be lodged, being the period specified in the relevant section or that period as extended by the Court under subsection (4), has not ended at the start of the critical day and the notice is lodged before the end of that period;
(e) in relation to a charge to which subsection 263(3) applies—the period of 45 days after the chargee becomes aware that the registrable body has been registered as a company under Division 3 of Part 2.2, or registered under Part 4.1, has not ended at the start of the critical day and the notice is lodged before the end of that period; or
(f) in relation to a charge to which section 264 applies—the period of 45 days after the chargee becomes aware that the property charged has been acquired by a company has not ended at the start of the critical day and the notice is lodged before the end of that period.
(2) The reference in paragraph (1)(c) to the relevant period shall be construed as a reference to:
(a) in relation to a charge to which subsection 263(1) applies—the period of 45 days specified in that subsection, or that period as extended by the Court under subsection (4) of this section;
(b) in relation to a charge to which subsection 263(3) applies—the period of 45 days after the chargee becomes aware that the registrable body has been registered as a company under Division 3 of Part 2.2 or registered under Part 4.1; or
(c) in relation to a charge to which section 264 applies—the period of 45 days after the chargee becomes aware that the property has been acquired by a company.
(3) Where, after there has been a variation in the terms of a registrable charge on property of a company having the effect of increasing the amount of the debt or increasing the liabilities (whether present or prospective) secured by the charge:
(a) an order is made, or a resolution is passed, for the winding up of the company; or
(b) an administrator of a company is appointed under section 436A, 436B or 436C; or
(ba) a company executes a deed of company arrangement;
the registrable charge is void as a security on that property to the extent that it secures the amount of the increase in that debt or liability unless:
(c) a notice in respect of the variation was lodged under section 268:
(i) within the period of 45 days specified in subsection 268(2) or that period as extended by the Court under subsection (4) of this section; or
(ii) not later than 6 months before the critical day; or
(d) the period of 45 days specified in subsection 268(2), or that period as extended by the Court under subsection (4) of this section, has not ended at the start of the critical day and the notice is lodged before the end of that period.
(4) The Court, if it is satisfied that the failure to lodge a notice in respect of a charge, or in respect of a variation in the terms of a charge, as required by any provision of this Division:
(a) was accidental or due to inadvertence or some other sufficient cause; or
(b) is not of a nature to prejudice the position of creditors or shareholders;
or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested and on such terms and conditions as seem to the Court just and expedient, by order, extend the period for such further period as is specified in the order.
(5) Where:
(a) a registrable charge (in this subsection referred to as the later charge) is created before the end of 45 days after the creation of an unregistered registrable charge (in this subsection referred to as the earlier charge);
(b) the later charge relates to all or any of the property to which the earlier charge related; and
(c) the later charge is given as a security for the same liability as is secured by the earlier charge or any part of that liability;
the later charge, to the extent to which it is a security for the same liability or part thereof, and so far as it relates to the property comprised in the earlier charge, is void as a security on that property as against a liquidator or administrator of the company, or an administrator of a deed of company arrangement executed by the company, even if a notice in respect of the later charge was lodged under section 263 within a period mentioned in paragraph (1)(c) or (d) of this section, unless it is proved to the satisfaction of the Court that the later charge was given in good faith for the purpose of correcting some material error in the earlier charge or under other proper circumstances and not for the purposes of avoiding or evading the provisions of this Division.
(6) Nothing in subsection (1) or (3) operates to affect the title of a person to property purchased for value from a chargee or from a receiver appointed by a chargee in the exercise of powers conferred by the charge or implied by law if that person purchased the property in good faith and without notice of:
(a) the filing of an application for an order for the winding up of the company; or
(b) the passing of a resolution for the voluntary winding up of the company; or
(c) an administrator of the company being appointed under section 436A, 436B or 436C; or
(d) the company executing a deed of company arrangement.
(7) The onus of proving that a person purchased property in good faith and without notice of any of the matters referred to in paragraphs (6)(a), (b), (c) and (d) is on the person asserting that the property was so purchased.
(8) In this section:
critical day, in relation to a company, means:
(a) if the company is being wound up—the day when the winding up began; or
(b) if the company is under administration—the section 513C day in relation to the administration; or
(c) if the company has executed a deed of company arrangement—the section 513C day in relation to the administration that ended when the deed was executed.
267 Charges in favour of certain persons void in certain cases
(1) Where:
(a) a company creates a charge on property of the company in favour of a person who is, or in favour of persons at least one of whom is, a relevant person in relation to the charge; and
(b) within 6 months after the creation of the charge, the chargee purports to take a step in the enforcement of the charge without the Court having, under subsection (3), given leave for the charge to be enforced;
the charge, and any powers purported to be conferred by an instrument creating or evidencing the charge, are, and shall be deemed always to have been, void.
(2) Without limiting the generality of subsection (1), a person who:
(a) appoints a receiver of property of a company under powers conferred by an instrument creating or evidencing a charge created by the company; or
(b) whether directly or by an agent, enters into possession or assumes control of property of a company for the purposes of enforcing a charge created by the company;
shall be taken, for the purposes of subsection (1), to take a step in the enforcement of the charge.
(3) On application by the chargee under a charge, the Court may, if it is satisfied that:
(a) immediately after the creation of the charge, the company that created the charge was solvent; and
(b) in all the circumstances of the case, it is just and equitable for the Court to do so;
give leave for the charge to be enforced.
(4) Nothing in subsection (1) affects a debt, liability or obligation of a company that would, if that subsection had not been enacted, have been secured by a charge created by the company.
(5) Nothing in subsection (1) operates to affect the title of a person to property (other than the charge concerned or an interest in the charge concerned) purchased for value from a chargee under a charge, from an agent of a chargee under a charge, or from a receiver appointed by a chargee under a charge in the exercise of powers conferred by the charge or implied by law, if that person purchased the property in good faith and without notice that the charge was created in favour of a person who is, or in favour of persons at least one of whom is, as the case may be, a relevant person in relation to the charge.
(6) The onus of proving that a person purchased property in good faith and without notice that a charge was created as mentioned in subsection (5) is on the person asserting that the property was so purchased.
(7) In this section:
chargee, in relation to a charge, means:
(a) in any case—the holder, or all or any of the holders, of the charge; or
(b) in the case of a charge that is an agreement to give or execute a charge in favour of a person or persons, whether upon demand or otherwise—that person, or all or any of those persons;
officer, in relation to a company, includes, in the case of a registered foreign company, a local agent of the foreign company;
receiver includes a receiver and manager;
relevant person, in relation to a charge created by a company, means:
(a) a person who is at the time when the charge is created, or who has been at any time during the period of 6 months ending at that time, an officer of the company; or
(b) a person associated, in relation to the creation of the charge, with a person of a kind referred to in paragraph (a).
268 Assignment and variation of charges
(1) Where, after a registrable charge on property of a company has been created, a person other than the original chargee becomes the holder of the charge, the person who becomes the holder of the charge shall, within 45 days after he, she or it becomes the holder of the charge:
(a) lodge a notice stating that he, she or it has become the holder of the charge; and
(b) give the company a copy of the notice.
(2) Where, after a registrable charge on property of a company has been created, there is a variation in the terms of the charge having the effect of:
(a) increasing the amount of the debt or increasing the liabilities (whether present or prospective) secured by the charge; or
(b) prohibiting or restricting the creation of subsequent charges on the property;
the company shall, within 45 days after the variation occurs, ensure that there is lodged a notice setting out particulars of the variation and accompanied by the instrument (if any) effecting the variation or a certified copy of that instrument.
(3) Where a charge created by a company secures a debt of an unspecified amount or secures a debt of a specified amount and further advances, a payment or advance made by the chargee to the company in accordance with the terms of the charge shall not be taken, for the purposes of subsection (2), to be a variation in the terms of the charge having the effect of increasing the amount of the charge or the liabilities (whether present or prospective) secured by the charge.
(4) A reference in this section to the chargee in relation to a charge shall, if the charge is constituted by a debenture and debentures and there is a trustee for debenture holders, be construed as a reference to the trustee for debenture holders.
(5) Nothing in section 263 requires the lodgment of a notice under that section in relation to a charge merely because of the fact that the terms of the charge are varied only in a manner mentioned in this section.
268A Assignment of charges under the State Bank (Corporatisation) Act 1994 of South Australia
Application of section
(1) This section applies if:
(a) after one or more registrable charges on property of a company have been created, a person other than the original chargee becomes the holder of the charges; and
(b) the person is the State Bank of South Australia or Bank of South Australia Limited; and
(c) the person becomes the holder of the charges as a result of the operation of:
(i) section 7 or 23 of the State Bank (Corporatisation) Act 1994 of South Australia; or
(ii) a corresponding provision of a law of another State or of a Territory.
Lodgment of notice with Commission
(2) The person may lodge a notice stating that it has become the holder of the charges.
Notice to be in a form approved by Commission
(3) The notice must be in a form approved by the Commission.
Time within which notice must be lodged
(4) The notice must be lodged within:
(a) 6 months after the commencement of the State Bank (Corporatisation) Act 1994 of South Australia (the initial period); or
(b) such longer period as the Commission allows.
When Commission may allow longer period for lodgment of notice
(5) The Commission may only allow a longer period under paragraph (4)(b) if:
(a) the person applies in writing to the Commission within the initial period; and
(b) the Commission is satisfied that, having regard to the nature of the charges involved, it would not be practicable for the person to lodge a notice in relation to those charges within the initial period.
Effect of notice
(6) A person who lodges a notice under subsection (2) in respect of one or more charges on property of a company is taken, for the purposes of this Law and the Corporations (Fees) Regulations:
(a) to have lodged a separate notice in accordance with subsection 268(1) in respect of each of those charges; and
(b) to have given a copy of each of those notices to the company in accordance with that subsection.
Debentures
(7) If:
(a) a charge is constituted by a debenture or debentures; and
(b) there is a trustee for debenture holders;
a reference in this section to the chargee in relation to a charge is a reference to that trustee.
269 Satisfaction of, and release of property from, charges
(1) Where, with respect to a charge registered under this Division:
(a) the debt or other liability the payment or discharge of which was secured by the charge has been paid or discharged in whole or in part; or
(b) the property charged or part of that property is released from the charge;
the person who was the holder of the charge at the time when the debt or other liability was so paid or discharged or the property or part of the property was released shall, within 14 days after receipt of a request in writing made by the company on whose property the charge exists, give to the company a memorandum in the prescribed form acknowledging that the debt or other liability has been paid or discharged in whole or in part or that the property or that part of it is no longer subject to the charge, as the case may be.
(2) The company may lodge the memorandum and, upon the memorandum being lodged, the Commission shall enter in the Register particulars of the matters stated in the memorandum.
(3) The reference in subsection (1) to the person who was the holder of a charge at the time when the debt or other liability was so paid or discharged or the property or part of the property was released shall, if the charge was constituted by a debenture or debentures and there was a trustee for debenture holders, be construed as a reference to the person who was, at that time, the trustee for debenture holders.
270 Lodgment of notices, offences etc.
(1) Where a notice in respect of a charge on property of a company is required to be lodged under section 263 or 264 or subsection 268(2), the notice may be lodged by the company or by any interested person.
(2) Where default is made in complying with section 263 or 264 or subsection 268(2) in relation to a registrable charge on property of a company, the company and any officer of the company who is in default each contravene this subsection.
(3) Where a person who becomes the holder of a registrable charge fails to comply with subsection 268(1), the person and, if the person is a body corporate, any officer of the body corporate who is in default, each contravene this subsection.
(4) Where a document required by this Division other than subsection 268(1) to be lodged is lodged by a person other than the company concerned, that person:
(a) shall, within 7 days after the lodgment of the document, give to the company a copy of the document; and
(b) is entitled to recover from the company the amount of any fees properly paid by the person on lodgment of the document.
271 Company to keep documents relating to charges and register of charges
(1) A company shall keep, at the place where the register referred to in subsection (2) is kept, a copy of every document relating to a charge on property of the company that is lodged under this Division or was lodged with a person under a corresponding previous law, and a copy of every document given to the company under this Division or a corresponding previous law.
(2) A company shall keep a register and shall, upon the creation of a charge (whether registrable or not) on property of the company, or upon the acquisition of property subject to a charge (whether registrable or not), as soon as practicable enter in the register particulars of the charge, giving in each case:
(a) if the charge is a charge created by the company, the date of its creation or, if the charge was a charge existing on property acquired by the company, the date on which the property was so acquired;
(b) a short description of the liability (whether present or prospective) secured by the charge;
(c) a short description of the property charged;
(d) the name of the trustee for debenture holders or, if there is no such trustee, the name of the chargee; and
(e) the name of the person whom the company believes to be the holder of the charge.
(3) A register kept by a company pursuant to subsection (2) shall be open for inspection:
(a) by any creditor or member of the company—without charge; and
(b) by any other person—on payment for each inspection of such amount, not exceeding the prescribed amount, as the company requires or, where the company does not require the payment of an amount, without charge.
(4) A person may request a company to furnish the person with a copy of the register or any part of the register and, where such a request is made, the company shall send the copy to that person:
(a) if the company requires payment of an amount not exceeding the prescribed amount—within 21 days after payment of the amount is received by the company or within such longer period as the Commission approves; or
(b) in a case to which paragraph (a) does not apply—within 21 days after the request is made or within such longer period as the Commission approves.
(5) If default is made in complying with any provision of this section, the company and any officer of the company who is in default are each guilty of an offence.
272 Certificates
(1) Where particulars of a charge are entered in the Register in accordance with this Division, the Commission shall, on request by any person, issue to that person a certificate under the common seal of the Commission setting out those particulars and stating the time and day when a notice in respect of the charge containing those particulars was lodged with the Commission and, if the word “provisional” appears in the Register in relation to the reference to that time and day, stating that fact.
(2) A certificate issued under subsection (1) is prima facie evidence of the matters stated in the certificate.
(3) Where particulars of a charge are entered in the Register in accordance with this Division, and the word “provisional” does not appear in the register in relation to the reference to the time and day when a notice in respect of the charge was lodged, the Commission shall, on request by any person, issue to that person a certificate under the common seal of the Commission stating that particulars of the charge are entered in the Register in accordance with this Division.
(4) A certificate issued under subsection 272(3) of the Corporations Law of this or another jurisdiction is conclusive evidence that the requirements of Division 2 of Part 3.5 of that Law as to registration (other than the requirements relating to the period after the creation of the charge within which notice in respect of the charge is required to be lodged) have been complied with.
273 Registration under other legislation relating to charges
(1) Where, whether before or after the prescribed time, a notice in relation to a charge is required to be lodged under this Division:
(a) the charge need not be registered under a specified law of this jurisdiction; and
(b) no provision of a specified law of this jurisdiction relating to priorities applies to or in relation to the charge; and
(c) a failure to register the charge under a specified law of this jurisdiction does not affect the validity, or limit the effect, of the charge.
(2) Where:
(a) a transfer, assignment, or giving of security, by a company is registrable under a specified law of this jurisdiction;
(b) notice in relation to the transfer, assignment or giving of security is required to be lodged under this Division; and
(c) the transfer, assignment or giving of security is registered under this Division;
then:
(d) the transfer, assignment or giving of security is, subject to paragraph (1)(b), as valid and effectual; and
(e) by force of this subsection, the specified provisions (if any) of a law of this jurisdiction have effect, with the prescribed modifications (if any), in relation to the transfer, assignment or giving of security;
as if it had been duly registered under that specified law.
(3) Where:
(a) a crop lien, wool lien, or stock mortgage, given by a company is registrable under a specified law of this jurisdiction;
(b) notice in relation to the crop lien, wool lien, or stock mortgage, is required to be lodged under this Division; and
(c) the crop lien, wool lien, or stock mortgage, is registered under this Division;
then:
(d) the crop lien, wool lien or stock mortgage is, subject to paragraph (1)(b), as valid and effectual; and
(e) by force of this subsection, the specified provisions (if any) of a law of this jurisdiction have effect, with the prescribed modifications (if any), in relation to the crop lien, wool lien, or stock mortgage;
as if it had been duly registered under that specified law.
(4) Subject to this Part, the regulations may provide that specified provisions of a law of this jurisdiction:
(a) do not apply; or
(b) apply, because of the regulations and with the prescribed modifications (if any);
in relation to specified charges in relation to which notices must be lodged under this Division.
(5) Nothing in this section applies in relation to a charge given by a company jointly with another person who is not, or other persons at least one of whom is not, a company.
(6) In this section:
specified means specified in an application order.
274 Power of Court to rectify Register
Where the Court is satisfied:
(a) that a particular with respect to a registrable charge on property of a company has been omitted from, or mis‑stated in, the Register or a memorandum referred to in section 269; and
(b) that the omission or mis‑statement:
(i) was accidental or due to inadvertence or to some other sufficient cause; or
(ii) is not of a nature to prejudice the position of creditors or shareholders;
or that on other grounds it is just and equitable to grant relief;
the Court may, on the application of the company or any person interested and on such terms and conditions as seem to the Court just and expedient, order that the omission or mis‑statement be rectified.
275 Charges of Division 2 company
(1) This section applies where a body corporate is taken to be registered as a company under Division 2 of Part 2.2.
(2) On and after the company’s registration day, this Part (other than this section) applies in relation to the company, with such modifications as the circumstances require, as if:
(a) the company had always been a company as defined in section 9;
(b) this Law had always been in operation;
(c) an act or thing done by or in relation to the company under, or for the purposes of, a previous law of this jurisdiction corresponding to a provision of this Part had been done under, or for the purposes of, that provision; and
(d) a reference in this Part to the Register included a reference to a register of company charges kept under a previous law of this jurisdiction corresponding to section 265.
(3) Nothing in subsection (2) makes a person guilty of a contravention of this Law in respect of an act or thing done, or an omission made, when the company was not a company as defined in section 9.
(4) Subsection (5) applies to each charge on property of the company that, immediately before the company’s registration day, was registered under a previous law of this jurisdiction corresponding to this Division.
(5) At the commencement of the company’s registration day:
(a) there are taken to be entered in the Register the time and date, and the particulars, entered in relation to that charge in the Register kept under that corresponding previous law; and
(b) the time and date, and the particulars, are taken to have been entered in the Register in accordance with subsection 265(2).
275A Charges of bodies to which section 365B applies
(1) This section applies where, because of section 365B, a registrable body is taken to have been registered under Division 1 or 2 of Part 4.1.
(2) This Part (other than this section) applies in relation to the body, with such modifications as the circumstances require, as if:
(a) this Law had always been in operation; and
(b) the body had been a registered body throughout each period before 1 January 1991 throughout which it was registered under a previous law of this jurisdiction relating to foreign companies within the meaning of that law; and
(c) an act or thing done by or in relation to the body under, or for the purposes of, a previous law of this jurisdiction corresponding to a provision of this Part had been done under, or for the purposes of, that provision; and
(d) a reference in this Part to the Register included a reference to a register of company charges kept under a previous law of this jurisdiction corresponding to section 265.
(3) Nothing in subsection (2) makes a person guilty of a contravention of this Law in respect of an act or thing done, or an omission made, before 1 January 1991.
(4) Subsection (5) applies to each charge on property of the body that, immediately before 1 January 1991, was registered under a previous law of this jurisdiction corresponding to this Division.
(5) The Commission is taken to have entered in the Register at the beginning of 1 January 1991, in accordance with subsection 265(2), the time and date, and the particulars, entered in relation to the charge under the previous law referred to in subsection (4) of this section.
276 Charges of Division 3 company
Where, immediately before a Division 3 company’s registration day, a charge on property of the company was registered under a law corresponding to this Division and was not also registered under this Division, the Commission is taken to have entered in the Register at the beginning of that day, in accordance with subsection 265(2), the time and date, and the particulars, entered in relation to the charge under that corresponding law.
276AA Charges of Division 4 company
Where, immediately before a Division 4 company’s registration day:
(a) the company was, because of the definition of company in section 9 of the Corporations Law of another jurisdiction, a company for the purposes of that section of that Law; and
(b) a charge on property of the company was registered under Division 2 of Part 3.5 of that Law and was not also registered under this Division;
the Commission is taken to have entered in the Register at the beginning of that day, in accordance with subsection 265(2) of this Law, the time and date, and the particulars, entered in relation to the charge under Division 2 of Part 3.5 of that Law.
276A Charges of recognised companies and certain foreign companies
Part 3.5 (except section 276A) of the Corporations Law of another jurisdiction, and the Corporations Regulations of that jurisdiction, so far as they have effect for the purposes of that Part, apply in and in relation to this jurisdiction:
(a) in relation to property (within the meaning of that Part) of a body corporate that, because of the definition of company in section 9 of that Law, is a company for the purposes of section 9 of that Law; or
(b) in relation to property in Australia or an external Territory of a foreign company that is registered under Division 2 of Part 4.1 of that Law.
277 Power to exempt from compliance with certain requirements of Division
(1) The Commission may, by instrument in writing, exempt a person, as specified in the instrument and subject to such conditions (if any) as are specified in the instrument, from compliance with such of the requirements of section 263, 264 or 268 relating to:
(a) the particulars to be contained in a notice under the relevant section;
(b) the documents (other than the notice) to be lodged under the relevant section; or
(c) the verification of any document required to be lodged under the relevant section;
as are specified in the instrument.
(2) A person who is exempted by the Commission, subject to a condition, from compliance with a requirement of section 263, 264 or 268 shall not contravene the condition.
(3) Where a person has contravened or failed to comply with a condition to which an exemption under this section is subject, the Court may, on the application of the Commission, order the person to comply with the condition.
Division 3—Order of priority
278 Interpretation
(1) In this Division:
priority time, in relation to a registered charge, means:
(a) except as provided by paragraph (b) or (c)—the time and date appearing in the Register in relation to the charge, being a time and day entered in the Register pursuant to section 265;
(b) where a notice has been lodged under section 264 in relation to a charge on property, being a charge that, at the time when the notice was lodged, was already registered under Division 2—the earlier or earliest time and day appearing in the Register in relation to the charge, being a time and day entered in the Register pursuant to section 264; and
(c) to the extent that the charge has effect as varied by a variation notice of which was required to be lodged under subsection 268(2)—the time and day entered in the Register in relation to the charge pursuant to subsection 265(14);
prior registered charge, in relation to another registered charge, means a charge the priority time of which is earlier than the priority time of the other charge;
registered charge means a charge that is registered under Division 2;
subsequent registered charge, in relation to another registered charge, means a charge the priority time of which is later than the priority time of the other registered charge;
unregistered charge means a charge that is not registered under Division 2 but does not include a charge that is not a registrable charge.
(2) A reference in this Division to a person having notice of a charge includes a reference to a person having constructive notice of the charge.
(3) Where, by virtue of the definition of priority time in subsection (1), a registered charge has 2 or more priority times each of which relates to a particular liability secured by the charge, each of those liabilities shall, for the purposes of this Division, be deemed to be secured by a separate registered charge the priority time of which is the priority time of the first‑mentioned registered charge that relates to the liability concerned.
279 Priorities of charges
(1) Subject to this section, sections 280 to 282, inclusive, have effect with respect to the priorities, in relation to each other, of registrable charges on the property of a company.
(2) The application, in relation to particular registrable charges, of the order of priorities of charges set out in sections 280 to 282, inclusive, is subject to:
(a) any consent (express or implied) that varies the priorities in relation to each other of those charges, being a consent given by the holder of one of those charges, being a charge that would otherwise be entitled to priority over the other charge; and
(b) any agreement between those chargees that affects the priorities in relation to each other of the charges in relation to which those persons are the chargees.
(3) The holder of a registered charge, being a floating charge, on property of a company shall be deemed, for the purposes of subsection (2), to have consented to that charge being postponed to a subsequent registered charge, being a fixed charge that is created before the floating charge becomes fixed, on any of that property unless:
(a) the creation of the subsequent registered charge contravened a provision of the instrument or resolution creating or evidencing the floating charge; and
(b) a notice in respect of the floating charge indicating the existence of the provision referred to in paragraph (a) was lodged with the Commission under section 263, 264 or 268 before the creation of the subsequent registered charge.
(4) Where a charge relates to property of a kind or kinds to which a particular paragraph or paragraphs of subsection 262(1) applies or apply and also relates to other property, sections 280 to 282, inclusive, apply so as to affect the priority of the charge only in so far as it relates to the first‑mentioned property and do not affect the priority of the charge in so far as it relates to the other property.
(5) Sections 280 to 282, inclusive, do not apply so as to affect the operation of:
(a) the Copyright Act 1968;
(b) the Designs Act 1906;
(c) the Life Insurance Act 1995;
(d) the Patents Act 1952; or
(e) the Trade Marks Act 1955.
280 General priority rules in relation to registered charges
(1) A registered charge on property of a company has priority over:
(a) a subsequent registered charge on the property, unless the subsequent registered charge was created before the creation of the prior registered charge and the chargee in relation to the subsequent registered charge proves that the chargee in relation to the prior registered charge had notice of the subsequent registered charge at the time when the prior registered charge was created;
(b) an unregistered charge on the property created before the creation of the registered charge, unless the chargee in relation to the unregistered charge proves that the chargee in relation to the registered charge had notice of the unregistered charge at the time when the registered charge was created; and
(c) an unregistered charge on the property created after the creation of the registered charge.
(2) A registered charge on property of a company is postponed to:
(a) a subsequent registered charge on the property, where the subsequent registered charge was created before the creation of the prior registered charge and the chargee in relation to the subsequent registered charge proves that the chargee in relation to the prior registered charge had notice of the subsequent registered charge at the time when the prior registered charge was created; and
(b) an unregistered charge on the property created before the creation of the registered charge, where the chargee in relation to the unregistered charge proves that the chargee in relation to the registered charge had notice of the unregistered charge at the time when the registered charge was created.
281 General priority rule in relation to unregistered charges
An unregistered charge on property of a company has priority over:
(a) a registered charge on the property that was created after the creation of the unregistered charge and does not have priority over the unregistered charge under subsection 280(1); and
(b) another unregistered charge on the property created after the first‑mentioned unregistered charge.
282 Special priority rules
(1) Except as provided by this section, any priority accorded by this Division to a charge over another charge does not extend to any liability that, at the priority time in relation to the first‑mentioned charge, is not a present liability.
(2) Where a registered charge on property of a company secures:
(a) a present liability and a prospective liability of an unspecified amount; or
(b) a prospective liability of an unspecified amount;
any priority accorded by this Division to the charge over another charge of which the chargee in relation to the first‑mentioned charge does not have actual knowledge extends to the prospective liability, whether the prospective liability became a present liability before or after the registration of the first‑mentioned charge.
(3) Where a registered charge on property of a company secures:
(a) a present liability and a prospective liability up to a specified maximum amount; or
(b) a prospective liability up to a specified maximum amount;
and the notice lodged under section 263 or 264 in relation to the charge sets out the nature of the prospective liability and the amount so specified, then any priority accorded by this Division to the charge over another charge extends to any prospective liability secured by the first‑mentioned charge to the extent of the maximum amount so specified, whether the prospective liability became a present liability before or after the registration of the first‑mentioned charge and notwithstanding that the chargee in relation to the first‑mentioned charge had actual knowledge of the other charge at the time when the prospective liability became a present liability.
(4) Where:
(a) a registered charge on property of a company secures:
(i) a present liability and a prospective liability up to a specified maximum amount; or
(ii) a prospective liability up to a specified maximum amount;
but the notice lodged under section 263 or 264 in relation to the charge does not set out the nature of the prospective liability or the maximum amount so specified; or
(b) a registered charge on property of a company secures a prospective liability of an unspecified amount;
the following paragraphs have effect:
(c) any priority accorded by this Division to the charge over another charge of which the chargee in relation to the first‑mentioned charge has actual knowledge extends to any prospective liability secured by the first‑mentioned charge that had become a present liability at the time when the chargee in relation to the first‑mentioned charge first obtained actual knowledge of the other charge;
(d) any priority accorded by this Division to the charge over another charge of which the chargee in relation to the first‑mentioned charge has actual knowledge extends to any prospective liability secured by the first‑mentioned charge that became a present liability, as the result of the making of an advance, after the time when the chargee in relation to the first‑mentioned charge first obtained actual knowledge of the other charge if, at that time, the terms of the first‑mentioned charge required the chargee in relation to that charge to make the advance after that time, and so extends to that prospective liability whether the advance was made before or after the registration of the first‑mentioned charge and notwithstanding that the chargee in relation to the first‑mentioned charge had actual knowledge of the other charge at the time when the advance was made.
Part 3.6—Accounts
Division 1A—Application of Part
283 Disclosing entity
This Part applies to a disclosing entity for all its accounting periods.
Note: For disclosing entity see section 111AC.
283A Public company or large proprietary company
This Part applies to a public company or a large proprietary company for all its accounting periods.
283B Small proprietary company (foreign control and not covered by consolidated accounts)
This Part applies to a small proprietary company for an accounting period if:
(a) the company is controlled by a foreign company for all or a part of the period; and
(b) the company’s profit or loss for the period is not covered by accounts lodged with the ASC by the foreign company.
Note 1: For the concept of one company controlling another see section 243E.
Note 2: For foreign company see section 9.
283C Other small proprietary companies
Small proprietary company covered by this section
(1) This section covers a small proprietary company that is neither:
(a) a disclosing entity; nor
(b) dealt with by section 283B.
Application
(2) Sections 289, 315, 317, 319 and 320 apply to the small proprietary company for all of its financial years. The other provisions of this Part will only apply to a particular financial year of a small proprietary company if:
(a) they are applied to that financial year by subsection (3) (shareholders’ request); or
(b) they are applied to that financial year by subsection (7) (ASC request).
Shareholders’ request
(3) If shareholders holding 5% or more of the voting shares in the company request the company to do so, the company must prepare the following for the financial year specified in the request:
(a) the financial statements
(b) the Division 5 statements
(c) the Division 6 report.
Subject to subsections (5) and (6), all of this Part (except section 317B) applies to the company for that financial year.
Note 1: For financial statements see section 9.
Note 2: Although the shareholders cannot require the company to lodge the documents with the ASC, the ASC itself may ask the company to lodge them (see section 317).
Request
(4) The request must be:
(a) served on the company; and
(b) signed by the shareholders making the request; and
(c) made no later than 12 months after the end of the financial year concerned.
Applicable accounting standards
(5) If the request specifies that the financial statements do not have to be made out in accordance with the applicable accounting standards (see section 298), the financial statements do not have to be made out in accordance with those standards.
Audit
(6) The financial statements must be audited only if the request asks for an audit.
ASC request
(7) If the ASC makes a request under subsection 317(1) to a small proprietary company for a financial year, the provisions of this Part apply to the company for that year in accordance with the request.
283D Time for preparing accounts etc.
(1) This section applies for the purposes of working out the deadlines that apply to the various kinds of company for the purposes of this Part.
(2) The deadline for an accounting period for a disclosing entity or a public company that is not a disclosing entity is the deadline for the period as defined in section 58C.
(3) The deadline for a financial year for a large proprietary company that is not a disclosing entity is 4 months after the end of the year.
(4) The deadline for a financial year for a small proprietary company referred to in section 283B is 4 months after the end of the year.
(5) The deadline for a financial year for a small proprietary company that has been given a request under subsection 283C(3) is worked out using subsections (6) and (7).
(6) If the request is made before the end of the financial year, the deadline is 4 months after the end of the year.
(7) If the request is made after the end of the financial year, the deadline is:
(a) 2 months after the date on which the request is made; or
(b) 4 months after the end of the financial year;
whichever ends later.
(8) The deadline for a financial year for a small proprietary company that has been given a request under subsection 317(1) is the date specified in the request.
Division 1—Accounting standards
284 Application of accounting standards: general
(2) Accounting standards may be of general or specially limited application and may differ according to differences in time, locality, place or circumstance.
(3) Without limiting the generality of subsection (2), an accounting standard’s application may be limited to specified bodies or undertakings.
285 Application of accounting standards: accounting periods
(1) Except so far as the contrary intention appears in an accounting standard, an accounting standard applies to:
(a) the first accounting period of a body or undertaking that ends after the commencement of the last‑mentioned accounting standard; and
(b) later accounting periods of the body or undertaking.
(2) Despite anything in an accounting standard, but subject to subsection (4), an accounting standard does not apply to an accounting period of a body or undertaking ending before the commencement of the last‑mentioned accounting standard.
(3) A body or undertaking may elect in writing that an accounting standard that, apart from subsection (4), does not apply to a particular accounting period of the body or undertaking is to apply to that accounting period.
(3A) An election under subsection (3) is to be made:
(a) in relation to a body—by the directors of the body; or
(b) in relation to an undertaking—by the trustee or representative.
(4) An election under subsection (3) has effect accordingly.
285A Accounting standards to be made for the purposes of this Part and Part 3.7
Nothing in this Division is to be taken to allow the making of accounting standards otherwise than for the purposes of this Part and Part 3.7.
286 Interpreting accounting standards
(1) An expression has in an accounting standard the same meaning as it has in this Part.
(2) Part 1.2 applies in relation to an accounting standard as if the accounting standard’s provisions were provisions of this Part.
(3) This section has effect except so far as the contrary intention appears in an accounting standard.
286A Severing invalid provisions
(1) An accounting standard is to be interpreted subject to this Law.
(2) It is intended that where, but for this section, an accounting standard would have been interpreted as being inconsistent with this Law, the accounting standard is nevertheless to be valid in so far as it is not so inconsistent.
286B Evidence of text of accounting standard
A document that purports:
(a) to be issued or published by or on behalf of the Board or the Commission; and
(b) to set out the text of:
(i) a specified instrument as in force at a specified time under section 32 of the Corporations Act 1989; or
(ii) a specified provision of such an instrument;
or a copy of such a document, is, in proceedings under the Corporations Law of this jurisdiction, prima facie evidence that:
(c) the specified instrument was in force at that time under that section; and
(d) the text set out in the document is the text referred to in paragraph (b).
287 Board may require copy of company’s financial statements
Where an auditor of a company has sent to the Board under section 332A a copy of a report on the company’s financial statements for an accounting period, the Board may, by written notice given to the company, require it to give to the Board, within 7 days after the notice is given, a copy of the financial statements.
288 Application of accounting standards approved under a corresponding previous law
(1) This section applies in relation to an accounting standard (in this section called the approved standard) that was at the commencement of this Part an approved accounting standard within the meaning of a previous law of this jurisdiction corresponding to this Part.
(2) As from that commencement, the approved standard has effect, with such modifications as the circumstances require, as if it were an accounting standard as defined in section 9.
(3) In so far as it has effect because of subsection (2), the approved standard applies to a financial year of a body corporate if, and only if, it would apply in relation to that financial year for the purposes of the previous law referred to in subsection (1) if that law still applied and the body were a company within the meaning of that law.
(4) Subsection (3) has effect despite section 285 but subject to an accounting standard as defined in section 9.
(5) Subsection 8(3) does not apply in relation to a reference in this section to a provision of this Law.
Division 2—Accounting records
289 Accounting records
(1) A company shall:
(a) keep such accounting records as correctly record and explain its transactions (including any transactions as trustee) and financial position; and
(b) so keep its accounting records that:
(i) true and fair accounts of the company can be prepared from time to time; and
(ii) its accounts can be conveniently and properly audited or reviewed in accordance with this Law.
(2) A company shall retain the accounting records kept by it under this section, or under a corresponding previous law, for 7 years after the completion of the transactions to which they relate.
(3) A company shall keep its accounting records at such place or places as its directors think fit.
(4) The Commission may by writing require a company to produce:
(a) at a specified place within Australia that is reasonable in the circumstances; and
(b) within a specified period of at least 14 days;
specified accounting records of the company that are kept outside Australia.
(5) Where accounting records of a company are kept outside Australia, the company shall keep at a place within Australia determined by the directors such statements and records with respect to the matters dealt with in the records kept outside Australia as would enable true and fair accounts, and any documents required by this Law to be attached to the accounts, to be prepared.
(6) A company shall lodge written notice of the place in Australia where statements and records kept under subsection (5) are kept, unless the statements and records are kept at the registered office of the company.
(7) A company shall keep its accounting records in writing in the English language or so as to enable them to be readily accessible and readily convertible into writing in the English language.
(8) The Court may, on application by a director of a company, make an order authorising a registered company auditor acting for the director to inspect the accounting records of the company.
(9) A company shall make its accounting records available in writing in the English language at all reasonable times for inspection without charge by any director of the company and by any other person authorised or permitted by or under this Law to inspect them.
(10) Where a registered company auditor inspects the accounting records pursuant to an order of the Court under subsection (8), he or she shall not disclose to a person other than the director on whose application the order was made any information acquired by him or her in the course of his or her inspection.
Division 3—Financial years of a company and the entities it controls
290 Synchronisation
(1) Subject to this section, a company’s directors must do whatever is necessary to ensure that the financial year of each entity that the company controls coincides with the financial year of the company.
(2) Subsection (1) must be complied with in relation to a particular entity within 12 months after:
(a) if the entity was a subsidiary of the company at the commencement of section 7 of the Corporations Legislation Amendment Act 1991—the entity became such a subsidiary; or
(b) if paragraph (a) does not apply but the company controlled the entity at that commencement—that commencement; or
(c) otherwise—the company began to control the entity.
(3) Subject to any order by the Commission under this section, where the financial year of a company coincides with the financial year of an entity that the company controls, the company’s directors must do whatever is necessary to prevent either financial year from being changed in such a way that those financial years no longer coincide.
(4) Where the directors of a company are of the opinion that there is good reason why the financial year of an entity that the company controls should not coincide with the financial year of the company, they may apply in writing to the Commission for an order authorising the entity to continue to have or to adopt (as the case requires) a financial year that does not coincide with that of the company.
(5) The application shall be supported by a statement in writing made in accordance with a resolution of the directors of the company signed by:
(a) in the case of a proprietary company that has only one director—that director; or
(b) in any other case—at least 2 directors.
The notice must state the reasons for seeking the order.
(6) The Commission may require the directors making the application to supply such information relating to the operations of the company, of any related body corporate, or of any entity that the company controls, or has controlled, during a financial year of the company, as the Commission thinks necessary for the purpose of determining the application.
(7) The Commission may engage a registered company auditor to investigate and report to it on the application.
(8) The costs of an investigation and report under subsection (7) are payable by the company of which the applicants are directors.
(9) The Commission may make an order granting or refusing the application or granting the application subject to such limitations, terms or conditions as it thinks fit, and shall serve a copy of the order on the company.
(10) Where the directors of a company make an application under subsection (4) in relation to an entity:
(a) subsection (1) does not apply in relation to the entity until the determination day for the application; and
(b) subject to subsection (12), the period within which the directors of the company are required to comply with subsection (1) in relation to the entity is the period of 12 months beginning on that day.
(11) Subsection (10) has effect despite sections 41 and 44A of the Administrative Appeals Tribunal Act 1975 or of that Act as it applies as a law of this jurisdiction.
(12) Where an order is made under this section authorising an entity controlled by a company to have, or to adopt, a financial year that does not coincide with that of the company, compliance with the order (including any limitations, terms or conditions set out in it) shall be taken to be compliance with subsection (1) in relation to the entity.
(13) Where the directors of a company make an application under subsection (4) in relation to an entity, the directors of the company are not entitled to make another application under subsection (4) in relation to the entity within 3 years after the determination day for the first‑mentioned application unless:
(a) the first‑mentioned application resulted in the making of an order granting the application or granting it subject to limitations, terms or conditions; or
(b) the Commission is satisfied that there has been a substantial change in the relevant facts or circumstances since that day.
(14) In this section:
determination day, in relation to an application under subsection (4), means:
(a) if the Tribunal makes a decision on an application for review of the Commission’s decision on the application under subsection (4)—the day when:
(i) if there is an appeal from the Tribunal’s decision—any appeal arising out of the Tribunal’s decision is finally determined or otherwise disposed of; or
(ii) otherwise—the Tribunal’s decision comes into operation;
(b) if paragraph (a) does not apply but an application is, or applications are, made to the Tribunal for review of the Commission’s decision on the application under subsection (4)—the day of withdrawal or dismissal of the application, or of the last of the applications to be withdrawn or dismissed; or
(c) otherwise—the day when the Commission’s order on the application under subsection (4) is served on the company.
291 Orders under corresponding laws
(1) Where, immediately before a Division 2 company’s registration day, an order was in force in relation to the company under a previous law corresponding to section 290, this section applies on and after that day.
(2) The order has effect, with such modifications as the circumstances require, as if it had been made under section 290.
(3) Subject to section 290, if the order, as in force immediately before the company’s registration day, was limited to a specified period, it ceases to have effect at the end of that period.
Division 4—Accounts of a company
292 Profit and loss account
Subject to section 293A, a company’s directors shall, before the deadline after an accounting period, cause to be made out a profit and loss account for that accounting period that gives a true and fair view of the company’s profit or loss for that accounting period.
293 Balance‑sheet
Subject to section 293A, a company’s directors shall, before the deadline after an accounting period, cause to be made out a balance‑sheet as at the end of that accounting period that gives a true and fair view of the company’s state of affairs as at the end of that accounting period.
293A Sections 292 and 293 do not apply to half‑year of chief entity
(1) Sections 292 and 293 do not apply to a half‑year of a company if the company is a chief entity in relation to that half‑year.
(2) However, subsections 294(2), (3) and (4) apply to that half‑year:
(a) as if the reference in subsection 294(1) to a company’s accounts being made out under sections 292 and 293 in relation to an accounting period were instead a reference to the company’s directors causing to be made out a consolidated profit and loss account and consolidated balance‑sheet under sections 295A and 295B in relation to that half‑year; and
(b) subject to such modifications (if any) as are prescribed.
294 Steps to be taken before accounts made out
(1) This section shall be complied with before a company’s accounts are made out under sections 292 and 293 in relation to an accounting period.
(2) The directors shall take reasonable steps:
(a) to find out what has been done about writing off bad debts and making provision for doubtful debts; and
(b) to cause all known bad debts to be written off and adequate provision to be made for doubtful debts.
(3) The directors shall take reasonable steps to find out whether any current assets, other than bad or doubtful debts, are unlikely to realise (whether directly or indirectly) in the ordinary course of business their value as shown in the company’s accounting records and, if so, to cause:
(a) the value of those assets to be written down to an amount that they might be expected so to realise; or
(b) adequate provision to be made for the difference between their value as so shown and the amount that they might be expected so to realise.
(4) The directors shall take reasonable steps:
(a) to find out whether the value of any non‑current asset is shown in the company’s accounting records at an amount that, having regard to the asset’s value to the company as a going concern, exceeds the amount that it would have been reasonable for the company to spend to acquire the asset as at the end of the accounting period; and
(b) unless adequate provision for writing down the value of that asset is made—to cause to be included in the accounts such information and explanations as will prevent the accounts from being misleading because of the overstatement of the value of that asset.
Division 4A—Consolidated accounts of a company and the entities it controls
294A Entities, parent entities, economic entities and reporting entities
(1) The regulations may define the expression entity, parent entity, economic entity, or reporting entity, for the purposes of this Part and Part 3.7 as they apply in relation to a company in relation to prescribed accounting periods.
(2) Regulations in force because of subsection (1) have effect accordingly.
(3) Subject to subsection (2), where an accounting standard:
(a) deals with the making out of consolidated accounts by companies; and
(b) applies to an accounting period of a company; and
(c) defines the expression entity, parent entity, economic entity or reporting entity;
the definition in the accounting standard also has effect for the purposes of this Part and Part 3.7 as they apply in relation to the company in relation to that accounting period.
(4) Despite subsections (2) and (3), each of the following is an entity for the purposes of this Part and Part 3.7:
(a) a company;
(b) a recognised company;
(c) any other corporation;
(d) a partnership;
(e) an unincorporated body;
(f) a person in a capacity as trustee of a trust that has only one trustee.
(5) Despite subsections (2) and (3), where a trust has 2 or more trustees, those trustees, in their capacity as such, together constitute an entity.
294B When one entity controls another
(1) The regulations may make provision for or in relation to determining, for the purposes of this Part and Part 3.7 as they apply in relation to a company in relation to prescribed accounting periods, whether or not an entity controls another entity.
(2) Regulations in force because of subsection (1) have effect accordingly.
(3) Subject to subsection (2), where, because of a provision of an accounting standard that:
(a) deals with the making out of consolidated accounts by companies; and
(b) applies to an accounting period of a company;
an entity is taken for the purposes of that accounting standard to control another entity, the first‑mentioned entity is also taken to control the other entity for the purposes of this Part and Part 3.7 as they apply in relation to the company in relation to that accounting period.
295 Application of Division
(1) The later provisions of this Division apply where a company:
(a) controlled another entity during all or part of an accounting period of the company; or
(b) controls another entity at the end of an accounting period of the company;
and, for the purposes of this Part as it applies in relation to the company in relation to that accounting period, the company is the parent entity in an economic entity that is a reporting entity.
(2) The company is a chief entity in relation to that accounting period for the purposes of this Law.
295A Consolidated profit and loss account
(1) The company’s directors must cause to be made out, before the deadline after that accounting period, a consolidated profit and loss account that gives a true and fair view of the profit or loss, for that accounting period, of the economic entity constituted by the company and the entities it controlled from time to time during that accounting period (even if the company did not control the same entities throughout that accounting period).
(2) To avoid doubt, if the company did not control a particular entity throughout that accounting period, the consolidated profit and loss account must relate to the entity’s profit or loss for each part of that accounting period throughout which the company controlled the entity, but not to the entity’s profit or loss for any other part.
295B Consolidated balance‑sheet
The company’s directors must cause to be made out, before the deadline after that accounting period, a consolidated balance‑sheet, as at the period’s end, that gives a true and fair view of the state of affairs, as at the period’s end, of the economic entity constituted by the company and the entities that it controls at the period’s end.
Division 4B—Requirements for financial statements
296 Audit of financial statements
(1) The directors of a company shall take reasonable steps to ensure that the company’s financial statements for an accounting period are audited or reviewed in accordance with this Law before the deadline after that accounting period.
(2) A company’s directors shall cause to be attached to, or endorsed on, the company’s financial statements for an accounting period the auditor’s report on those financial statements that is furnished to the directors under subsection 331A(2) or (3).
297 Financial statements to comply with regulations
(1) A company’s directors shall ensure that the company’s financial statements for an accounting period comply with such of the prescribed requirements as are relevant to the financial statements.
298 Financial statements to comply with applicable accounting standards
(1) Subject to section 297, a company’s directors shall ensure that the company’s financial statements for an accounting period are made out in accordance with applicable accounting standards.
299 Additional information to give a true and fair view
(1) If a company’s financial statements for an accounting period, as prepared in accordance with sections 297 and 298, would not otherwise give a true and fair view of the matters with which this Part requires them to deal, the directors must add such information and explanations as will give a true and fair view of those matters.
(2) Nothing in subsection (1), or in section 297 or 298, limits the generality of a provision of this Division or of Division 4 or 4A, other than this section or section 297 or 298.
300 Inclusion of comparative amounts for items required by accounting standards
(1) Where:
(a) section 298 requires a company’s financial statements for an accounting period to specify a particular amount (in this subsection called the current period amount); and
(b) that section required the company’s financial statements for a previous accounting period to specify an amount that, within the meaning of an applicable accounting standard, is a corresponding amount in relation to the current period amount;
the directors shall ensure that the first‑mentioned financial statements:
(c) set out the corresponding amount in such a way as to allow easy comparison between the current period amount and the corresponding amount; and
(d) if the current period amount has been determined on a different basis from the corresponding amount:
(i) include a note to that effect; and
(ii) set out the corresponding amount in such a way as to draw attention to the note.
(2) For the purposes of this section, section 298 requires a body corporate’s financial statements for an accounting period to specify an amount if, and only if, the directors:
(a) are required to ensure that the financial statements included an amount relating to the matter to which the first‑mentioned amount relates; and
(b) would not have been so required if that section had not applied in relation to the accounting period.
Division 5—Directors’ statements
301 Statement to be attached to accounts
(1A) This section applies to a company and an accounting period unless the accounting period is a half‑year in relation to which the company is a chief entity.
(1) The company’s directors shall cause to be attached to the company’s accounts that are, or are included in, the company’s financial statements for the accounting period a statement complying with this section and subsection 303(2).
(2) The statement shall state whether or not, in the directors’ opinion:
(a) the profit and loss account gives a true and fair view of the company’s profit or loss for the accounting period; and
(b) the balance‑sheet gives a true and fair view of the company’s state of affairs as at the end of the accounting period.
(3) In forming their opinion for the purposes of subsection (2), the directors shall have regard to circumstances that have arisen, and information that has become available, since the end of the accounting period and that would, if the accounts had been made out when the statement is made, have affected the determination of an amount or particular in them.
(4) If adjustments have not been made in the accounts to reflect circumstances or information of a kind referred to in subsection (3) that are or is relevant to understanding the accounts or an amount or particular in them, the statement shall include such information and explanations as will prevent the accounts, or that amount or particular, from being misleading because adjustments have not been so made.
(5) The statement shall state whether or not, in the directors’ opinion, there are, when the statement is made, reasonable grounds to believe that the company will be able to pay its debts as and when they fall due.
(7) If the applicable accounting standards in relation to the accounts include accounting standards that apply to the accounting period because of an election under section 285, the statement shall specify those accounting standards and state that they so apply.
(11) If the company has been dormant throughout the period beginning at the start of the accounting period and ending on the day the statement is made, the statement shall state that the company has so been dormant.
302 Statement to be attached to consolidated accounts
(1) Where Division 4A requires consolidated accounts to be made out in relation to an accounting period of a company, the company’s directors must cause to be attached to them a statement that complies with this section and subsection 303 (2).
(2) The statement must state whether or not, in the directors’ opinion, the consolidated accounts:
(a) have been made out in accordance with Divisions 4A and 4B; and
(b) in particular, give a true and fair view of the matters with which they deal.
(3) In forming their opinion for the purposes of subsection (2), the directors must have regard to circumstances that have arisen, and information that has become available, since the end of that accounting period and that would, if the consolidated accounts had been made out when the statement is made, have affected the determination of an amount or a particular in them.
(4) If adjustments have not been made in the consolidated accounts to reflect circumstances or information of a kind referred to in subsection (3) that are or is relevant to understanding the consolidated accounts or an amount or particular in them, the statement shall include such information and explanations as will prevent the consolidated accounts, or that amount or particular, from being misleading because adjustments have not been so made.
(6) If the applicable accounting standards in relation to the consolidated accounts include accounting standards that apply to the accounting period because of an election made under section 285, the statement shall specify those accounting standards and state that they so apply.
(9) If:
(a) the company has been dormant throughout the period beginning at the start of the accounting period and ending on the day the statement is made; and
(b) each entity that the company controlled during all or part of, or at the end of, the accounting period has been dormant throughout so much of each period during which the company controlled it as falls within the period referred to in paragraph (a);
the statement shall state that the company and each such entity have so been dormant.
303 Statements under this Division
(1) Subject to subsection (1A), a company’s directors must comply with section 301, section 302, or sections 301 and 302, as the case requires, in relation to an accounting period before the auditor reports under this Part on the financial statements.
(1A) If:
(a) a company is a small proprietary company; and
(b) either:
(i) the Commission has asked the company under section 317 to prepare accounts; or
(ii) the shareholders have asked the company under subsection 283C(3) to prepare accounts but have not asked the company to have the accounts audited;
the company’s directors must comply with section 301, section 302, or sections 301 and 302, as the case requires, in relation to a financial year before the deadline after the financial year.
(2) A statement required by section 301 or 302 in relation to an accounting period of a company shall:
(a) be made in accordance with a resolution of the directors;
(b) be made not more than 42 days before the day of the deadline after the accounting period;
(c) specify the day on which it was made; and
(d) be signed by at least 2 directors.
(3) If a company is a proprietary company and has only one director, the signature requirement in paragraph (2)(d) is satisfied if the director signs a statement referred to in subsection (2).
Division 6—Directors’ reports
304 Report on company that is not a chief entity
(1) The directors of a company that is not a chief entity in relation to an accounting period must cause to be made out a report complying with this Division, other than section 305.
(1A) If the accounting period is a financial year of a company:
(a) that was not a disclosing entity at the end of that financial year; and
(b) that was, at the end of that financial year, a proprietary company or a wholly‑owned subsidiary of another company or of a recognised company;
the report need not comply with subsections (3A), (3B), (10) and (11).
(2) Subsection (1) does not apply in relation to a company in relation to an accounting period if the company is dormant throughout the period beginning at the start of, and ending at the deadline after, the accounting period.
(3) The report shall state the names of the directors in office on the day the report is made out.
(3A) The report must contain a review of the company’s operations during the accounting period and of the results of those operations.
(3B) The report must give particulars of any significant change in the company’s state of affairs that occurred during that accounting period.
(3C) If the accounting period is a financial year, the report must also comply with subsections (4), (5), (6), (7), (10) and (11).
(4) If subsection (3C) applies, the report must state the company’s principal activities in the course of the financial year and any significant change in the nature of those activities that occurred during the financial year.
(5) If subsection (3C) applies, the report must state the net amount of the company’s profit or loss for the financial year after provision for income tax.
(6) If subsection (3C) applies, the report must state the amount (if any) that the directors recommend should be paid by way of dividend.
(7) If subsection (3C) applies, the report must state the amounts (if any) that have been paid or declared by way of dividend since the start of the financial year, indicating which (if any) of those amounts have been shown in a previous report under this Division or a corresponding previous law.
(10) If subsection (3C) applies, the report must give particulars of any matter or circumstance that has arisen since the end of the financial year and has significantly affected, or may significantly affect:
(a) the company’s operations;
(b) the results of those operations; or
(c) the company’s state of affairs;
in financial years after the financial year.
(11) If subsection (3C) applies, the report must refer to:
(a) likely developments in the company’s operations; and
(b) the expected results of those operations;
in financial years after the financial year.
305 Report on company that is a chief entity
(1) The directors of a company that is a chief entity in relation to an accounting period must cause to be made out a report complying with this Division, other than section 304.
(1A) If the accounting period is a financial year of a company:
(a) that was not a disclosing entity at the end of that financial year; and
(b) that was a proprietary company at the end of that financial year;
the report need not comply with subsections (3A), (3B), (10) and (11).
(2) Subsection (1) does not apply in relation to a company in relation to an accounting period if:
(a) the company is dormant throughout the period beginning at the start of, and ending at the deadline after, the accounting period; and
(b) each entity that the company controls during all or part of, or at the end of, the accounting period is dormant throughout so much of each period during which the company controls it as falls within the period referred to in paragraph (a).
(3) The report shall state the names of the directors in office on the day the report is made out.
(3A) The report must contain a review of:
(a) the operations, during the accounting period, of the economic entity constituted by the company and the entities it controlled from time to time during the accounting period (even if the company did not control the same entities throughout the accounting period); and
(b) the results of those operations.
(3B) The report must give particulars of any significant change in the state of affairs of the economic entity referred to in paragraph (3A)(a) that occurred during the accounting period.
(3C) If the accounting period is a financial year, the report must also comply with subsections (4), (5), (6), (7), (10) and (11).
(4) If subsection (3C) applies, the report must state:
(a) the principal activities, during the financial year, of the economic entity constituted by the company and the entities it controlled from time to time during the financial year (even if the company did not control the same entities throughout the financial year); and
(b) any significant change in the nature of those activities that occurred during the financial year.
(5) If subsection (3C) applies, the report must state the net amount of the consolidated profit or loss, for the financial year, of the economic entity referred to in paragraph (4)(a), after:
(a) provision for income tax; and
(b) deducting any amounts that should properly be attributed to an entity that is neither the company nor an entity that the company controlled at the relevant time.
(6) If subsection (3C) applies, the report must state the amount (if any) that the directors recommend should be paid by way of dividend.
(7) If subsection (3C) applies, the report must state the amounts (if any) that have been paid or declared by way of dividend since the start of the financial year, indicating which (if any) of those amounts have been shown in a previous report under this Division or a corresponding previous law.
(10) If subsection (3C) applies, the report must give particulars of any matter or circumstance that has arisen since the end of the financial year and has significantly affected, or may significantly affect:
(a) the operations, in financial years after the financial year, of the economic entity constituted by the company and the entities it controls from time to time; or
(b) the results of those operations; or
(c) the state of affairs, in financial years after the financial year, of that economic entity.
(11) If subsection (3C) applies, the report must refer to:
(a) likely developments in the operations referred to in paragraph (10)(a); and
(b) the expected results of those operations.
(12) If the company controlled a particular entity throughout some, but not all, of the accounting period, the report need not relate to the entity’s activities, operations or state of affairs during a period throughout which the company did not control it, or to the results of such operations.
306 Report may omit prejudicial information
If the directors believe, on reasonable grounds, that to include in the report particular information that subsection 304(11) or 305(11) requires would be likely to result in unreasonable prejudice to the company:
(a) the information need not be so included; and
(b) if it is not so included—the report shall state that some or all, as the case requires, of the information required by that subsection has not been so included.
307 Public companies
(1) If at the end of the accounting period the company is a public company and is not a wholly‑owned subsidiary of another company or of a recognised company, the report shall contain, or have attached to it, a statement that, in relation to each of the directors, sets out, as at the day the report is made out:
(a) particulars of the directors’ qualifications, experience and special responsibilities (if any);
(b) if the company is a listed company—that director’s relevant interests in shares of the company or of a related body corporate that paragraph 235(1)(a) requires the director to notify to the relevant securities exchange; and
(c) particulars of any interest of the director in a contract or proposed contract with the company, being an interest whose nature the director has declared:
(i) in accordance with subsection 231(1) or a corresponding previous law; and
(ii) since the date of the last report made out in relation to the company under this Division or a corresponding previous law.
(2) If subsection (1) applies, the report must also contain, or have attached to it, a statement that sets out:
(a) how many meetings of the company’s directors (including meetings of committees of directors) were held during the accounting period, or would have been so held if a quorum had been present; and
(b) in relation to each person who was a director of the company throughout the accounting period—how many of the meetings referred to in paragraph (a) the person attended; and
(c) in relation to each person who was such a director during some but not all of the accounting period:
(i) how many of the meetings referred to in paragraph (a) were held while the person was such a director; and
(ii) how many of the meetings referred to in paragraph (a) the person attended while he or she was such a director.
308 Options
(1) If:
(a) the accounting period is a financial year; and
(b) subsection 304(1) applies;
this section applies in relation to the company.
(2) If:
(aa) the accounting period is a financial year; and
(ab) subsection 305(1) applies;
this section applies in relation to each body corporate that:
(a) is the company or a body corporate that the company controlled at the end of the financial year; and
(b) has at any time granted to a person an option to have shares in the body issued to the person.
(3) The report shall state, in relation to each option that the company or body corporate has, during or since the financial year, granted to a person to have shares in the company or body issued to the person:
(a) unless subsection 304(1) applies—the name of the company or body;
(b) the name of the person to whom the option was granted or, if it was granted generally to all the holders of shares or debentures, or of a class of shares or debentures, of the company or body or of any other body corporate, that the option was so granted;
(c) the number and classes of shares in respect of which the option was granted;
(d) the day of expiration of the option;
(e) the basis on which the option is or was to be exercised; and
(f) whether or not a person entitled to exercise the option has or had, by virtue of the option, a right to participate in a share issue of any other body corporate.
(4) The report shall state:
(a) unless subsection 304(1) applies—the name of the company or body corporate;
(b) particulars of shares in the company or body issued, during or since the financial year, by virtue of the exercise of an option;
(c) the number and classes of unissued shares in the company or body under option as at the day the report is made out;
(d) the prices, or the method of fixing the prices, of issue of those unissued shares;
(e) the days of expiration of the options in respect of those unissued shares; and
(f) particulars of the rights (if any) of the holders of the options in respect of those unissued shares to participate by virtue of the options in any share issue of any other body corporate.
(5) If particulars that this section requires have been stated in a previous report made out in relation to the company under this Division or a corresponding previous law, they may be stated by referring to that report.
309 Benefits under contracts with directors
(1) The report must set out whether or not, during or since the accounting period, a director has received, or has become entitled to receive, a benefit because of a contract that:
(a) the director; or
(b) a firm of which the director is a member; or
(c) an entity in which the director has a substantial financial interest;
has made (during that or any other accounting period) with:
(d) the company; or
(e) an entity that the company controlled, or a body corporate that was related to the company, when the contract was made or when the director received, or became entitled to receive, the benefit (if any).
(2) If so, the report shall set out the general nature of each such benefit that a director has so received or to which a director has so become entitled.
(3) Subsections (1) and (2) do not apply to:
(a) a benefit included in the aggregate amount of emoluments received, or due and receivable, by directors shown, in accordance with the regulations in force for the purposes of section 297, in the company’s financial statements for the accounting period; or
(b) the fixed salary of a full‑time employee of:
(i) the company; or
(ii) an entity that the company controlled, or a body corporate that was related to the company, at a relevant time.
309A Indemnifying officer or auditor
(1) If:
(a) during or since the financial year, the company has indemnified against a liability a person who is or has been an officer or auditor of the company or of a related body corporate; and
(b) but for subsection 241(2) or (3), subsection 241(1) would have prohibited the company from indemnifying the person against that liability;
the report must set out:
(c) the person’s name; and
(d) the nature of the liability; and
(e) how much the company paid, and what else the company did, by way of indemnifying the person against the liability.
(2) If:
(a) during or since the financial year, the company has made a relevant agreement (as defined in section 9) for indemnifying against a liability a person who is or has been an officer or auditor of the company or of a related body corporate; and
(b) but for subsection 241(2) or (3), subsection 241(1) would prohibit the company from indemnifying the person against that liability;
the report must set out particulars of the relevant agreement, including:
(c) the person’s name; and
(d) the nature of the liability; and
(e) how much the relevant agreement provides for the company to pay, and what else it provides for the company to do, by way of indemnifying the person against the liability.
(3) If:
(a) during or since the financial year, the company has paid, or agreed to pay, a premium in respect of a contract insuring against a liability a person who is or has been an officer or auditor of the company or of a related body corporate; and
(b) but for subsection 241A(3), subsection 241A(1) would have prohibited the company from paying, or agreeing to pay, the premium;
the report must:
(c) name the person and state that the company has paid, or agreed to pay, a premium in respect of a contract insuring the person against a liability; and
(d) set out, except so far as prohibited by the contract itself, the nature of the liability and the amount of the premium.
(4) Nothing in this section limits the generality of section 309.
(5) In this section:
officer has the same meaning as in section 241.
310 Reports generally
(1) A company’s directors shall comply with this Division in relation to an accounting period before the deadline after the accounting period.
(2) A report that this Division requires in relation to an accounting period of a company shall:
(a) be made out in accordance with a resolution of the directors;
(b) be made out not more than 42 days before the day of the deadline after the accounting period;
(c) specify the day on which it was made out; and
(d) be signed by at least 2 directors.
(3) If a company is a proprietary company and has only one director, the signature requirement in paragraph (2)(d) is satisfied if the director signs a report referred to in subsection (2).
Division 7—Financial statements and directors’ reports
311 Rounding off amounts
The regulations may permit specified companies, subject to such conditions, exceptions or qualifications (if any) as are specified in the regulations, to insert in any accounts, consolidated accounts or report under this Law, in substitution for an amount that the company would, but for this section, be required or permitted to set out in the accounts, consolidated accounts or report, an amount that is ascertained in accordance with the regulations and is not more than $500 greater or less than the first‑mentioned amount.
312 Directors of chief entity to obtain all necessary information
(1) Subject to subsection (3), the directors of a company that is a chief entity in relation to a particular accounting period shall not cause to be made out the consolidated accounts referred to in Division 4A, the statement referred to in section 302 or the report referred to in section 305 unless they have available to them sufficient information about each entity that the company controlled during all or part of, or at the end of, the accounting period to enable them to ensure:
(a) that the consolidated accounts:
(i) will be made out in accordance with Divisions 4A and 4B; and
(ii) in particular, will give a true and fair view of the matters with which they must deal; and
(b) that neither the statement nor the report will be false or misleading in a material particular.
(2) The reporting officers of an entity that a company controlled during all or part of, or at the end of, a particular accounting period of the company must, at the request of the directors of the company, supply to the company all the information that is required by the directors of the company for the preparation of the consolidated accounts, the statement and the report referred to in subsection (1).
(3) Where the directors of a company, having taken all such steps as are reasonably available to them, are unable to obtain from the reporting officers of an entity the information required by the directors of the company for the preparation of the consolidated accounts, the statement and the report referred to in subsection (1) within the period within which those consolidated accounts, that statement and that report are respectively required, by the provisions referred to in that subsection, to be prepared:
(a) the directors of the company shall cause to be made out those consolidated accounts, that statement and that report without incorporating in, or including with, those consolidated accounts, or incorporating in that statement or report, as the case requires, the information relating to the entity, but:
(i) they shall include in those consolidated accounts, that statement or that report, as the case requires, a description of the nature of the information that has not been obtained, and shall include in those consolidated accounts, that statement and that report such qualifications and explanations as are necessary to prevent those consolidated accounts, that statement and that report from being misleading; and
(ii) they may qualify accordingly that part of that statement that is made under subsection 302(2); and
(b) where the directors of the company have caused to be made out those consolidated accounts, that statement and that report in accordance with paragraph (a), they shall, within 1 month after receiving any of that information from the reporting officers of the entity:
(i) lodge a statement setting out or summarising the information and containing such qualifications and explanations, by the directors of the company, of those consolidated accounts, that statement or that report as are necessary having regard to the information received from those reporting officers; and
(ii) send, to each member of the company, a copy of the statement required by subparagraph (i) to be lodged.
(4) In this section:
reporting officers, in relation to an entity, means:
(a) in the case of a corporation—the corporation’s directors; or
(b) otherwise—the entity’s officers.
313 Relief from requirements as to accounts and reports
(1) A company’s directors may apply to the Commission for an order relieving them, relieving the company, or relieving the auditor (if any) of the company, from compliance with specified requirements of this Law relating to, or to the audit or review of, accounts or consolidated accounts or to the report required by Division 6.
(2) On an application under subsection (1), the Commission may make an order relieving the directors, the company, or the auditor of the company, as the case may be, from compliance with all or any of the specified requirements either unconditionally or on condition that the directors comply, the company complies, or the auditor of the company complies, as the case may be, with such other requirements relating to, or to the audit of, the accounts or consolidated accounts or to the report as the Commission imposes.
(3) An application under subsection (1) shall be in writing supported by a statement in writing made in accordance with a resolution of the directors of the company signed by:
(a) in the case of a proprietary company that has only one director—that director; or
(b) in any other case—at least 2 directors.
The notice must state the reasons for seeking the order.
(4) The Commission may require the directors making application under subsection (1) to supply such information relating to the operations of the company, of any related body corporate, or of any entity that the company controls, or has controlled, during an accounting period of the company, as the Commission thinks necessary for the purpose of determining the application.
(5) Notice of an order under subsection (2) shall be served on the company to which it relates.
(6) The Commission may, where it considers it appropriate, make an order in respect of a specified class of companies relieving the directors of a company included in that class, relieving a company included in that class, or relieving the auditor (if any) of a company included in that class, from compliance with specified requirements of this Law relating to, or to the audit of, accounts or consolidated accounts or to the report required by Division 6.
(7) An order under subsection (6) may be made either unconditionally or on condition that the directors of the company comply, the company complies, or the auditor of the company complies, as the case may be, with such other requirements relating to, or to the audit of, accounts or consolidated accounts or to the report as the Commission imposes.
(8) Notice of an order under subsection (6) shall be published in the Gazette.
(9) A reference in subsection (2) or (6) to requirements of this Law relating to, or to the audit of, accounts or consolidated accounts does not include a reference to the requirements of section 289.
(10) Without limiting the generality of subsections (2) and (6), a reference in either of those subsections to requirements of this Law relating to, or to the audit of, accounts or consolidated accounts includes:
(a) a reference to a requirement that an annual return of a company be accompanied by a copy of accounts or consolidated accounts of the company; and
(b) a reference to a requirement that particulars relating to:
(i) the profit or loss of a company for a financial year;
(ii) the state of affairs of a company as at the end of a financial year;
(iii) the profit or loss of a company and any other entity or entities in relation to a financial year of the company; or
(iv) the state of affairs of a company and any other entity or entities as at the end of a financial year of the company;
be contained in an annual return of the company.
(11) The Commission shall not make an order in relation to a company, or in relation to a class of companies, unless:
(a) in relation to each requirement of this Law that is specified in the order, the Commission is of the opinion that compliance with the requirement:
(i) would render accounts or consolidated accounts, or a report required by Division 6, misleading;
(ii) would be inappropriate to the circumstances of the company, or of the companies included in that class, as the case may be; or
(iii) would impose unreasonable burdens on:
(A) the company, an officer of the company or the auditor (if any) of the company; or
(B) the companies, or officers or auditors of the companies, included in that class;
as the case may be; or
(b) the company is a company (in this paragraph called a relevant company):
(i) not carried on for the purposes of profit or gain to its individual members;
(ii) prohibited, by the terms of its constitution, from making any distribution, whether in money, property or otherwise, to its members; and
(iii) required by or under an Australian law to prepare annually a statement of its income and expenditure or a statement as to its financial position, or both;
or that class is a class of relevant companies, as the case may be.
(11A) In deciding for the purposes of subsection (11) whether the audit requirements for a large proprietary company, or a class of large proprietary companies, would impose an unreasonable burden on the company or companies, the Commission is to have regard to:
(a) the expected costs of complying with the audit requirements; and
(b) the expected benefits of having the company or companies comply with the audit requirements; and
(c) any practical difficulties that the company or companies face in complying effectively with the audit requirements (in particular, any difficulties that arise because a financial year is the first one for which the audit requirements apply or because the company or companies are likely to move frequently between the small and large proprietary company categories from one financial year to another); and
(d) any unusual aspects of the operation of the company or companies during the financial year concerned; and
(e) any other matters that the Commission considers relevant.
(11B) In assessing expected benefits under subsection (11A), the Commission is to take account of:
(a) the number of creditors and potential creditors; and
(b) the position of creditors and potential creditors (in particular, their ability to independently obtain financial information about the company or companies); and
(c) the nature and extent of the liabilities of the company or companies.
(12) The reference in subsection (11) to an order in relation to a company, or in relation to a class of companies, is a reference to:
(a) an order under subsection (2) relieving the directors of the company, relieving the company, or relieving the auditor (if any) of the company; or
(b) an order under subsection (6) relieving the directors of a company included in that class, relieving a company included in that class, or relieving the auditor (if any) of a company included in that class;
from compliance with specified requirements of this Law.
(13) The Commission may make an order under subsection (2) or (6) that is limited to a specified period and:
(a) in the case of an order under subsection (2)—may from time to time either on application by the directors, or without any such application, revoke or suspend the operation of the order; or
(b) in the case of an order under subsection (6)—may from time to time revoke or suspend the operation of the order.
(14) The revocation or suspension under subsection (13) of an order does not take effect until:
(a) in the case of an order under subsection (2)—notice of the revocation or suspension is served on the company to which the order relates; and
(b) in the case of an order under subsection (6)—notice of the revocation or suspension is published in the Gazette.
314 Orders under corresponding laws
(1) Where, immediately before a Division 2 company’s registration day, an order was in force in relation to the company under a previous law corresponding to section 313, this section applies on and after that day.
(2) The order has effect, with such modifications as the circumstances require, as if:
(a) it had been made under section 313; and
(b) there were specified in it, instead of the specified requirements of the previous law, the corresponding requirements of this Law.
(3) Subject to section 313, if the order, as in force immediately before the company’s registration day, was limited to a specified period, it ceases to have effect at the end of that period.
315 Members entitled to financial statements and reports
(1) In this section:
eligible person, in relation to a company, means a person who is entitled to receive notice of general meetings of the company.
(2) A public company shall, at or before the time when it sends notice of an annual general meeting to eligible persons or, if the company sends notice of an annual general meeting to eligible persons more than 14 days before the meeting, at least 14 days before the meeting, send to each eligible person a copy of each document a copy of which section 316 requires to be laid before the meeting.
(3) A public company shall furnish to a member of the company, whether or not the member is entitled to have sent to him, her or it copies of the accounts or consolidated accounts, to whom copies have not been sent, or a holder of debentures, on request in writing being made by him, her or it to the company, as soon as practicable and without charge, a copy of the last accounts and consolidated accounts (if any) laid or to be laid before the company at its annual general meeting, together with copies of the other documents required under subsection (2) to accompany those accounts and consolidated accounts (if any).
(3A) If a company is:
(a) a large proprietary company for a financial year; or
(b) a small proprietary company to which section 283B applies for a financial year; or
(c) a small proprietary company that receives a request under subsection 283C(3) for a financial year;
the company must send to each eligible person by the deadline for that year a copy of:
(d) the company’s financial statements for that year; and
(e) each Division 5 statement for that year; and
(f) the Division 6 report for that year; and
(g) the auditor’s report (if any) about the financial statements for that year under section 331A.
(4) It is a defence to a prosecution for a contravention of subsection (2), (3) or (3A) in relation to a person if it is proved that the person had, before the contravention occurred, been furnished with documents as required by that subsection.
(5) This section does not apply in relation to a mutual life assurance company limited by guarantee registered under the Life Insurance Act 1945.
316 Financial statements and reports to be laid before annual general meeting
(1) A public company’s directors shall cause to be laid before the annual general meeting of the company that section 245 requires to be held in relation to a financial year:
(a) a copy of the company’s financial statements for that financial year;
(b) a copy of each statement that Division 5 requires in relation to that financial year;
(c) a copy of the report that Division 6 requires in relation to that financial year; and
(d) a copy of the auditor’s report (if any) about the financial statements that section 331A requires.
(2) If a member so requires, the directors must cause the auditor’s report to be read aloud to the meeting.
317 ASC may require company to prepare or lodge accounts etc.
(1) The ASC may ask a small proprietary company to comply with the provisions of this Part for a financial year.
(2) The request may be general or may specify the particular requirements of this Part that the company is to comply with.
(3) A request under subsection (1) must specify the date by which the documents have to be prepared, sent or lodged. The date must be a reasonable one in view of the nature of the request.
(4) The ASC may ask a company to lodge with the ASC a copy of any of the following documents prepared for a financial year:
(a) the financial statements
(b) the Division 5 statements
(c) the Division 6 report
(d) the auditor’s report on the financial statements.
(5) A request under subsection (4) must specify the date by which the documents have to be lodged. The date must be at least 14 days after the date on which the request is served on the company.
(6) A request under subsection (1) or (4) must:
(a) be made in writing; and
(b) be served on the company; and
(c) specify the financial year or years concerned; and
(d) be made no later than 7 years after the end of each financial year specified under paragraph (c).
317A Lodgment of accounts etc. by companies that are disclosing entities
(1) A company that was a disclosing entity at the end of an accounting period must lodge copies of the following documents before the deadline after the accounting period:
(a) the company’s financial statements for the accounting period;
(b) the statement or statements that Division 5 requires in relation to the accounting period;
(c) the report that Division 6 requires in relation to the accounting period;
(d) the report about the financial statements that section 331A requires from the company’s auditor.
(2) If the company was a borrowing corporation at the end of the accounting period, copies of the documents referred to in subsection (1) must also be given to the trustee (if any) for the holders of the debentures before the deadline after the accounting period.
317B Lodgment of accounts etc. by some proprietary companies
(1) Application of section
Subject to subsection (3), this section applies to:
(a) a large proprietary company that is not a disclosing entity; and
(b) a small proprietary company to which section 283B applies.
(2) Company accounts and reports
A proprietary company to which this section applies must lodge a copy of the following documents with the ASC before the deadline for a financial year:
(a) the company’s financial statements for the year
(b) the Division 5 statements for the year
(c) the Division 6 report for the year
(d) the report about the financial statements that section 331A requires from the company’s auditor.
(3) Subsection (1) does not apply to a large proprietary company for a financial year if:
(a) the company was an exempt proprietary company on 30 June 1994; and
(b) the company has continued to meet the definition of exempt proprietary company (as in force at 30 June 1994) at all times since that date; and
(c) the company is a large proprietary company at the end of the first financial year after the commencement of this section; and
(d) the company’s financial statements for the financial year ending during 1993 and each later financial year have been audited before the deadline for that year; and
(e) within 4 months after the end of the first financial year of the company that ends after the commencement of this section, the company lodges with the ASC a notice that the company wants this subsection to apply to the company.
(4) The ASC may extend the period referred to in paragraph (3)(e).
318 Contravention of Part
(1) Subject to this section, if a director of a company fails to take all reasonable steps to comply with, or to secure compliance with, or has knowingly been the cause of any default under, any of the provisions of this Part (including any of those provisions as applying by virtue of section 1058) other than Divisions 1 and 2 and section 317, the director contravenes this subsection.
(2) Subsection (1) is a civil penalty provision as defined by section 1317DA, so Part 9.4B provides for civil and criminal consequences of contravening it, or of being involved in a contravention of it.
(3) In any proceedings against a person for failure to take all reasonable steps to comply with, or to secure compliance with, the provisions of this Part relating to the form and content of the accounts or consolidated accounts of a company by reason of an omission from the accounts or consolidated accounts (including any of those provisions as applying by virtue of section 1058), it is a defence if it is proved that the information omitted was immaterial and did not affect the giving of a true and fair view of the matters required by Division 4 or 4A to be dealt with in the accounts or consolidated accounts, as the case may be.
(5) After the end of the period within which Division 4, 4A, 5 or 6 requires a company’s directors to cause a document to be made out, the Commission may require the company’s directors to produce the document on a specified day, at a specified place, to a specified person.
(6) A request under subsection (5) must be made by writing given to each of the company’s directors.
(7) In a proceeding for a contravention of Division 4, 4A, 5 or 6, proof of contravention of a requirement made under subsection (5) is prima facie evidence that the document was not made out within the period referred to in that subsection.
Division 8—Inspection of records
319 Inspection of records
(1) Where:
(a) a member of a company applies to the Court for an order authorising a registered company auditor, or a duly qualified legal practitioner, acting on behalf of the member to inspect books of the company; and
(b) the Court is satisfied that the member is acting in good faith and that the inspection is to be made for a proper purpose;
the Court may:
(c) make an order authorising a registered company auditor, or a duly qualified legal practitioner, acting on behalf of the member, at such time as is specified in the order, to inspect, and to make copies of, or take extracts from, specified books of the company; and
(d) make such other order or orders (if any) as it thinks fit including, without limiting the generality of the foregoing, an order relating to the use that may be made of the information disclosed to the member by the registered company auditor or the duly qualified legal practitioner as a result of the inspection.
(2) The right of a member of a company to apply for an order under subsection (1) is in addition to and not in derogation of any right in relation to the inspection of books of a company that a member of a company has under any other law.
320 Disclosure of information
A registered company auditor, or a duly qualified legal practitioner, who inspects books of a company pursuant to an order of the Court under section 319 shall not disclose information acquired in the course of the inspection to a person other than:
(a) the member of the company on whose application the order was made; or
(b) a staff member, or a member or acting member, of the Commission.
Division 9—Transitional
321 Application of this Part and Part 3.7 to Division 2 company
A person need not comply with a provision of this Part or Part 3.7 in relation to a Division 2 company in relation to a financial year of the company that ended before its registration day.
322 Continued application to Division 2 company of requirements of corresponding previous law
(1) Where:
(a) a body corporate is taken to be registered as a company under Division 2 of Part 2.2; and
(b) as at the start of the company’s registration day, a person (being the company or anyone else) had not fully complied, in relation to the company in relation to a financial year of the company that ended before that day, with the requirements of a previous law corresponding to a provision of this Part (other than sections 289 and 290) or Part 3.7;
subsections (2) and (3) of this section apply, subject to this Law, on and after that day.
(2) The person must comply with those requirements as if, in the previous law referred to in paragraph (1)(b):
(a) a reference to a particular law corresponding to a provision of this Law included a reference to that provision; and
(b) a reference to the NCSC were, or included, as the case requires, a reference to the Commission.
(3) If, at a time, or throughout a period beginning, on or after that day, the person contravenes those requirements, this Law applies as if the person had, at that time or throughout that period, as the case may be, contravened the provision referred to in paragraph (1)(b).
(4) The regulations may modify or vary, and may grant exemptions from compliance with, requirements with which this section requires a person to comply.
323 Division 3 or 4 companies
The regulations may provide for the application of this Part and Part 3.7, with the prescribed modifications (if any), in relation to a Division 3 or 4 company in relation to a financial year of the company ending before its registration day.
Division 10—Accounts of certain non‑companies
323A Application of provisions to disclosing entities that are not companies or undertakings
(1) In this section:
applied provisions means:
(a) the provisions of Divisions 3 to 7 (inclusive) of this Part; and
(b) the provisions of Part 3.7 and section 287; and
(c) the provisions of the regulations made for the purposes of any of the provisions referred to in paragraphs (a) and (b).
(2) The applied provisions apply in relation to a disclosing entity that is a body (other than a company) incorporated or formed in this jurisdiction:
(a) with prescribed modifications (if any); and
(b) as if references in the provisions to a company included references to such a disclosing entity.
(3) Except where the contrary intention appears, or the context otherwise requires:
(a) a reference in this Law to an applied provision includes a reference to that provision as it applies because of this section; and
(b) for the purposes of a reference in this Law to a Chapter, Part, Division or other group of provisions of this Law that includes some of the applied provisions, the Chapter, Part, Division or other group is taken to include those applied provisions as they apply because of this section.
Division 11—Accounts in relation to disclosing entities that are prescribed interest undertakings
323B Introduction
(1) This Division deals with various accounting and reporting requirements to be complied with in relation to a disclosing entity that is an undertaking to which prescribed interests relate.
(2) In this Division:
(a) the trustee or representative in relation to the prescribed interests is referred to as the trustee; and
(b) the management company in relation to the prescribed interests is referred to as the manager.
323C Profit and loss account
Before the deadline after the accounting period, the trustee must prepare, or cause to be prepared, a profit and loss account for that period that gives a true and fair view of the profit or loss for that period resulting from the operations of the undertaking.
323D Balance‑sheet
Before the deadline after the accounting period, the trustee must prepare, or cause to be prepared, a balance‑sheet as at the end of that period that gives a true and fair view of the state of affairs of the undertaking as at the end of that period.
323E Accounts to comply with regulations
The trustee must ensure that the accounts comply with such of the prescribed requirements as are relevant to the accounts.
323F Accounts to comply with applicable accounting standards
Subject to section 323E, the trustee must ensure that the accounts are prepared in accordance with applicable accounting standards.
323G Additional information to give a true and fair view
If the accounts, as prepared in accordance with sections 323E and 323F, would not otherwise give a true and fair view of the matters with which this Division requires them to deal, the trustee must add, or cause to be added, such information and explanations as will give a true and fair view of those matters.
323H Audit or review of accounts
(1) The trustee must take reasonable steps to ensure that, before the deadline after the accounting period, a registered company auditor gives to the trustee a written report:
(a) stating that the accounts have been audited; and
(b) stating whether or not, as a result of that audit, in the auditor’s opinion, the accounts are properly drawn up:
(i) so as to give a true and fair view of the matters with which this Division requires them to deal; and
(ii) in accordance with this Law; and
(iii) in accordance with applicable accounting standards; and
(c) if the auditor is of the opinion that the accounts are not so drawn up—stating the auditor’s reasons for that opinion; and
(d) if the auditor is of the opinion that the accounts are not drawn up in accordance with a particular applicable accounting standard—giving particulars of the quantified financial effect on the accounts of failing to draw them up in accordance with that accounting standard.
(2) If the accounting period is a half‑year, the report may instead:
(a) state whether, as a result of a review of the accounts, any matter has come to the auditor’s attention that causes the auditor to believe that they are not drawn up as mentioned in subsection (1); and
(b) if a matter or matters have so come to the auditor’s attention that cause the auditor so to believe—include a description of the matter or matters and a statement of the auditor’s reasons for that belief.
(3) The trustee must cause the auditor’s report to be attached to, or endorsed on, the accounts.
323J Trustee’s report for accounting period
The trustee must prepare, or cause to be prepared, a report:
(a) containing a review of the operations of the undertaking during the accounting period and of the results of those operations; and
(b) giving particulars of any significant change in the state of affairs of the undertaking that occurred during the accounting period.
323K Lodging accounts etc.
(1) The manager must lodge a copy of each of the following:
(a) the accounts that sections 323C and 323D require;
(b) the auditor’s report on those accounts given under section 323H;
(c) the report that section 323J requires.
(2) If the accounting period is a financial year, the manager must lodge the copies together with the return that section 1071 requires in relation to that financial year.
(3) Otherwise, the manager must lodge the copies before the deadline after the accounting period.
323L Regulations may make additional provision
(1) The regulations may make provision, in relation to:
(a) prescribed interests that are ED securities; or
(b) without limiting paragraph (a), accounting periods of undertakings to which prescribed interests relate;
for matters of a kind dealt with in any of the provisions of section 287, Divisions 2 to 8 (inclusive) of this Part and Part 3.7.
(2) The regulations may also make provision for lodging, or for sending to the holders of prescribed interests, documents prepared under regulations in force for the purposes of subsection (1).
Part 3.7—Audit
Division 1—Appointment and removal of auditors
324 Qualifications of auditors
(1) Subject to this section, a person shall not:
(a) consent to be appointed as auditor of a company;
(b) act as auditor of a company; or
(c) prepare a report required by this Law to be prepared by a registered company auditor or by an auditor of a company;
if:
(d) the person is not a registered company auditor;
(e) the person, or a body corporate in which the person is a substantial shareholder for the purposes of Part 6.7, owes more than $5,000 to the company, to a related body corporate or to an entity that the company controls; or
(f) except where the company is a proprietary company, the person:
(i) is an officer of the company;
(ii) is a partner, employer or employee of an officer of the company; or
(iii) is a partner or employee of an employee of an officer of the company.
(2) Subject to this section, a firm shall not:
(a) consent to be appointed as auditor of a company;
(b) act as auditor of a company; or
(c) prepare a report required by this Law to be prepared by a registered company auditor or by an auditor of a company;
unless:
(d) at least 1 member of the firm is a registered company auditor who is ordinarily resident in Australia;
(e) the business name under which the firm is carrying on business is registered under a law of a State or Territory relating to the registration of business names or a return in the prescribed form has been lodged showing, in relation to each member of the firm, the member’s full name and address as at the time when the firm so consents, acts or prepares a report;
(f) no member of the firm, and no body corporate in which a member of the firm is a substantial shareholder for the purposes of Part 6.7, owes more than $5,000 to the company , to a related body corporate or to an entity that the company controls;
(g) except where the company is a proprietary company, no member of the firm is:
(i) an officer of the company;
(ii) a partner, employer or employee of an officer of the company; or
(iii) a partner or employee of an employee of an officer of the company; and
(h) except where the company is a proprietary company, no officer of the company receives any remuneration from the firm for acting as a consultant to it on accounting or auditing matters.
(3) A reference in subsection (1) or (2) to indebtedness to a body corporate or entity does not, in relation to indebtedness of a natural person, include a reference to indebtedness of that person to a body corporate or entity that is a prescribed corporation for the purposes of Part 4.5 where:
(a) the indebtedness arose as a result of a loan made to that person by the body corporate or entity in the ordinary course of its ordinary business; and
(b) the amount of that loan was used by that person to pay the whole or part of the purchase price of premises that are used by that person as his or her principal place of residence.
(4) For the purposes of subsections (1) and (2), a person shall be deemed to be an officer of a company if:
(a) the person is an officer of a related body corporate or of an entity that the company controls; or
(b) except where the Commission, if it thinks fit in the circumstances of the case, directs that this paragraph shall not apply in relation to the person in relation to the company—the person has, at any time within the immediately preceding period of 12 months, been an officer or promoter of the company, of a related body corporate or of an entity that the company controlled at that time.
(5) For the purposes of this section, a person shall not be taken to be an officer of a company by reason only of being or having been the liquidator of that company, of a related body corporate or of an entity that that company controls or has controlled.
(6) For the purposes of this section, a person is not taken to be an officer of a company merely because of one or more of the following:
(a) having been appointed as auditor of the company, of a related body corporate or of an entity that the company controls or has controlled;
(b) having been appointed, for any purpose relating to taxation, as public officer of a body corporate, an unincorporated body or a trust estate;
(c) being or having been authorised to accept, on behalf of the company, a related body corporate or an entity that the company controls or has controlled, service of process or notices.
(7) The appointment of a firm as auditor of a company shall be deemed to be an appointment of all persons who are members of the firm and are registered company auditors, whether resident in Australia or not, at the date of the appointment.
(8) Where a firm that has been appointed as auditor of a company is reconstituted by reason of the death, retirement or withdrawal of a member or members or by reason of the admission of a new member or new members, or both:
(a) a person who was deemed under subsection (7) to be an auditor of the company and who has so retired or withdrawn from the firm as previously constituted shall be deemed to have resigned as auditor of the company as from the day of his or her retirement or withdrawal but, unless that person was the only member of the firm who was a registered company auditor and, after the retirement or withdrawal of that person, there is no member of the firm who is a registered company auditor, section 329 does not apply to that resignation;
(b) a person who is a registered company auditor and who is so admitted to the firm shall be deemed to have been appointed as an auditor of the company as from the day of his or her admission; and
(c) the reconstitution of the firm does not affect the appointment of the continuing members of the firm who are registered company auditors as auditors of the company;
but nothing in this subsection affects the operation of subsection (2).
(9) Except as provided by subsection (8), the appointment of the members of a firm as auditors of a company that is deemed by subsection (7) to have been made by reason of the appointment of the firm as auditor of the company is not affected by the dissolution of the firm.
(10) A report or notice that purports to be made or given by a firm appointed as auditor of a company shall not be taken to be duly made or given unless it is signed in the firm name and in his or her own name by a member of the firm who is a registered company auditor.
(11) Without limiting the generality of section 1311, if, in contravention of this section, a firm consents to be appointed, or acts as, auditor of a company or prepares a report required by this Law to be prepared by an auditor of a company, each member of the firm is guilty of an offence.
(12) Where it is, in the opinion of the Commission, impracticable for a proprietary company to obtain the services of a registered company auditor as auditor of the company by reason of the place where the company carries on business, a person who is, in the opinion of the Commission, suitably qualified or experienced and is approved by the Commission for the purposes of this Law in relation to the audit of the company’s accounts may be appointed as auditor of the company, subject to such terms and conditions as are specified in the approval.
(13) A person appointed in accordance with subsection (12) shall, in relation to the auditing of the company’s accounts and consolidated accounts (if any), but subject to the terms and conditions of the approval under that subsection, be deemed to be a registered company auditor and the provisions of this Law shall, with the necessary modifications, apply in relation to the person accordingly.
(14) Where a person approved by the Commission under subsection (12) is acting as auditor of a company, the Commission may at any time, by notice in writing given to the company:
(a) amend, revoke or vary the terms and conditions of its approval; or
(b) terminate the appointment of that person as auditor of the company.
(15) A notice under subsection (14) terminating the appointment of a person as auditor of a company takes effect as if, on the date on which the notice is received by the company, the company had received from the person notice of the person’s resignation as auditor taking effect from that date.
(16) A person shall not:
(a) if the person has been appointed auditor of a company—knowingly disqualify himself or herself while the appointment continues from acting as auditor of the company; or
(b) if the person is a member of a firm that has been appointed auditor of a company—knowingly disqualify the firm while the appointment continues from acting as auditor of the company.
325 Appointment of auditor by small proprietary company
(1) A small proprietary company only has to appoint an auditor under subsection 327(1), (3) or (5) or subsection 327(10) if it is covered by section 283 or 283B.
(2) If:
(a) a small proprietary company receives a request under subsection 283C(3) or section 317 for a financial year; and
(b) to comply with the request the company has to have its financial statements for the year audited; and
(c) the company does not have an auditor;
the directors of the company must appoint an auditor for the company.
327 Appointment of auditors
(1) Within 1 month after the day on which a company is incorporated, the directors of the company shall appoint, unless the company at a general meeting has appointed, a person or persons, a firm or firms, or a person or persons and a firm or firms, as auditor or auditors of the company.
(2) A person or firm appointed as auditor of a company under subsection (1) holds office, subject to this Part, until the first annual general meeting of the company.
(3) A company shall:
(a) at its first annual general meeting appoint a person or persons, a firm or firms, or a person or persons and a firm or firms, as auditor or auditors of the company; and
(b) at each subsequent annual general meeting, if there is a vacancy in the office of auditor of the company, appoint a person or persons, a firm or firms, or a person or persons and a firm or firms, to fill the vacancy.
(4) A person or firm appointed as auditor under subsection (3) holds office until death or removal or resignation from office in accordance with section 329 or until ceasing to be capable of acting as auditor by reason of subsection 324(1) or (2).
(5) Within 1 month after a vacancy, other than a vacancy caused by the removal of an auditor from office, occurs in the office of auditor of the company, if there is no surviving or continuing auditor of the company, the directors shall, unless:
(a) the company at a general meeting has appointed a person or persons, a firm or firms, or a person or persons and a firm or firms, to fill the vacancy; or
(b) where the company is a proprietary company, all the members of the company have within 1 month after the vacancy occurs agreed that it is not necessary for the vacancy to be filled;
appoint a person or persons, a firm or firms, or a person or persons and a firm or firms, to fill the vacancy.
(6) While a vacancy in the office of auditor continues, the surviving or continuing auditor or auditors (if any) may act.
(7) A company or the directors of a company shall not appoint a person or firm as auditor of the company unless that person or firm has, before the appointment, consented by notice in writing given to the company or to the directors to act as auditor and has not withdrawn his, her or its consent by notice in writing given to the company or to the directors.
(8) A notice under subsection (7) given by a firm shall be signed in the firm name and in his or her own name by a member of the firm who is a registered company auditor.
(9) If a company appoints a person or firm as auditor of a company in contravention of subsection (7), the purported appointment does not have any effect and the company and any officer of the company who is in default are each guilty of an offence.
(10) Where an auditor of a company is removed from office at a general meeting in accordance with section 329:
(a) the company may at that meeting (without adjournment), by a resolution passed by a majority of not less than three‑quarters of such members of the company as, being entitled so to do, vote in person or, where proxies are allowed, by proxy, forthwith appoint as auditor or auditors a person or persons, a firm or firms, or a person or persons and a firm or firms, to whom or which has been sent a copy of the notice of nomination in accordance with subsection 328(3); or
(b) if such a resolution is not passed or, by reason only that such a copy of the notice of nomination has not been sent to a person, could not be passed, the meeting may be adjourned to a day not earlier than 20 days and not later than 30 days after the day of the meeting and the company may, at the adjourned meeting, by ordinary resolution appoint as auditor or auditors a person or persons, a firm or firms, or a person or persons and a firm or firms, notice of whose nomination for appointment as auditor has been received by the company from a member of the company at least 14 clear days before the day to which the meeting is adjourned.
(11) Where, after the removal from office of an auditor of a company, the company fails to appoint an auditor under subsection (10), the company shall, within the period of 7 days commencing on the day of the failure, give to the Commission notice of the failure, and, subject to subsection (12), the Commission:
(a) in a case where the company, before the end of that period, gives to the Commission notice of the failure—shall, upon receiving the notice; or
(b) in any other case:
(i) may, at any time after the end of that period and before the Commission receives from the company notice of the failure; and
(ii) if the company, after the end of that period, gives to the Commission notice of the failure—shall, upon receiving the notice;
appoint as auditor or auditors of the company a person or persons, a firm or firms, or a person or persons and a firm or firms, who or which consents or consent to be so appointed.
(12) Where, after the removal from office of an auditor of a company, the company fails to appoint an auditor under subsection (10), the Commission shall not appoint an auditor of the company under subsection (11):
(a) in any case—if there is another auditor of the company whom the Commission believes to be able to carry out the responsibilities of auditor alone and who agrees to continue as auditor;
(b) in the case of a proprietary company—if:
(i) all the members have, since the removal from office of the first‑mentioned auditor, agreed that it is not necessary for an auditor to be appointed; and
(ii) the company has given to the Commission notice of the failure and has, at the time of giving to the Commission notice of the failure, given to the Commission notice that all the members have so agreed; or
(c) in a case where, at the end of the period of 7 days commencing on the day of the failure, the company has not given to the Commission notice of the failure—if the Commission has, at any time after the end of that period, already appointed an auditor of the company under subsection (11).
(13) Subject to subsection (11), if a company does not appoint an auditor when required by this Law to do so, the Commission may, on the application in writing of a member of the company, appoint as auditor or auditors of the company a person or persons, a firm or firms, or a person or persons and a firm or firms, who or which consents or consent to be so appointed.
(14) A person or firm appointed as auditor of a company under subsection (5), (10), (11) or (13) holds office, subject to this Part, until the next annual general meeting of the company.
(15) Notwithstanding subsection (4), a person or firm who holds the office of auditor of a company that begins to be controlled by a corporation must, unless the person or firm sooner vacates that office, retire at the annual general meeting of the company next held after it begins to be controlled by the corporation but, subject to this Part, is eligible for re‑appointment.
(16) If a director of a company fails to take all reasonable steps to comply with, or to secure compliance with, subsection (1) or (5), he or she is guilty of an offence.
328 Nomination of auditors
(1) Subject to this section, a company is not entitled to appoint a person or a firm as auditor of the company at its annual general meeting, not being a meeting at which an auditor is removed from office, unless notice in writing of his, her or its nomination as auditor was given to the company by a member of the company:
(a) before the meeting was convened; or
(b) not less than 21 days before the meeting.
(2) If a company purports to appoint a person or firm as auditor of the company in contravention of subsection (1), the purported appointment is of no effect and the company and any officer of the company who is in default are each guilty of an offence.
(3) Where notice of nomination of a person or firm for appointment as auditor of a company is received by the company, whether for appointment at a meeting or an adjourned meeting referred to in subsection 327(10) or at an annual general meeting, the company shall:
(a) not less than 7 days before the meeting; or
(b) at the time notice of the meeting is given;
send a copy of the notice of nomination to each person or firm nominated, to each auditor of the company and to each person entitled to receive notice of general meetings of the company.
329 Removal and resignation of auditors
(1) An auditor of a company may be removed from office by resolution of the company at a general meeting of which special notice has been given, but not otherwise.
(2) Where special notice of a resolution to remove an auditor is received by a company, it shall as soon as possible send a copy of the notice to the auditor and lodge a copy of the notice.
(3) Within 7 days after receiving a copy of the notice, the auditor may make representations in writing, not exceeding a reasonable length, to the company and request that, before the meeting at which the resolution is to be considered, a copy of the representations be sent by the company at its expense to every member of the company to whom notice of the meeting is sent.
(4) Unless the Commission on the application of the company otherwise orders, the company shall send a copy of the representations in accordance with the auditor’s request, and the auditor may, without prejudice to his or her right to be heard orally or, where a firm is the auditor, to have a member of the firm heard orally on its behalf, require that the representations be read out at the meeting.
(5) An auditor of a company may, by notice in writing given to the company, resign as auditor of the company if:
(a) the auditor has, by notice in writing given to the Commission, applied for consent to the resignation and stated the reasons for the application and, at or about the same time as the notice was given to the Commission, notified the company in writing of the application to the Commission; and
(b) the consent of the Commission has been given.
(6) The Commission shall, as soon as practicable after receiving a notice from an auditor under subsection (5), notify the auditor and the company whether it consents to the resignation of the auditor.
(7) A statement made by an auditor in an application to the Commission under subsection (5) or in answer to an inquiry by the Commission relating to the reasons for the application:
(a) is not admissible in evidence in any civil or criminal proceedings against the auditor; and
(b) may not be made the ground of a prosecution, action or suit against the auditor;
and a certificate by the Commission that the statement was made in the application or in the answer to the inquiry by the Commission is conclusive evidence that the statement was so made.
(8) Subject to subsection (9), the resignation of an auditor takes effect:
(a) on the day (if any) specified for the purpose in the notice of resignation;
(b) on the day on which the Commission gives its consent to the resignation; or
(c) on the day (if any) fixed by the Commission for the purpose;
whichever last occurs.
(9) The resignation of an auditor of a proprietary company does not require the consent of the Commission under subsection (5), and takes effect:
(a) on the day (if any) specified for the purpose in the notice of resignation; or
(b) on the day on which the notice is received by the company;
whichever is the later.
(10) Where on the retirement or withdrawal from a firm of a member the firm will no longer be capable, by reason of the provisions of paragraph 324(2)(d) of acting as auditor of a company, the member so retiring or withdrawing shall (if not disqualified from acting as auditor of the company) be deemed to be the auditor of the company until he or she obtains the consent of the Commission to his or her retirement or withdrawal.
(11) Within 14 days after:
(a) the removal from office of an auditor of a company; or
(b) the receipt of a notice of resignation from an auditor of a company,
the company shall:
(c) lodge with the Commission a notice of the removal or resignation in the prescribed form; and
(d) where there is a trustee for the holders of debentures of the company—give to the trustee a copy of the notice lodged with the Commission.
330 Effect of winding up on office of auditor
An auditor of a company ceases to hold office if:
(a) a special resolution is passed for the voluntary winding up of the company; or
(b) in a case to which paragraph (a) does not apply an order is made by the Court for the winding up of the company.
331 Fees and expenses of auditors
The reasonable fees and expenses of an auditor of a company are payable by the company.
Division 2—The auditor’s report on the company’s financial statements
331A Auditor must report
(1) A company’s auditor must report on:
(a) the company’s financial statements for an accounting period; and
(b) the company’s accounting records and other records relating to those financial statements.
(1A) If the accounting period is a financial year, the report is to be a report to the company’s members.
(2) If the accounting period is a financial year at the end of which the company was not a disclosing entity, the auditor must give the report to the company’s directors soon enough for them to comply with subsection 315(2) or (3A).
(3) If the company was a disclosing entity at the end of the accounting period, the auditor must give the report to the company’s directors soon enough for them to comply with section 317A.
331AA Requirements for auditor’s report
(1) Subject to this section, sections 331B, 331C, 331D and 331E must be complied with in relation to the report.
(2) If the accounting period is a half‑year, the report may instead:
(a) state whether, as a result of a review of the financial statements, any matter has come to the auditor’s attention that causes the auditor to believe that they are not drawn up as mentioned in subsection 331B(1); and
(b) if a matter or matters have so come to the auditor’s attention that cause the auditor so to believe—include a description of the matter or matters and a statement of the auditor’s reasons for that belief.
(3) If the report complies with subsection (2), sections 331B, 331C, 331D and 331E do not apply to the report.
331B Are the financial statements properly drawn up?
(1) The report must state whether or not, in the auditor’s opinion, the financial statements are properly drawn up:
(a) so as to give a true and fair view of the matters with which Divisions 4, 4A and 4B of Part 3.6 require them to deal (or, in the case of a prescribed corporation as defined by section 408A, with which Part 3.6 requires them to deal); and
(b) in accordance with this Law; and
(c) in accordance with applicable accounting standards.
(2) If, in the auditor’s opinion, the financial statements are not drawn up in accordance with a particular applicable accounting standard, the report must give particulars of the quantified financial effect on the financial statements of failing to draw them up in accordance with that accounting standard.
(3) If the auditor is not satisfied about a matter referred to in subsection (1) or (2), the report must state why not.
331C Matters affecting consolidated accounts
(1) If the financial statements include consolidated accounts, the report must specify each entity that the company controlled during all or a part of, or at the end of, the accounting period, but of which the auditor has not acted as auditor.
(2) If:
(a) the financial statements include consolidated accounts prepared on the basis of information derived from accounts of an entity of the kind referred to in subsection (1); and
(b) the auditor has not examined those accounts and the auditor’s report (if any) on those accounts;
the report on the financial statements must specify that entity.
(3) If:
(a) the financial statements include consolidated accounts prepared on the basis of information derived from accounts of an entity that the company controlled during all or part of, or at the end of, the accounting period; and
(b) the auditor’s report on those accounts was made subject to any qualification, or included any comment made under section 331E or a corresponding previous law;
the report on the financial statements must:
(c) specify the entity; and
(d) give particulars of the qualification or comment.
331D Defects, irregularities and omissions
The report must describe:
(a) any defect or irregularity in the financial statements; and
(b) any matter that the financial statements do not set out and to which one must have regard in order to obtain a true and fair view of the matters with which the financial statements deal.
331E Are the financial statements, and the auditor’s report, based on adequate information?
(1) It is the auditor’s duty to form an opinion about each of the matters set out in subsection (2), and the report must set out particulars of any deficiency, failure or shortcoming in respect of any of those matters.
(2) These are the matters:
(a) whether the auditor has obtained all the information and explanations he or she needed;
(b) whether the company has kept proper accounting records, and other records (including registers), as required by this Law;
(c) whether the returns received from branch offices of the company are adequate;
(d) if the company is a chief entity in relation to the accounting period concerned:
(i) whether the accounts of entities that were used in preparing the consolidated accounts of the company in relation to the accounting period are in form and content appropriate and proper for such use;
(ii) whether the auditor has received satisfactory information and explanations as required by the auditor for the purposes of forming an opinion about the matter referred to in subparagraph (i);
(iii) whether the procedures and methods used in arriving at the amounts taken into the consolidated accounts were appropriate to the circumstances of preparing the consolidated accounts.
331F Members entitled to inspect auditor’s report
A member of the company is entitled to inspect the report at any reasonable time.
Division 3—Certain powers and duties of auditors
332 Auditor may obtain information and attend company meetings, and must report certain breaches to Commission
(5) An auditor of a company has a right of access at all reasonable times to the accounting records and other records, including registers, of the company, and is entitled to require from any officer of the company such information and explanations as the auditor desires for the purposes of audit.
(6) Where Division 4A of Part 3.6 requires consolidated accounts to be made out in relation to an accounting period of a company:
(a) the company’s auditor has a right of access at all reasonable times to the accounting records and other records, including registers, of each entity that the company controlled during all or part of, or at the end of, that accounting period, even if the company no longer controls the entity; and
(b) the auditor is entitled to require from any officer or auditor of such an entity (at the company’s expense), such information and explanations about the entity’s affairs as the first‑mentioned auditor needs in order to report on the consolidated accounts.
(8) An auditor of a company or an agent of the auditor authorised by the auditor in writing for the purpose is entitled to attend any general meeting of the company and to receive all notices of, and other communications relating to, any general meeting that a member is entitled to receive, and to be heard at any general meeting that the auditor attends on any part of the business of the meeting that concerns the auditor in the capacity of auditor, and is entitled so to be heard notwithstanding that the auditor retires at that meeting or a resolution to remove the auditor from office is passed at that meeting.
(9) If an auditor of a company becomes aware that the company or the directors has or have made default in complying with section 245 or the provisions of section 316 relating to the laying of financial statements before the annual general meeting of the company, the auditor shall immediately inform the Commission by notice in writing and, if financial statements have been prepared and audited or reviewed in accordance with this Law, send to the Commission a copy of the financial statements and of the auditor’s report on the financial statements.
(10) Except in a case to which subsection (9) applies, if an auditor, in the course of the performance of duties as auditor of a company, is satisfied that:
(a) there has been a contravention of this Law; and
(b) the circumstances are such that in the auditor’s opinion the matter has not been or will not be adequately dealt with by comment in the auditor’s report on the financial statements or by bringing the matter to the notice of the directors of the company or, if the company is an entity controlled by another corporation, of the directors of that corporation;
the auditor shall forthwith report the matter to the Commission by notice in writing.
332A Board to be informed of non‑compliance with accounting standard
Where an auditor of a company:
(a) is not satisfied that the company’s financial statements for an accounting period have been drawn up in accordance with a particular applicable accounting standard; or
(b) is of the opinion that the company’s financial statements for an accounting period have not been drawn up in accordance with a particular applicable accounting standard;
the auditor must, within 7 days after the auditor gives to the company’s directors the auditor’s report under Division 2 on the financial statements, send by post to the Board a copy of the report.
333 Obstruction of auditor
(1) An officer of a company must not, without lawful excuse, obstruct an auditor of the company.
(2) An officer or auditor of an entity must not, without lawful excuse, obstruct an auditor of a company that controls the entity, or has controlled the entity but no longer controls it.
(3) For the purposes of this section, a person obstructs an auditor of a company if, and only if, the person:
(a) refuses or fails to allow the auditor access in accordance with this Law to accounting records or other records, including registers, that:
(i) if the person is an officer of the company or of an entity—are records of the company or entity and are in the person’s possession; or
(ii) if the person is an auditor of an entity—are records of the entity and are in the person’s custody or control; or
(b) refuses or fails to give the auditor information or an explanation as and when required under this Law; or
(c) otherwise hinders, obstructs or delays the auditor in performing or exercising any of his or her duties and powers.
334 Special provisions relating to borrowing corporations and guarantor bodies
(1) The auditor of a borrowing corporation shall, within 7 days after furnishing the corporation or its members with any report, certificate or other document that the auditor is required by this Law or by the debentures or trust deed to give to the corporation or its members, send to every trustee for the holders of debentures of the borrowing corporation a copy of the report, certificate or document, together with a copy of each document accompanying the report, certificate or document so furnished.
(2) Where, in the performance of duties as auditor of a borrowing corporation, or a guarantor body, the auditor becomes aware of any matter that, in the auditor’s opinion, is or is likely to be prejudicial to the interests of the holders of debentures of the borrowing corporation and is relevant to the exercise and performance of the powers and duties imposed by this Law or by any trust deed upon any trustee for the holders of the debentures, the auditor shall, within 7 days after becoming aware of the matter, send a report in writing on the matter to the corporation of which the auditor is auditor and a copy of the report to the trustee.
Part 3.8—Annual return
335 Annual return
(1) A public company shall, after the end of a financial year of the company and before the end of the period of 1 month commencing immediately after:
(a) unless paragraph (b) applies—the day of the annual general meeting of the company that is held in relation to that financial year; or
(b) if no annual general meeting of the company is held in relation to that financial year within the period within which section 245 requires it to be so held—the end of the last‑mentioned period;
lodge an annual return of the company in the prescribed form, containing a list of members and such other particulars as are prescribed and accompanied by the prescribed documents.
(1A) A proprietary company must lodge with the Commission an annual return for each calendar year before 31 January in the next calendar year. The annual return must:
(a) be in the prescribed form; and
(b) contain a list of members; and
(c) contain the prescribed particulars (if any); and
(d) be lodged together with the prescribed documents.
(1B) The Commission may extend the period referred to in subsection (1A).
(2) The Commission may serve on a company a partly completed annual return of the company that is in the prescribed form and in which the Commission has set out particulars on the basis of information previously received by the Commission.
(3) Where the Commission, under subsection (2), serves on a company a partly completed annual return of the company in which the Commission has set out particulars (in this subsection referred to as the relevant particulars), the company must:
(a) delete such (if any) of the relevant particulars as are incorrect and insert in the return as required the correct particulars of the matters to which the deleted particulars related; and
(b) complete and lodge the return in accordance with this Part;
and, when the company lodges the return, the company shall be deemed, except for the purposes of subsection (2) and this subsection, to have set out in the return such (if any) of the relevant particulars as the company has not deleted.
(4) A company that is required to comply with subsection (3) in relation to a partly completed annual return is to be taken not to comply with subsection (1) or subsection (1A), as the case requires in relation to the financial year concerned unless and until it complies with subsection (3) in relation to that return.
(5) A company need not comply with subsection (3) in relation to a partly completed annual return if it instead completes and lodges, in accordance with this Part (other than that subsection) an annual return in a form in relation to which approval is in force under subsection (6) in relation to the case.
(6) The Commission may, for the purposes of subsection (5), approve in writing, for use in specified cases, forms of annual return that are not inconsistent with the form or forms prescribed for the purposes of subsection (1) or (1A).
335A Company’s address for service for the purposes of section 335
(1) A company may lodge a notice in the prescribed form specifying its address for service for the purposes of section 335.
(2) A company may lodge a notice in the prescribed form stating that the company no longer has an address for service for the purposes of section 335.
(3) A notice lodged under subsection (1) or (2) takes effect at the beginning of:
(a) if the notice specifies, as the day on which it is to take effect, a day that is more than 7 days after the day of lodgment—the day so specified; or
(b) otherwise—the eighth day after the day of lodgment.
(4) The Commission may serve a document on a company under subsection 335(2) by leaving it at, or sending it by post to, the address specified in:
(a) if only one notice lodged by the company under subsection (1) has taken effect—that notice; or
(b) if 2 or more such notices have taken effect—the later or latest such notice to take effect;
unless a notice lodged by the company under subsection (2) has taken effect since the notice referred to in paragraph (a) or (b) of this subsection took effect.
(5) The address specified in a notice under subsection (1) need not be the address of particular premises, but may be a postal address, for example, a post office box number at a post office.
(6) This section does not affect the operation of any other provision of this Law or any other law of the Commonwealth or of this jurisdiction that authorises a document to be served otherwise than as provided in subsection (4).
337 Exemption of certain companies
(1) A public company that:
(a) has more than 500 members;
(b) keeps its register of members at a place within 25 kilometres of an office of the Commission; and
(c) provides reasonable accommodation and facilities for persons to inspect and take copies of its list of members and its particulars of shares transferred;
need not comply with such of the provisions of this Part and of the regulations made for the purposes of this Part as relate to the inclusion in the annual return of a list of members.
(2) A company limited by guarantee, being a company the memorandum or articles of which prohibits or prohibit the payment of any dividend by the company to its members, need not comply with such of the provisions of this Part and of the regulations made for the purposes of this Part as relate to the inclusion in the annual return of a list of members.
(3) The Commission may, by order published in the Gazette require a company to which subsection (1) or (2) applies to comply with all or any of the provisions of this Part or of the regulations made for the purposes of this Part referred to in that subsection.
338 Information in annual return deemed to satisfy certain other lodgment requirements
Where:
(a) a company is or was required by or under a provision of this Law to lodge a document; and
(b) without having lodged the document, the company lodges in accordance with this Part an annual return of the company that sets out all the particulars that are or were required by or under that provision to be set out in the document;
then, for the purposes of this Law (other than section 1354):
(c) the company shall be deemed to lodge the document when the company so lodges the annual return; and
(d) the document shall be deemed to consist of so much of the annual return as sets out the particulars referred to in paragraph (b).
339 Division 2 company
(1) A Division 2 company need not comply with this Part in relation to a financial year of the company that ended before its registration day.
(2) Where:
(a) a body corporate is taken to be registered as a company under Division 2 of Part 2.2; and
(b) as at the start of the company’s registration day, the company had not yet lodged with the NCSC, as required by a previous law corresponding to this Part, a return relating to a financial year of the company ending before that day;
the company shall, within:
(c) if the period within which that law required the company so to lodge the return had not ended as at the start of that day—that period; or
(d) otherwise—14 days after that day;
lodge a return that relates to that financial year and is made out in accordance with the requirements of that law.
Chapter 4—Various corporations
Part 4.1—Registration of certain bodies
Division 1—Registrable Australian bodies
340 When a registrable Australian body may carry on business in this jurisdiction
A registrable Australian body must not carry on business in this jurisdiction unless:
(a) it is incorporated in this jurisdiction; or
(b) it is unincorporated but is formed, or has its head office or principal place of business, in this jurisdiction; or
(c) it is registered under this Division or a corresponding law; or
(d) it has applied to be so registered and the application has not been dealt with.
341 Application for registration
Subject to section 102A and this Part, where a registrable Australian body lodges an application for registration under this Division that is in the prescribed form and is accompanied by:
(a) a certified copy of a current certificate of its incorporation or registration in its place of origin, or a document of similar effect;
(b) a certified copy of its constitution;
(c) a list of its directors containing personal details of those directors that are equivalent to the personal details of directors referred to in subsection 242(3);
(d) unless the body is a registrable local body—in relation to each existing charge on property of the body that would be a registrable charge within the meaning of Part 3.5 if the body were a registered Australian body, the documents that subsection 263(3) requires to be lodged;
(e) notice of the address of:
(i) if it has in its place of origin a registered office for the purposes of a law (other than this Law or a corresponding law) there in force—that office; or
(ii) otherwise—its principal place of business in its place of origin; and
(f) notice of the address of its registered office under section 359;
the Commission shall:
(g) grant the application and register the body under this Division by entering the body’s name in a register kept for the purposes of this Division and of each corresponding law; and
(h) allot to the body a registration number distinct from the registration number of each body corporate (other than the body) already registered under Part 2.2, this Part or a law corresponding to Part 2.2 or to this Part.
342 Cessation of business etc
(1) Within 7 days after ceasing to carry on business, a registered Australian body shall lodge written notice that it has so ceased.
(1A) For the purposes of this section, a body carries on business if, and only if, the body carries on business in this jurisdiction or elsewhere.
(2) Where the Commission has reasonable cause to believe that a registered Australian body does not carry on business, the Commission may send to the body in the prescribed manner a letter to that effect and stating that, if no answer showing cause to the contrary is received within one month from the date of the letter, a notice will be published in the Gazette with a view to striking the body’s name off the register.
(3) Unless the Commission receives, within one month after the date of the letter, an answer to the effect that the body is still carrying on business, it may publish in the Gazette, and send to the body in the prescribed manner, a notice that, at the end of 3 months after the date of the notice, the body’s name will, unless cause to the contrary is shown, be struck off the register.
(4) At the end of the period specified in a notice sent under subsection (3), the Commission may, unless cause to the contrary has been shown, strike the body’s name off the register and shall publish in the Gazette notice of the striking off.
(5) Nothing in subsection (4) affects the power of the Court to wind up a body whose name has been struck off the register.
(6) Where a body’s name is struck off the register under subsection (4), the body ceases to be registered under this Division.
(7) If the Commission is satisfied that a body’s name was struck off the register as a result of an error on the Commission’s part, the Commission may restore the body’s name to the register, and thereupon the body’s name shall be deemed never to have been struck off and the body shall be deemed never to have ceased to be registered under this Division.
(8) A person who is aggrieved by a body’s name having been struck off the register may, within 15 years after the striking off, apply to the Court for the body’s name to be restored to the register.
(9) If, on an application under subsection (8), the Court is satisfied that:
(a) at the time of the striking off, the body was carrying on business; or
(b) it is otherwise just for the body’s name to be restored to the register;
the Court may, by order:
(c) direct the body’s name to be restored to the register; and
(d) give such directions, and make such provisions, as it thinks just for placing the body and all other persons in the same position, as nearly as practicable, as if the body’s name had never been struck off.
(10) On the lodging of an office copy of an order under subsection (9), the body’s name shall be deemed never to have been struck off.
(11) Where a body’s name is restored to the register under subsection (7) or (9), the Commission shall cause notice of that fact to be published in the Gazette.
(12) Where a body ceases to be registered under this Division, an obligation to lodge a document that this Law imposes on the body by virtue of the doing of an act or thing, or the occurrence of an event, at or before the time when the body so ceased, being an obligation not discharged at or before that time, continues to apply in relation to the body even if the period prescribed for lodging the document has not ended at or before that time.
(13) Where a registered Australian body commences to be wound up, or is dissolved, in its place of origin, the Court shall, on application by the person who is the liquidator for the body’s place of origin, or by the Commission, appoint a liquidator of the body.
(14) A liquidator of a registered Australian body who is appointed by the Court:
(a) shall, before any distribution of the body’s property is made, by advertisement in a daily newspaper circulating generally in each State or Territory where the body carried on business at any time during the 6 years before the liquidation, invite all creditors to make their claims against the body within a reasonable time before the distribution;
(b) shall not, without obtaining an order of the Court, pay out a creditor of the body to the exclusion of another creditor of the body; and
(c) shall, unless the Court otherwise orders, recover and realise the property of the body in Australia outside the body’s place of origin and shall pay the net amount so recovered and realised to the liquidator of the body for its place of origin.
(15) Where a registered Australian body has been wound up so far as its property in Australia outside its place of origin is concerned and there is no liquidator for its place of origin, the liquidator may apply to the Court for directions about the disposal of the net amount recovered under subsection (14).
Division 2—Foreign companies
343 When a foreign company may carry on business in this jurisdiction
A foreign company must not carry on business in this jurisdiction unless:
(a) it is registered under this Division or a corresponding law; or
(b) it has applied to be so registered and the application has not been dealt with.
344 Application for registration
Subject to section 102A and this Part, where a foreign company lodges an application for registration under this Division that is in the prescribed form and is accompanied by:
(a) a certified copy of a current certificate of its incorporation or registration in its place of origin, or a document of similar effect;
(b) a certified copy of its constitution;
(c) a list of its directors containing personal details of those directors that are equivalent to the personal details of directors referred to in subsection 242(3);
(d) if that list includes directors who are:
(i) resident in Australia; and
(ii) members of a local board of directors;
a memorandum that is duly executed by or on behalf of the foreign company and states the powers of those directors;
(e) in relation to each existing charge on property of the foreign company that would be a registrable charge within the meaning of Part 3.5 if the foreign company were a registered foreign company, the documents that subsection 263(3) requires to be lodged;
(f) notice of the address of:
(i) if it has in its place of origin a registered office for the purposes of a law there in force—that office; or
(ii) otherwise—its principal place of business in its place of origin; and
(g) notice of the address of its registered office under section 359;
the Commission shall:
(h) grant the application and register the foreign company under this Division by entering the foreign company’s name in a register kept for the purposes of this Division and of each corresponding law; and
(j) allot to the foreign company a registration number distinct from the registration number of each body corporate (other than the foreign company) already registered under Part 2.2, this Part or a law corresponding to Part 2.2 or to this Part.
345 Appointment of local agent
(1) A foreign company may at any time appoint a person as a local agent.
(2) The Commission shall not register a foreign company under this Division unless the foreign company has at least one local agent in relation to whom the foreign company has complied with section 346.
(3) Where:
(a) because a person ceased on a particular day to be a local agent of the foreign company, a registered foreign company has no local agent; and
(b) the foreign company carries on business, or has a place of business, in Australia;
the foreign company shall, within 21 days after that day, appoint a person as a local agent.
346 Local agent: how appointed
(1) A foreign company that lodges a memorandum of appointment, or a power of attorney, that is duly executed by or on behalf of the foreign company and states the name and address of a person who is:
(a) a natural person or a company;
(b) resident in Australia; and
(c) authorised to accept on the foreign company’s behalf service of process and notices;
shall be taken to appoint that person as a local agent.
(2) Where a memorandum of appointment, or a power of attorney, lodged under subsection (1) is executed on the foreign company’s behalf, the foreign company shall, unless it has already done so, lodge a copy, verified in writing in the prescribed form to be a true copy, of the document authorising the execution.
(3) A copy lodged under subsection (2) shall be deemed for all purposes to be the original of the document.
(4) A foreign company that appoints a local agent shall lodge a written statement that is in the prescribed form and is made by the local agent.
(5) A person whom a foreign company appoints as a local agent is a local agent of the foreign company until the person:
(a) ceases by virtue of section 347 to be such a local agent; or
(b) dies or ceases to exist.
347 Local agent: how removed
(1) Where a person is a local agent of a foreign company, the foreign company or the person may lodge a written notice stating that the person’s appointment as a local agent has terminated, or will terminate, on a specified day.
(2) Where a notice is lodged under subsection (1), the person ceases to be a local agent of the foreign company at the end of:
(a) the period of 21 days beginning on the day of lodgment; or
(b) the day specified in the notice;
whichever is the later.
348 Liability of local agent
A local agent of a registered foreign company:
(a) is answerable for the doing of all acts, matters and things that the foreign company is required by or under this Law to do; and
(b) is personally liable to a penalty imposed on the foreign company for a contravention of this Law if the court or tribunal hearing the matter is satisfied that the local agent should be so liable.
349 Balance‑sheets and other documents
(1) Subject to this section, a registered foreign company shall, at least once in every calendar year and at intervals of not more than 15 months, lodge a copy of its balance‑sheet made up to the end of its last financial year, and a copy of its profit and loss account for its last financial year, in such form and containing such particulars and including copies of such documents as the company is required to prepare by the law for the time being applicable to that company in its place of origin, together with a statement in writing in the prescribed form verifying that the copies are true copies of the documents so required.
(2) The Commission may extend the period within which subsection (1) requires a balance‑sheet, profit and loss account or other document to be lodged.
(3) The Commission may, if it is of the opinion that the balance‑sheet, the profit and loss account and the other documents referred to in subsection (1) do not sufficiently disclose the company’s financial position:
(a) require the company to lodge a balance‑sheet;
(b) require the company to lodge an audited balance‑sheet;
(c) require the company to lodge a profit and loss account; or
(d) require the company to lodge an audited profit and loss account;
within such period, in such form, containing such particulars and including such documents as the Commission by notice in writing to the company requires, but this subsection does not authorise the Commission to require a balance‑sheet or a profit and loss account to contain any particulars or include any documents that would not be required to be furnished if the company were a public company within the meaning of this Law.
(4) The registered foreign company shall comply with the requirements set out in the notice.
(5) Where a registered foreign company is not required by the law of the place of its incorporation or formation to prepare a balance‑sheet, the company shall prepare and lodge a balance‑sheet, or, if the Commission so requires, an audited balance‑sheet, within such period, in such form and containing such particulars and including such documents as the company would have been required to prepare if the company were a public company incorporated under this Law.
(6) Where a registered foreign company is not required by the law of its place of origin to prepare a profit and loss account, the company shall prepare and lodge a profit and loss account or, if the Commission so requires, an audited profit and loss account, within such period, in such form, containing such particulars and including such documents as the company would have been required to prepare if the company were a public company incorporated under this Law.
(7) The Commission may, by Gazette notice, declare that this section does not apply to specified foreign companies.
(8) Subsections (1) to (6), inclusive, do not apply in relation to a foreign company in relation to which a notice is in force under subsection (7) or a corresponding law.
(9) A registered foreign company in relation to which a notice is in force under subsection (7) must, at least once in every calendar year, lodge with the Commission a return in the prescribed form made up to the date of its annual general meeting.
(10) The return must be lodged within 1 month after the date to which it is made up, or within such further period as the Commission, in special circumstances, allows.
350 Cessation of business, etc
(1) Within 7 days after ceasing to carry on business in Australia, a registered foreign company shall lodge written notice that it has so ceased.
(2) Where the Commission receives notice from a local agent of a registered foreign company that the foreign company has been dissolved, the Commission shall remove the foreign company’s name from the register.
(3) Where the Commission has reasonable cause to believe that a registered foreign company does not carry on business in Australia, the Commission may send to the foreign company in the prescribed manner a letter to that effect and stating that, if no answer showing cause to the contrary is received within one month from the date of the letter, a notice will be published in the Gazette with a view to striking the foreign company’s name off the register.
(4) Unless the Commission receives, within one month after the date of the letter, an answer to the effect that the foreign company is still carrying on business in Australia, it may publish in the Gazette, and send to the foreign company in the prescribed manner, a notice that, at the end of 3 months after the date of the notice, the foreign company’s name will, unless cause to the contrary is shown, be struck off the register.
(5) At the end of the period specified in a notice sent under subsection (4), the Commission may, unless cause to the contrary has been shown, strike the foreign company’s name off the register and shall publish in the Gazette notice of the striking off.
(6) Nothing in subsection (5) affects the power of the Court to wind up a foreign company whose name has been struck off the register.
(7) Where a foreign company’s name is struck off the register under subsection (5), the foreign company ceases to be registered under this Division.
(8) If the Commission is satisfied that a foreign company’s name was struck off the register as a result of an error on the Commission’s part, the Commission may restore the foreign company’s name to the register, and thereupon the foreign company’s name shall be deemed never to have been struck off and the foreign company shall be deemed never to have ceased to be registered under this Division.
(9) A person who is aggrieved by a foreign company’s name having been struck off the register may, within 15 years after the striking off, apply to the Court for the foreign company’s name to be restored to the register.
(10) If, on an application under subsection (9), the Court is satisfied that:
(a) at the time of the striking off, the foreign company was carrying on business in Australia; or
(b) it is otherwise just for the foreign company’s name to be restored to the register;
the Court may, by order:
(c) direct the foreign company’s name to be restored to the register; and
(d) give such directions, and make such provision, as it thinks just for placing the foreign company and all other persons in the same position, as nearly as practicable, as if the foreign company’s name had never been struck off.
(11) On the lodging of an office copy of an order under subsection (10), the foreign company’s name shall be deemed never to have been struck off.
(12) Where a foreign company’s name is restored to the register under subsection (8) or (10), the Commission shall cause notice of that fact to be published in the Gazette.
(13) Where a foreign company ceases to be registered under this Division, an obligation to lodge a document that this Law imposes on the foreign company by virtue of the doing of an act or thing, or the occurrence of an event, at or before the time when the foreign company so ceased, being an obligation not discharged at or before that time, continues to apply in relation to the foreign company even if the period prescribed for lodging the document has not ended at or before that time.
(14) Where a registered foreign company commences to be wound up, or is dissolved, in its place of origin:
(a) each person who, on the day when the winding up proceedings began, was a local agent of the foreign company shall, within the period of 1 month after that day or within that period as extended by the Commission in special circumstances, lodge or cause to be lodged notice of that fact and, when a liquidator is appointed, notice of the appointment; and
(b) the Court shall, on application by the person who is the liquidator for the foreign company’s place of origin, or by the Commission, appoint a liquidator of the foreign company
(15) A liquidator of a registered foreign company who is appointed by the Court:
(a) shall, before any distribution of the foreign company’s property is made, by advertisement in a daily newspaper circulating generally in each State or Territory where the foreign company carried on business at any time during the 6 years before the liquidation, invite all creditors to make their claims against the foreign company within a reasonable time before the distribution;
(b) shall not, without obtaining an order of the Court, pay out a creditor of the foreign company to the exclusion of another creditor of the foreign company; and
(c) shall, unless the Court otherwise orders, recover and realise the property of the foreign company in Australia and shall pay the net amount so recovered and realised to the liquidator of the foreign company for its place of origin.
(16) Where a registered foreign company has been wound up so far as its property in Australia is concerned and there is no liquidator for its place of origin, the liquidator may apply to the Court for directions about the disposal of the net amount recovered under subsection (15).
351 Register of members of foreign company
(1) A registered foreign company that has a share capital may cause a branch register of members to be kept in Australia.
(2) Where a member of a registered foreign company is resident in Australia and requests the foreign company in writing to register in a branch register in Australia shares held by the member, then:
(a) if the foreign company already keeps an Australian register—the foreign company shall register in that register the shares held by the member; or
(b) otherwise—the foreign company shall, within 1 month after receiving the request:
(i) keep at its registered office or at some other place in Australia a branch register of members; and
(ii) register in that register the shares held by the member.
(3) Subsection (2) does not apply in relation to a foreign company whose constitution prohibits any invitation to the public to subscribe for, and any offer to the public to accept subscriptions for, shares in the foreign company.
(4) Subject to this section, a registered foreign company may discontinue its Australian register and shall, if it does so, transfer all entries in that register to a register of members kept outside Australia.
(5) Where shares held by a member of a registered foreign company who is resident in Australia are registered in the foreign company’s Australian register, the foreign company shall not discontinue that register without that member’s written consent.
353 Register kept under section 351
(1) This section has effect where a registered foreign company keeps a register under section 351.
(2) The foreign company shall keep the register in the same manner as this Act requires a company to keep its register of members.
(3) Subject to subsection (2), the foreign company shall register a transaction in the register in the same way, and at the same charge, as it would have registered the transaction in the register of members that the foreign company keeps in its place of origin.
(4) A transfer of shares in the foreign company that is lodged at the foreign company’s registered office, or at the place where the register is kept, is binding on the foreign company.
(5) The Court has the same powers in relation to correction of the register as it has in relation to correction of a company’s register of members.
(6) The register shall be deemed to be part of the foreign company’s register of members.
(7) At the written request of a member who holds shares registered in the register, the foreign company shall remove the shares from the register and register them in such other register as is specified in the request.
(8) The register is prima facie evidence of matters that this Law requires or authorises to be entered in the register.
354 Notifying Commission about register kept under section 351
Within 14 days after:
(a) beginning to keep a register under section 351;
(b) changing the place where a register is so kept; or
(c) discontinuing a register under section 351;
a registered foreign company shall lodge a written notice of that fact specifying, if paragraph (a) or (b) applies, the address or new address, as the case may be, where the register is kept.
355 Effect of right to acquire shares compulsorily
Where:
(a) a law of the place of origin of a foreign company that corresponds to section 414 or 701 entitles a person to give notice to another person that the first‑mentioned person wishes to acquire shares in the foreign company that the other person holds; and
(b) some or all of those shares are registered in a register kept under section 351;
sections 351, 353 and 354 cease to apply in relation to the foreign company until the first‑mentioned person acquires, or ceases to be entitled to acquire, the shares so registered.
356 Index of members and inspection of registers
Subsection 216B(2) and sections 216F, 216G and 216J apply in relation to a register kept under section 351.
357 Certificate as to shareholding
A certificate under the seal of a foreign company specifying shares held by a member of that company and registered in a register kept under section 351 is prima facie evidence of the title of the member to the shares and of the fact that the shares are registered in the register.
Division 3—Bodies registered under this Part
358 Names
(2) A registered body must not use a name in this jurisdiction unless:
(a) the body is registered under that name under Division 1 or 2 or a corresponding law; or
(b) the name is registered in respect of the body under the law of this jurisdiction relating to business names.
(3) Subject to this section, where a registered body lodges in accordance with section 361 notice of particulars of a change in the body’s name, the Commission shall alter the register it keeps for the purposes of Division 1 or 2, as the case requires, by substituting the body’s new name for the name by which the body was previously registered.
359 Registered office
(1) A registered body shall have a registered office in Australia to which all communications and notices may be addressed and that shall be open:
(a) if the body has:
(i) lodged a notice under subsection (2); or
(ii) lodged a notice under subsection (2) and a notice or notices under subsection (4);
for such hours (being not fewer than 3) between 9 a.m. and 5 p.m. on each business day as are specified in that notice, or in the later or last of those notices, as the case may be; or
(b) otherwise—for not fewer than 5 hours between 10 a.m. and 4 p.m. on each business day;
and at which a representative of the body is present at all times when the office is open.
(2A) A registered body must ensure that its registered office under this section and its registered offices under the laws corresponding to this section are all at the same place.
(2) A registered body may lodge written notice of the hours (being not fewer than 3) between 9 a.m. and 5 p.m. on each business day during which the body’s registered office is open.
(3) Within 7 days after a change in the situation of its registered office, a registered body shall lodge a written notice of the change and of the new address of that office.
(4A) Where:
(a) a registered body has a registered office under a law corresponding to this section; and
(b) the situation of that office changes;
the situation of the body’s registered office under this section is taken to change to the new situation of the office referred to in paragraph (a).
(4) A registered body that has lodged a notice under subsection (2) shall, within 7 days after a change in the hours during which its registered office is open, lodge a notice, in the prescribed form, of the change.
360 Certificate of registration
(1) On registering a body corporate under Division 1 or 2 or registering under subsection 358(3) a change in a registered body’s name, the Commission shall issue to the body a certificate, under the Commission’s common seal and in the prescribed form, of the body’s registration under that Division.
(2) A certificate under subsection (1) or a corresponding law is prima facie evidence of the matters stated in it.
361 Notice of certain changes
(1) A registered body shall, within 1 month after a change in:
(a) its name;
(b) its constitution or any other document lodged in relation to the body;
(c) its directors;
(d) if the body is a foreign company;
(i) the powers of any directors who are resident in Australia and members of an Australian board of directors of the foreign company;
(ii) a local agent or local agents; or
(iii) the name or address of a local agent; or
(e) the situation of:
(i) if it has in its place of origin a registered office for the purposes of a law (other than this Law or a corresponding law) there in force—that office; or
(ii) otherwise—its principal place of business in its place of origin;
lodge a written notice of particulars of the change, together with such documents (if any) as the regulations require.
(2) The Commission may in special circumstances extend the period within which subsection (1) requires a notice or document to be lodged.
362 Publication of body’s name and registration number
(1A) A reference in this section to issuing, signing or publishing is a reference to issuing, signing or publishing, as the case may be, in this jurisdiction.
(1) This section applies to a registrable body other than a registrable local body.
(2) The body shall set out in legible characters on every public document of the body that is issued, signed or published:
(a) in any case—the body’s name;
(b) unless the body is an Australian bank—the name of the body’s place of origin; and
(c) if:
(i) the liability of the body’s members is limited;
(ii) the last word of the body’s name is neither the word “Limited” nor the abbreviation “Ltd.”; and
(iii) the body is not an Australian bank;
notice of the fact that the liability of the body’s members is limited.
(3) The body shall set out its name, in legible characters, on every eligible negotiable instrument of the body that is signed or issued.
(3A) On every public document of the body that, when it is signed, issued or published:
(a) is intended to be lodged; or
(b) is required by or under this Law or the ASC Law to be lodged;
the body must set out in legible characters, after the body’s name where it first appears, the expression “Australian Registered Body Number” and the body’s registration number.
(4) On:
(a) every public document of the body that is issued, signed or published; and
(b) every eligible negotiable instrument of the body that is signed or issued;
after 31 December 1991, the body must set out in legible characters, after the body’s name where it first appears, the expression “Australian Registered Body Number” and the body’s registration number.
(4A) Subsection (4) has effect subject to Division 2 of Part 4.2.
(5) The body may comply with subsection (3A) or (4) by setting out:
(a) the abbreviation “Aust.” instead of the word “Australian”;
(b) the abbreviation “Regd.” instead of the word “Registered”;
(c) the abbreviation “No.” instead of the word “Number”; or
(d) the abbreviation “A.R.B.N.” instead of the expression “Australian Registered Body Number”.
(6) An officer of the body, or any other person, shall not, on the body’s behalf, issue, sign or publish a public document of the body that contravenes subsection (2), (3A) or (4).
(7) An officer of the body, or any other person, shall not sign or issue, or authorise to be signed or issued, on the body’s behalf, an eligible negotiable instrument of the body that contravenes subsection (3).
(8) A person who contravenes subsection (7) is liable to the holder of the eligible negotiable instrument for the amount due on it unless that amount is paid by the body.
(9) Unless the body is an Australian bank, it shall paint or affix and keep painted or affixed, in a conspicuous position and in letters easily legible, on the outside of every office and place (including its registered office) that is in this jurisdiction, at which its business is carried on and that is open and accessible to the public:
(a) its name and the name of its place of origin;
(b) if the liability of its members is limited and the last word of its name is neither the word “Limited” nor the abbreviation “Ltd.”—notice of the fact that the liability of its members is limited; and
(c) in the case of its registered office—the expression “Registered Office”.
(10) If the body is an Australian bank, it shall paint or affix its name, and shall keep its name painted or affixed, in a conspicuous position and in letters easily legible, on the outside of every office or place (including its registered office) that is in this jurisdiction, at which its business is carried on and that is open and accessible to the public.
363 Service of documents on registered body
(1) A document may be served on a registered body:
(a) by leaving it at, or by sending it by post to, the registered office of the body; or
(b) in the case of a registered foreign company—by leaving it at, or by sending it by post to, the address of a local agent of the foreign company, being:
(i) in a case to which subparagraph (ii) does not apply—an address notice of which has been lodged under subsection 346(1); or
(ii) if a notice or notices of a change or alteration in that address has or have been lodged under subsection 361(1)—the address shown in that last‑mentioned notice or the later or latest of those last‑mentioned notices.
(2) For the purposes of subsection (1), the situation of the registered office of a registered body:
(a) in a case to which neither paragraph (b) nor paragraph (c) applies—shall be deemed to be the place notice of the address of which has been lodged under paragraph 341(e) or 344(g);
(b) if only one notice of a change in the situation of the registered office has been lodged with the Commission under subsection 359(3)—shall, on and from:
(i) the day that is 7 days after the day on which the notice was lodged; or
(ii) the day that is specified in the notice as the day from which the change is to take effect;
whichever is later, be deemed to be the place the address of which is specified in the notice; or
(c) if 2 or more notices of a change in the situation of the registered office have been lodged under subsection 359(3)—shall, on and from:
(i) the day that is 7 days after the day on which the later or latest of those notices was lodged; or
(ii) the day that is specified in the later or latest of those notices as the day from which the change is to take effect;
whichever is later, be deemed to be the place the address of which is specified in the relevant notice;
and shall be so deemed to be that place irrespective of whether the address of a different place is shown as the address of the registered office of the registered body in a return or other document (not being a notice under subsection 359(3)) lodged after the notice referred to in paragraph (a) or (b), or the later or latest of the notices referred to in paragraph (c), was lodged.
(3) Without limiting the operation of subsection (1), if 2 or more directors of a registered body reside in Australia or an external Territory, a document may be served on the body by delivering a copy of the document personally to each of 2 of those directors.
(3A) Without limiting the operation of subsection (1), a document may be served on a registered body that is registered as a proprietary company and has only one director by delivering a copy personally to that director.
(4) Where a liquidator of a registered body has been appointed, a document may be served on the body by leaving it at, or by sending it by post to, the last address of the office of the liquidator notice of which has been lodged.
(5) Nothing in this section affects the power of the Court to authorise a document to be served on a registered body in a manner not provided for by this section.
(6) Subject to subsection 8(4), subsection 8(3) applies in relation to a reference in this section.
364 Power to hold land
A registered body has power to hold land in this jurisdiction.
Division 4—Transitional
365A Bodies registered under previous foreign companies law of this jurisdiction
This Division (except section 365F) applies to each registrable body that was, immediately before the commencement of this Part (in this Division called the commencement), registered under a previous law of this jurisdiction relating to foreign companies within the meaning of that law.
365B Deemed registration under Division 1 or 2
(1) If the body is a registrable Australian body, the Commission is taken to have registered it under Division 1 at the commencement.
(2) If the body is a foreign company, the Commission is taken to have registered it under Division 2 at the commencement.
(3) The Commission need not issue a certificate under subsection 360(1) merely because of the effect of this section.
365C Registered office under previous law
Subject to this Part, the body’s registered office under section 359 is taken to be at the place that, immediately before the commencement, was taken by a previous law of this jurisdiction corresponding to subsection 363(2) to be the situation of the body’s registered office for the purposes of a previous law of this jurisdiction corresponding to subsection 363(1).
365D Transition to single registered office in Australia
(1) This section applies if the body has under a law or laws corresponding to section 359 a registered office that is, or registered offices that are, because of a law or laws corresponding to section 365C, at a place or places different from the place of the body’s registered office under section 359.
(2) The body must ensure that, within 6 months after the commencement:
(a) all of the offices referred to in subsection (1) are at the same place; and
(b) the body has, in relation to a change in the situation of any of those offices that happens, or is taken by subsection 359(4A) or a corresponding law to happen, and is necessary for the body to comply with this section, complied with subsection 359(3) or a corresponding law, as the case requires.
(3) If the body contravenes subsection (2), the Commission may give to the body a notice stating that, as from the end of 6 days after the day on which the notice is given, the body’s registered office under section 359 of the Corporations Law will be at a specified place (being a place that is taken because of subsection (6) of this section to be a registered office of the body under section 359 of this Law).
(4) If the Commission gives a notice under subsection (3), then:
(a) unless the body’s registered office under section 359 is already at the specified place, that office changes to that place at the end of 6 days after the day on which the notice is given; and
(b) the Commission must keep a copy of the notice.
(5) A copy of a notice that is kept under subsection (4) is taken to be a notice lodged by the body under subsection 359(3) on the day when the first‑mentioned notice was served under subsection (3).
(6) Until the body complies with subsection (2) or the end of 6 days after the day on which the Commission gives a notice under subsection (3), each place that, apart from this subsection, would be taken by subsection 363(2) or a corresponding law to be the situation of the body’s registered office for the purposes of subsection 363(1) or a corresponding law is taken for all purposes (including subsection 363(1)) to be the situation of a registered office of the body under section 359.
365E Application of sections 359 and 363
Subsections 359(1) and (4) and 363(1) and (2) apply in relation to the body as if a reference in them to a provision of this Law included a reference to a previous law of this jurisdiction corresponding to that provision of this Law.
365F Application of section 363 in relation to certain bodies
(1) This section applies where a registrable body is registered under a law corresponding to Division 1 or 2 but is not registered under that Division.
(2) Subsection 363(2) does not apply in relation to the body.
(3) Instead, each place that is taken by a law corresponding to subsection 363(2) to be the situation of the body’s registered office for the purposes of a law corresponding to subsection 363(1) is taken to be the situation of a registered office of the body for the purposes of subsection 363(1).
Part 4.2—Names and registration numbers
Division 1—Names
366 Interpretation
In this Part:
body corporate includes an intended body corporate;
company includes an intended company;
registrable body includes an intended registrable body.
367 Available names
(1) Subject to this section, a name is available to a body corporate unless the name:
(a) is reserved or registered in respect of another body corporate; or
(aa) is included on the national business names register in respect of a person other than the body corporate; or
(b) is a name, or a name of a kind, that is declared by the regulations to be unacceptable for registration under this Part.
(2) In comparing one name with another for the purposes of subsection (1), disregard:
(a) any use of the definite article as the first word in one or both of those names; or
(b) the use in one or both of those names of any word, abbreviation or symbol as required by section 368; or
(ba) the use in one or both of those names of:
(i) an abbreviation or symbol referred to in section 371 instead of the equivalent word referred to in the section concerned; or
(ii) a word referred to in section 371 instead of the equivalent abbreviation or symbol referred to in the section concerned; or
(c) the type, size and case of letters, the size of any numbers or other characters, and any accents, spaces between letters, numbers or characters, and punctuation marks, used in one or both of those names.
(3) A name that would not otherwise be available to a body corporate is available to the body corporate if it is reserved or registered in respect of the body corporate.
(4) A name that would not otherwise be available to a body corporate is available to the body corporate if the Minister has consented in writing to the name being available to the body corporate.
(4A) Subsection (4) does not apply to a name that is not available to a body corporate because it is included on the national business names register in respect of another body corporate.
368 Names of particular classes of companies
(1) A limited company shall have the word “Limited” or the abbreviation “Ltd.” as part of and at the end of its name.
(2) A no liability company shall have the words “No Liability” or the abbreviation “N.L.” as part of and at the end of its name.
(3) A proprietary company shall have the word “Proprietary” or the abbreviation “Pty.” as part of its name, inserted immediately before the word “Limited” or before the abbreviation “Ltd.” or, in the case of an unlimited company, at the end of its name.
369 Use of words “Limited” and “No Liability”
A person shall not carry on business under a name or title of which “Limited” or “No Liability”, or any abbreviation of either of those expressions, is the final expression or abbreviation, unless the person is duly incorporated with limited liability or no liability, as the case may be, under an Australian law or the law of a country or place outside Australia.
370 Use of word “Proprietary”
(1) A company shall not use the word “Proprietary”, or any abbreviation of that word, as part of its name unless the company fulfils the requirements that this Law requires proprietary companies to fulfil.
(2) Subsection (1) does not apply in relation to a company that was originally incorporated before 24 December 1896 under the company law of Victoria.
371 Abbreviations of words included in a company’s name
A description of a company is not inadequate or incorrect merely because of one or more of the following:
(a) the use of the abbreviation “Co.” or “Coy.” instead of the word “Company” in the company’s name;
(b) the use of the abbreviation “Pty.” instead of the word “Proprietary” in the company’s name;
(c) the use of the abbreviation “Ltd.” instead of the word “Limited” in the company’s name;
(d) the use of the abbreviation “Aust.” instead of the word “Australian” in the company’s name;
(e) the use of the abbreviation “No.” instead of the word “Number” in the company’s name;
(f) the use of the symbol “&” instead of the word “and” in the company’s name;
(g) the use of the abbreviation “N.L.” instead of the words “No Liability” in the company’s name;
(h) the use of the abbreviation “A.C.N.” instead of the words “Australian Company Number” in the company’s name;
(j) the use of any of those words instead of the corresponding abbreviation or symbol in the company’s name.
372 Company with registration number as name
(1) This section applies where the memorandum, or the application for the registration, as the case requires, of a company that it is proposed to incorporate under Division 1 of Part 2.2:
(a) has been lodged; and
(b) states that the company’s name on registration is to be its registration number.
(3) If the Commission registers the company under section 120, it shall so register it by a name consisting of the following:
(a) first, the expression “Australian Company Number”;
(b) next, the company’s registration number;
(c) next, the expression or expressions (if any) that section 368 requires to be included in the company’s name;
and shall register the name under this Part in respect of the company.
372A Certain names taken to be registered at commencement of Law
(1) Subject to this Part, where a body corporate is taken to be registered as a company under Division 2 of Part 2.2, the body corporate’s name is taken to be registered in respect of the body corporate.
(2) Subject to this Part, where a registrable Australian body is taken to be registered under Division 1 of Part 4.1, the body’s name is taken to be registered in respect of the body.
(3) Subject to this Part, where a foreign company is taken to be registered under Division 2 of Part 4.1, the foreign company’s name is taken to be registered in respect of the foreign company.
373 Name of intended Division 1 company
(1) A person may lodge an application to reserve a specified name in respect of an intended Division 1 company.
(2) If the name is available to the company, the Commission shall reserve it in respect of the company for 2 months after the date of lodgment of the application.
(3) Where:
(a) a name is reserved under this section in respect of a company; and
(b) the Commission registers the company by that name under Division 1 of Part 2.2;
the Commission shall register the name in respect of the company and, where the Commission does so, the name is no longer reserved in respect of the company.
(4) Where:
(a) a name is reserved under this section in respect of a company; and
(b) the person who applied for the reservation informs the Commission in writing that the person no longer wishes the name to be reserved in respect of the company;
the Commission shall cancel the reservation.
(5) The reservation of a name under this section in respect of a company does not of itself entitle the company to be registered by that name under Division 1 of Part 2.2.
374 Name by which body corporate proposes to be registered as a company
(1) A body corporate (other than a body corporate that is registered under Division 2 of Part 4.1) may lodge an application to reserve a specified name as the name by which it is proposed that the body be registered as a company under Division 3 of Part 2.2.
(2) If the name is available to the body, the Commission shall reserve it in respect of the body for 2 months after the date of lodgment of the application.
(4) Subject to this Part, where, at the commencement of this Law:
(a) a registrable Australian body (not being a body to which subsection 372A(2) applies) was registered or incorporated by a particular name under the law of its place of origin; or
(b) a foreign company (not being a foreign company to which subsection 372A(3) applies) was registered or incorporated by a particular name under the law of its place of origin;
then, so long as the registrable Australian body or foreign company continues to be registered or incorporated by that name under that law, the name is taken, except for the purposes of subsection 367(1), to be reserved under this section in respect of the registrable Australian body or foreign company, as the case may be.
(5) Where:
(a) a name is reserved under this section in respect of a body corporate; and
(b) the Commission registers the body as a company by that name under Division 3 of Part 2.2;
the Commission shall register the name in respect of the company and, where the Commission does so, the name is no longer reserved in respect of the body.
(6) Where:
(a) a name is reserved under this section in respect of a body corporate; and
(b) the body informs the Commission in writing that it no longer wishes the name to be reserved in respect of it;
the Commission shall cancel the reservation.
(7) The reservation of a name under this section in respect of a body corporate does not of itself entitle the body to be registered as a company by that name.
375 Proposed new name of company
(1) A company may lodge an application to reserve a specified name as the name to which the company proposes to change its name.
(2) If the name is available to the company, the Commission shall reserve it in respect of the company for 2 months after the date of lodgment of the application.
(3) Where:
(a) a name is reserved under this section in respect of a company; and
(b) the company changes its name to that name under section 382;
the Commission shall register the new name in respect of the company and, where the Commission does so:
(c) the new name is no longer reserved in respect of the company; and
(d) the Commission shall cancel the registration, in respect of the company, of the name by which the company was registered before it changed its name.
(4) Where:
(a) a name is reserved under this section in respect of a company; and
(b) the company informs the Commission in writing that it no longer wishes the name to be reserved in respect of it;
the Commission shall cancel the reservation.
(5) The reservation of a name under this section in respect of a company does not of itself entitle the company to change its name to that name.
376 Name by which registrable body proposes to be registered
(1) A person may lodge an application to reserve a specified name in respect of an intended registrable body that it is proposed will be registered under Part 4.1.
(2) A registrable body may lodge an application to reserve a specified name as the name by which the body proposes to be registered under Part 4.1.
(3) If the name is available to the registrable body, the Commission shall reserve it in respect of the body for 2 months after the date of lodgment of the application.
(6) Where:
(a) a name is reserved under this section in respect of a registrable body; and
(b) the Commission registers the body by that name under Part 4.1;
the Commission shall register the name in respect of the body and, where the Commission does so, the name is no longer reserved in respect of the body.
(7) Where:
(a) a name is reserved under this section in respect of a registrable body; and
(b) the person who applied for the reservation of the name informs the Commission in writing that the person no longer wishes the name to be reserved in respect of the body;
the Commission shall cancel the reservation.
(8) The reservation of a name under this section in respect of a registrable body does not of itself entitle the body to be registered by that name under Part 4.1.
377 New name or proposed new name of registered body
(1) A registered body may lodge an application to reserve a specified name as the name to which the body has changed, or proposes to change, its name.
(2) If the name is available to the body, the Commission shall reserve it in respect of the body for 2 months after the date of lodgment of the application.
(3) Where:
(a) a name is reserved under this section in respect of a registered body; and
(b) whether before or after the name is reserved, the body changed or changes its name to that reserved name;
the Commission shall register the new name in respect of the body and, where the Commission does so:
(c) the new name is no longer reserved in respect of the body; and
(d) the Commission shall cancel the registration, in respect of the body, of the name by which the body was registered before it changed its name.
(4) Where:
(a) a name is reserved under this section in respect of a registered body; and
(b) the body informs the Commission in writing that it no longer wishes the name to be reserved in respect of it;
the Commission shall cancel the reservation.
378 Applications under sections 373 to 377
An application under any of sections 373 to 377, inclusive, shall be in the prescribed form and accompanied by the prescribed documents.
379 Extension of reservation
Where at any time during a period for which a name is reserved (whether or not pursuant to the exercise on any previous occasion or occasions of a power under this section) an application is made to the Commission for an extension of that period, the Commission may extend that period for a further period of 2 months.
380 Cancellation of registration where body corporate dissolved or de‑registered
(1) Where a name is registered in respect of a body corporate and the body is dissolved, the Commission shall cancel the registration.
(2) Where a name is registered in respect of a body corporate and the body ceases to be registered under Part 2.2 or 4.1, the Commission shall cancel the registration of the name in respect of that body.
381 Registration remains in force until cancelled
The registration of a name under a provision of this Part remains in force under that provision until the Commission cancels it.
382 Change of name
(1) A company may, by special resolution and with the approval of the Commission, change its name.
(2) The Commission must not approve a change of name of a company under subsection (1) unless the proposed new name is available to the company within the meaning of section 367.
(3) If the name of a company is (whether through inadvertence or otherwise and whether originally or by change of name) a name that is not available to the company:
(a) the company may, by special resolution, change its name to a name that is available to the company; and
(b) if the Commission so directs, the company shall so change its name within 6 weeks after the date of the direction or within such longer period as the Commission allows, unless the Minister, by writing, annuls the direction.
(4) A change of name by a company under this section does not:
(a) create a new legal entity;
(b) prejudice or affect the identity of the body corporate constituted by the company or its continuity as a body corporate;
(c) affect the property, or the rights or obligations, of the company; or
(d) render defective any legal proceedings by or against the company;
and any legal proceedings that could have been continued or begun by or against the company by its former name may be continued or begun by or against it by its new name.
383 Omission of “Limited” in names of charitable and other companies
(1) Where the Commission is satisfied that a proposed limited company:
(a) is being formed for the purpose of providing recreation or amusement or promoting commerce, industry, art, science, religion, charity, patriotism, pension or superannuation schemes or any other object useful to the community;
(b) will apply its profits (if any) or other income in promoting its objects; and
(c) will prohibit the payment of any dividend to its members;
the Commission may (after requiring, if it thinks fit, the proposal to be advertised in such manner as it directs either generally or in a particular case), by licence, authorise the proposed company to be incorporated as a company with limited liability without the addition of the word “Limited” to its name.
(2) Where the Commission is satisfied:
(a) that the objects of a limited company are restricted to those specified in paragraph (1)(a) and to objects incidental or conducive to those so specified; and
(b) that by its memorandum or articles the company is required to apply its profits (if any) or other income in promoting its objects and is prohibited from paying any dividend to its members;
the Commission may, by licence, authorise the company to change its name to a name approved by the Commission that does not contain the word “Limited”.
(3) A licence may be issued on such conditions as the Commission thinks fit.
(4) Any conditions on which a licence is so issued are binding on the company and shall, if the Commission so directs, be inserted in the memorandum or articles, which may, by special resolution, be altered to give effect to any such direction.
(5) A company in respect of which a licence is in force is exempt from complying with the provisions of this Law relating to the use of the word “Limited” as part of its name.
(6) Subject to subsection (7), a licence may be revoked by the Commission and, where a licence is so revoked:
(a) the name of the company shall be deemed to be altered by the addition of the word “Limited” at the end of the name; and
(b) the company no longer enjoys the exemptions and privileges granted, because of the licence, by or under this Law.
(7) Before a licence is revoked, the Commission shall give to the company notice in writing of the Commission’s intention to revoke the licence and shall give the company an opportunity to appear at a hearing before the Commission and make submissions and give evidence in relation to the matter.
(8) Where a licence is revoked, a provision of the memorandum that was inserted in compliance with a condition on which the licence was issued may be altered in the same manner as a provision of that memorandum with respect to the objects of the company may be altered, and section 172 applies to a proposal for such an alteration accordingly.
(9) Where a licence is in force in respect of a company, an alteration of the memorandum or articles, other than an alteration consisting solely of a change of the name of the company, does not have any effect unless:
(a) a statement setting out the text of the alteration or proposed alteration has been lodged and the alteration or proposed alteration has been approved by the Commission; and
(b) the alteration is made in accordance with the articles and the provisions of this Law.
(10) Where an alteration or proposed alteration of the memorandum or articles of a company, other than an alteration consisting solely of a change of the name of the company, is approved as mentioned in paragraph (9)(a) and the alteration is made as mentioned in paragraph (9)(b), the alteration has effect notwithstanding a failure to obtain any consent or approval required to be obtained by virtue of a provision contained in the licence or a provision inserted in the memorandum or articles for the purposes of subsection (3) or a corresponding previous law.
(11) Where:
(a) a body corporate is taken to be registered as a company under Division 2 of Part 2.2 of the Corporations Law of this jurisdiction; and
(b) a licence under a previous law of this jurisdiction corresponding to this section was in force in respect of that body corporate immediately before its registration day;
the licence continues in force, subject to this section, as if it had been issued by the Commission under this section.
383A Names reserved within 2 months before commencement
Where, within 2 months before the commencement of this Part, a name was reserved under a corresponding previous law in respect of a body corporate, the name is taken to be reserved under this Part in respect of that body corporate for so much of the period of 2 months after the name was reserved as occurs after that commencement.
Division 2—Exemptions from requirements to publish registration numbers
383B Machine‑produced receipts
Neither of paragraphs 219(3)(a) and 362(4)(a) applies in relation to a receipt that:
(a) is produced by an electronic, mechanical or other device; and
(b) sets out information reproduced from, or worked out on the basis of, information entered, recorded or stored in the device.
383C Transport documents
(1) On application by a body, the Commission may by writing exempt the body, or a specified class of bodies that includes the body, from complying (either generally or as otherwise specified) with subsection 219(3) or 362(4), as the case requires, in relation to specified documents.
(2) However, the Commission may do so only if it is satisfied that the exemption is necessary or desirable in the interests of promoting or maintaining consistency in international practices relating to the form, content or use of transport documents.
(3) An application under subsection (1) must:
(a) specify the documents to which the exemption applied for would relate; and
(b) if the application is for an exemption to be given to a class of bodies—specify the class; and
(c) set out why, in the applicant’s opinion, the exemption should be given to the body, or to that class, as the case requires.
(4) Subsection (1) has effect subject to section 102A.
(5) The Commission may require an applicant under subsection (1) to give the Commission such further information in relation to the application as the Commission thinks necessary.
(6) An exemption may be given subject to specified conditions that, in the Commission’s opinion, are necessary or desirable to ensure that the registration number of a body to which the exemption relates can easily be found out by persons to whom the body issues or publishes documents specified in the exemption.
(7) For example (but without limitation), an exemption might be subject to a condition that a body to which the exemption relates must display its name and registration number in a particular way at each place where documents specified in the exemption are issued or published.
(8) A body to which an exemption relates must not contravene a condition to which the exemption is subject.
(9) On application by the Commission, the Court may order a body to which an exemption relates to comply with a condition:
(a) to which the exemption is subject; and
(b) that the body has contravened.
(10) The Commission may by writing vary or revoke an exemption.
(11) An exemption, or a variation or revocation of an exemption, takes effect on the day when:
(a) the exemption, or the variation or revocation of the exemption, as the case may be, is given to the body that applied for the exemption; or
(b) a copy of the exemption, or of the variation or revocation, as the case may be, is published in the Gazette;
whichever happens later.
(12) In this section:
body means a company or a registrable body;
document includes a public document, or an eligible negotiable instrument, of a body;
transport document means a document (for example, but without limitation, a ticket, waybill or bill of lading) used in connection with the transportation, by sea, land or air, of persons, goods or mail.
Part 4.3—No liability companies
384 Application of Law to no liability companies
Subject to this Part and except as otherwise expressly provided in this Law, the provisions of this Law relating to public companies, other than Division 2 of Part 5.6 and section 477 (so far as it relates to calls), paragraphs 478(1)(a) and (b), subsections 478(2), (3) and (4) and subsection 483(3), apply in relation to no liability companies.
385 Shareholder not liable to calls or contributions
The acceptance of a share in a no liability company, whether by original allotment or by transfer, does not constitute a contract on the part of the person accepting it to pay any calls in respect of the share or any contribution to the debts and liabilities of the company and such a person is not liable to be sued for any calls or contributions but is not entitled to a dividend upon any such share upon which a call is due and unpaid.
386 Dividends payable on shares irrespective of amount paid up
Subject to any provisions of the articles relating to preferred, deferred or other special classes of shares, dividends that are payable to the shareholders in a no liability company are payable to the persons entitled to those dividends in proportion to the shares held by them respectively, irrespective of the amount paid up or credited as paid up on the shares.
387 Calls: when due
(1) The calls upon shares in a no liability company shall be so made that they are payable at least 14 days after the day on which the call is made, and no subsequent call shall be made until after the end of 7 days after the day on which the call made immediately before it is payable.
(2) When a call is made, notice of the amount of the call, of the day when it is payable and of the place for payment shall, at least 7 days before that day, be sent by post to the holder of shares on which the call is made.
388 Forfeiture of shares
(1) Any share in a no liability company upon which a call is unpaid at the end of 14 days after the day for its payment is thereupon forfeited without any resolution of directors or other proceedings and shall, subject to this Part, be offered for sale by public auction not more than 6 weeks after the day on which the call is payable.
(2) The sale shall be advertised not less than 14 and not more than 21 days before the day appointed for the sale in a daily newspaper circulating generally throughout Australia.
(3) Where a sale is not held because of error or inadvertence, the sale, if it is held in due course as soon as practicable after the discovery of the error or inadvertence, is not invalid.
(4) If there is any failure to comply with the provisions of this section, the company and any officer of the company who is in default are each guilty of an offence.
(5) At any such sale, a share forfeited for non‑payment of any call may, if the company in accordance with its articles or by ordinary resolution so determines, be offered for sale and sold credited as paid up to the sum of the amount paid up on the share at the time of forfeiture and the amount of the call and the amount of any other calls becoming payable on or before the day of the sale.
(6) The proceeds of the sale shall be applied in payment of:
(a) first, the expenses of the sale;
(b) second, any expenses necessarily incurred in respect of the forfeiture; and
(c) third, the calls then due and unpaid;
and the balance (if any) shall be paid to the member whose share has been so sold on the member’s delivering to the company the share certificate that relates to the forfeited share.
389 Provisions as to sale of forfeited shares
(1) The directors may, in the case of a share advertised for sale as forfeited for non‑payment of a call, fix a reserve price not exceeding the sum of the amount of the call due and unpaid on the share at the time of forfeiture and the amount of any other calls becoming payable on or before the date of the sale.
(2) If a bid at least equal to the reserve price so fixed is not made for the share, the share may be withdrawn from sale
(3) A share so withdrawn from sale or a share for which no bid is received at the sale shall be held by the directors in trust for the company and shall be disposed of in such manner as the company, in accordance with its articles or by resolution, determines, but, at any meeting of the company, no person is entitled to any vote in respect of the shares so held by the directors in trust.
(4) Unless otherwise specifically provided by resolution, the shares to be so disposed of shall first be offered to shareholders for a period of 14 days before being disposed of in any other manner.
390 Shares held by, or in trust for, company
A call does not have any effect upon any forfeited share that is held by or in trust for the company pursuant to this Part, but such a share, when it is re‑issued or sold by the company, may be credited as paid up to such amount as the company, in accordance with its articles or by resolution, determines.
391 Sale of shares on non‑payment of calls valid although specific numbers not advertised
(1) When forfeited shares are sold for non‑payment of any call, the sale is valid although the specific numbers of the shares are not advertised.
(2) In every advertisement, it is sufficient to give notice of the intended sale of forfeited shares by advertising to the effect that all shares on which a call remains unpaid will be sold.
392 Postponement of sale
(1) An intended sale of forfeited shares that has been duly advertised may be postponed for not more than 21 days from the advertised date of sale or from any date to which the sale has duly been postponed, but so that no such intended sale shall be postponed to a date more than 90 days from the first date fixed for the intended sale.
(2) The date to which the sale is postponed shall, in respect of every postponement, be advertised in a daily newspaper circulating generally in Australia.
393 Redemption of forefeited shares
(1) Notwithstanding anything in this Part, if a share belonging to a person has been forfeited, the person may, at any time up to or on the day immediately before the day upon which it is intended to sell the share, redeem the share by payment to the company of:
(a) all calls due on the share; and
(b) if the company so requires:
(i) a portion, calculated on a pro rata basis, of all expenses incurred by the company in respect of the forfeiture; and
(ii) a portion, calculated on a pro rata basis, of all costs and expenses of any proceeding that has been taken in respect of the forfeiture.
(2) Upon such a payment, the person is entitled to the share as if the forfeiture had not occurred.
394 Office to be open on day before sale
On the day immediately before the day appointed for the sale of a forfeited share, the registered office of the company shall be open during the hours for which it is by this Law required to be open and accessible to the public.
395 Distribution of surplus on cessation of business on winding up
(1) If, on the winding up of a no liability company, there remains any surplus, the surplus shall be distributed amongst the parties entitled to it in proportion to the shares held by them respectively irrespective of the amounts paid up on the shares.
(2) A member who is in arrears in payment of any call, but whose shares have not been actually forfeited, is not entitled to share in such a distribution until the amount owing in respect of the call has been fully paid and satisfied.
396 Distribution of surplus on cessation of business within 12 months after incorporation
(1) If a no liability company ceases to carry on business within 12 months after its incorporation, shares issued for cash rank on a winding up, to the extent of the capital contributed by subscribing shareholders, in priority to those issued to vendors or promotors, or both, for consideration other than cash.
(2) In subsection (1), no liability company includes a company that, having been incorporated as a no liability company, changes its status under section 167.
397 Rights attaching to preference shares issued to promoters
(1) Notwithstanding the constitution of a no liability company, the holders of any shares issued to vendors or promoters are not entitled to any preference on the winding up of the company.
(2) In subsection (1), no liability company includes a company that, having been incorporated as a no liability company, changes its status under section 167.
398 Restrictions on tribute arrangements
(1) Without the sanction of a special resolution of the company, the directors of a no liability company shall 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.
(2) Subsection (1) does not preclude the directors of a no liability company from letting the whole or portion of a mine or claim on tribute, or making any contract for working any land on tribute, for any period not exceeding 3 months, without the sanction of such a resolution, if no such letting or contract has been made within the period of 2 years immediately preceding the proposed letting or contract.
Part 4.4—Investment companies
399 Interpretation
(1) In this Part, unless the contrary intention appears:
investment company means a corporation in relation to which an order under subsection (3) is in force;
net tangible assets, in relation to a corporation, means tangible property at book values, less total liabilities at book values and less any aggregate amount by which the book values of the marketable securities held by the corporation exceed their market values;
relevant provision of this Part means any of the provisions of sections 400 to 407 (inclusive).
(2) A reference in a relevant provision of this Part to an investment company is a reference to an investment company to which that provision applies.
(3) The Commission may, by order published in the Gazette, declare to be an investment company a corporation that:
(a) is:
(i) a company; or
(ii) a registrable Australian body that is, or is required to be, registered under Division 1 of Part 4.1; or
(iii) a foreign company that is, or is required to be, registered as a foreign company under Division 2 of Part 4.1; and
(b) is engaged primarily in the business of investment in marketable securities for the purpose of revenue and for profit and not for the purpose of exercising control.
(4) Where the Commission makes an order declaring a corporation to be an investment company, the Commission may specify in the order the relevant provisions of this Part that are to apply to that investment company.
(5) If, in an order declaring a corporation to be an investment company, the Commission specifies relevant provisions of this Part that are to apply to that corporation, any relevant provisions of this Part that are not so specified do not apply to the corporation.
(6) If the Commission does not, in an order declaring a corporation to be an investment company, specify relevant provisions of this Part that are to apply to the corporation, every provision of this Part applies to the corporation.
(7) Where, immediately before the commencement of this Part, an order made under a previous law corresponding to subsection (3) was in force in relation to a corporation of a kind described in paragraph (3)(a):
(a) the order continues in force, subject to this Part, as if it had been made by the Commission under subsection (3); and
(b) subsections (5) and (6) apply in relation to the order as if the specification in the order of any provisions of the previous corresponding law that applied to the investment company were the specification of the provisions of this Law to which the specified provisions correspond.
400 Restrictions on borrowing by investment companies
(1) An investment company shall not borrow an amount if that amount, or the sum of that amount and amounts previously borrowed by it and not repaid, exceeds an amount equivalent to 50% of its net tangible assets.
(2) An investment company shall not borrow an amount otherwise than by the issue of debentures if that amount, or the sum of that amount and amounts previously borrowed by it otherwise than by the issue of debentures and not repaid, exceeds an amount equivalent to 25% of its net tangible assets.
(3) In subsection (2), debentures does not include a debenture:
(a) that is redeemable, except at the option of the borrower exercised not earlier than 30 months after the day of issue of the debenture, within less than 5 years after that day; or
(b) that is issued to a bank as security for an overdraft.
401 Restrictions on investments of investment companies
(1) An investment company shall not invest an amount in a corporation if that amount, or the sum of that amount and amounts previously invested by it in that corporation and still so invested, exceeds an amount equivalent to 10% of the net tangible assets of the investment company.
(2) An investment company shall not hold more than 5% of the subscribed ordinary share capital of a corporation.
402 Restrictions on underwriting by investment companies
(1) An investment company shall not underwrite any issue of authorised securities to an amount that, when added to the amount or amounts (if any) to which it has previously underwritten a current issue or issues of other authorised securities (not being an amount or amounts in respect of which the underwriting obligation has been discharged), exceeds an amount equivalent to 40% of its net tangible assets.
(2) An investment company shall not underwrite any issue of non‑authorised securities to an amount that, when added to the amount or amounts (if any) to which it has previously underwritten a current issue or issues of other non‑authorised securities (not being an amount or amounts in respect of which the underwriting obligation has been discharged), exceeds an amount equivalent to 20% of its net tangible assets.
(3) Where:
(a) an investment company has underwritten any issue of securities and, in relation to the underwriting, has not contravened subsection (1) or (2); and
(b) the investment company, as a result of the underwriting, invests in a corporation contrary to section 401;
the investment company shall be deemed not to have contravened a provision of that section by reason of so investing in the corporation if, at the end of 12 months after so investing:
(c) the amount invested by it in the corporation does not exceed an amount equivalent to 10% of the net tangible assets of the investment company; and
(d) it does not hold more than 5% of the subscribed ordinary share capital of the corporation.
(4) This section applies in relation to sub‑underwriting as if the sub‑underwriting were underwriting.
(5) In this section:
authorised securities means securities in which trustees are authorised by an Australian law, or by a law of New Zealand, to invest trust funds in their hands;
non‑authorised securities means securities other than authorised securities.
403 Special requirements as to articles and prospectus
(1) An investment company shall not issue a prospectus or permit a prospectus to be issued on its behalf unless the prospectus:
(a) where the memorandum of the company contains a provision stating the objects of the company:
(i) specifies the type of security in which, in accordance with the objects of the company, the company may invest; and
(ii) states whether it is among the objects of the company to invest in Australia or outside Australia or both; or
(b) where the memorandum of the company does not contain a provision stating the objects of the company—states that the memorandum does not contain such a provision.
(2) After the end of 3 months after an investment company has been declared to be an investment company, the investment company shall not borrow or invest any moneys, or underwrite or sub‑underwrite any issue of securities, unless the articles of the company specify the matters referred to in paragraph (1)(a) or (b), as the case requires.
404 Investment company not to hold shares in other investment companies
(1) An investment company shall not purchase, or (after the end of 3 years after it is declared to be an investment company) hold, shares in, or debentures of:
(a) another investment company; or
(b) a corporation that is incorporated in Australia, in an excluded Territory, or in New Zealand, and in relation to which an order under subsection (2) is in force.
(2) The Commission may, by order published in the Gazette, declare a corporation that is engaged primarily in the business of investment in marketable securities for the purpose of revenue or profit and not for the purpose of exercising control to be a corporation to which paragraph (1)(b) applies.
(3) Where, immediately before the commencement of this section, an order made under a previous law corresponding to subsection (2) was in force in relation to a corporation, the order continues in force as if it had been made by the Commission under subsection (2).
405 Investment company not to speculate in commodities
(1) An investment company shall not, for the purpose of profit, buy or sell, or deal in, any raw materials or manufactured goods, whether in existence or not, otherwise than by investing in companies trading in such materials or goods.
(2) Subsection (1) does not apply in relation to:
(a) any buying, selling or dealing by an investment company pursuant to a contract entered into by the investment company before it was declared to be an investment company; or
(b) the selling of or the dealing in raw materials or manufactured goods acquired by the investment company:
(i) before it was so declared; or
(ii) pursuant to a contract entered into before it was so declared.
406 Balance‑sheets and accounts
(1) An investment company shall state under separate headings in every balance‑sheet of the company, in addition to any other matters required to be stated in that balance‑sheet:
(a) the investments of the company in any securities other than relevant securities; and
(b) the manner in which the investments of the company have been valued.
(2) In subsection (1):
relevant securities means:
(a) government, municipal and other public debentures, stocks and bonds;
(b) shares in a corporation;
(c) options in respect of shares in a corporation; and
(d) debentures of a corporation.
(3) An investment company shall attach to every such balance‑sheet:
(a) a complete list of all purchases and sales of securities by the company during the period to which the accounts relate together with a statement of the total amount of brokerage paid or charged by the company during that period and the proportion of that brokerage paid to any stock or share broker, or any employee or nominee of any stock or share broker, who is an officer of the company; and
(b) a complete list of all the investments of the company as at the date of the balance‑sheet showing the descriptions and quantities of those investments.
(4) An investment company shall show separately in the profit and loss account, in addition to any other matters required to be shown in that profit and loss account, income from underwriting (including sub‑underwriting).
407 Investment fluctuation reserve
(1) The net profits and losses of an investment company from the purchase and sale of securities shall be respectively credited and debited by the company to a reserve account to be kept by it and to be called the investment fluctuation reserve.
(2) The investment fluctuation reserve is not available for the payment of dividends.
(3) The investment fluctuation reserve is available for the payment of income tax payable in respect of profits made on the sale of securities.
408 Contraventions
(1) If default is made by an investment company in complying with any of the provisions of this Part, the investment company and any officer of the investment company who is in default each contravene this subsection.
(2) A transaction entered into by the company is not invalid by reason only of such a contravention.
Part 4.5—Financial statements of Australian banks and life insurance corporations
408A Interpretation
(1) In this Part:
prescribed corporation means:
(a) an Australian bank; or
(b) a body corporate that is registered under the Life Insurance Act 1995.
(2) Sections 294A and 294B have effect for the purposes of this Part as if the provisions of this Part were provisions of Part 3.6.
408B Application of Parts 3.6 and 3.7—companies that are prescribed corporations
(1) Parts 3.6 and 3.7 apply in relation to a prescribed corporation that is a company.
(2) For the purposes of Parts 3.6 and 3.7, as they apply in relation to a company (including one that is a prescribed corporation), in relation to an accounting period of the company, a reference to an entity includes a reference to an entity that is a prescribed corporation.
(3) The application that Parts 3.6 and 3.7 have because of subsections (1) and (2) is subject to this Part.
408C Application of provisions applied by section 323A—certain disclosing entities that are prescribed corporations
(1) In this section:
section 323A provisions means the applied provisions, within the meaning of section 323A, as they apply because of that section.
(2) The section 323A provisions apply in relation to a prescribed corporation that is a disclosing entity to which section 323A applies.
(3) For the purposes of the section 323A provisions, as they apply in relation to such a disclosing entity (including one that is a prescribed corporation) and an accounting period of the disclosing entity, a reference to an entity includes a reference to an entity that is a prescribed corporation.
(4) The application that the section 323A provisions have because of subsections (2) and (3) is subject to this Part.
409 Accounts, and directors’ reports, of a prescribed corporation
(3) Where, under a law of the Commonwealth relating to banking, a prescribed corporation is required to prepare accounts annually, annual accounts of the corporation that comply with that law shall be deemed to comply with the provisions of Chapter 3 relating to accounts for financial years.
(4) Subsection 304(1) does not apply to or in relation to a prescribed corporation or its directors.
(5) Where, under a law of the Commonwealth relating to life insurance, a prescribed corporation is required to prepare accounts annually, the prescribed corporation and the directors and auditors of the corporation shall not be taken to have contravened such of the provisions of Parts 3.6 and 3.7 as are applicable to it or them by reason only:
(a) that no accounts are laid before the annual general meeting of the corporation, or are lodged in relation to a financial year of the corporation, other than accounts that:
(i) comply with that law; or
(ii) comply with such conditions as are specified by the Commission; or
(b) that, where accounts that comply with such conditions as are specified by the Commission are laid before the annual general meeting of the corporation, or are lodged in relation to a financial year of the corporation, an auditor’s report to the members on those accounts is not laid before that meeting, or is not lodged, as the case requires.
(6) Neither of sections 331B and 331D applies in relation to the accounts of a prescribed corporation that is registered under the Life Insurance Act 1995 where those accounts comply with that law.
(8) A prescribed corporation shall not be taken to have contravened section 315 in relation to an annual general meeting by reason only that it does not send to a person entitled to receive notice of general meetings of the company documents referred to in that section other than documents so referred to that, in compliance with the provisions of Part 3.6, whether by the operation of this Part or otherwise, are to be laid before that annual general meeting.
(9) Where a prescribed corporation registered under the Life Insurance Act 1995 does not lay before its annual general meeting accounts and an auditor’s report that comply with that Act, it shall lodge a copy of those accounts and a copy of that report on or before a day at most 9 months after the end of the period to which they relate.
409A Consolidated accounts where the chief entity or a controlled entity is a prescribed corporation
(1) A company that is a chief entity in relation to an accounting period, and its directors and auditors, do not contravene the provisions of Chapter 3 relating to consolidated accounts merely because consolidated accounts of the company made out in relation to that accounting period do not comply with those provisions, if:
(a) those consolidated accounts would so comply if:
(i) a reference in subsection 295A(1) to an economic entity constituted as mentioned in that subsection were a reference to an economic entity constituted by such of the following as are not prescribed corporations at the end of that accounting period:
(A) the company;
(B) the entities that the company controlled from time to time during that accounting period (even if the company did not control the same entities throughout that accounting period); and
(ii) a reference in section 295B to an economic entity constituted as mentioned in that section were a reference to an economic entity constituted by such of the following as are not prescribed corporations at the end of that accounting period:
(A) the company;
(B) the entities that the company controlled at the end of that accounting period; and
(b) there are attached to those consolidated accounts a copy of the accounts of each corporation that:
(i) is a prescribed corporation at the end of that accounting period; and
(ii) is the company or an entity that the company controlled during all or part of, or at the end of, that accounting period;
being accounts that relate to the corresponding accounting period of that prescribed corporation and:
(iii) in any case—comply with a law of the Commonwealth relating to the preparation of accounts of that prescribed corporation; or
(iv) in the case of a prescribed corporation registered under the Life Insurance Act 1995—comply with such conditions as are specified by the Commission.
(2) Where, because of paragraph (1)(b), accounts of a prescribed corporation are attached to consolidated accounts of a company, the first‑mentioned accounts do not form part of the consolidated accounts.
(3) A company that is a chief entity in relation to an accounting period, and its directors and auditors, do not contravene section 305 merely because a directors’ report made out under that section in relation to that accounting period does not relate to one or more of such of the following as are prescribed corporations at the end of that accounting period:
(a) the company;
(b) the entities controlled by the company from time to time.
(4) A company that is a chief entity in relation to an accounting period, and its directors and auditors, do not contravene any of sections 296 and 331A to 332A, inclusive, merely because the section is not complied with in relation to one or more of such of the following as are registered under the Life Insurance Act 1945 at the end of that accounting period:
(a) the company;
(b) the entities controlled by the company from time to time.
(5) In this section:
company includes a disclosing entity to which section 323A applies.
Chapter 5—External administration
Part 5.1—Arrangements and reconstructions
410 Interpretation
A reference in this Part, in relation to a Part 5.1 body, to the directors is a reference to the directors of the body or any one or more of them.
411 Administration of compromises etc.
(1) Where a compromise or arrangement is proposed between a Part 5.1 body and its creditors or any class of them or between a Part 5.1 body and its members or any class of them, the Court may, on the application in a summary way of the body or of any creditor or member of the body, or, in the case of a body being wound up, of the liquidator, order a meeting or meetings of the creditors or class of creditors or of the members of the body or class of members to be convened in such manner, and to be held in such place or places (in this jurisdiction or elsewhere), as the Court directs and, where the Court makes such an order, the Court may approve the explanatory statement required by paragraph 412(1)(a) to accompany notices of the meeting or meetings.
(1A) Where:
(a) a compromise or arrangement is proposed:
(i) between 30 or more Part 5.1 bodies that are wholly‑owned subsidiaries of a holding company and the creditors or a class of the creditors of each of those subsidiaries; and
(ii) between the holding company and the creditors or a class of the creditors of the holding company; and
(b) the proposed compromise or arrangement in relation to each subsidiary includes a term that orders will be sought under section 413 transferring the whole of the undertaking and of the property and liabilities of the subsidiary to the holding company; and
(c) the Court is satisfied, on the application in a summary way:
(i) of the holding company or of a creditor of the holding company; or
(ii) if the holding company is being wound up—of the liquidator;
that the number of meetings that would be required between creditors in order to consider the proposed compromises or arrangements would be so great as to result in a significant impediment to the timely and effective consideration by those creditors of the terms of the compromises or arrangements;
the Court may order a meeting or meetings, on a consolidated basis, of the creditors of the holding company and of each of the subsidiaries or of such class or classes of those creditors as the Court determines and, where the Court makes such an order, the Court may approve the explanatory statement required by paragraph 412(1)(a) to accompany notices of the meeting or meetings.
(1B) Where:
(a) there are fewer than 30 wholly‑owned subsidiaries of the holding company but the matters referred to in paragraphs (1A)(b) and (c) are satisfied; and
(b) the Court considers that circumstances exist that would justify its doing so;
the Court may make an order under subsection (1A) in relation to the proposed compromise or arrangement.
(1C) Where an order is made under subsection (1A) in relation to a proposed compromise or arrangement, the succeeding provisions of this Part apply to the compromise or arrangement as if:
(a) references in this Part to a company included references to all of the Part 5.1 bodies to which the order relates; and
(b) references in this Part to creditors of a company included references to the creditors of all the Part 5.1 bodies to which the order relates; and
(c) references in this Part to a class of the creditors of a company were references to the relevant class of creditors of all of the Part 5.1 bodies to which the order relates.
(2) The Court shall not make an order pursuant to an application under subsection (1) or (1A) unless:
(a) 14 days notice of the hearing of the application, or such lesser period of notice as the Court or the Commission permits, has been given to the Commission; and
(b) the Court is satisfied that the Commission has had a reasonable opportunity:
(i) to examine the terms of the proposed compromise or arrangement to which the application relates and a draft explanatory statement relating to the proposed compromise or arrangement; and
(ii) to make submissions to the Court in relation to the proposed compromise or arrangement and the draft explanatory statement.
(3) In subsection (2), draft explanatory statement, in relation to a proposed compromise or arrangement between a body and its creditors or any class of them or between a body and its members or any class of them, means a statement:
(a) explaining the effect of the proposed compromise or arrangement and, in particular, stating any material interests of the directors of the body, whether as directors, as members or creditors of the body or otherwise, and the effect on those interests of the proposed compromise or arrangement in so far as that effect is different from the effect on the like interests of other persons; and
(b) setting out such information as is prescribed and any other information that is material to the making of a decision by a creditor or member of the body whether or not to agree to the proposed compromise or arrangement, being information that is within the knowledge of the directors of the body and has not previously been disclosed to the creditors or members of the body.
(3A) In considering whether to make an order under subsection (1) or (1A) for a meeting to be held in another jurisdiction, the Court must have regard to where the creditors or members, or the creditors or members included in the class concerned, as the case requires, reside.
(4) A compromise or arrangement is binding on the creditors, or on a class of creditors, or on the members, or on a class of members, as the case may be, of the body and on the body or, if the body is in the course of being wound up, on the liquidator and contributories of the body, if, and only if:
(a) at a meeting convened in accordance with an order of the Court under subsection (1) or (1A):
(i) in the case of a compromise or arrangement between a body and its creditors or a class of creditors—the compromise or arrangement is agreed to by a majority in number of the creditors, or of the creditors included in that class of creditors, present and voting, either in person or by proxy, being a majority whose debts or claims against the company amount in the aggregate to at least 75% of the total amount of the debts and claims of the creditors present and voting in person or by proxy, or of the creditors included in that class present and voting in person or by proxy, as the case may be; and
(ii) in the case of a compromise or arrangement between a body and its members or a class of members—the compromise or arrangement is agreed to by a majority in number of the members, or of the members included in that class of members, present and voting, either in person or by proxy, being, in the case of a body having a share capital, a majority whose shares have nominal values that amount, in the aggregate, to at least 75% of the total of the nominal values of all the shares of the members present and voting in person or by proxy, or of the members included in that class present and voting in person or by proxy, as the case may be; and
(b) it is approved by order of the Court.
(5) Where the Court orders 2 or more meetings of creditors or of a class of creditors, or 2 or more meetings of members or of a class of members, to be held in relation to the proposed compromise or arrangement:
(a) in the case of meetings of creditors—the meetings shall, for the purposes of subsection (4), be deemed together to constitute a single meeting and the votes in favour of the proposed compromise or arrangement cast at each of the meetings shall be aggregated, and the votes against the proposed compromise or arrangement cast at each of the meetings shall be aggregated, accordingly; or
(b) in the case of meetings of members—the meetings shall, for the purposes of subsection (4), be deemed together to constitute a single meeting and the votes in favour of the proposed compromise or arrangement cast at each of the meetings shall be aggregated, and the votes against the proposed compromise or arrangement cast at each of the meetings shall be aggregated, accordingly.
(6) The Court may grant its approval to a compromise or arrangement subject to such alterations or conditions as it thinks just.
(7) Except with the leave of the Court, a person shall not be appointed to administer, and shall not administer, a compromise or arrangement approved under this Law between a body and its creditors or any class of them or between a body and its members or any class of them, whether by the terms of that compromise or arrangement or pursuant to a power given by the terms of a compromise or arrangement, if the person:
(a) is a mortgagee of any property of the body;
(b) is an auditor or an officer of the body;
(c) is an officer of a body corporate that is a mortgagee of property of the body;
(d) is not a registered liquidator;
(e) is an officer of a body corporate related to the body; or
(f) unless the Commission directs in writing that this paragraph does not apply in relation to the person in relation to the body—has at any time within the last 12 months been an officer or promoter of the body or of a related body corporate.
(8) Paragraph (7)(d) does not apply in relation to a body corporate authorised by or under a law of this jurisdiction to administer the compromise or arrangement concerned.
(8A) Subsection (7) does not disqualify a person from administering a compromise or arrangement under an appointment validly made before the commencement of this section.
(9) Where a person is or persons are appointed by, or under a power given by, the terms of a compromise or arrangement, to administer the compromise or arrangement:
(a) section 425, subsections 427(2) and (4) and sections 428, 432 and 434 apply in relation to that person or those persons as if:
(i) the appointment of the person or persons to administer the compromise or arrangement were an appointment of the person or persons as a receiver and manager, or as receivers and managers, of property of the body; and
(ii) a reference in any of those sections or subsections to a receiver, or to a receiver of property, of a corporation were a reference to that person or to those persons; and
(b) section 536 applies in relation to that person or those persons as if:
(i) the appointment of the person or persons to administer the compromise or arrangement were an appointment of the person or persons as a liquidator of the body; and
(ii) a reference in that section to a liquidator were a reference to that person or to those persons.
(10) An order of the Court made for the purposes of paragraph (4)(b) does not have any effect until an office copy of the order is lodged with the Commission, and upon being so lodged, notwithstanding subsection 171(8), the order takes effect, or shall be deemed to have taken effect, on and from the date of lodgment or such earlier date as the Court determines and specifies in the order.
(11) Subject to subsection (12), a copy of every order of the Court made for the purposes of paragraph (4)(b) shall be annexed to every copy of the memorandum of the body issued after the order has been made or, in the case of a body not having a memorandum, to every copy so issued of the constitution of the body.
(12) The Court may, by order, exempt a body from compliance with subsection (11) or determine the period during which the body shall comply with that subsection.
(13) Where a compromise or arrangement referred to in subsection (1) or (1A) (whether or not for the purposes of or in connection with a scheme for the reconstruction of a body or bodies or the amalgamation of any 2 or more bodies) has been proposed, the directors of the body shall:
(a) if a meeting of the members of the body by resolution so directs—instruct such accountants or solicitors or both as are named in the resolution to report on the proposals and send their report or reports to the directors as soon as practicable; and
(b) if a report or reports is or are obtained pursuant to paragraph (a)—make the report or reports available at the registered office of the body for inspection by the shareholders and creditors of the body at least 7 days before the day of the meeting ordered by the Court to be convened as provided in subsection (1) or (1A), as the case may be.
(14) If default is made in complying with subsection (11), the body contravenes this subsection.
(15) If default is made in complying with subsection (13), each director of the body contravenes this subsection.
(16) Where no order has been made or resolution passed for the winding up of a Part 5.1 body and a compromise or arrangement has been proposed between the body and its creditors or any class of them, the Court may, in addition to exercising any of its other powers, on the application in a summary way of the body or of any member or creditor of the body, restrain further proceedings in any action or other civil proceeding against the body except by leave of the Court and subject to such terms as the Court imposes.
(17) The Court shall not approve a compromise or arrangement under this section unless:
(a) it is satisfied that the compromise or arrangement has not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Chapter 6; or
(b) there is produced to the Court a statement in writing by the Commission stating that the Commission has no objection to the compromise or arrangement;
but the Court need not approve a compromise or arrangement merely because a statement by the Commission stating that the Commission has no objection to the compromise or arrangement has been produced to the Court as mentioned in paragraph (b).
412 Information as to compromise with creditors
(1) Where a meeting is convened under section 411, the body shall:
(a) with every notice convening the meeting that is sent to a creditor or member, send a statement (in this section called the explanatory statement):
(i) explaining the effect of the compromise or arrangement and, in particular, stating any material interests of the directors, whether as directors, as members or creditors of the body or otherwise, and the effect on those interests of the compromise or arrangement in so far as that effect is different from the effect on the like interests of other persons; and
(ii) setting out such information as is prescribed and any other information that is material to the making of a decision by a creditor or member whether or not to agree to the compromise or arrangement, being information that is within the knowledge of the directors and has not previously been disclosed to the creditors or members; and
(b) in every notice convening the meeting that is given by advertisement, include either a copy of the explanatory statement or a notification of the place at which and the manner in which creditors or members entitled to attend the meeting may obtain copies of the explanatory statement.
(2) In the case of a creditor whose debt does not exceed $200, paragraph (1)(a) does not apply unless the Court otherwise orders but the notice convening the meeting that is sent to such a creditor shall specify a place at which a copy of the explanatory statement can be obtained on request and, where the creditor makes such a request, the body shall as soon as practicable comply with the request.
(3) Where the compromise or arrangement affects the rights of debenture holders, the explanatory statement shall specify any material interests of the trustees for the debenture holders, whether as such trustees, as members or creditors of the body or otherwise, and the effect on those interests of the compromise or arrangement in so far as that effect is different from the effect on the like interests of other persons.
(4) Where a notice given by advertisement includes a notification that copies of the explanatory statement can be obtained in a particular manner, every creditor or member entitled to attend the meeting shall, on making application in that matter, be furnished by the body free of charge with a copy of the explanatory statement.
(5) Each person who is a director or trustee for debenture holders shall give notice to the body of such matters relating to the person as are required to be included in the explanatory statement.
(6) In the case of a compromise or arrangement that is not, or does not include, a compromise or arrangement between a Part 5.1 body and its creditors or any class of them, the body shall not send out an explanatory statement pursuant to subsection (1) unless a copy of that statement has been registered by the Commission.
(7) Where an explanatory statement sent out under subsection (1) is not required by subsection (6) to be registered by the Commission, the Court shall not make an order approving the compromise or arrangement unless it is satisfied that the Commission has had a reasonable opportunity to examine the explanatory statement and to make submissions to the Court in relation to that statement.
(8) Where a copy of an explanatory statement is lodged with the Commission for registration under subsection (6), the Commission shall not register the copy of the statement unless the statement appears to comply with this Law and the Commission is of the opinion that the statement does not contain any matter that is false in a material particular or materially misleading in the form or context in which it appears.
(9) Where a body contravenes this section, a person involved in the contravention contravenes this subsection.
(10) It is a defence to a prosecution for a contravention of this section if it is proved that the contravention was due to the failure of a person (other than the defendant), being a director of the body or a trustee for debenture holders of the body, to supply for the purposes of the explanatory statement particulars of the person’s interests.
413 Provisions for facilitating reconstruction and amalgamation of Part 5.1 bodies
(1) Where an application is made to the Court under this Part for the approval of a compromise or arrangement and it is shown to the Court that the compromise or arrangement has been proposed for the purposes of, or in connection with, a scheme for the reconstruction of a Part 5.1 body or Part 5.1 bodies or the amalgamation of 2 or more Part 5.1 bodies and that, under the scheme, the whole or any part of the undertaking or of the property of a body concerned in the scheme (in this section called the transferor body) is to be transferred to a company (in this section called the transferee company), the Court may, either by the order approving the compromise or arrangement or by a later order, provide for all or any of the following matters:
(a) the transfer to the transferee company of the whole or a part of the undertaking and of the property or liabilities of the transferor body;
(b) the allotting or appropriation by the transferee company of shares, debentures, policies or other interests in that company that, under the compromise or arrangement, are to be allotted or appropriated by that company to or for any person;
(c) the continuation by or against the transferee company of any legal proceedings pending by or against the transferor body;
(d) if the transferor body is a company—the dissolution, without winding up, of the transferor body;
(e) the provision to be made for any persons who, within such time and in such manner as the Court directs, dissent from the compromise or arrangement;
(f) the transfer or allotment of any interest in property to any person concerned in the compromise or arrangement;
(g) such incidental, consequential and supplemental matters as are necessary to ensure that the reconstruction or amalgamation is fully and effectively carried out.
(2) Where an order made under this section provides for the transfer of property or liabilities, then, by virtue of the order, that property shall be transferred to and vest in, and those liabilities shall be transferred to and become the liabilities of, the transferee company, free, in the case of any particular property if the order so directs, from any charge that is, by virtue of the compromise or arrangement, to cease to have effect.
(3) Where an order is made under this section, each body to which the order relates shall, within 14 days after the making of the order, lodge with the Commission an office copy of the order.
(4) In this section:
liabilities includes duties of any description, including duties that are of a personal character or are incapable under the general law of being assigned or performed vicariously;
property includes rights and powers of any description, including rights and powers that are of a personal character and are incapable under the general law of being assigned or performed vicariously.
414 Acquisition of shares of shareholders dissenting from scheme or contract approved by majority
(1) In this section:
dissenting shareholder, in relation to a scheme or contract, means a shareholder who has not assented to the scheme or contract or who has failed to transfer his, her or its shares in accordance with the scheme or contract;
excluded shares, in relation to a scheme or contract involving a transfer to a person of shares in a class of shares in a company, means shares in that class that, when the offer relating to the scheme or contract is made, are held by:
(a) in any case—the person or a nominee of the person; or
(b) if the person is a body corporate—a subsidiary of the body.
(2) Where a scheme or contract (not being a scheme or contract arising out of the making of takeover offers, or a takeover announcement, under Chapter 6) involving a transfer of shares in a class of shares in a company (in this section called the transferor company) to a person (in this section called the transferee) has, within 4 months after the making of the offer relating to the scheme or contract by the transferee, been approved by the holders of at least nine‑tenths in nominal value of the shares included in that class of shares (other than excluded shares), the transferee may, within 2 months after the offer has been so approved, give notice as prescribed to a dissenting shareholder that the transferee wishes to acquire the shares held by that shareholder.
(3) Where such a notice is given, then, unless the Court orders otherwise on an application by a dissenting shareholder made within one month after the day on which the notice was given or within 14 days after a statement is supplied under subsection (7) to a dissenting shareholder, whichever is the later, the transferee is entitled and bound, subject to this section, to acquire those shares on the terms on which, under the scheme or contract, the shares of the approving shareholders are to be transferred to the transferee.
(4) Where alternative terms were offered to the approving shareholders, the dissenting shareholder is entitled to elect not later than the end of one month after the date on which the notice is given under subsection (2) or 14 days after a statement is supplied under subsection (7), whichever is the later, which of those terms he, she or it prefers and, if he, she or it fails to make the election within the time allowed by this subsection, the transferee may, unless the Court otherwise orders, determine which of those terms is to apply to the acquisition of the shares of the dissenting shareholder.
(5) Notwithstanding subsections (3) and (4), where the nominal value of the excluded shares exceeds one‑tenth of the aggregate nominal value of the excluded shares and the shares (other than excluded shares) to be transferred under the scheme or contract, those subsections do not apply unless:
(a) the transferee offers the same terms to all holders of the shares (other than excluded shares) to be transferred under the scheme or contract; and
(b) the holders who approve the scheme or contract together hold at least nine‑tenths in nominal value of the shares (other than excluded shares) to be transferred under the scheme or contract and are also at least three‑quarters in number of the holders of those shares.
(6) For the purposes of paragraph (5)(b), 2 or more persons registered as holding shares jointly shall be counted as one person.
(7) When a notice is given under subsection (2), the dissenting shareholder may, by written notice given to the transferee within one month after the day on which the notice was given under subsection (2), ask for a statement in writing of the names and addresses of all other dissenting shareholders as shown in the register of members.
(8) Where a notice is given under subsection (7), the transferee shall comply with it.
(9) Where, under a scheme or contract referred to in subsection (2), the transferee becomes beneficially entitled to shares in the transferor company which, together with any other shares in the transferor company to which the transferee or, where the transferee is a body corporate, a body corporate related to the transferee is beneficially entitled, comprise or include nine‑tenths in nominal value of the shares included in the class of shares concerned, then:
(a) the transferee shall, within one month after the date on which he, she or it becomes beneficially entitled to those shares (unless in relation to the scheme or contract he, she or it has already complied with this requirement), give notice of the fact as prescribed to the holders of the remaining shares included in that class who, when the notice was given, had not assented to the scheme or contract or been given notice by the transferee under subsection (2); and
(b) such a holder may, within 3 months after the giving of the notice to him, her or it by notice to the transferee, require the transferee to acquire his, her or its share and, where alternative terms were offered to the approving shareholders, elect which of those terms he, she or it will accept.
(10) Where a shareholder gives notice under paragraph (9)(b) with respect to his, her or its shares, the transferee is entitled and bound to acquire those shares:
(a) on the terms on which under the scheme or contract the shares of the approving shareholders were transferred to him, her or it and, where alternative terms were offered to those shareholders, on the terms for which the shareholder has elected, or where he, she or it has not so elected, for whichever of the terms the transferee determines; or
(b) on such other terms as are agreed or as the Court, on the application of the transferee or of the shareholder, thinks fit to order.
(11) Subsections (12) and (13) apply where a notice has been given under subsection (1) unless the Court, on an application made by the dissenting shareholder, orders to the contrary.
(12) The transferee shall, within 14 days after:
(a) the end of one month after the day on which the notice was given;
(b) the end of 14 days after a statement under subsection (7) is supplied; or
(c) if an application has been made to the Court by a dissenting shareholder—the application is disposed of;
whichever last happens:
(d) send a copy of the notice to the transferor company together with an instrument of transfer that relates to the shares that the transferee is entitled to acquire under this section and is executed, on the shareholder’s behalf, by a person appointed by the transferee and, on the transferee’s own behalf, by the transferee; and
(e) pay, allot or transfer to the transferor company the consideration for the shares.
(13) When the transferee has complied with subsection (12), the transferor company shall register the transferee as the holder of the shares.
(14) All sums received by the transferor company under this section shall be paid into a separate bank account and those sums, and any other consideration so received, shall be held by that company in trust for the several persons entitled to the shares in respect of which they were respectively received.
(15) Where a sum or other property received by a company under this section or a corresponding previous law has been held in trust by the company for a person for at least 2 years (whether or not that period began before the commencement of this Part), the company shall, before the end of 10 years after the day on which the sum was paid, or the consideration was allotted or transferred, to the company, pay the sum or transfer the consideration, and any accretions to it and any property that may become substituted for it or for part of it, to the Commission to be dealt with under Part 9.7.
415 Notification of appointment of scheme manager and power of Court to require report
(1) Within 14 days after being appointed to administer a compromise or arrangement approved under this Part, a person shall lodge a notice in writing of the appointment.
(2) Where an application is made to the Court under this Part in relation to a proposed compromise or arrangement, the Court may:
(a) before making any order on the application, require the Commission or another person specified by the Court to give to the Court a report as to the terms of the compromise or arrangement or of the scheme for the purposes of or in connection with which the compromise or arrangement has been proposed, the conduct of the officers of the body or bodies concerned and any other matters that, in the opinion of the Commission or that person, ought to be brought to the attention of the Court;
(b) in deciding the application, have regard to anything contained in the report; and
(c) make such order or orders as to the payment of the costs of preparing and giving the report as the Court thinks fit.
415A Enforcement of orders made in other jurisdictions
(1) Where:
(a) the Federal Court makes an order under subsection 411(1) or (1A) of the Corporations Law of another jurisdiction; or
(b) the Supreme Court of another jurisdiction makes an order under subsection 411(1) or (1A) of the Corporations Law of any jurisdiction; or
(c) the Supreme Court of this jurisdiction makes an order under subsection 411(1) or (1A) of the Corporations Law of another jurisdiction;
the order has effect, and may be enforced in all respects, in this jurisdiction as if it were an order made under subsection 411(1) or (1A) of this Law, in relation to a Part 5.1 body, by:
(d) if paragraph (a) applies—the Federal Court; or
(e) if paragraph (b) or (c) applies—the Supreme Court of this jurisdiction.
(2) A compromise or arrangement that is binding on the creditors, or a class of creditors, of a body corporate because of subsection 411(4) of the Corporations Law of another jurisdiction is also binding on the creditors of the body, or the creditors in that class, whose debts are recoverable by action in a court of this jurisdiction.
Part 5.2—Receivers, and other controllers, of property of corporations
416 Interpretation
In this Part, unless the contrary intention appears:
officer, in relation to a registered foreign company, includes a local agent of the foreign company;
property, in relation to a corporation, means property:
(a) in the case of a company—within or outside Australia; or
(b) in the case of a registered foreign company—within Australia or an external Territory; or
(c) otherwise—within this jurisdiction;
receiver, in relation to property of a corporation, includes a receiver and manager.
417 Application of Part
Except so far as the contrary intention appears in this Part or Part 9.11, this Part applies in relation to a receiver of property of a corporation who is appointed after the commencement of this section, even if the appointment arose out of a transaction entered into, or an act or thing done, before that commencement.
418 Persons not to act as receivers
(1) A person is not qualified to be appointed, and shall not act, as receiver of property of a corporation if the person:
(a) is a mortgagee of property of the corporation;
(b) is an auditor or an officer of the corporation;
(c) is an officer of a body corporate that is a mortgagee of property of the corporation;
(d) is not a registered liquidator;
(e) is an officer of a body corporate related to the corporation; or
(f) unless the Commission directs in writing that this paragraph does not apply in relation to the person in relation to the corporation—has at any time within the last 12 months been an officer or promoter of the corporation or of a related body corporate.
(2) In subsection (1):
officer, in relation to a body corporate, does not include a receiver, appointed under an instrument whether before or after the commencement of this section, of property of the body.
(3) Paragraph (1)(d) does not apply in relation to a body corporate authorised by or under a law of the Commonwealth, of a State or of a Territory to act as receiver of property of the corporation concerned.
(4) Nothing in this section prevents a person from acting as receiver of property of a Division 2 company under an appointment validly made before the company’s registration day.
418A Court may declare whether controller is validly acting
(1) Where there is doubt, on a specific ground, about:
(a) whether a purported appointment of a person, after the commencement of this section, as receiver of property of a corporation is valid; or
(b) whether a person who has entered into possession, or assumed control, of property of a corporation after the commencement of this section did so validly under the terms of a charge on that property;
the person, the corporation or any of the corporation’s creditors may apply to the Court for an order under subsection (2).
(2) On an application, the Court may make an order declaring whether or not:
(a) the purported appointment was valid; or
(b) the person entered into possession, or assumed control, validly under the terms of the charge;
as the case may be, on the ground specified in the application or on some other ground.
419 Liability of controller
(1) A receiver, or any other authorised person, who, whether as agent for the corporation concerned or not, enters into possession or assumes control of any property of a corporation for the purpose of enforcing any charge is, notwithstanding any agreement to the contrary, but without prejudice to the person’s rights against the corporation or any other person, liable for debts incurred by the person in the course of the receivership, possession or control for services rendered, goods purchased or property hired, leased, used or occupied.
(2) Subsection (1) does not constitute the person entitled to the charge a mortgagee in possession.
(3) Where:
(a) a person (in this subsection called the controller) enters into possession or assumes control of property of a corporation;
(b) the controller purports to have been properly appointed as a receiver in respect of that property under a power contained in an instrument, but has not been properly so appointed; and
(c) civil proceedings in an Australian court arise out of an act alleged to have been done by the controller;
the court may, if it is satisfied that the controller believed on reasonable grounds that the controller had been properly so appointed, order that:
(d) the controller be relieved in whole or in part of a liability that the controller has incurred but would not have incurred if the controller had been properly so appointed; and
(e) a person who purported to appoint the controller as receiver be liable in respect of an act, matter or thing in so far as the controller has been relieved under paragraph (d) of liability in respect of that act, matter or thing.
419A Liability of controller under pre‑existing agreement about property used by corporation
(1) This section applies if:
(a) under an agreement made before the control day in relation to a controller of property of a corporation, the corporation continues after that day to use or occupy, or to be in possession of, property (the third party property) of which someone else is the owner or lessor; and
(b) the controller is controller of the third party property.
(2) Subject to subsections (4) and (7), the controller is liable for so much of the rent or other amounts payable by the corporation under the agreement as is attributable to a period:
(a) that begins more than 7 days after the control day; and
(b) throughout which:
(i) the corporation continues to use or occupy, or to be in possession of, the third party property; and
(ii) the controller is controller of the third party property.
(3) Within 7 days after the control day, the controller may give to the owner or lessor a notice that specifies the third party property and states that the controller does not propose to exercise rights in relation to that property as controller of the property, whether on behalf of the corporation or anyone else.
(4) Despite subsection (2), the controller is not liable for so much of the rent or other amounts payable by the corporation under the agreement as is attributable to a period during which a notice under subsection (3) is in force, but such a notice does not affect a liability of the corporation.
(5) A notice under subsection (3) ceases to have effect if:
(a) the controller revokes it by writing given to the owner or lessor; or
(b) the controller exercises, or purports to exercise, a right in relation to the third party property as controller of the property, whether on behalf of the corporation or anyone else.
(6) For the purposes of subsection (5), the controller does not exercise, or purport to exercise, a right as mentioned in paragraph (5)(b) merely because the controller continues to be in possession, or to have control, of the third party property, unless the controller:
(a) also uses the property; or
(b) asserts a right, as against the owner or lessor, so to continue.
(7) Subsection (2) does not apply in so far as a court, by order, excuses the controller from liability, but an order does not affect a liability of the corporation.
(8) The controller is not taken because of subsection (2):
(a) to have adopted the agreement; or
(b) to be liable under the agreement otherwise than as mentioned in subsection(2).
420 Powers of receiver
(1) Subject to this section, a receiver of property of a corporation has power to do, in Australia and elsewhere, all things necessary or convenient to be done for or in connection with, or as incidental to, the attainment of the objectives for which the receiver was appointed.
(2) Without limiting the generality of subsection (1), but subject to any provision of the court order by which, or the instrument under which, the receiver was appointed, being a provision that limits the receiver’s powers in any way, a receiver of property of a corporation has, in addition to any powers conferred by that order or instrument, as the case may be, or by any other law, power, for the purpose of attaining the objectives for which the receiver was appointed:
(a) to enter into possession and take control of property of the corporation in accordance with the terms of that order or instrument;
(b) to lease, let on hire or dispose of property of the corporation;
(c) to grant options over property of the corporation on such conditions as the receiver thinks fit;
(d) to borrow money on the security of property of the corporation;
(e) to insure property of the corporation;
(f) to repair, renew or enlarge property of the corporation;
(g) to convert property of the corporation into money;
(h) to carry on any business of the corporation;
(j) to take on lease or on hire, or to acquire, any property necessary or convenient in connection with the carrying on of a business of the corporation;
(k) to execute any document, bring or defend any proceedings or do any other act or thing in the name of and on behalf of the corporation;
(m) to draw, accept, make and indorse a bill of exchange or promissory note;
(n) to use a seal of the corporation;
(o) to engage or discharge employees on behalf of the corporation;
(p) to appoint a solicitor, accountant or other professionally qualified person to assist the receiver;
(q) to appoint an agent to do any business that the receiver is unable to do, or that it is unreasonable to expect the receiver to do, in person;
(r) where a debt or liability is owed to the corporation—to prove the debt or liability in a bankruptcy, insolvency or winding up and, in connection therewith, to receive dividends and to assent to a proposal for a composition or a scheme of arrangement;
(s) where the receiver was appointed under an instrument that created a charge on uncalled capital or uncalled premiums of the corporation:
(i) in the name of the corporation, to make a call in respect of money unpaid on shares in the corporation (whether on account of the nominal value of the shares or by way of premium); or
(ii) upon the giving of a proper indemnity to a liquidator of the corporation—in the name of the liquidator, to make a call in respect of money unpaid on account of the nominal value of shares in the corporation;
(t) to enforce payment of any call that is due and unpaid, whether the calls were made by the receiver or otherwise;
(u) to make or defend an application for the winding up of the corporation; and
(w) to refer to arbitration any question affecting the corporation.
(3) The conferring by this section on a receiver of powers in relation to property of a corporation does not affect any rights in relation to that property of any other person other than the corporation.
(4) In this section, a reference, in relation to a receiver, to property of a corporation is, unless the contrary intention appears, a reference to the property of the corporation in relation to which the receiver was appointed.
420A Controller’s duty of care in exercising power of sale
(1) In exercising a power of sale in respect of property of a corporation, a controller must take all reasonable care to sell the property for:
(a) if, when it is sold, it has a market value—not less than that market value; or
(b) otherwise—the best price that is reasonably obtainable, having regard to the circumstances existing when the property is sold.
(2) Nothing in subsection (1) limits the generality of anything in section 232.
420B Court may authorise managing controller to dispose of property despite prior charge
(1) On the application of a managing controller of property of a corporation, the Court may by order authorise the controller to sell, or to dispose of in some other specified way, specified property of the corporation, even though it is subject to a charge (in this section called the prior charge) that has priority over a charge (in this section called the controller’s charge) on that property that the controller is enforcing.
(2) However, the Court may only make an order if satisfied that:
(a) apart from the existence of the prior charge, the controller would have power to sell, or to so dispose of, the property; and
(b) the controller has taken all reasonable steps to obtain the consent of the holder of the prior charge to the sale or disposal, but has not obtained that consent; and
(c) sale or disposal of the property under the order is in the best interests of the corporation’s creditors and of the corporation; and
(d) sale or disposal of the property under the order will not unreasonably prejudice the rights or interests of the holder of the prior charge.
(3) The Court is to have regard to the need to protect adequately the rights and interests of the holder of the prior charge.
(4) If the property would be sold or disposed of together with other property that is subject to the controller’s charge, the Court may have regard to:
(a) the amount (if any) by which it is reasonable to expect that the net proceeds of selling or disposing of that other property otherwise than together with the first‑mentioned property would be less than so much of the net proceeds of selling or disposing of all the property together as would be attributable to that other property; and
(b) the amount (if any) by which it is reasonable to expect that the net proceeds of selling or disposing of the first‑mentioned property otherwise than together with the other property would be greater than so much of the net proceeds of selling or disposing of all the property together as would be attributable to the first‑mentioned property.
(5) Nothing in subsection (3) or (4) limits the matters to which the Court may have regard for the purposes of subsection (2).
(6) An order may be made subject to conditions, for example (but without limitation):
(a) a condition that:
(i) the net proceeds of the sale or disposal; and
(ii) the net proceeds of the sale or disposal of such other property (if any) as is specified in the condition and is subject to the controller’s charge;
or a specified part of those net proceeds, be applied in payment of specified amounts secured by the prior charge; or
(b) a condition that the controller apply a specified amount in payment of specified amounts secured by the prior charge.
420C Receiver’s power to carry on corporation’s business during winding up
(1) A receiver of property of a corporation that is being wound up may:
(a) with the written approval of the corporation’s liquidator or with the approval of the Court, carry on the corporation’s business either generally or as otherwise specified in the approval; and
(b) do whatever is necessarily incidental to carrying on that business under paragraph (a).
(2) Subsection (1) does not:
(a) affect a power that the receiver has otherwise than under that subsection; or
(b) empower the receiver to do an act that he or she would not have power to do if the corporation were not being wound up.
(3) A receiver of property of a corporation who carries on the corporation’s business under subsection (1) does so:
(a) as agent for the corporation; and
(b) in his or her capacity as receiver of property of the corporation.
(4) The consequences of subsection (3) include, but are not limited to, the following:
(a) for the purposes of subsection 419(1), a debt that the receiver incurs in carrying on the business as mentioned in subsection (3) of this section is incurred in the course of the receivership;
(b) a debt or liability that the receiver incurs in so carrying on the business is not a cost, charge or expense of the winding up.
421 Controller’s duties in relation to bank accounts and accounting records
(1) A controller of property of a corporation must:
(a) open and maintain an account, with an Australian bank, bearing:
(i) the controller’s own name; and
(ii) in the case of a receiver of the property—the title “receiver”; and
(iii) otherwise—the title “controller”; and
(iv) the corporation’s name;
or 2 or more such accounts; and
(b) within 3 business days after money of the corporation comes under the control of the controller, pay that money into such an account that the controller maintains; and
(c) ensure that no such account that the controller maintains contains money other than money of the corporation that comes under the control of the controller; and
(d) keep such accounting records as correctly record and explain all transactions that the controller enters into as the controller.
(2) Any director, creditor or member of a corporation may, unless the Court otherwise orders, personally or by an agent, inspect records kept by a controller of property of the corporation for the purposes of paragraph (1)(d).
421A Managing controller to report within 2 months about corporation’s affairs
(1) A managing controller of property of a corporation must prepare a report about the corporation’s affairs that is in the prescribed form and is made up to a day not later than 30 days before the day when it is prepared.
(2) The managing controller must prepare and lodge the report within 2 months after the control day.
(3) As soon as practicable, and in any event within 14 days, after lodging the report, the managing controller must cause to be published in a national newspaper, or in each jurisdiction in a daily newspaper that circulates generally in that jurisdiction, a notice stating:
(a) that the report has been prepared; and
(b) that a person can, on paying the prescribed fee, inspect the report at specified offices of the Commission.
(4) If, in the managing controller’s opinion, it would seriously prejudice:
(a) the corporation’s interests; or
(b) the achievement of the objectives for which the controller was appointed, or entered into possession or assumed control of property of the corporation, as the case requires;
if particular information that the controller would otherwise include in the report were made available to the public, the controller need not include the information in the report.
(5) If the managing controller omits information from the report as permitted by subsection (4), the controller must include instead a notice:
(a) stating that certain information has been omitted from the report; and
(b) summarising what the information is about, but without disclosing the information itself.
422 Reports by receiver
(1) If it appears to the receiver of property of a corporation that:
(a) a past or present officer, or a member, of the corporation may have been guilty of an offence in relation to the corporation; or
(b) a person who has taken part in the formation, promotion, administration, management or winding up of the corporation:
(i) may have misapplied or retained, or may have become liable or accountable for, any money or property (whether the property is within or outside Australia) of the corporation; or
(ii) may have been guilty of any negligence, default, breach of duty or breach of trust in relation to the corporation;
the receiver shall:
(c) lodge as soon as practicable a report about the matter; and
(d) give to the Commission such information, and such access to and facilities for inspecting and taking copies of any documents, as the Commission requires.
(2) The receiver may also lodge further reports specifying any other matter that, in the receiver’s opinion, it is desirable to bring to the notice of the Commission.
(3) If it appears to the Court:
(a) that a past or present officer, or a member, of a corporation in respect of property of which a receiver has been appointed has been guilty of an offence under a law referred to in paragraph (1)(a) in relation to the corporation; or
(b) that a person who has taken part in the formation, promotion, administration, management or winding up of a corporation in respect of property of which a receiver has been appointed has engaged in conduct referred to in paragraph (1)(b) in relation to the corporation;
and that the receiver has not lodged a report about the matter, the Court may, on the application of a person interested in the appointment of the receiver or of its own motion, direct the receiver to lodge such a report.
423 Supervision of controller
(1) If:
(a) it appears to the Court or to the Commission that a controller of property of a corporation has not faithfully performed, or is not faithfully performing, the controller’s functions or has not observed, or is not observing, a requirement of:
(i) in the case of a receiver—the order by which, or the instrument under which, the receiver was appointed; or
(ii) otherwise—an instrument under which the controller entered into possession, or took control, of that property; or
(iii) in any case—the Court; or
(iv) in any case—this Law, the regulations or the rules; or
(b) a person complains to the Court or to the Commission about an act or omission of a controller of property of a corporation in connection with performing or exercising any of the controller’s functions and powers;
the Court or the Commission, as the case may be, may inquire into the matter and, where the Court or Commission so inquires, the Court may take such action as it thinks fit.
(2) The Commission may report to the Court any matter that in its opinion is a misfeasance, neglect or omission on the part of a controller of property of a corporation and the Court may order the controller to make good any loss that the estate of the corporation has sustained thereby and may make such other order or orders as it thinks fit.
(3) The Court may at any time:
(a) require a controller of property of a corporation to answer questions about the performance or exercise of any of the controller’s functions and powers as controller; or
(b) examine a person about the performance or exercise by such a controller of any of the controller’s functions and powers as controller; or
(c) direct an investigation to be made of such a controller’s books.
424 Controller may apply to Court
(1) A controller of property of a corporation may apply to the Court for directions in relation to any matter arising in connection with the performance or exercise of any of the controller’s functions and powers as controller.
(2) In the case of a receiver of property of a corporation, subsection (1) applies only if the receiver was appointed under a power contained in an instrument.
425 Court’s power to fix receiver’s remuneration
(1) The Court may by order fix the amount to be paid by way of remuneration to any person who, under a power contained in an instrument, has been appointed as receiver of property of a corporation.
(2) The power of the Court to make an order under this section:
(a) extends to fixing the remuneration for any period before the making of the order or the application for the order;
(b) is exercisable even if the receiver has died, or ceased to act, before the making of the order or the application for the order; and
(c) if the receiver has been paid or has retained for the receiver’s remuneration for any period before the making of the order any amount in excess of that fixed for that period—extends to requiring the receiver or the receiver’s personal representatives to account for the excess or such part of the excess as is specified in the order.
(3) The power conferred by paragraph (2)(c) shall not be exercised in respect of any period before the making of the application for the order unless, in the opinion of the Court, there are special circumstances making it proper for the power to be so exercised.
(4) The Court may from time to time vary or amend an order under this section.
(5) An order under this section may be made, varied or amended on the application of:
(a) a liquidator of the corporation; or
(b) an administrator of the corporation; or
(c) an administrator of a deed of company arrangement executed by the corporation; or
(d) the Commission.
(6) An order under this section may be varied or amended on the application of the receiver concerned.
(7) An order under this section may be made, varied or amended only as provided in subsections (5) and (6).
426 Controller has qualified privilege in certain cases
A controller of property of a corporation has qualified privilege in respect of:
(a) a matter contained in a report that the controller lodges under section 421A or 422; or
(b) a comment that the controller makes under paragraph 429(2)(c).
427 Notification of matters relating to controller
(1) A person who obtains an order for the appointment of a receiver of property of a corporation, or who appoints such a receiver under a power contained in an instrument, shall:
(a) within 7 days after obtaining the order or making the appointment, lodge notice that the order has been obtained, or that the appointment has been made, as the case may be; and
(b) within 21 days after obtaining the order or making the appointment, cause notice that the order has been obtained, or that the appointment has been made, as the case may be, to be published in the Gazette.
(1A) A person who appoints another person to enter into possession, or take control, of property of a corporation (whether or not as agent for the corporation) for the purpose of enforcing a charge otherwise than as receiver of that property must:
(a) within 7 days after making the appointment, lodge notice of the appointment; and
(b) within 21 days after making the appointment, cause notice of the appointment to be published in the Gazette.
(1B) A person who enters into possession, or takes control, as mentioned in subsection (1A) must:
(a) within 7 days after so entering into possession or taking control, lodge notice that the person has done so; and
(b) within 21 days after so entering into possession or taking control, cause to be published in the Gazette notice that the person has done so;
unless another person:
(c) appointed the first‑mentioned person so to enter into possession or take control; and
(d) complies with subsection (1A) in relation to the appointment.
(2) Within 14 days after becoming a controller of property of a corporation, a person must lodge notice in the prescribed form of the address of the person’s office.
(3) A controller of property of a corporation must, within 14 days after a change in the situation of the controller’s office, lodge notice in the prescribed form of the change.
(4) A person who ceases to be a controller of property of a corporation must:
(a) within 7 days after so ceasing, lodge notice that the person has so ceased; and
(b) within 21 days after so ceasing, cause notice that the person has so ceased to be published in the Gazette.
428 Statement that receiver appointed or other controller acting
(1) Where a receiver of property (whether within or outside this jurisdiction or within or outside Australia) of a corporation has been appointed, the corporation shall set out, in every public document, and in every eligible negotiable instrument, of the corporation, after the name of the corporation where it first appears, a statement that a receiver, or a receiver and manager, as the case requires, has been appointed.
(2) Where there is a controller (other than a receiver) of property (whether within Australia or elsewhere) of a corporation, the corporation must set out, in every public document, and in every eligible negotiable instrument, of the corporation, after the corporation’s name where it first appears, a statement that a controller is acting.
429 Officers to report to controller about corporation’s affairs
(1) In this section:
reporting officer, in relation to a corporation in respect of property of which a person is controller, means a person who was:
(a) in the case of a company or registered Australian corporation—a director or secretary of the company or registered Australian corporation; or
(b) in the case of a foreign company—a local agent of the foreign company;
on the control day.
(2) Where a person becomes a controller of property of a corporation:
(a) the person shall serve on the corporation as soon as practicable notice that the person is a controller of property of the corporation;
(b) within 14 days after the corporation receives the notice, the reporting officers shall make out and submit to the person a report in the prescribed form about the affairs of the corporation as at the control day; and
(c) the person shall, within one month after receipt of the report:
(i) lodge a copy of the report and a notice setting out any comments the person sees fit to make relating to the report or, if the person does not see fit to make any comment, a notice stating that the person does not see fit to make any comment;
(ii) send to the corporation a copy of the notice lodged in accordance with subparagraph (i); and
(iii) if the person became a controller of the property:
(A) because of an appointment as receiver of the property that was made by or on behalf of the holder of debentures of the corporation; or
(B) by entering into possession, or taking control, of the property for the purpose of enforcing a charge securing such debentures;
and there are trustees for the holders of those debentures—send to those trustees a copy of the report and a copy of the notice lodged under subparagraph (i).
(3) Where notice has been served on a corporation under paragraph (2)(a), the reporting officers may apply to the controller or to the Court to extend the period within which the report is to be submitted and:
(a) if application is made to the controller—if the controller believes that there are special reasons for so doing, the controller may, by notice in writing given to the reporting officers, extend that period until a specified day; and
(b) if application is made to the Court—if the Court believes that there are special reasons for so doing, the Court may, by order, extend that period until a specified day.
(4) As soon as practicable after granting an extension under paragraph (3)(a), the controller shall lodge a copy of the notice.
(5) As soon as practicable after the Court grants an extension under paragraph (3)(b), the reporting officers shall lodge a copy of the order.
(6) Subsections (2), (3) and (4) do not apply in a case where a person becomes a controller of property of a corporation:
(a) to act with an existing controller of property of the corporation; or
(b) in place of a controller of such property who has died or ceased to be a controller of such property.
(6A) However, if subsection (2) applies in a case where a controller of property of a corporation dies, or ceases to be a controller of property of the corporation, before subsection (2) is fully complied with, then:
(a) the references in paragraphs (2)(b) and (c) to the person; and
(b) the references in subsections (3) and (4) to the controller;
include references to the controller’s successor and to any continuing controller.
(7) Where a corporation is being wound up, this section (including subsection (6A)) and section 430 apply even if the controller and the liquidator are the same person, but with any necessary modifications arising from that fact.
430 Controller may require reports
(1) A controller of property of a corporation may, by notice given to the person or persons, require one or more persons included in one or more of the following classes of persons to make out as required by the notice, verify by a statement in writing in the prescribed form, and submit to the controller, a report, containing such information as is specified in the notice as to the affairs of the corporation or as to such of those affairs as are specified in the notice, as at a date specified in the notice:
(a) persons who are or have been officers of the corporation;
(b) where the corporation was incorporated within one year before the control day—persons who have taken part in the formation of the corporation;
(c) persons who are employed by the corporation or have been so employed within one year before the control day and are, in the opinion of the controller, capable of giving the information required;
(d) persons who are, or have been within one year before the control day, officers of, or employed by, a corporation that is, or within that year was, an officer of the corporation.
(2) Without limiting the generality of subsection (1), a notice under that subsection may specify the information that the controller requires as to affairs of the corporation by reference to information that this Law requires to be included in any other report, statement or notice under this Law.
(3) A person making a report and verifying it as required by subsection (1) shall, subject to the regulations, be allowed, and shall be paid by the controller (or the controller’s successor) out of the controller’s receipts, such costs and expenses incurred in and about the preparation and making of the report and the verification of the report as the controller (or the controller’s successor) considers reasonable.
(4) A person shall comply with a requirement made under subsection (1).
(5) A reference in this section to the controller’s successor includes a reference to a continuing controller.
431 Controller may inspect books
A controller of property of a corporation is entitled to inspect at any reasonable time any books of the corporation that relate to that property and a person shall not fail to allow the controller to inspect such books at such a time.
432 Lodging controller’s accounts
(1) A controller of property of a corporation must lodge an account:
(a) within one month after the end of:
(i) 6 months, or such shorter period as the controller determines, after the day when the controller became a controller of property of the corporation; and
(ii) each subsequent period of 6 months throughout which the controller is a controller of property of the corporation; and
(b) within one month after the controller ceases to be a controller of property of the corporation.
(1A) An account must be in the prescribed form and show:
(a) the controller’s receipts and payments during:
(i) in the case of an account under paragraph (1)(a)—the 6 months or shorter period, as the case requires; or
(ii) in the case of an account under paragraph (1)(b)—the period beginning at the end of the period to which the last account related, or on the control day, as the case requires, and ending on the day when the controller so ceased; and
(b) except in the case of an account lodged under subparagraph (1)(a)(i)—the respective aggregates of the controller’s receipts and payments since the control day; and
(c) in the case of:
(i) a receiver appointed under a power contained in an instrument; or
(ii) anyone else who is in possession, or has control, of property of the corporation for the purpose of enforcing a charge;
the following:
(iii) the amount (if any) owing under that instrument or charge:
(A) in the case of an account lodged under subparagraph (1)(a)(i)—at the end of the control day and at the end of the period to which the account relates; or
(B) otherwise—at the end of the period to which the account relates;
(iv) the controller’s estimate of the total value, at the end of the period to which the account relates, of the property of the corporation that is subject to the instrument or charge.
(2) The Commission may, of its own motion or on the application of the corporation or a creditor of the corporation, cause the accounts lodged in accordance with subsection (1) to be audited by a registered company auditor appointed by the Commission and, for the purpose of the audit, the controller must furnish the auditor with such books and information as the auditor requires.
(3) Where the Commission causes the accounts to be audited on the request of the corporation or a creditor, the Commission may require the corporation or creditor, as the case may be, to give security for the payment of the cost of the audit.
(4) The costs of an audit under subsection (2) shall be fixed by the Commission and the Commision may if it thinks fit make an order declaring that, for the purposes of subsection 419(1), those costs shall be deemed to be a debt incurred by the controller as mentioned in subsection 419(1) and, where such an order is made, the controller is liable accordingly.
(5) A person shall comply with a requirement made under this section.
433 Payment of certain debts, out of property subject to floating charge, in priority to claims under charge
(1) In this section:
registered body does not include a registrable local body.
(2) This section applies where:
(a) a receiver is appointed on behalf of the holders of any debentures of a company or registered body that are secured by a floating charge, or possession is taken or control is assumed, by or on behalf of the holders of any debentures of a company or registered body, of any property comprised in or subject to a floating charge; and
(b) at the date of the appointment or of the taking of possession or assumption of control (in this section called the relevant date):
(i) the company or registered body has not commenced to be wound up voluntarily; and
(ii) the company or registered body has not been ordered to be wound up by the Court.
(3) In the case of a company, the receiver or other person taking possession or assuming control of property of the company shall pay, out of the property coming into his, her or its hands, the following debts or amounts in priority to any claim for principal or interest in respect of the debentures:
(a) first, any amount that in a winding up is payable in priority to unsecured debts pursuant to section 562;
(b) next, if an auditor of the company had applied to the Commission under subsection 329(6) for consent to his, her or its resignation as auditor and the Commission had refused that consent before the relevant date—the reasonable fees and expenses of the auditor incurred during the period beginning on the day of the refusal and ending on the relevant date;
(c) subject to subsections (6) and (7), next, any debt or amount that in a winding up is payable in priority to other unsecured debts pursuant to paragraph 556(1)(e), (g) or (h) or section 560.
(4) In the case of a registered body, the receiver or other person taking possession or assuming control of property of the registered body shall pay, out of the property of the registered body coming into his, her or its hands, the following debts or amounts in priority to any claim for principal or interest in respect of the debentures:
(a) first, any amount that in a winding up is payable in priority to unsecured debts pursuant to section 562;
(b) next, any debt or amount that in a winding up is payable in priority to other unsecured debts pursuant to paragraph 556(1)(e), (g) or (h) or section 560.
(5) The receiver or other person taking possession or assuming control of property shall pay debts and amounts payable pursuant to paragraph (3)(c) or (4)(b) in the same order of priority as is prescribed by Division 6 of Part 5.6 in respect of those debts and amounts.
(6) In the case of a company, if an auditor of the company had applied to the Commission under subsection 329(6) for consent to his, her or its resignation as auditor and the Commission had, before the relevant date, refused that consent, a receiver shall, when property comes to the receiver’s hands, before paying any debt or amount referred to in paragraph (3)(c), make provision out of that property for the reasonable fees and expenses of the auditor incurred after the relevant date but before the date on which the property comes into the receiver’s hands, being fees and expenses in respect of which provision has not already been made under this subsection.
(7) If an auditor of the company applies to the Commission under subsection 329(6) for consent to his, her or its resignation as auditor and, after the relevant date, the Commission refuses that consent, the receiver shall, in relation to property that comes into the receiver’s hands after the refusal, before paying any debt or amount referred to in paragraph (3)(c), make provision out of that property for the reasonable fees and expenses of the auditor incurred after the refusal and before the date on which the property comes into the receiver’s hands, being fees and expenses in respect of which provision has not already been made under this subsection.
(8) A receiver shall make provision in respect of reasonable fees and expenses of an auditor in respect of a particular period as required by subsection (6) or (7) whether or not the auditor has made a claim for fees and expenses for that period, but where the auditor has not made a claim, the receiver may estimate the reasonable fees and expenses of the auditor for that period and make provision in accordance with the estimate.
(9) For the purposes of this section the references in Division 6 of Part 5.6 to the relevant date shall be read as references to the date of the appointment of the receiver, or of possession being taken or control being assumed, as the case may be.
434 Enforcing controller’s duty to make returns
(1) If a controller of property of a corporation:
(a) who has made default in making or lodging any return, account or other document or in giving any notice required by law fails to make good the default within 14 days after the service on the controller, by any member or creditor of the corporation or trustee for debenture holders, of a notice requiring the controller to do so; or
(b) who has become a controller of property of the corporation otherwise than by being appointed a receiver of such property by a court and who has, after being required at any time by the liquidator of the corporation so to do, failed to render proper accounts of, and to vouch, the controller’s receipts and payments and to pay over to the liquidator the amount properly payable to the liquidator;
the Court may make an order directing the controller to make good the default within such time as is specified in the order.
(2) An application under subsection (1) may be made:
(a) if paragraph (1)(a) applies—by a member or creditor of the corporation or by a trustee for debenture holders; and
(b) if paragraph (1)(b) applies—by the liquidator of the corporation.
434A Court may remove controller for misconduct
Where, on the application of a corporation, the Court is satisfied that a controller of property of the corporation has been guilty of misconduct in connection with performing or exercising any of the controller’s functions and powers, the Court may order that, on and after a specified day, the controller cease to act as receiver or give up possession or control, as the case requires, of property of the corporation.
434B Court may remove redundant controller
(1) The Court may order that, on and after a specified day, a controller of property of a corporation:
(a) cease to act as receiver, or give up possession or control, as the case requires, of property of the corporation; or
(b) act as receiver, or continue in possession or control, as the case requires, only of specified property of the corporation.
(2) However, the Court may only make an order under subsection (1) if satisfied that the objectives for which the controller was appointed, or entered into possession or took control of property of the corporation, as the case requires, have been achieved, so far as is reasonably practicable, except in relation to any property specified in the order under paragraph (1)(b).
(3) For the purposes of subsection (2), the Court must have regard to:
(a) the corporation’s interests; and
(b) the interests of the holder of the charge that the controller is enforcing; and
(c) the interests of the corporation’s other creditors; and
(d) any other relevant matter.
(4) The Court may only make an order under subsection (1) on the application of a liquidator appointed for the purposes of winding up the corporation in insolvency.
(5) An order under subsection (1) may also prohibit the holder of the charge from doing any or all of the following, except with the leave of the Court:
(a) appointing a person as receiver of property of the corporation under a power contained in an instrument relating to the charge;
(b) entering into possession, or taking control, of such property for the purpose of enforcing the charge;
(c) appointing a person so to enter into possession or take control (whether as agent for the chargee or for the corporation).
434C Effect of sections 434A and 434B
(1) Except as expressly provided in section 434A or 434B, an order under that section does not affect a charge on property of a corporation.
(2) Nothing in section 434A or 434B limits any other power of the Court to remove, or otherwise deal with, a controller of property of a corporation (for example, the Court’s powers under section 423).
Part 5.3A—Administration of a company’s affairs with a view to executing a deed of company arrangement
Division 1—Preliminary
435A Object of Part
The object of this Part is to provide for the business, property and affairs of an insolvent company to be administered in a way that:
(a) maximises the chances of the company, or as much as possible of its business, continuing in existence; or
(b) if it is not possible for the company or its business to continue in existence—results in a better return for the company’s creditors and members than would result from an immediate winding up of the company
435B Interpretation
In this Part, unless the contrary intention appears:
receiver includes a receiver and manager.
435C When administration begins and ends
(1) The administration of a company:
(a) begins when an administrator of the company is appointed under section 436A, 436B or 436C; and
(b) ends on the happening of whichever event of a kind referred to in subsection (2) or (3) happens first after the administration begins.
(2) The normal outcome of the administration of a company is that:
(a) a deed of company arrangement is executed by both the company and the deed’s administrator; or
(b) the company’s creditors resolve under paragraph 439C(b) that the administration should end; or
(c) the company’s creditors resolve under paragraph 439C(c) that the company be wound up.
(3) However, the administration of a company may also end because:
(a) the Court orders, under section 447A or otherwise, that the administration is to end, for example, because the Court is satisfied that the company is solvent; or
(b) the convening period, as fixed by subsection 439A(5), for a meeting of the company’s creditors ends:
(i) without the meeting being convened in accordance with section 439A; and
(ii) without an application being made for the Court to extend under subsection 439A(6) the convening period for the meeting; or
(c) an application for the Court to extend under subsection 439A(6) the convening period for such a meeting is finally determined or otherwise disposed of otherwise than by the Court extending the convening period; or
(d) the convening period, as extended under subsection 439A(6), for such a meeting ends without the meeting being convened in accordance with section 439A; or
(e) such a meeting convened under section 439A ends (whether or not it was earlier adjourned) without a resolution under section 439C being passed at the meeting; or
(f) the company contravenes subsection 444B(2) by failing to execute a proposed deed of company arrangement; or
(g) the Court appoints a provisional liquidator of the company, or orders that the company be wound up.
(4) During the administration of a company, the company is taken to be under administration.
Division 2—Appointment of administrator and first meeting of creditors
436A Company may appoint administrator if board thinks it is or will become insolvent
(1) A company may, by writing under its common seal, appoint an administrator of the company if the board has resolved to the effect that:
(a) in the opinion of the directors voting for the resolution, the company is insolvent, or is likely to become insolvent at some future time; and
(b) an administrator of the company should be appointed.
(2) Subsection (1) does not apply to a company that is already being wound up.
436B Liquidator may appoint administrator
(1) A liquidator or provisional liquidator of a company may by writing appoint an administrator of the company if he or she thinks that the company is insolvent, or is likely to become insolvent at some future time.
(2) With the leave of the Court, a liquidator or provisional liquidator of a company may appoint himself or herself under subsection (1).
(3) Subsection (2) has effect subject to Division 14.
436C Chargee may appoint administrator
(1) A person who is entitled to enforce a charge on the whole, or substantially the whole, of a company’s property may by writing appoint an administrator of the company if the charge has become, and is still, enforceable.
(2) Subsection (1) does not apply to a company that is already being wound up.
436D Company already under administration
An administrator cannot be appointed under section 436A, 436B or 436C if the company is already under administration.
436E Purpose and timing of first meeting of creditors
(1) The administrator of a company under administration must convene a meeting of the company’s creditors in order to determine:
(a) whether to appoint a committee of creditors; and
(b) if so, who are to be the committee’s members.
(2) The meeting must be held within 5 business days after the administration begins.
(3) The administrator must convene the meeting by:
(a) giving written notice of the meeting to as many of the company’s creditors as reasonably practicable; and
(b) causing notice of the meeting to be published:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the company has its registered office or carries on business, in a daily newspaper that circulates generally in that jurisdiction;
at least 2 business days before the meeting.
(4) At the meeting, the company’s creditors may also, by resolution:
(a) remove the administrator from office; and
(b) appoint someone else as administrator of the company.
436F Functions of committee of creditors
(1) The functions of a committee of creditors of a company under administration are:
(a) to consult with the administrator about matters relating to the administration; and
(b) to receive and consider reports by the administrator.
(2) A committee cannot give directions to the administrator, except as provided in subsection (3).
(3) As and when a committee reasonably requires, the administrator must report to the committee about matters relating to the administration.
436G Membership of committee
A person can be a member of a committee of creditors of a company under administration if, and only if, he or she is:
(a) a creditor of the company; or
(b) the attorney of such a creditor because of a general power of attorney; or
(c) authorised in writing by such a creditor to be such a member.
Division 3—Administrator assumes control of company’s affairs
437A Role of administrator
(1) While a company is under administration, the administrator:
(a) has control of the company’s business, property and affairs; and
(b) may carry on that business and manage that property and those affairs; and
(c) may terminate or dispose of all or part of that business, and may dispose of any of that property; and
(d) may perform any function, and exercise any power, that the company or any of its officers could perform or exercise if the company were not under administration.
(2) Nothing in subsection (1) limits the generality of anything else in it.
437B Administrator acts as company’s agent
When performing a function, or exercising a power, as administrator of a company under administration, the administrator is taken to be acting as the company’s agent.
437C Powers of other officers suspended
(1) While a company is under administration, a person (other than the administrator) cannot perform or exercise, and must not purport to perform or exercise, a function or power as an officer of the company, except with the administrator’s written approval.
(2) Subsection (1) does not remove an officer of a company from his or her office.
(3) Section 437D does not limit the generality of subsection (1) of this section.
(4) In this section:
officer, in relation to a company under administration, includes:
(a) a receiver who is not also a manager; and
(b) a receiver and manager appointed by a court; and
(c) a liquidator or provisional liquidator appointed by the Court before the administration began.
(5) However, a person is not an officer of a company for the purposes of this section merely because he or she is an employee of the company.
437D Only administrator can deal with company’s property
(1) This section applies where:
(a) a company under administration purports to enter into; or
(b) a person purports to enter into, on behalf of a company under administration;
a transaction or dealing affecting property of the company.
(2) The transaction or dealing is void unless:
(a) the administrator entered into it on the company’s behalf; or
(b) the administrator consented to it in writing before it was entered into; or
(c) it was entered into under an order of the Court.
(3) Subsection (2) does not apply to a payment made:
(a) by an Australian bank out of an account kept by the company with the bank; and
(b) in good faith and in the ordinary course of the bank’s banking business; and
(c) after the administration began and on or before the day on which:
(i) the administrator gives to the bank (under subsection 450A(3) or otherwise) written notice of the appointment that began the administration; or
(ii) the administrator complies with paragraph 450A(1)(b) in relation to that appointment;
whichever happens first.
(4) Subsection (2) has effect subject to an order that the Court makes after the purported transaction or dealing.
(5) If, because of subsection (2), the transaction or dealing is void, or would be void apart from subsection (4), an officer of the company who:
(a) purported to enter into the transaction or dealing on the company’s behalf; or
(b) was in any other way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the transaction or dealing;
contravenes this subsection.
437E Order for compensation where officer involved in void transaction
(1) Where:
(a) a court finds a person guilty of an offence constituted by a contravention of subsection 437D(5) (including such an offence that is taken to have been committed because of section 5 of the Crimes Act 1914 or that section as it applies as a law of this jurisdiction); and
(b) the court is satisfied that the company or another person has suffered loss or damage because of the act or omission constituting the offence;
the court may (whether or not it imposes a penalty) order the first‑mentioned person to pay compensation to the company or other person, as the case may be, of such amount as the order specifies.
Note: Section 73A defines when a court is taken to find a person guilty of an offence.
(2) An order under subsection (1) may be enforced as if it were a judgment of the court.
(3) The power of a court under section 1318 to relieve a person from liability as mentioned in that section extends to relieving a person from liability to be ordered under this section to pay compensation.
437F Effect of administration on company’s members
A transfer of shares in a company, or an alteration in the status of members of a company, that is made during the administration of the company is void except so far as the Court otherwise orders.
Division 4—Administrator investigates company’s affairs
438A Administrator to investigate affairs and consider possible courses of action
As soon as practicable after the administration of a company begins, the administrator must:
(a) investigate the company’s business, property, affairs and financial circumstances; and
(b) form an opinion about each of the following matters:
(i) whether it would be in the interests of the company’s creditors for the company to execute a deed of company arrangement;
(ii) whether it would be in the creditors’ interests for the administration to end;
(iii) whether it would be in the creditors’ interests for the company to be wound up.
438B Directors to help administrator
(1) As soon as practicable after the administration of a company begins, each director must:
(a) deliver to the administrator all books in the director’s possession that relate to the company, other than books that the director is entitled, as against the company and the administrator, to retain; and
(b) if the director knows where other books relating to the company are—tell the administrator where those books are.
(2) Within 7 days after the administration of a company begins or such longer period as the administrator allows, the directors must give to the administrator a statement about the company’s business, property, affairs and financial circumstances.
(3) A director of a company under administration must:
(a) attend on the administrator at such times; and
(b) give the administrator such information about the company’s business, property, affairs and financial circumstances;
as the administrator reasonably requires.
(4) A person must not, without reasonable excuse, fail to comply with subsection (1), (2) or (3).
438C Administrator’s rights to company’s books
(1) A person is not entitled, as against the administrator of a company under administration:
(a) to retain possession of books of the company; or
(b) to claim or enforce a lien on such books;
but such a lien is not otherwise prejudiced.
(2) Paragraph (1)(a) does not apply in relation to books of which a secured creditor of the company is entitled to possession otherwise than because of a lien, but the administrator is entitled to inspect, and make copies of, such books at any reasonable time.
(3) The administrator of a company under administration may give to a person a written notice requiring the person to deliver to the administrator, as specified in the notice, books so specified that are in the person’s possession.
(4) A notice under subsection (3) must specify a period of at least 3 business days as the period within which the notice must be complied with.
(5) A person must comply with a notice under subsection (3) except so far as the person is entitled, as against the company and the administrator, to retain possession of the books.
438D Reports by administrator
(1) If it appears to the administrator of a company under administration that:
(a) a past or present officer, or a member, of the company may have been guilty of an offence in relation to the company; or
(b) a person who has taken part in the formation, promotion, administration, management or winding up of the company:
(i) may have misapplied or retained, or may have become liable or accountable for, money or property (in Australia or elsewhere) of the company; or
(ii) may have been guilty of negligence, default, breach of duty or breach of trust in relation to the company;
the administrator must:
(c) lodge a report about the matter as soon as practicable; and
(d) give the Commission such information, and such access to and facilities for inspecting and taking copies of documents, as the Commission requires.
(2) The administrator may also lodge further reports specifying any other matter that, in his or her opinion, it is desirable to bring to the Commission’s notice.
(3) If it appears to the Court:
(a) that a past or present officer, or a member, of a company under administration has been guilty of an offence in relation to the company; or
(b) that a person who has taken part in the formation, promotion, administration, management or winding up of a company under administration has engaged in conduct of a kind referred to in paragraph (1)(b) in relation to the company;
and that the administrator has not lodged a report about the matter, the Court may, on the application of an interested person or of its own motion, direct the administrator to lodge such a report.
Division 5—Meeting of creditors decides company’s future
439A Administrator to convene meeting and inform creditors
(1) The administrator of a company under administration must convene a meeting of the company’s creditors within the convening period as fixed by subsection (5) or extended under subsection (6).
(2) The meeting must be held within 5 business days after the end of the convening period.
(3) The administrator must convene the meeting by:
(a) giving written notice of the meeting to as many of the company’s creditors as reasonably practicable; and
(b) causing notice of the meeting to be published:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the company has its registered office or carries on business, in a daily newspaper that circulates generally in that jurisdiction;
at least 5 business days before the meeting.
(4) The notice given to a creditor under paragraph (3)(a) must be accompanied by a copy of:
(a) a report by the administrator about the company’s business, property, affairs and financial circumstances; and
(b) a statement setting out the administrator’s opinion about each of the following matters:
(i) whether it would be in the creditors’ interests for the company to execute a deed of company arrangement;
(ii) whether it would be in the creditors’ interests for the administration to end;
(iii) whether it would be in the creditors’ interests for the company to be wound up;
and his or her reasons for those opinions; and
(c) if a deed of company arrangement is proposed—a statement setting out details of the proposed deed.
(5) The convening period is:
(a) if the administration begins on a day that is in December, or is less than 28 days before Good Friday—the period of 28 days beginning on that day; or
(b) otherwise—the period of 21 days beginning on the day when the administration begins.
(6) The Court may extend the convening period on an application made within the period referred to in paragraph (5)(a) or (b), as the case requires.
439B Conduct of meeting
(1) At a meeting convened under section 439A, the administrator is to preside.
(2) A meeting convened under section 439A may be adjourned from time to time, but cannot be adjourned to a day that is more than 60 days after the first day on which the meeting was held, even if no resolution under section 439C has been passed at the meeting.
439C What creditors may decide
At a meeting convened under section 439A, the creditors may resolve:
(a) that the company execute a deed of company arrangement specified in the resolution (even if it differs from the proposed deed (if any) details of which accompanied the notice of meeting); or
(b) that the administration should end; or
(c) that the company be wound up.
Division 6—Protection of company’s property during administration
440A Winding up company
(1) A company under administration cannot be wound up voluntarily, except as provided by section 446A.
(2) The Court is to adjourn the hearing of an application for an order to wind up a company if the company is under administration and the Court is satisfied that it is in the interests of the company’s creditors for the company to continue under administration rather than be wound up.
(3) The Court is not to appoint a provisional liquidator of a company if the company is under administration and the Court is satisfied that it is in the interests of the company’s creditors for the company to continue under administration rather than have a provisional liquidator appointed.
440B Charge unenforceable
During the administration of a company, a person cannot enforce a charge on property of the company, except:
(a) with the administrator’s written consent; or
(b) with the leave of the Court.
440C Owner or lessor cannot recover property used by company
During the administration of a company, the owner or lessor of property that is used or occupied by, or is in the possession of, the company cannot take possession of the property or otherwise recover it, except:
(a) with the administrator’s written consent; or
(b) with the leave of the Court.
440D Stay of proceedings
(1) During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except:
(a) with the administrator’s written consent; or
(b) with the leave of the Court and in accordance with such terms (if any) as the Court imposes.
(2) Subsection (1) does not apply to:
(a) a criminal proceeding; or
(b) a prescribed proceeding.
440E Administrator not liable in damages for refusing consent
A company’s administrator is not liable to an action or other proceeding for damages in respect of a refusal to give an approval or consent for the purposes of this Division.
440F Suspension of enforcement process
During the administration of a company, no enforcement process in relation to property of the company can be begun or proceeded with, except:
(a) with the leave of the Court; and
(b) in accordance with such terms (if any) as the Court imposes.
440G Duties of court officer in relation to property of company
(1) This section applies where an officer of a court (in this section called the court officer), being:
(a) a sheriff; or
(b) the registrar or other appropriate officer of the court;
receives written notice of the fact that a company is under administration.
(2) During the administration, the court officer cannot:
(a) take action to sell property of the company under a process of execution; or
(b) pay to a person (other than the administrator):
(i) proceeds of selling property of the company (at any time) under a process of execution; or
(ii) money of the company seized (at any time) under a process of execution; or
(iii) money paid (at any time) to avoid seizure or sale of property of the company under a process of execution; or
(c) take action in relation to the attachment of a debt due to the company; or
(d) pay to a person (other than the administrator) money received because of the attachment of such a debt.
(3) The court officer must deliver to the administrator any property of the company that is in the court officer’s possession under a process of execution (whenever begun).
(4) The court officer must pay to the administrator all proceeds or money of a kind referred to in paragraph (2)(b) or (d) that:
(a) are in the court officer’s possession; or
(b) have been paid into the court and have not since been paid out.
(5) The costs of the execution or attachment are a first charge on property delivered under subsection (3) or proceeds or money paid under subsection (4).
(6) In order to give effect to a charge under subsection (5) on proceeds or money, the court officer may retain, on behalf of the person entitled to the charge, so much of the proceeds or money as the court officer thinks necessary.
(7) The Court may, if it is satisfied that it is appropriate to do so, permit the court officer to take action, or to make a payment, that subsection (2) would otherwise prevent.
(8) A person who buys property in good faith under a sale under a process of execution gets a good title to the property as against the company and the administrator, despite anything else in this section.
440H Lis pendens taken to exist
(1) This section has effect only for the purposes of a law about the effect of a lis pendens on purchasers or mortgagees.
(2) During the administration of a company, an application to wind up the company is taken to be pending.
(3) An application that is taken because of subsection (2) to be pending constitutes a lis pendens.
440J Administration not to trigger liability of director or relative under guarantee of company’s liability
(1) During the administration of a company:
(a) a guarantee of a liability of the company cannot be enforced, as against:
(i) a director of the company who is a natural person; or
(ii) a spouse, de facto spouse or relative of such a director; and
(b) without limiting paragraph (a), a proceeding in relation to such a guarantee cannot be begun against such a director, spouse, de facto spouse or relative;
except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.
(2) While subsection (1) prevents a person (the creditor) from:
(a) enforcing as against another person (the guarantor) a guarantee of a liability of a company; or
(b) beginning a proceeding against another person (the guarantor) in relation to such a guarantee;
section 1323 applies in relation to the creditor and the guarantor as if:
(c) a civil proceeding against the guarantor had begun under this Law; and
(d) the creditor were the only person of a kind referred to in that section as an aggrieved person.
Note: Under section 1323 the Court can make a range of orders to ensure that a person can meet the person’s liabilities.
(3) The effect that section 1323 has because of a particular application of subsection (2) is additional to, and does not prejudice, the effect the section otherwise has.
(4) In this section:
guarantee, in relation to a liability of a company, includes a relevant agreement (as defined in section 9) because of which a person other than the company has incurred, or may incur, whether jointly with the company or otherwise, a liability in respect of the liability of the company;
liability means a debt, liability or other obligation.
Division 7—Rights of chargee, owner or lessor
441A Where chargee acts before or during decision period
(1) This section applies where:
(a) the whole, or substantially the whole, of the property of a company under administration is subject to a charge; and
(b) before or during the decision period, the chargee enforced the charge in relation to all property of the company subject to the charge, whether or not the charge was enforced in the same way in relation to all that property.
(2) This section also applies where:
(a) a company is under administration; and
(b) the same person is the chargee in relation to each of 2 or more charges on property of the company; and
(c) the property of the company (in this subsection called the charged property) subject to the respective charges together constitutes the whole, or substantially the whole, of the company’s property; and
(d) before or during the decision period, the chargee enforced the charges in relation to all the charged property:
(i) whether or not the charges were enforced in the same way in relation to all the charged property; and
(ii) whether or not any of the charges was enforced in the same way in relation to all the property of the company subject to that charge; and
(iii) in so far as the charges were enforced in relation to property of the company in a way referred to in paragraph (a), (b) or (d) of the definition of enforce in section 9—whether or not the same person was appointed in respect of all of the last‑mentioned property.
(3) Nothing in section 437C or 440B, or in an order under subsection 444F(2), prevents any of the following from enforcing the charge, or any of the charges:
(a) the chargee;
(b) a receiver or person appointed as mentioned in paragraph (a), (b) or (d) of the definition of enforce in section 9 as that definition applies in relation to the charge, or any of the charges (even if appointed after the decision period).
(4) Section 437D does not apply in relation to a transaction or dealing that affects property of the company and is entered into by:
(a) the chargee; or
(b) a receiver or person of a kind referred to in paragraph (3)(b) of this section;
in the performance or exercise of a function or power as chargee, or as such a receiver or person, as the case may be.
441B Where enforcement of charge begins before administration
(1) This section applies if, before the beginning of the administration of a company, a chargee, receiver or other person:
(a) entered into possession, or assumed control, of property of the company; or
(b) entered into an agreement to sell such property; or
(c) made arrangements for such property to be offered for sale by public auction; or
(d) publicly invited tenders for the purchase of such property; or
(e) exercised any other power in relation to such property;
for the purpose of enforcing a charge on that property.
(2) Nothing in section 437C or 440B prevents the chargee, receiver or other person from enforcing the charge in relation to that property.
(3) Section 437D does not apply in relation to a transaction or dealing that affects that property and is entered into:
(a) in the exercise of a power of the chargee as chargee; or
(b) in the performance or exercise of a function or power of the receiver or other person;
as the case may be.
441C Charge on perishable property
(1) This section applies where perishable property of a company under administration is subject to a charge.
(2) Nothing in section 437C or 440B prevents:
(a) the chargee; or
(b) a receiver or person appointed (at any time) as mentioned in paragraph (a), (b) or (d) of the definition of enforce in section 9;
from enforcing the charge, so far as it is a charge on perishable property.
(3) Section 437D does not apply in relation to a transaction or dealing that affects perishable property of the company and is entered into by:
(a) the chargee; or
(b) a receiver or person appointed (at any time) as mentioned in paragraph (a), (b) or (d) of the definition of enforce in section 9;
in the performance or exercise of a function or power as chargee, or as such a receiver or person, as the case may be.
441D Court may limit powers of chargee, etc. in relation to charged property
(1) This section applies if:
(a) for the purpose of enforcing a charge on property of a company, the chargee, or a receiver or other person, does an act of a kind referred to in a paragraph of subsection 441B(1); and
(b) the company is under administration when the chargee, receiver or other person does the act, or the company later begins to be under administration;
but does not apply in a case where section 441A applies.
(2) On application by the administrator, the Court may order the chargee, receiver or other person not to perform specified functions, or exercise specified powers, except as permitted by the order.
(3) The Court may only make an order if satisfied that what the administrator proposes to do during the administration will adequately protect the chargee’s interests.
(4) An order may only be made, and only has effect, during the administration.
(5) An order has effect despite sections 441B and 441C.
441E Giving a notice under a charge
Nothing in section 437C or 440B prevents a person from giving a notice under the provisions of a charge.
441F Where recovery of property begins before administration
(1) This section applies if, before the beginning of the administration of a company, a receiver or other person:
(a) entered into possession, or assumed control, of property used or occupied by, or in the possession of, the company; or
(b) exercised any other power in relation to such property;
for the purpose of enforcing a right of the owner or lessor of the property to take possession of the property or otherwise recover it.
(2) Nothing in section 437C or 440C prevents the receiver or other person from performing a function, or exercising a power, in relation to the property.
(3) Section 437D does not apply in relation to a transaction or dealing that affects the property and is entered into in the performance or exercise of a function or power of the receiver or other person.
441G Recovering perishable property
(1) Nothing in section 437C or 440C prevents a person from taking possession of, or otherwise recovering, perishable property.
(2) Section 437D does not apply in relation to a transaction or dealing that affects perishable property and is entered into for the purpose of enforcing a right of the owner or lessor of the property to take possession of the property or otherwise recover it.
441H Court may limit powers of receiver etc. in relation to property used by company
(1) This section applies if:
(a) for the purpose of enforcing a right of the owner or lessor of property used or occupied by, or in the possession of, a company to take possession of the property or otherwise recover it, a person:
(i) enters into possession, or assumes control, of the property; or
(ii) exercises any other power in relation to the property; and
(b) the company is under administration when the person does so, or the company later begins to be under administration.
(2) On application by the administrator, the Court may order the person not to perform specified functions, or exercise specified powers, in relation to the property, except as permitted by the order.
(3) The Court may only make an order if satisfied that what the administrator proposes to do during the administration will adequately protect the interests of the owner or lessor.
(4) An order may only be made, and only has effect, during the administration.
(5) An order has effect despite sections 441F and 441G.
441J Giving a notice under an agreement about property
Nothing in section 437C or 440C prevents a person from giving a notice to a company under an agreement relating to property that is used or occupied by, or is in the possession of, the company.
441K Effect of Division
Except as expressly provided, nothing in this Division limits the generality of anything else in it.
Division 8—Powers of administrator
442A Additional powers of administrator
Without limiting section 437A, the administrator of a company under administration has power to do any of the following:
(a) remove from office a director of the company;
(b) appoint a person as such a director, whether to fill a vacancy or not;
(c) execute a document, bring or defend proceedings, or do anything else, in the company’s name and on its behalf;
(d) whatever else is necessary for the purposes of this Part.
442B Dealing with property subject to a floating charge that has crystallised
(1) This section applies where a charge on property of a company under administration was a floating charge when created but has since become a fixed or specific charge.
(2) Subject to sections 442C and 442D, the administrator may deal with any of that property as if the charge were still a floating charge.
442C When administrator may dispose of encumbered property
(1) The administrator of a company under administration or of a deed of company arrangement must not dispose of:
(a) property of the company that is subject to a charge; or
(b) property that is used or occupied by, or is in the possession of, the company but of which someone else is the owner or lessor.
(2) Subsection (1) does not prevent a disposal:
(a) in the ordinary course of the company’s business; or
(b) with the written consent of the chargee, owner or lessor, as the case may be; or
(c) with the leave of the Court.
(3) The Court may only give leave under paragraph (2)(c) if satisfied that arrangements have been made to protect adequately the interests of the chargee, owner or lessor, as the case may be.
442D Administrator’s powers subject to powers of chargee, receiver etc.
(1) Where section 441A applies, the administrator’s functions and powers are subject to the functions and powers of a person as:
(a) the chargee; or
(b) a receiver or person of a kind referred to in paragraph 441A(3)(b) (even if appointed after the decision period).
(2) Where section 441C applies, then, so far as concerns perishable property of the company, the administrator’s functions and powers are subject to the functions and powers of a person as:
(a) the chargee; or
(b) a receiver or person appointed (at any time) as mentioned in paragraph (a), (b) or (d) of the definition of enforce in section 9.
(3) Where section 441B, 441F or 441G applies, then, so far as concerns the property referred to in subsection 441B(1), 441F(1) or 441G(1), the administrator’s functions and powers are subject to the functions and powers of the chargee, receiver or other person.
442E Administrator has qualified privilege
A person who is or has been the administrator of a company under administration has qualified privilege in respect of a statement that he or she has made, whether orally or in writing, in the course of performing or exercising any of his or her functions and powers as administrator of the company.
442F Protection of persons dealing with administrator
(1) Sections 164 and 166 apply in relation to a company under administration as if:
(a) a reference in those sections to the company, or to an officer of the company, included a reference to the administrator; and
(b) a reference in those sections to an assumption referred to in subsection 164(3) included a reference to an assumption that the administrator is:
(i) acting within his or her functions and powers as administrator; and
(ii) in particular, is complying with this Law.
(2) The effect that sections 164 and 166 have because of subsection (1) of this section is additional to, and does not prejudice, the effect that sections 164 and 166 otherwise have in relation to a company under administration.
Division 9—Administrator’s liability and indemnity for debts of administration
Subdivision A—Liability
443A General debts
(1) The administrator of a company under administration is liable for debts he or she incurs, in the performance or exercise, or purported performance or exercise, of any of his or her functions and powers as administrator, for:
(a) services rendered; or
(b) goods bought; or
(c) property hired, leased, used or occupied.
(2) Subsection (1) has effect despite any agreement to the contrary, but without prejudice to the administrator’s rights against the company or anyone else.
443B Payments for property used or occupied by, or in the possession of, the company
(1) This section applies if, under an agreement made before the administration of a company began, the company continues to use or occupy, or to be in possession of, property of which someone else is the owner or lessor.
(2) Subject to this section, the administrator is liable for so much of the rent or other amounts payable by the company under the agreement as is attributable to a period:
(a) that begins more than 7 days after the administration began; and
(b) throughout which:
(i) the company continues to use or occupy, or to be in possession of, the property; and
(ii) the administration continues.
(3) Within 7 days after the beginning of the administration, the administrator may give to the owner or lessor a notice that specifies the property and states that the company does not propose to exercise rights in relation to the property.
(4) Despite subsection (2), the administrator is not liable for so much of the rent or other amounts payable by the company under the agreement as is attributable to a period during which a notice under subsection (3) is in force, but such a notice does not affect a liability of the company.
(5) A notice under subsection (3) ceases to have effect if:
(a) the administrator revokes it by writing given to the owner or lessor; or
(b) the company exercises, or purports to exercise, a right in relation to the property.
(6) For the purposes of subsection (5), the company does not exercise, or purport to exercise, a right in relation to the property merely because the company continues to occupy, or to be in possession of, the property, unless the company:
(a) also uses the property; or
(b) asserts a right, as against the owner or lessor, so to continue.
(7) Subsection (2) does not apply in relation to so much of a period as elapses after:
(a) a receiver of the property is appointed; or
(b) a chargee appoints an agent, under the provisions of a charge on the property, to enter into possession, or to assume control, of the property; or
(c) a chargee takes possession, or assumes control, of the property under the provisions of a charge on the property;
but this subsection does not affect a liability of the company.
(8) Subsection (2) does not apply in so far as a court, by order, excuses the administrator from liability, but an order does not affect a liability of the company.
(9) The administrator is not taken because of subsection (2):
(a) to have adopted the agreement; or
(b) to be liable under the agreement otherwise than as mentioned in subsection (2).
443BA Certain taxation liabilities
(1) The administrator of a company is liable to pay to the Commissioner of Taxation:
(a) each amount payable under a remittance provision because of a deduction made by the administrator; and
(b) without limiting paragraph (a), so much of each amount payable under a remittance provision because of a deduction made by the company during the administration as equals so much of the deduction as is attributable to a period throughout which the administration continued;
even if the amount became payable after the end of the administration.
(2) In this section:
remittance provision means any of the following provisions of the Income Tax Assessment Act 1936:
(a) section 221F (except subsection 221F(12)) or section 221G (except subsection 221G(4A));
(b) subsection 221YHDC(2);
(c) subsection 221YHZD(1) or (1A);
(d) subsection 221YN(1);
unpaid amount, in relation to an estimate, has the same meaning as in Division 8 of Part VI of the Income Tax Assessment Act 1936.
443C Administrator not otherwise liable for company’s debts
The administrator of a company under administration is not liable for the company’s debts except under this Subdivision.
Subdivision B—Indemnity
443D Right of indemnity
The administrator of a company under administration is entitled to be indemnified out of the company’s property for:
(a) debts for which the administrator is liable under Subdivision A or a remittance provision as defined in subsection 443BA(3); and
(b) his or her remuneration as fixed under section 449E.
443E Right of indemnity has priority over other debts
(1) Subject to section 556, a right of indemnity under section 443D has priority over:
(a) all the company’s unsecured debts; and
(b) subject to subsections (2) and (3) of this section, debts of the company secured by a floating charge on property of the company.
(2) Where:
(a) debts of a company under administration are secured by a floating charge on property of the company; and
(b) before the beginning of the administration, the chargee:
(i) appointed a receiver of property of the company under a power contained in an instrument relating to the charge; or
(ii) obtained an order for the appointment of a receiver of property of the company for the purpose of enforcing the charge; or
(iii) entered into possession, or assumed control, of property of the company for that purpose; or
(iv) appointed a person so to enter into possession or assume control (whether as agent for the chargee or for the company); and
(c) the receiver or person is still in office, or the chargee is still in possession or control of the property;
the right of indemnity of the administrator under section 443D does not have priority over those debts, except so far as the chargee agrees.
(3) Where:
(a) debts of a company under administration are secured by a floating charge on property of the company; and
(b) during the administration, the chargee, consistently with this Part:
(i) appoints a receiver of property of the company under a power contained in an instrument relating to the charge; or
(ii) obtains an order for the appointment of a receiver of property of the company for the purpose of enforcing the charge; or
(iii) enters into possession, or assumes control, of property of the company for that purpose; or
(iv) appoints a person so to enter into possession or assume control (whether as agent for the chargee or for the company);
the right of indemnity of the administrator under section 443D has priority over those debts only in so far as it is a right of indemnity for debts incurred, or remuneration accruing, before written notice of the appointment, or of the entering into possession or assuming of control, as the case may be, was given to the administrator.
443F Lien to secure indemnity
(1) To secure a right of indemnity under section 443D, the administrator has a lien on the company’s property.
(2) A lien under subsection (1) has priority over a charge only in so far as the right of indemnity under section 443D has priority over debts secured by the charge.
Division 10—Execution and effect of deed of company arrangement
444A Effect of creditors’ resolution
(1) This section applies where, at a meeting convened under section 439A, a company’s creditors resolve that the company execute a deed of company arrangement.
(2) The administrator of the company is to be the administrator of the deed, unless the creditors, by resolution passed at the meeting, appoint someone else to be administrator of the deed.
(3) The administrator of the deed must prepare an instrument setting out the terms of the deed.
(4) The instrument must also specify the following:
(a) the administrator of the deed;
(b) the property of the company (whether or not already owned by the company when it executes the deed) that is to be available to pay creditors’ claims;
(c) the nature and duration of any moratorium period for which the deed provides;
(d) to what extent the company is to be released from its debts;
(e) the conditions (if any) for the deed to come into operation;
(f) the conditions (if any) for the deed to continue in operation;
(g) the circumstances in which the deed terminates;
(h) the order in which proceeds of realising the property referred to in paragraph (b) are to be distributed among creditors bound by the deed;
(i) the day (not later than the day when the administration began) on or before which claims must have arisen if they are to be admissible under the deed.
(5) The instrument is taken to include the prescribed provisions, except so far as it provides otherwise.
444B Execution of deed
(1) This section applies where an instrument is prepared under section 444A.
(2) The company must execute the instrument within:
(a) 21 days after the end of the meeting of creditors; or
(b) such further period as the Court allows on an application made within those 21 days.
(3) The board of the company may, by resolution, authorise the instrument to be executed by or on behalf of the company.
(4) Subsection (3) has effect despite section 437C, but does not limit the functions and powers of the administrator of the company.
(5) The administrator of the deed must execute the instrument before, or as soon as practicable after, the company executes it.
(6) When executed by both the company and the deed’s administrator, the instrument becomes a deed of company arrangement.
(7) Division 12 provides for consequences of the company contravening subsection (2).
444C Creditor etc. not to act inconsistently with deed before its execution
(1) Where, at a meeting convened under section 439A, a company’s creditors resolve that the company execute a deed of company arrangement, this section applies until:
(a) the deed is executed by both the company and the deed’s administrator; or
(b) the period within which subsection 444B(2) requires the company to execute the deed ends;
whichever happens sooner.
(2) In so far as a person would be bound by the deed if it had already been so executed, the person:
(a) must not do anything inconsistent with the deed, except with the leave of the Court; and
(b) is subject to section 444E.
444D Effect of deed on creditors
(1) A deed of company arrangement binds all creditors of the company, so far as concerns claims arising on or before the day specified in the deed under paragraph 444A(4)(i).
(2) Subsection (1) does not prevent a secured creditor from realising or otherwise dealing with the security, except so far as:
(a) the deed so provides in relation to a secured creditor who voted in favour of the resolution of creditors because of which the company executed the deed; or
(b) the Court orders under subsection 444F(2).
(3) Subsection (1) does not affect a right that an owner or lessor of property has in relation to that property, except so far as:
(a) the deed so provides in relation to an owner or lessor of property who voted in favour of the resolution of creditors because of which the company executed the deed; or
(b) the Court orders under subsection 444F(4).
444E Protection of company’s property from persons bound by deed
(1) Until a deed of company arrangement terminates, this section applies to a person bound by the deed.
(2) The person cannot:
(a) make an application for an order to wind up the company; or
(b) proceed with such an application made before the deed became binding on the person.
(3) The person cannot:
(a) begin or proceed with a proceeding against the company or in relation to any of its property; or
(b) begin or proceed with enforcement process in relation to property of the company;
except:
(c) with the leave of the Court; and
(d) in accordance with such terms (if any) as the Court imposes.
(4) In subsection (3):
property, in relation to the company, includes property used or occupied by, or in the possession of, the company.
444F Court may limit rights of secured creditor or owner or lessor
(1) This section applies where:
(a) it is proposed that a company execute a deed of company arrangement; or
(b) a company has executed such a deed.
(2) Subject to subsection 441A(3), the Court may order a secured creditor of the company not to realise or otherwise deal with the security, except as permitted by the order.
(3) The Court may only make an order under subsection (2) if satisfied that:
(a) for the creditor to realise or otherwise deal with the security would have a material adverse effect on achieving the purposes of the deed; and
(b) having regard to:
(i) the terms of the deed; and
(ii) the terms of the order; and
(iii) any other relevant matter;
the creditor’s interests will be adequately protected.
(4) The Court may order the owner or lessor of property that is used or occupied by, or is in the possession of, the company not to take possession of the property or otherwise recover it.
(5) The Court may only make an order under subsection (4) if satisfied that:
(a) for the owner or lessor to take possession of the property or otherwise recover it would have a material adverse effect on achieving the purposes of the deed; and
(b) having regard to:
(i) the terms of the deed; and
(ii) the terms of the order; and
(iii) any other relevant matter;
the interests of the owner or lessor will be adequately protected.
(6) An order under this section may be made subject to conditions.
(7) An order under this section may only be made on the application of:
(a) if paragraph (1)(a) applies—the administrator of the company; or
(b) if paragraph (1)(b) applies—the deed’s administrator.
444G Effect of deed on company, officers and members
A deed of company arrangement also binds:
(a) the company; and
(b) its officers and members; and
(c) the deed’s administrator.
444H Extent of release of company’s debts
A deed of company arrangement releases the company from a debt only in so far as:
(a) the deed provides for the release; and
(b) the creditor concerned is bound by the deed.
Division 11—Variation, termination and avoidance of deed
445A Variation of deed by creditors
A deed of company arrangement may be varied by a resolution passed at a meeting of the company’s creditors convened under section 445F, but only if the variation is not materially different from a proposed variation set out in the notice of the meeting.
445B Court may cancel variation
(1) Where a deed of company arrangement is varied under section 445A, a creditor of the company may apply to the Court for an order cancelling the variation.
(2) On an application, the Court:
(a) may make an order cancelling the variation, or confirming it, either wholly or in part, on such conditions (if any) as the order specifies; and
(b) may make such other orders as it thinks appropriate.
445C When deed terminates
A deed of company arrangement terminates when:
(a) the Court makes under section 445D an order terminating the deed; or
(b) the company’s creditors pass a resolution terminating the deed at a meeting that was convened under section 445F by a notice setting out the proposed resolution; or
(c) if the deed specifies circumstances in which it is to terminate—those circumstances exist;
whichever happens first.
445D When Court may terminate deed
(1) The Court may make an order terminating a deed of company arrangement if satisfied that:
(a) information about the company’s business, property, affairs or financial circumstances that:
(i) was false or misleading; and
(ii) can reasonably be expected to have been material to creditors of the company in deciding whether to vote in favour of the resolution that the company execute the deed;
was given to the administrator of the company or to such creditors; or
(b) such information was contained in a report or statement under subsection 439A(4) that accompanied a notice of the meeting at which the resolution was passed; or
(c) there was an omission from such a report or statement and the omission can reasonably be expected to have been material to such creditors in so deciding; or
(d) there has been a material contravention of the deed by a person bound by the deed; or
(e) effect cannot be given to the deed without injustice or undue delay; or
(f) the deed or a provision of it is, an act or omission done or made under the deed was, or an act or omission proposed to be so done or made would be:
(i) oppressive or unfairly prejudicial to, or unfairly discriminatory against, one or more such creditors; or
(ii) contrary to the interests of the creditors of the company as a whole; or
(g) the deed should be terminated for some other reason.
(2) An order may be made on the application of:
(a) a creditor of the company; or
(b) the company; or
(c) any other interested person.
445E Creditors may terminate deed and resolve that company be wound up
Where:
(a) at a meeting convened under section 445F, the company’s creditors pass a resolution terminating the deed; and
(b) the notice of the meeting set out a proposed resolution that the company be wound up;
the creditors may also resolve at the meeting that the company be wound up.
445F Meeting of creditors to consider proposed variation or termination of deed
(1) The administrator of a deed of company arrangement:
(a) may at any time convene a meeting of the company’s creditors; and
(b) must convene such a meeting if so requested in writing by creditors the value of whose claims against the company is not less than 10% of the value of all the creditors’ claims against the company.
(2) A meeting under this section must be convened by the deed’s administrator:
(a) giving written notice of the meeting to as many of the company’s creditors as reasonable practicable; and
(b) causing notice of the meeting to be published:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the company has its registered office or carries on business, in a daily newspaper that circulates generally in that jurisdiction;
at least 5 business days before the meeting.
(3) The notice given to a creditor under paragraph (2)(a) must:
(a) set out each resolution (if any) under section 445A or paragraph 445C(b) that the deed’s administrator proposes that the meeting vote on; and
(b) if the meeting is convened under paragraph (1)(b) of this section—set out each proposed resolution under section 445A or paragraph 445C(b) that is set out in the request.
(4) At a meeting convened under this section, the deed’s administrator is to preside.
(5) A meeting convened under this section may be adjourned from time to time.
445G When Court may void or validate deed
(1) Where there is doubt, on a specific ground, whether a deed of company arrangement was entered into in accordance with this Part or complies with this Part, the administrator of the deed, a member or creditor of the company, or the Commission, may apply to the Court for an order under this section.
(2) On an application, the Court may make an order declaring the deed, or a provision of it, to be void or not to be void, as the case requires, on the ground specified in the application or some other ground.
(3) On an application, the Court may declare the deed, or a provision of it, to be valid, despite a contravention of a provision of this Part, if the Court is satisfied that:
(a) the provision was substantially complied with; and
(b) no injustice will result for anyone bound by the deed if the contravention is disregarded.
(4) Where the Court declares a provision of a deed of company arrangement to be void, the Court may by order vary the deed, but only with the consent of the deed’s administrator.
445H Effect of termination or avoidance
The termination or avoidance, in whole or in part, of a deed of company arrangement does not affect the previous operation of the deed.
Division 12—Transition to creditors’ voluntary winding up
446A Administrator becomes liquidator in certain cases
(1) This section applies if:
(a) the creditors of a company under administration resolve at a particular time under paragraph 439C(c) that the company be wound up; or
(b) a company under administration contravenes subsection 444B(2) at a particular time; or
(c) at a meeting convened under section 445F, a company’s creditors:
(i) pass a resolution terminating a deed of company arrangement executed by the company; and
(ii) also resolve at a particular time under section 445E that the company be wound up.
(2) The company is taken:
(a) to have passed, at the time referred to in paragraph (1)(a) or (b) or subparagraph (1)(c)(ii), as the case may be, a special resolution under section 491 that the company be wound up voluntarily; and
(b) to have done so without a declaration having been made and lodged under section 494.
(3) Section 497 is taken to have been complied with in relation to the winding up.
(4) For the purposes of subsection 499(1):
(a) the company is taken to have nominated:
(i) if paragraph (1)(a) or (b) of this section applies—the administrator of the company; or
(ii) if paragraph (1)(c) of this section applies—the administrator of the deed;
to be liquidator for the purposes of the winding up; and
(b) the creditors are taken not to have so nominated anyone.
(5) The liquidator must:
(a) within 7 days after the day on which the company is taken to have passed the resolution, lodge a written notice stating that the company is taken because of this section to have passed such a resolution and specifying that day; and
(b) cause a notice of that kind to be published, within 21 days after that day:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the company has its registered office or carries on business, in a daily newspaper that circulates generally in that jurisdiction.
(6) Section 482 applies in relation to the winding up as if it were a winding up in insolvency or by the Court.
Note: Section 482 empowers the Court to stay or terminate a winding up and give consequential directions.
(7) An application under section 482 as applying because of subsection (6) may be made:
(a) despite subsection 499(4), by the company pursuant to a resolution of the board; or
(b) by the liquidator; or
(c) by a creditor; or
(d) by a contributory.
446B Regulations may provide for transition in other cases
(1) The regulations may prescribe cases where:
(a) a company under administration; or
(b) a company that has executed a deed of company arrangement (even if the deed has terminated);
is taken to have passed a special resolution under section 491 that the company be wound up voluntarily.
(2) The regulations may provide for Part 5.5 to apply with prescribed modifications in cases prescribed for the purposes of subsection (1).
(3) Without limiting subsection (2), the regulations may provide, in relation to such cases, for matters of a kind provided for by any of subsections 446A(2) to (7), inclusive.
(4) Regulations in force for the purposes of this section have effect accordingly.
Division 13—Powers of Court
447A General power to make orders
(1) The Court may make such order as it thinks appropriate about how this Part is to operate in relation to a particular company.
(2) For example, if the Court is satisfied that the administration of a company should end:
(a) because the company is solvent; or
(b) because provisions of this Part are being abused; or
(c) for some other reason;
the Court may order under subsection (1) that the administration is to end.
(3) An order may be made subject to conditions.
(4) An order may be made on the application of:
(a) the company; or
(b) a creditor of the company; or
(c) in the case of a company under administration—the administrator of the company; or
(d) in the case of a company that has executed a deed of company arrangement—the deed’s administrator; or
(e) the Commission; or
(f) any other interested person.
447B Orders to protect creditors during administration
(1) On the application of the Commission, the Court may make such order as it thinks necessary to protect the interests of a company’s creditors while the company is under administration.
(2) On the application of a creditor of a company, the Court may make such order as it thinks necessary to protect the creditor’s interests while the company is under administration.
(3) An order may be made subject to conditions.
447C Court may declare whether administrator validly appointed
(1) If there is doubt, on a specific ground, about whether a purported appointment of a person as administrator of a company, or of a deed of company arrangement, is valid, the person, the company or any of the company’s creditors may apply to the Court for an order under subsection (2).
(2) On an application, the Court may make an order declaring whether or not the purported appointment was valid on the ground specified in the application or on some other ground.
447D Administrator may seek directions
(1) The administrator of a company under administration, or of a deed of company arrangement, may apply to the Court for directions about a matter arising in connection with the performance or exercise of any of the administrator’s functions and powers.
(2) The administrator of a deed of company arrangement may apply to the Court for directions about a matter arising in connection with the operation of, or giving effect to, the deed.
447E Supervision of administrator of company or deed
(1) Where the Court is satisfied that the administrator of a company under administration, or of a deed of company arrangement:
(a) has managed, or is managing, the company’s business, property or affairs in a way that is prejudicial to the interests of some or all of the company’s creditors or members; or
(b) has done an act, or made an omission, or proposes to do an act, or to make an omission, that is or would be prejudicial to such interests;
the Court may make such order as it thinks just.
(2) Where the Court is satisfied that:
(a) a company is under administration but:
(i) there is a vacancy in the office of administrator of the company; or
(ii) no administrator of the company is acting; or
(b) a deed of company arrangement has not yet terminated but:
(i) there is a vacancy in the office of administrator of the deed; or
(ii) no administrator of the deed is acting;
the Court may make such order as it thinks just.
(3) An order may only be made on the application of the Commission or of a creditor or member of the company.
447F Effect of Division
Nothing in this Division limits the generality of anything else in it.
Division 14—Qualifications of administrators
448A Appointee must consent
A person cannot be appointed as administrator of a company or of a deed of company arrangement unless:
(a) the person has consented in writing to the appointment; and
(b) as at the time of the appointment, the person has not withdrawn the consent.
448B Administrator must be registered liquidator
A person must not consent to be appointed, and must not act, as administrator of a company or of a deed of company arrangement unless he or she is a registered liquidator.
448C Disqualification of person connected with company
(1) Subject to this section, a person must not, except with the leave of the Court, seek or consent to be appointed as, or act as, administrator of a company or of a deed of company arrangement if:
(a) the person, or a body corporate in which the person is a substantial shareholder for the purposes of Part 6.7, is indebted in an amount exceeding $5,000 to the company or to a body corporate related to the company; or
(b) the person is, otherwise than in a capacity as administrator or liquidator of, or as administrator of a deed of company arrangement executed by, the company or a related body corporate, a creditor of the company or of a related body corporate in an amount exceeding $5,000; or
(c) the person is an officer of the company (otherwise than because of being an administrator or liquidator of, or an administrator of a deed of company arrangement executed by, a body corporate related to the company); or
(d) the person is an officer of a body corporate that is a mortgagee of property of the company; or
(e) the person is an auditor of the company; or
(f) the person is a partner or employee of an auditor of the company; or
(g) the person is a partner, employer or employee of an officer of the company; or
(h) the person is a partner or employee of an employee of an officer of the company.
(2) The reference in paragraph (1)(a) to indebtedness to a body corporate does not, in relation to indebtedness of a natural person, include a reference to indebtedness of that person to a body corporate that is a prescribed corporation for the purposes of Part 4.5 where:
(a) the indebtedness arose as a result of a loan made to that person by the body corporate in the ordinary course of its ordinary business; and
(b) the amount of that loan was used by the person to pay the whole or part of the purchase price of premises used by the person as his or her principal place of residence.
(3) For the purposes of subsection (1), a person is taken to be an officer or auditor of a company if:
(a) the person is an officer or auditor of the company or of a related body corporate; or
(b) except where the Commission, if it thinks fit in the circumstances of the case, directs that this paragraph not apply in relation to the person—the person has, within the last 2 years, been an officer, auditor or promoter of the company or of a related body corporate.
448D Disqualification of insolvent under administration
A person must not consent to be appointed, and must not act, as administrator of a company or of a deed of company arrangement if he or she is an insolvent under administration.
Division 15—Removal, replacement and remuneration of administrator
449A Appointment of administrator cannot be revoked
The appointment of a person as administrator of a company or of a deed of company arrangement cannot be revoked.
449B Court may remove administrator
On the application of the Commission or of a creditor of the company concerned, the Court may:
(a) remove from office the administrator of a company under administration or of a deed of company arrangement; and
(b) appoint someone else as administrator of the company or deed.
449C Vacancy in office of administrator of company
(1) Where the administrator of a company under administration:
(a) dies; or
(b) becomes prohibited from acting as administrator of the company; or
(c) resigns by notice in writing given to his or her appointer and to the company;
his or her appointer may appoint someone else as administrator of the company.
(2) In subsection (1):
appointer, in relation to the administrator of a company under administration, means:
(a) if the administrator was appointed by the Court under section 449B or subsection (6) of this section—the Court; or
(b) otherwise:
(i) if the administration began because of an appointment under section 436A—the company; or
(ii) if the administration began because of an appointment under section 436B—a liquidator or provisional liquidator of the company; or
(iii) if the administration began because of an appointment under section 436C—a person who is entitled, or would apart from section 440B or 441D be entitled, to enforce the charge.
(3) An appointment under subsection (1) by the company under administration must be made pursuant to a resolution of the board.
(4) Within 5 business days after being appointed under subsection (1) as administrator of a company otherwise than by the Court, a person must convene a meeting of the company’s creditors so that they may:
(a) determine whether to remove the person from office; and
(b) if so, appoint someone else as administrator of the company.
(5) A person must convene a meeting under subsection (4) by:
(a) giving written notice of the meeting to as many of the company’s creditors as reasonably practicable; and
(b) causing notice of the meeting to be published:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the company has its registered office or carries on business, in a daily newspaper that circulates generally in that jurisdiction;
at least 2 business days before the meeting.
(6) Where a company is under administration, but for some reason no administrator is acting, the Court may appoint a person as administrator on the application of the Commission or of an officer, member or creditor of the company.
(7) Subsections (3) and (6) have effect despite section 437C.
449D Vacancy in office of administrator of deed of company arrangement
(1) Where the administrator of a deed of company arrangement:
(a) dies; or
(b) becomes prohibited from acting as administrator of the deed; or
(c) resigns by notice in writing given to the company;
the Court may appoint someone else as administrator of the deed.
(2) Where a deed of company arrangement has not yet terminated, but for some reason no administrator of the deed is acting, the Court may appoint a person as administrator of the deed.
(3) An appointment may be made on the application of the Commission or of an officer, member or creditor of the company.
449E Remuneration of administrator
(1) The administrator of a company under administration, or of a deed of company arrangement, is entitled to:
(a) such remuneration as is fixed by a resolution of the company’s creditors passed at a meeting convened under section 439A, or under section 439A or 445F, as the case may be; or
(b) if no remuneration is so fixed—such remuneration as the Court fixes on the application of the administrator.
(2) Where remuneration is fixed under paragraph (1)(a), the Court may, on the application of the administrator or of an officer, member or creditor of the company:
(a) review the remuneration; and
(b) confirm, increase or reduce it.
(3) Subsection (2) has effect despite section 437C.
Division 16—Notices about steps taken under Part
450A Appointment of administrator
(1) Where an administrator of a company is appointed under section 436A, 436B or 436C, the administrator must:
(a) lodge a notice of the appointment before the end of the next business day after the appointment; and
(b) cause such a notice to be published, within 3 business days after the appointment:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the company has its registered office or carries on business, in a daily newspaper that circulates generally in that jurisdiction.
(2) As soon as practicable, and in any event before the end of the next business day, after appointing an administrator of a company under section 436C, a person must give to the company a written notice of the appointment.
(3) As soon as practicable, and in any event before the end of the next business day, after an administrator of a company is appointed under section 436A, 436B or 436C, he or she must give a written notice of the appointment to:
(a) each person who holds a charge on the whole, or substantially the whole, of the company’s property; and
(b) each person who holds 2 or more charges on property of the company where the property of the company subject to the respective charges together constitutes the whole, or substantially the whole, of the company’s property.
(4) An administrator need not give a notice under subsection (3) to the person who appointed the administrator.
450B Execution of deed of company arrangement
As soon as practicable after a deed of company arrangement is executed, the deed’s administrator must:
(a) send to each creditor of the company a written notice of the execution of the deed; and
(b) cause such a notice to be published:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the company has its registered office or carries on business, in a daily newspaper that circulates generally in that jurisdiction; and
(c) lodge a copy of the deed.
450C Failure to execute deed of company arrangement
As soon as practicable after a company contravenes subsection 444B(2), the deed’s administrator must:
(a) lodge a notice that the company has failed to execute the instrument within the required period; and
(b) cause a notice of the failure to be published as prescribed.
450D Termination of deed of company arrangement
Where a deed of company arrangement terminates because of paragraph 445C(b), the deed’s administrator must:
(a) lodge a notice of the termination; and
(b) send such a notice to each of the company’s creditors; and
(c) cause such a notice to be published as prescribed.
450E Notice in public documents etc. of company
(1) A company under administration must set out, in every public document, and in every eligible negotiable instrument, of the company, after the company’s name where it first appears, the expression “(administrator appointed)”.
(2) Until a deed of company arrangement terminates, the company must set out, in every public document, and in every eligible negotiable instrument, of the company, after the company’s name where it first appears, the expression “(subject to deed of company arrangement)”.
450F Effect of contravention of this Division
A contravention of this Division does not affect the validity of anything done or omitted under this Part, except so far as the Court otherwise orders.
Division 17—Miscellaneous
451A Appointment of 2 or more administrators of company
(1) Where a provision of this Law provides for an administrator of a company to be appointed, 2 or more persons may be appointed as administrators of the company.
(2) Where, because of subsection (1), there are 2 or more administrators of a company:
(a) a function or power of an administrator of the company may be performed or exercised by any one of them, or by any 2 or more of them together, except so far as the instrument or resolution appointing them otherwise provides; and
(b) a reference in this Law to an administrator, or to the administrator, of a company is, in the case of the first‑mentioned company, a reference to whichever one or more of those administrators the case requires.
451B Appointment of 2 or more administrators of deed of company arrangement
(1) Where a provision of this Law provides for an administrator of a deed of company arrangement to be appointed, 2 or more persons may be appointed as administrators of the deed.
(2) Where, because of subsection (1), there are 2 or more administrators of a deed of company arrangement:
(a) a function or power of an administrator of the deed may be performed or exercised by any one of them, or by any 2 or more of them together, except so far as the deed, or the resolution or instrument appointing them, otherwise provides; and
(b) a reference in this Law to an administrator, or to the administrator, of a deed of company arrangement is, in the case of the first‑mentioned deed, a reference to whichever one or more of those administrators the case requires.
451C Effect of things done during administration of company
A payment made, transaction entered into, or any other act or thing done, in good faith, by, or with the consent of, the administrator of a company under administration:
(a) is valid and effectual for the purposes of this Law; and
(b) is not liable to be set aside in a winding up of the company.
451D Time for doing act does not run while act prevented by this Part
Where:
(a) for any purpose (for example, the purposes of a law, agreement or instrument) an act must or may be done within a particular period or before a particular time; and
(b) this Part prevents the act from being done within that period or before that time;
the period is extended, or the time is deferred, because of this section, according to how long this Part prevented the act from being done.
