An Act to make provision in relation to corporations and financial products and services, and for other purposes
Chapter 1—Introductory
Part 1.1—Preliminary
1 Short title
This Act may be cited as the Corporations Act 2001.
2 Commencement
This Act commences on a day to be fixed by Proclamation.
3 Constitutional basis for this Act
(1) The operation of this Act in the referring States is based on:
(a) the legislative powers that the Commonwealth Parliament has under section 51 of the Constitution (other than paragraph 51(xxxvii)); and
(b) the legislative powers that the Commonwealth Parliament has in respect of matters to which this Act relates because those matters are referred to it by the Parliaments of the referring States under paragraph 51(xxxvii) of the Constitution.
Note: The State referrals fully supplement the Commonwealth Parliament’s other powers by referring the matters to the Commonwealth Parliament to the extent to which they are not otherwise included in the legislative powers of the Commonwealth Parliament.
(2) The operation of this Act in the Territories is based on:
(a) the legislative powers that the Commonwealth Parliament has under section 122 of the Constitution to make laws for the government of those Territories; and
(b) the legislative powers that the Commonwealth Parliament has under section 51 of the Constitution.
Despite section 2H of the Acts Interpretation Act 1901, this Act as applying in those Territories is a law of the Commonwealth.
(3) The operation of this Act outside Australia is based on:
(a) the legislative power the Commonwealth Parliament has under paragraph 51(xxix) of the Constitution; and
(b) the other legislative powers that the Commonwealth Parliament has under section 51 of the Constitution; and
(c) the legislative powers that the Commonwealth Parliament has under section 122 of the Constitution to make laws for the government of the external Territories.
(4) The operation of this Act in a State that is not a referring State is based on:
(a) the legislative powers that the Commonwealth Parliament has under section 51 (other than paragraph 51(xxxvii)) and section 122 of the Constitution; and
(b) the legislative powers that the Commonwealth Parliament has in respect of matters to which this Act relates because those matters are referred to it by the Parliaments of the referring States under paragraph 51(xxxvii) of the Constitution.
4 Referring States
Reference of matters by State Parliament to Commonwealth Parliament
(1) A State is a referring State if the Parliament of the State has referred the matters covered by subsections (4) and (5) to the Parliament of the Commonwealth for the purposes of paragraph 51(xxxvii) of the Constitution:
(a) if and to the extent that the matters are not otherwise included in the legislative powers of the Parliament of the Commonwealth (otherwise than by a reference under paragraph 51(xxxvii) of the Constitution); and
(b) if and to the extent to which the matters are included in the legislative powers of the Parliament of the State.
This subsection has effect subject to subsections (6) and (7).
(2) A State is a referring State even if the State reference Act includes a provision to the effect that nothing in the State reference Act is intended to enable the making of laws pursuant to the amendment reference with the sole or main underlying purpose or object of regulating industrial relations matters even if, but for that provision in the State reference Act, the law would be a law with respect to a matter referred to the Parliament of the Commonwealth by the amendment reference.
(3) A State is a referring State even if a law of the State provides that the reference to the Commonwealth Parliament of either or both of the matters covered by subsections (4) and (5) is to terminate in particular circumstances.
Reference covering initial Corporations Act and ASIC Act
(4) This subsection covers the matters to which the referred provisions relate to the extent of making laws with respect to those matters by including the referred provisions in the initial Corporations Act and the initial ASIC Act.
Reference covering amendments of this Act and ASIC Act
(5) This subsection covers the matters of the formation of corporations, corporate regulation and the regulation of financial products and services to the extent of the making of laws with respect to those matters by making express amendments of this Act or the ASIC Act.
Effect of termination of reference
(6) A State ceases to be a referring State if the State’s initial reference terminates.
(7) A State ceases to be a referring State if:
(a) the State’s amendment reference terminates; and
(b) subsection (8) does not apply to the termination.
(8) A State does not cease to be a referring State because of the termination of its amendment reference if:
(a) the termination is effected by the Governor of that State fixing a day by proclamation as the day on which the reference terminates; and
(b) the day fixed is no earlier than the first day after the end of the period of 6 months beginning on the day on which the proclamation is published; and
(c) that State’s amendment reference, and the amendment reference of every other State, terminates on the same day.
Definitions
(9) In this section:
amendment reference of a State means the reference by the Parliament of the State to the Parliament of the Commonwealth of the matters covered by subsection (5).
express amendment of this Act or the ASIC Act means the direct amendment of the text of this Act or the ASIC Act (whether by the insertion, omission, repeal, substitution or relocation of words or matter) by Commonwealth Acts, but does not include the enactment by a Commonwealth Act of a provision that has, or will have, substantive effect otherwise than as part of the text of this Act or the ASIC Act.
initial ASIC Act means the ASIC Act as originally enacted.
initial Corporations Act means this Act as originally enacted.
initial reference of a State means the reference by the Parliament of the State to the Parliament of the Commonwealth of the matters covered by subsection (4).
referred provisions means:
(a) the initial Corporations Act; and
(b) the initial ASIC Act;
to the extent to which they deal with matters that are included in the legislative powers of the Parliaments of the States.
State reference Act for a State is the law under which the initial reference and the amendment reference are given.
5 General territorial application of Act
Geographical coverage of “this jurisdiction”
(1) Section 9 defines this jurisdiction as the area that includes:
(a) each referring State (including its coastal sea); and
(b) each Territory (including its coastal sea, if any); and
(d) also, for the purposes of the application of a provision of Chapter 7 or an associated provision (see subsection (10))—any external Territory in which the provision applies because of subsection (9) (but only to the extent provided for in that subsection).
(2) Throughout this Act, this jurisdiction therefore consists of:
(a) either:
(i) the whole of Australia (if all the States are referring States); or
(ii) Australia (other than any State that is not a referring State) if one or more States are not referring States; and
(b) also, when used in or in relation to a provision of Chapter 7 or an associated provision (see subsection (10))—any external Territory in which the provision applies because of subsection (9) (but only to the extent provided for in that subsection).
Operation in this jurisdiction
(3) Each provision of this Act applies in this jurisdiction.
Operation outside this jurisdiction
(4) Subject to subsection (8), each provision of this Act also applies, according to its tenor, in relation to acts and omissions outside this jurisdiction.
Residence, place of formation etc.
(7) Each provision of this Act applies according to its tenor to:
(a) natural persons whether:
(i) resident in this jurisdiction or not; and
(ii) resident in Australia or not; and
(iii) Australian citizens or not; and
(b) all bodies corporate and unincorporated bodies whether:
(i) formed or carrying on business in this jurisdiction or not; and
(ii) formed or carrying on business in Australia or not.
Note: Paragraph (b)—many of the provisions in this Act apply only in relation to companies (that is, to companies that are registered under this Act).
Operation in non‑referring States
(8) This Act does not apply to an act or omission in a State that is not a referring State to the extent to which that application would be beyond the legislative powers of the Parliament (including powers it has under paragraphs 51(xxxvii) and (xxxix) of the Constitution).
Expanded application of provisions of Chapter 7 and associated provisions
(9) The regulations may provide that, in specified circumstances, a specified external Territory is included in this jurisdiction for the purposes of a specified provision of Chapter 7 (the applicable provision). If the regulations do so:
(a) the applicable provision applies in that external Territory in those circumstances; and
(b) the associated provisions (see subsection (10)) in relation to the applicable provision apply in that external Territory in relation to the applicable provision as so applying.
Meaning of associated provisions
(10) For the purposes of this section, the associated provisions in relation to a provision of Chapter 7 are:
(a) the provisions of Chapters 1, 9 (including the provisions of Division 2 of Part 9.4 that create offences and of Part 9.4B that allow for pecuniary penalty orders) and 10 as they apply or have effect in relation to, or for the purposes of, the provision; and
(b) any regulations or other instruments (including any that create offences or allow for pecuniary penalty orders) made under this Act for the purposes of any of the provisions covered by paragraph (a); and
(c) if regulations made for the purposes of subsection (9) have been made in relation to the provision—any other provisions of this Act, or any regulations or other instruments made under this Act (including any that create offences or allow for pecuniary penalty orders), specified in those regulations.
5A Application to the Crown
(1) To avoid doubt, a reference in this section to the Crown in a particular right includes a reference to an instrumentality or agency (whether a body corporate or not) of the Crown in that right.
(2) Chapter 5 (except Part 5.8) binds the Crown in right of the Commonwealth, of each of the States, of the Australian Capital Territory and of the Northern Territory.
(3) Chapters 6, 6A, 6B, 6C and 6D:
(a) bind the Crown in right of the Commonwealth; and
(b) do not bind the Crown in right of any State, of the Australian Capital Territory or of the Northern Territory.
(4) A provision of Chapter 5D, 6CA or 7 only binds the Crown in a particular capacity in circumstances (if any) specified in the regulations.
(5) Nothing in this Act makes the Crown in any right liable to a pecuniary penalty or to be prosecuted for an offence.
5B ASIC has general administration of this Act
Subject to the ASIC Act, ASIC has the general administration of this Act.
Part 1.1A—Interaction between Corporations legislation and State and Territory laws
5D Coverage of Part
(1) This Part applies only to laws of a State or Territory that is in this jurisdiction.
(2) This Part applies only to the following Corporations legislation:
(a) this Act (including the regulations made under this Act); and
(b) Part 3 of the ASIC Act; and
(c) regulations made under the ASIC Act for the purposes of Part 3 of that Act.
Note: This Part does not apply in relation to the trustee company provisions: see section 601RAE.
(3) This Part does not apply to Part 3 of the ASIC Act, or regulations made under that Act for the purposes of Part 3 of that Act, to the extent to which they operate in relation to a contravention of Division 2 of Part 2 of that Act.
5E Concurrent operation intended
(1) The Corporations legislation is not intended to exclude or limit the concurrent operation of any law of a State or Territory.
(2) Without limiting subsection (1), the Corporations legislation is not intended to exclude or limit the concurrent operation of a law of a State or Territory that:
(a) imposes additional obligations or liabilities (whether criminal or civil) on:
(i) a director or other officer of a company or other corporation; or
(ii) a company or other body; or
(b) confers additional powers on:
(i) a director or other officer of a company or other corporation; or
(ii) a company or other body; or
(c) provides for the formation of a body corporate; or
(d) imposes additional limits on the interests a person may hold or acquire in a company or other body; or
(e) prevents a person from:
(i) being a director of; or
(ii) being involved in the management or control of;
a company or other body; or
(f) requires a company:
(i) to have a constitution; or
(ii) to have particular rules in its constitution.
Note: Paragraph (a)—this includes imposing additional reporting obligations on a company or other body.
(3) Without limiting subsection (2), a reference in that subsection to a law of a State or Territory imposing obligations or liabilities, or conferring powers, includes a reference to a law of a State or Territory imposing obligations or liabilities, or conferring powers, by reference to the State or Territory in which a company is taken to be registered.
(4) This section does not apply to the law of the State or Territory if there is a direct inconsistency between the Corporations legislation and that law.
Note: Section 5G prevents direct inconsistencies arising in some cases by limiting the operation of the Corporations legislation.
(5) If:
(a) an act or omission of a person is both an offence against the Corporations legislation and an offence under the law of a State or Territory; and
(b) the person is convicted of either of those offences;
the person is not liable to be convicted of the other of those offences.
5F Corporations legislation does not apply to matters declared by State or Territory law to be an excluded matter
(1) Subsection (2) applies if a provision of a law of a State or Territory declares a matter to be an excluded matter for the purposes of this section in relation to:
(a) the whole of the Corporations legislation; or
(b) a specified provision of the Corporations legislation; or
(c) the Corporations legislation other than a specified provision; or
(d) the Corporations legislation otherwise than to a specified extent.
(2) By force of this subsection:
(a) none of the provisions of the Corporations legislation (other than this section) applies in the State or Territory in relation to the matter if the declaration is one to which paragraph (1)(a) applies; and
(b) the specified provision of the Corporations legislation does not apply in the State or Territory in relation to the matter if the declaration is one to which paragraph (1)(b) applies; and
(c) the provisions of the Corporations legislation (other than this section and the specified provisions) do not apply in the State or Territory in relation to the matter if the declaration is one to which paragraph (1)(c) applies; and
(d) the provisions of the Corporations legislation (other than this section and otherwise than to the specified extent) do not apply in the State or Territory in relation to the matter if the declaration is one to which paragraph (1)(d) applies.
(3) Subsection (2) does not apply to the declaration to the extent to which the regulations provide that that subsection does not apply to that declaration.
(4) By force of this subsection, if:
(a) the Corporations Law, ASC Law or ASIC Law of a State or Territory; or
(b) a provision of that Law;
did not apply to a matter immediately before this Act commenced because a provision of a law of the State or Territory provided that that Law, or that provision, did not apply to the matter, the Corporations legislation, or the provision of the Corporations legislation that corresponds to that provision of that Law, does not apply in the State or Territory to the matter until that law of the State or Territory is omitted or repealed.
(5) Subsection (4) does not apply to the application of the provisions of the Corporations legislation to the matter to the extent to which the regulations provide that that subsection does not apply to the matter.
(6) In this section:
matter includes act, omission, body, person or thing.
5G Avoiding direct inconsistency arising between the Corporations legislation and State and Territory laws
Section overrides other provisions of the Corporations legislation
(1) This section has effect despite anything else in the Corporations legislation.
Section does not deal with provisions capable of concurrent operation
(2) This section does not apply to a provision of a law of a State or Territory that is capable of concurrent operation with the Corporations legislation.
Note: This kind of provision is dealt with by section 5E.
When this section applies to a provision of a State or Territory law
(3) This section applies to the interaction between:
(a) a provision of a law of a State or Territory (the State provision); and
(b) a provision of the Corporations legislation (the Commonwealth provision);
only if the State provision meets the conditions set out in the following table:
<table cellspacing="0" cellpadding="0" style="margin-left:0.05pt; border-collapse:collapse"><thead><tr><td colspan="3" style="width:220.8pt; border-top:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Conditions to be met before section applies</span></p></td><td style="width:105.05pt; border-top:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>[operative]</span></p></td></tr><tr><td style="width:25pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Item</span></p></td><td style="width:95.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">Kind of provision</span></p></td><td colspan="2" style="width:194.65pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">Conditions to be met</span></p></td></tr></thead><tbody><tr><td style="width:25pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:95.5pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>a pre</span><span>‑</span><span>commencement (commenced) provision</span></p></td><td colspan="2" style="width:194.65pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tablea"><span>(a)</span><span style="width:3.1pt; text-indent:0pt; display:inline-block"> </span><span>the State provision operated, immediately before this Act commenced, despite the provision of:</span></p><p class="Tablei"><span>(i)</span><span style="width:4.76pt; text-indent:0pt; display:inline-block"> </span><span>the Corporations Law of the State or Territory (as in force at that time); or</span></p><p class="Tablei"><span>(ii)</span><span style="width:1.98pt; text-indent:0pt; display:inline-block"> </span><span>the ASC or ASIC Law of the State or Territory (as in force at that time);</span></p><p class="Tablea"><span style="width:14.2pt; text-indent:0pt; display:inline-block"></span><span>that corresponds to the Commonwealth provision; and</span></p><p class="Tablea"><span>(b)</span><span style="width:2.54pt; text-indent:0pt; display:inline-block"> </span><span>the State provision is not declared to be one that this section does not apply to (either generally or specifically in relation to the Commonwealth provision) by:</span></p><p class="Tablei"><span>(i)</span><span style="width:4.76pt; text-indent:0pt; display:inline-block"> </span><span>regulations made under this Act; or</span></p><p class="Tablei"><span>(ii)</span><span style="width:1.98pt; text-indent:0pt; display:inline-block"> </span><span>a law of the State or Territory.</span></p></td></tr><tr><td style="width:25pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:95.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>a pre</span><span>‑</span><span>commencement (enacted) provision</span></p></td><td colspan="2" style="width:194.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tablea"><span>(a)</span><span style="width:3.1pt; text-indent:0pt; display:inline-block"> </span><span>the State provision would have operated, immediately before this Act commenced, despite the provision of:</span></p><p class="Tablei"><span>(i)</span><span style="width:4.76pt; text-indent:0pt; display:inline-block"> </span><span>the Corporations Law of the State or Territory (as in force at that time); or</span></p><p class="Tablei"><span>(ii)</span><span style="width:1.98pt; text-indent:0pt; display:inline-block"> </span><span>the ASC or ASIC Law of the State or Territory (as in force at that time);</span></p><p class="Tablea"><span style="width:14.2pt; text-indent:0pt; display:inline-block"></span><span>that corresponds to the Commonwealth provision if the State provision had commenced before the commencement of this Act; and</span></p><p class="Tablea"><span>(b)</span><span style="width:2.54pt; text-indent:0pt; display:inline-block"> </span><span>the State provision is not declared to be one that this section does not apply to (either generally or specifically in relation to the Commonwealth provision) by:</span></p><p class="Tablei"><span>(i)</span><span style="width:4.76pt; text-indent:0pt; display:inline-block"> </span><span>regulations made under this Act; or</span></p><p class="Tablei"><span>(ii)</span><span style="width:1.98pt; text-indent:0pt; display:inline-block"> </span><span>a law of the State or Territory.</span></p></td></tr><tr><td style="width:25pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:95.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>a post</span><span>‑</span><span>commencement provision</span></p></td><td colspan="2" style="width:194.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>the State provision is declared by a law of the State or Territory to be a Corporations legislation displacement provision for the purposes of this section (either generally or specifically in relation to the Commonwealth provision)</span></p></td></tr><tr><td style="width:25pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:95.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>a provision that is materially amended on or after this Act commenced if the amendment was enacted before this Act commenced</span></p></td><td colspan="2" style="width:194.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tablea"><span>(a)</span><span style="width:3.1pt; text-indent:0pt; display:inline-block"> </span><span>the State provision as amended would have operated, immediately before this Act commenced, despite the provision of:</span></p><p class="Tablei"><span>(i)</span><span style="width:4.76pt; text-indent:0pt; display:inline-block"> </span><span>the Corporations Law of the State or Territory (as in force at that time); or</span></p><p class="Tablei"><span>(ii)</span><span style="width:1.98pt; text-indent:0pt; display:inline-block"> </span><span>the ASC or ASIC Law of the State or Territory (as in force at that time);</span></p><p class="Tablea"><span style="width:14.2pt; text-indent:0pt; display:inline-block"></span><span>that corresponds to the Commonwealth provision if the amendment had commenced before the commencement of this Act; and</span></p><p class="Tablea"><span>(b)</span><span style="width:2.54pt; text-indent:0pt; display:inline-block"> </span><span>the State provision is not declared to be one that this section does not apply to (either generally or specifically in relation to the Commonwealth provision) by:</span></p><p class="Tablei"><span>(i)</span><span style="width:4.76pt; text-indent:0pt; display:inline-block"> </span><span>regulations made under this Act; or</span></p><p class="Tablei"><span>(ii)</span><span style="width:1.98pt; text-indent:0pt; display:inline-block"> </span><span>a law of the State or Territory.</span></p></td></tr><tr><td style="width:25pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>5</span></p></td><td style="width:95.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>a provision that is materially amended on or after this Act commenced if the amendment is enacted on or after this Act commenced</span></p></td><td colspan="2" style="width:194.65pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>the State provision as amended is declared by a law of the State or Territory to be a Corporations legislation displacement provision for the purposes of this section (either generally or specifically in relation to the Commonwealth provision)</span></p></td></tr><tr style="height:0pt"><td style="width:35.7pt"></td><td style="width:106.2pt"></td><td style="width:89.6pt"></td><td style="width:115.75pt"></td></tr></tbody></table>
Note 1: Item 1—subsection (12) tells you when a provision is a pre‑commencement (commenced) provision.
Note 2: Item 1 paragraph (a)—For example, a State or Territory provision enacted after the commencement of the Corporations Law might not have operated despite the Corporations Law if it was not expressly provided that the provision was to operate despite a specified provision, or despite any provision, of the Corporations Law (see, for example, section 5 of the Corporations (New South Wales) Act 1990).
Note 3: Item 2—subsection (13) tells you when a provision is a pre‑commencement (enacted) provision.
Note 4: Item 3—subsection (14) tells you when a provision is a post‑commencement provision.
Note 5: Subsections (15) to (17) tell you when a provision is materially amended after commencement.
State and Territory laws specifically authorising or requiring act or thing to be done
(4) A provision of the Corporations legislation does not:
(a) prohibit the doing of an act; or
(b) impose a liability (whether civil or criminal) for doing an act;
if a provision of a law of a State or Territory specifically authorises or requires the doing of that act.
Instructions given to directors under State and Territory laws
(5) If a provision of a law of a State or Territory specifically:
(a) authorises a person to give instructions to the directors or other officers of a company or body; or
(b) requires the directors of a company or body to:
(i) comply with instructions given by a person; or
(ii) have regard to matters communicated to the company or body by a person; or
(c) provides that a company or body is subject to the control or direction of a person;
a provision of the Corporations legislation does not:
(d) prevent the person from giving an instruction to the directors or exercising control or direction over the company or body; or
(e) without limiting subsection (4):
(i) prohibit a director from complying with the instruction or direction; or
(ii) impose a liability (whether civil or criminal) on a director for complying with the instruction or direction.
The person is not taken to be a director of a company or body for the purposes of the Corporations legislation merely because the directors of the company or body are accustomed to act in accordance with the person’s instructions.
Use of names authorised by State and Territory laws
(6) The provisions of Part 2B.6 and Part 5B.3 of this Act do not:
(a) prohibit a company or other body from using a name if the use of the name is expressly provided for, or authorised by, a provision of a law of a State or Territory; or
(b) require a company or other body to use a word as part of its name if the company or body is expressly authorised not to use that word by a provision of a law of a State or Territory.
Meetings held in accordance with requirements of State and Territory laws
(7) The provisions of Chapter 2G of this Act do not apply to the calling or conduct of a meeting of a company to the extent to which the meeting is called or conducted in accordance with a provision of a law of a State or Territory. Any resolutions passed at the meeting are as valid as if the meeting had been called and conducted in accordance with this Act.
External administration under State and Territory laws
(8) The provisions of Chapter 5 of this Act do not apply to a scheme of arrangement, receivership, winding up or other external administration of a company to the extent to which the scheme, receivership, winding up or administration is carried out in accordance with a provision of a law of a State or Territory.
State and Territory laws dealing with company constitutions
(9) If a provision of a law of a State or Territory provides that a provision is included, or taken to be included, in a company’s constitution, the provision is included in the company’s constitution even though the procedures and other requirements of this Act are not complied with in relation to the provision.
(10) If a provision of a law of a State or Territory provides that additional requirements must be met for an alteration of a company’s constitution to take effect, the alteration does not take effect unless those requirements are met.
Other cases
(11) A provision of the Corporations legislation does not operate in a State or Territory to the extent necessary to ensure that no inconsistency arises between:
(a) the provision of the Corporations legislation; and
(b) a provision of a law of the State or Territory that would, but for this subsection, be inconsistent with the provision of the Corporations legislation.
Note 1: A provision of the State or Territory law is not covered by this subsection if one of the earlier subsections in this section applies to the provision: if one of those subsections applies there would be no potential inconsistency to be dealt with by this subsection.
Note 2: The operation of the provision of the State or Territory law will be supported by section 5E to the extent to which it can operate concurrently with the provision of the Corporations legislation.
Pre‑commencement (commenced) provision
(12) A provision of a law of a State or Territory is a pre‑commencement (commenced) provision if it:
(a) is enacted, and comes into force, before the commencement of this Act; and
(b) is not a provision that has been materially amended after commencement (see subsections (15) to (17)).
Pre‑commencement (enacted) provision
(13) A provision of a law of a State or Territory is a pre‑commencement (enacted) provision if it:
(a) is enacted before, but comes into force on or after, the commencement of this Act; and
(b) is not a provision that has been materially amended after commencement (see subsections (15) to (17)).
Post‑commencement provision
(14) A provision of a law of a State or Territory is a post‑commencement provision if it:
(a) is enacted, and comes into force, on or after the commencement of this Act; and
(b) is not a provision that has been materially amended after commencement (see subsections (15) to (17)).
Provision materially amended after commencement
(15) A provision of a law of a State or Territory is materially amended after commencement if:
(a) an amendment of the provision commences on or after the commencement of this Act; and
(b) neither subsection (16) nor subsection (17) applies to the amendment.
(16) A provision of a law of a State or Territory is not materially amended after commencement under subsection (15) if the amendment merely:
(a) changes:
(i) a reference to the Corporations Law or the ASC or ASIC Law, or the Corporations Law or the ASC or ASIC Law of a State or Territory, to a reference to the Corporations Act or the ASIC Act; or
(ii) a reference to a provision of the Corporations Law or the ASC or ASIC Law, or the Corporations Law or ASC or ASIC Law of a State or Territory, to a reference to a provision of the Corporations Act or the ASIC Act; or
(iii) a penalty for a contravention of a provision of a law of a State or Territory; or
(iv) a reference to a particular person or body to a reference to another person or body; or
(b) adds a condition that must be met before a right is conferred, an obligation imposed or a power conferred; or
(c) adds criteria to be taken into account before a power is exercised; or
(d) amends the provision in way declared by the regulations to not constitute a material amendment for the purposes of this subsection.
(17) A provision of a law of a State or Territory is not materially amended after commencement under subsection (15) if:
(a) the provision as amended would be inconsistent with a provision of the Corporations legislation but for this section; and
(b) the amendment would not materially reduce the range of persons, acts and circumstances to which the provision of the Corporations legislation applies if this section applied to the provision of the State or Territory law as amended.
5H Registration of body as company on basis of State or Territory law
(1) A body is taken to be registered under this Act as a company of a particular type under section 118 if a law of a State or Territory in this jurisdiction:
(a) provides that the body is a deemed registration company for the purposes of this section; and
(b) specifies:
(i) the day on which the body is to be taken to be registered (the registration day) or the manner in which that day is to be fixed; and
(ii) the type of company the body is to be registered as under this Act;
(iii) the company’s proposed name (unless the ACN is to be used in its name);
and subsections (2) and (3) are satisfied.
(2) A notice setting out the following details must be lodged before the registration day:
(a) the name and address of each person who is to be a member on registration;
(b) the present given and family name, all former given and family names and the date and place of birth of each person who is to be a director on registration;
(c) the present given and family name, all former given and family names and the date and place of birth of each person who consents in writing to become a company secretary;
(d) the address of each person who is to be a director or company secretary on registration;
(e) the address of the company’s proposed registered office;
(f) for a public company—the proposed opening hours of its registered office (if they are not the standard opening hours);
(g) the address of the company’s proposed principal place of business (if it is not the address of the proposed registered office);
(h) for a company limited by shares or an unlimited company—the following:
(i) the number and class of shares each member agrees in writing to take up;
(ii) the amount (if any) each member agrees in writing to pay for each share;
(iii) if that amount is not to be paid in full on registration—the amount (if any) each member agrees in writing to be unpaid on each share;
(i) for a public company that is limited by shares or is an unlimited company, if shares will be issued for non‑cash consideration—the prescribed particulars about the issue of the shares, unless the shares will be issued under a written contract and a copy of the contract is lodged with the application;
(j) for a company limited by guarantee—the proposed amount of the guarantee that each member agrees to in writing.
(3) If the company:
(a) is to be a public company; and
(b) is to have a constitution on registration;
a copy of the constitution must be lodged before the registration day.
(4) On the registration day, the body is taken:
(a) to be registered as a company under this Act; and
(b) to be registered in the State or Territory referred to in subsection (1).
(5) The regulations may modify the operation of this Act to facilitate the registration of the company.
(6) Without limiting subsection (5), the regulations may make provision in relation to:
(a) the share capital of the company on registration; and
(b) the issue of a certificate of registration on the basis of the company’s registration.
5I Regulations may modify operation of the Corporations legislation to deal with interaction between that legislation and State and Territory laws
(1) The regulations may modify the operation of the Corporations legislation so that:
(a) provisions of the Corporations legislation do not apply to a matter that is dealt with by a law of a State or Territory specified in the regulations; or
(b) no inconsistency arises between the operation of a provision of the Corporations legislation and the operation of a provision of a State or Territory law specified in the regulations.
(2) Without limiting subsection (1), regulations made for the purposes of that subsection may provide that the provision of the Corporations legislation:
(a) does not apply to:
(i) a person specified in the regulations; or
(ii) a body specified in the regulations; or
(iii) circumstances specified in the regulations; or
(iv) a person or body specified in the regulations in the circumstances specified in the regulations; or
(b) does not prohibit an act to the extent to which the prohibition would otherwise give rise to an inconsistency with the State or Territory law; or
(c) does not require a person to do an act to the extent to which the requirement would otherwise give rise to an inconsistency with the State or Territory law; or
(d) does not authorise a person to do an act to the extent to which the conferral of that authority on the person would otherwise give rise to an inconsistency with the State or Territory law; or
(e) does not impose an obligation on a person to the extent to which complying with that obligation would require the person to not comply with an obligation imposed on the person under the State or Territory law; or
(f) authorises a person to do something for the purposes of the Corporations legislation that the person:
(i) is authorised to do under the State or Territory law; and
(ii) would not otherwise be authorised to do under the Corporations legislation; or
(g) will be taken to be satisfied if the State or Territory law is satisfied.
(3) In this section:
matter includes act, omission, body, person or thing.
Part 1.2—Interpretation
Division 1—General
5J Simplified outline of this Part
This Part sets out the main interpretative provisions for this Act. Particular provisions of this Act may have different or additional interpretative provisions. Terms may be defined only for a particular purpose or have a different definition for different purposes.
The Dictionary in section 9 includes a definition for each term that is defined in this Act, except:
(a) terms that are defined for the purposes of a single section or part of a single section; and
(b) terms that are defined for the purposes of Chapter 10 (transitional provisions), Schedule 2 (the Insolvency Practice Schedule) or Schedule 4 (transfer of financial institutions and friendly societies).
To the extent that a term used in a provision is not defined in this Act, it has its ordinary meaning.
6 Effect of this Part
(1) The provisions of this Part have effect for the purposes of this Act, except so far as the contrary intention appears in this Act.
(2) This Part applies for the purposes of:
(a) Part 5.7; and
(b) Chapter 5 as applying by virtue of Part 5.7; and
(c) Part 9.2;
as if a reference in this Part to a person or to a body corporate included a reference to a Part 5.7 body.
(4) Where, because of Part 11.2, provisions of this Act, as in force at a particular time, continue to apply:
(a) in relation to someone or something; or
(b) for particular purposes;
then, for the purposes of those provisions as so applying:
(c) this Part as in force at that time continues to have effect; and
(d) this Part as in force at a later time does not have effect.
7 Identifying defined terms
(1) The Dictionary in section 9 includes a definition for each term that is defined in this Act, except:
(a) a term that is defined for the purposes of a single section or part of a single section; and
(b) a term that is defined for the purposes of Chapter 10 (transitional provisions) or Schedule 4 (transfer of financial institutions and friendly societies); and
(c) a term that is defined for the purposes of Schedule 2 (the Insolvency Practice Schedule).
In some cases, the definition is a signpost to another provision or Act which defines the term.
Note 1: An example for paragraph (a) is a definition that is expressed as being for the purposes of a section or subsection.
Note 2: Schedule 2 also has its own Dictionary: see section 5‑5 of Schedule 2. Subject to Schedule 2, the Dictionary in section 9 also has effect for the purposes of Schedule 2.
Note 3: This Part, including the Dictionary in section 9, also has effect for the purposes of the ASIC Act: see subsection 5(2) of that Act.
(2) Within a definition, the defined term is identified by bold italics.
Note: This Act also uses bold italics to “tag” a concept with a label for use as a narrative device.
(3) To the extent that a term used in a provision is not defined in this Act, it has its ordinary meaning.
Note: Example 1: The definition of complaint in section 9 defines the term only in Part 7.8A. The term has it its ordinary meaning in all other Parts of this Act.
Note: Example 2: The definition of participant in section 9 defines the term only in relation to a clearing and settlement facility and in relation to a financial market. The term has it its ordinary meaning when used in relation to all other persons and things.
9 Dictionary
In this Act:
2‑part simple corporate bonds prospectus has the meaning given by section 713B.
AASB means the Australian Accounting Standards Board.
able to be traded on a market:
(a) includes (but is not limited to) admitted to quotation on the market; and
(b) for the purposes of Division 3 (insider trading prohibitions) of Part 7.10—has a meaning affected by section 1042E.
ABN (short for “Australian Business Number”) has the meaning given by section 41 of the A New Tax System (Australian Business Number) Act 1999.
Aboriginal and Torres Strait Islander corporation means a corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
ACCC means the Australian Competition and Consumer Commission.
accounting standard means:
(a) an instrument in force under section 334; or
(b) a provision of such an instrument as it so has effect.
accumulation recovery day means 8 September 2022.
ACN (short for “Australian Company Number”) is the number given by ASIC to a company on registration (see sections 118 and 601BD).
ACNC means the Australian Charities and Not‑for‑profits Commission.
acquire, in relation to a financial product, has the meaning given by section 761E.
act includes thing.
Note: See also doing an act or thing.
add‑on insurance product has the same meaning as in section 12DO of the Australian Securities and Investments Commission Act 2001.
adequate, in relation to compensation arrangements or proposed compensation arrangements, has the meaning given by section 885B.
administration, in relation to a company, has the meaning given by section 435C.
administrator:
(a) in relation to a body corporate but not in relation to a deed of company arrangement:
(i) means an administrator of the body or entity appointed under Part 5.3A; and
(iii) if 2 or more persons are appointed under that Part as administrators of the body or entity—has a meaning affected by paragraph 451A(2)(b); or
(b) in relation to a deed of company arrangement:
(i) means an administrator of the deed appointed under Part 5.3A; and
(ii) if 2 or more persons are appointed under that Part as administrators of the deed—has a meaning affected by paragraph 451B(2)(b).
admit to quotation: financial products are admitted to quotation on a market if the market operator has given unconditional permission for quotation of the financial products on the market.
AFCA (short for the Australian Financial Complaints Authority) has the meaning given by section 761A.
AFCA regulated superannuation scheme has the meaning given by section 761A.
AFCA’s accumulated unpaid fees has the meaning given by subsection 1058B(4).
AFCA scheme has the meaning given by section 761A.
AFCA staff member has the meaning given by section 761A.
AFCA’s unpaid fees, for a month, has the meaning given by subsection 1058B(2).
affairs:
(a) in relation to a body corporate (other than a CCIV)—has, in the provisions referred to in section 53, a meaning affected by that section; and
(b) in relation to a body corporate that is a CCIV—has, in the provisions referred to in section 53AAA, a meaning affected by that section.
agency means an agency, authority, body or person.
AGM means an annual general meeting of a company that section 250N requires to be held.
agreement, in Chapter 6 or 7, means a relevant agreement.
amount includes a nil amount and zero.
annual transparency report means a report required by section 332A.
annual turnover, of a body corporate during a 12‑month period, means the sum of the values of all the supplies that the body corporate, and any body corporate related to the body corporate, have made, or are likely to make, during the 12‑month period, other than:
(a) supplies made from any of those bodies corporate to any other of those bodies corporate; or
(b) supplies that are input taxed; or
(c) supplies that are not for consideration (and are not taxable supplies under section 72‑5 of the A New Tax System (Goods and Services Tax) Act 1999); or
(d) supplies that are not made in connection with an enterprise that the body corporate carries on; or
(e) supplies that are not connected with Australia.
Expressions used in this definition that are also used in the A New Tax System (Goods and Services Tax) Act 1999 have the same meaning as in that Act.
annuity policy has the meaning given by section 761A.
APFRN: see Australian Passport Fund Registration Number.
application facility, in relation to a CSF offer, has the meaning given by subsection 738ZA(3).
apportionable claim, in Division 2A (proportionate liability for misleading and deceptive conduct) of Part 7.10, has the meaning given by subsection 1041L(1).
appropriate, in relation to a target market determination, has the meaning given by subsection 994B(8A).
appropriate officer, in Part 5.8 (offences), has the meaning given by subsection 589(5).
approved code of conduct means a code of conduct approved by ASIC by legislative instrument under section 1101A, and includes a replacement code of conduct approved under that section.
approved deposit fund has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
approved stock exchange has the same meaning as in the Income Tax Assessment Act 1997.
APRA means the Australian Prudential Regulation Authority.
ARBN (short for “Australian Registered Body Number”) is the number given by ASIC to a registrable body on registration under Part 5B.2.
ARFN (short for Australian Registered Fund Number) is the number given by ASIC to a sub‑fund of a CCIV on registration of the sub‑fund (see subsection 1222S(3)).
arrangement:
(a) in Part 5.1 (arrangements and reconstructions)—arrangement includes a reorganisation of the share capital of a body corporate by the consolidation of shares of different classes, by the division of shares into shares of different classes, or by both of those methods; and
(b) for the purposes of Chapter 7 (financial services and markets)—arrangement has the meaning given by subsection 761B(1).
Note: In Part 7.1, see also subsection 761B(2).
ARSN (short for “Australian Registered Scheme Number”) is the number given by ASIC to a registered scheme on registration (see section 601EB).
ASIC means the Australian Securities and Investments Commission.
ASIC Act means the Australian Securities and Investments Commission Act 2001 and includes the regulations made under that Act.
ASIC database means so much of the national companies database kept by ASIC as consists of:
(a) some or all of a register kept by ASIC under this Act; or
(b) information set out in a document lodged under this Act;
but does not include ASIC’s document imaging system.
ASIC delegate has the same meaning as in the ASIC Act.
asset has the meaning given by section 9AB.
asset‑based fee has the meaning given by section 964F.
associate has the meaning given by sections 10 to 17.
associated entity has the meaning given by section 50AAA.
AUASB means the Auditing and Assurance Standards Board.
audit means an audit conducted for the purposes of this Act and includes a review of a financial report for a financial year or a half‑year conducted for the purposes of this Act.
audit activity: see the definition of engage in audit activity.
audit company means a company that consents to be appointed, or is appointed, as auditor of a company, registered scheme or registrable superannuation entity.
audit‑critical employee, in relation to a company, or the responsible entity for a registered scheme, or a registrable superannuation entity, that is the audited body for an audit, means a person who:
(a) is an employee of the company, of the responsible entity for the registered scheme or of the RSE licensee for the registrable superannuation entity; and
(b) is able, because of the position in which the person is employed, to exercise significant influence over:
(i) a material aspect of the contents of the financial report being audited; or
(ii) the conduct or efficacy of the audit.
audited body, in relation to an audit of a company, registered scheme or registrable superannuation entity, means the company, registered scheme or registrable superannuation entity in relation to which the audit is, or is to be, conducted.
audit firm means a firm that consents to be appointed, or is appointed, as auditor of a company, registered scheme or registrable superannuation entity.
auditing standard means:
(a) a standard in force under section 336; or
(b) a provision of such a standard as it so has effect.
auditor for the purposes of the RSE licensee law means an auditor appointed in fulfilment of a requirement imposed by a provision of the RSE licensee law.
auditor independence requirements of this Act means the requirements of Divisions 3, 4 and 5 of Part 2M.4.
auditor’s report means:
(a) an auditor’s report on an annual financial report required by section 308; or
(b) an auditor’s report on a half‑year financial report required by section 309; or
(c) an auditor’s report on an annual sustainability report required by section 301A.
Australia means the Commonwealth of Australia and, when used in a geographical sense, includes each Territory.
Note: The Australian Capital Territory, the Jervis Bay Territory, the Northern Territory, Norfolk Island and the Territories of Christmas Island and of Cocos (Keeling) Islands are covered by the definition of Territory in this section.
Australian ADI means:
(a) an ADI (authorised deposit‑taking institution) within the meaning of the Banking Act 1959; and
(b) a person who carries on State banking within the meaning of paragraph 51(xiii) of the Constitution.
Australian business law means a law of the Commonwealth, or of a State or Territory, that is a law that regulates, or relates to the regulation of, business or persons engaged in business.
Australian carbon credit unit has the same meaning as in the Carbon Credits (Carbon Farming Initiative) Act 2011.
Australian court means a federal court or a court of a State or Territory.
Australian CS facility licence means a licence under section 824B that authorises a person to operate a clearing and settlement facility.
Australian derivative trade repository licence means a licence under section 905C that authorises a body corporate to operate a derivative trade repository.
Australian financial services licence means a licence under section 913B that authorises a person who carries on a financial services business to provide financial services.
Australian law means a law of the Commonwealth or of a State or Territory.
Australian market licence means a licence under section 795B that authorises a person to operate a financial market.
Australian member: a person is an Australian member of a notified foreign passport fund if:
(a) the person holds an interest in the fund that was acquired in this jurisdiction; or
(b) the person is ordinarily resident in this jurisdiction and holds an interest in the fund.
Australian passport fund means:
(a) a registered scheme that is registered as a passport fund under Part 8A.3; or
(b) a sub‑fund of a retail CCIV that is registered as a passport fund under Part 8A.3.
Australian Passport Fund Registration Number means the number assigned to an Australian passport fund under paragraph 1212A(2)(a).
authorised audit company means a company registered under Part 9.2A.
authorised clearing and settlement facility has the meaning given by section 761A.
authorised representative of a financial services licensee means a person authorised in accordance with section 916A or 916B to provide a financial service or financial services on behalf of the licensee.
bank or banker includes, but is not limited to, a body corporate that is an ADI (authorised deposit‑taking institution) for the purposes of the Banking Act 1959.
banking corporation means a body corporate that carries on, as its sole or principal business, the business of banking (other than State banking not extending beyond the limits of the State concerned).
banning order means an order made under subsection 920A(1).
base prospectus has the meaning given by subsection 713C(1).
base salary has the meaning specified in regulations made for the purposes of this definition.
basic banking product has the meaning given by section 961F.
basic deposit product means a deposit product that is a facility in relation to which the following conditions are satisfied:
(a) the terms applicable to the facility (the governing terms) do not permit the amount from time to time standing to the credit of the facility to be reduced otherwise than in consequence of one or more of the following:
(i) a withdrawal, transfer or debit on the instruction of, or by authority of, the depositor, not being on account of entry fees, exit fees or charges for the management of the funds (but this does not exclude charges for the maintenance of the facility itself);
(ii) a payment of charges or duties on deposits into, or withdrawals from, the facility that are payable under a law of the Commonwealth or of a State or Territory;
(iii) a payment that a law of the Commonwealth, or of a State or Territory, requires to be made out of the facility;
(iv) a payment that an order of a court requires to be made out of the facility;
(v) the exercise of a right to combine accounts;
(vi) the correction of an error;
(vii) any other circumstances specified in regulations made for the purposes of this subparagraph; and
(b) any return to be generated for the depositor on the amount from time to time standing to the credit of the facility is an amount that is set out in, or that is calculated by reference to a rate or rates that are set out in, the governing terms; and
(c) either:
(i) there is no minimum period before which funds cannot be withdrawn or transferred from the facility without a reduction in the return generated for the depositor; or
(ii) if there is such a period, it expires on or before the end of the period of 5 years starting on the day on which funds were first deposited in the facility; and
(d) unless subparagraph (c)(ii) applies and the period referred to in that subparagraph expires on or before the end of the period of 2 years starting on the day on which funds were first deposited in the facility—funds are able to be withdrawn or transferred from the facility on the instruction of, or by authority of, the depositor:
(i) without any prior notice to the ADI that makes the facility available; or
(ii) if the ADI that makes the facility available is included in a class of ADIs specified in regulations made for the purposes of this subparagraph—subject to a prior notice requirement that does not exceed the period specified in those regulations in relation to that class of ADIs;
whether or not the withdrawal or transfer will attract a reduction in the return generated for the depositor as mentioned in subparagraph (c)(i); and
(e) any other conditions specified in regulations made for the purposes of this paragraph.
begin, in relation to a winding up, has the meaning given by Division 1A of Part 5.6.
benchmark administrator licence means a licence granted under section 908BC.
benchmark administrator licensee means a person who holds a benchmark administrator licence.
benefit:
(a) means any benefit, whether by way of payment of cash or otherwise; and
(b) when used in Division 2 of Part 2D.2 (sections 200 to 200J)—has the meaning given by section 200AB.
benefit derived and detriment avoided:
(a) because of an offence—has the meaning given by section 1311D; and
(b) because of a contravention of a civil penalty provision—has the meaning given by section 1317GAD.
benefit ratio has the meaning given by subsection 963B(3A).
benefit ratio requirements has the meaning given by subsection 963BA(1).
bid class of securities for a takeover bid is the class of securities to which the securities being bid for belong.
bidder for a takeover bid means the person who makes or proposes to make, or each of the people who make or propose to make, the offers under the bid (whether personally or by an agent or nominee).
Note: A person who announces a bid on behalf of another person is not making the bid, the other person is making the bid.
bidder’s statement means a bidder’s statement under sections 636 and 637 as supplemented.
bid period:
(a) for an off‑market bid—starts when the bidder’s statement is given to the target and ends:
(i) 1 month later if no offers are made under the bid; or
(ii) at the end of the offer period; and
(b) for a market bid—starts when the bid is announced to the relevant financial market and ends at the end of the offer period.
binder has the meaning given by section 761A.
Board, when used in Part 9.2, means the Companies Auditors Disciplinary Board.
board limit means a limit described in section 201N.
board limit resolution means a resolution described in paragraph 201P(1)(a).
body means a body corporate or an unincorporated body and includes, for example, a society or association.
body corporate:
(a) includes a body corporate that is being wound up or has been dissolved; and
(b) in this Chapter (except section 66A) and section 206E includes an unincorporated registrable body; and
(c) for the purposes of Chapter 5 and Part 9.2—has a meaning affected by subsection 6(2) (about Part 5.7 bodies).
body corporate licensee has the meaning given by section 910A.
body regulated by APRA has the meaning given by subsection 3(2) of the Australian Prudential Regulation Authority Act 1998.
books includes:
(a) a register; and
(b) any other record of information; and
(c) financial reports or financial records, however compiled, recorded or stored; and
(ca) sustainability reports or sustainability records, however compiled, recorded or stored; and
(d) a document;
but does not include an index or recording made under Subdivision D of Division 5 of Part 6.5.
borrow includes obtain credit and:
(a) in relation to a debenture—borrower means the body that is or will be liable to repay money under the debenture; and
(b) in Part 7.7A (best interests obligations and remuneration)—borrowed has the meaning given by section 964G.
business affairs, in relation to an entity, has a meaning affected by sections 53AA, 53AB, 53AC and 53AD.
business day means a day that is not a Saturday, a Sunday or a public holiday or bank holiday in the place concerned.
Business Names Register means the Register established and maintained under section 22 of the Business Names Registration Act 2011.
buy‑back by a company means the acquisition by the company of shares in itself.
buy‑back agreement by a company means an agreement by the company to buy back its own shares (whether the agreement is conditional or not).
cancellation time, in relation to a registration prohibition order, has the meaning given by subparagraph 921L(1)(c)(i).
capital reserve establishment contribution has the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2023.
carry on, in relation to a business, has a meaning affected by Division 3.
Cash Settlement Fact Sheet means a Cash Settlement Fact Sheet required by section 948C to be given in accordance with Division 3A of Part 7.7.
CCIV: see corporate collective investment vehicle.
certificate of transfer has the meaning given by subsection 601WBG(1).
certified means:
(a) in relation to a copy of, or extract from, a document—certified by a statement in writing to be a true copy of, or extract from, the document; or
(b) in relation to a translation of a document—certified by a statement in writing to be a correct translation of the document into English.
CGS depository interest has the meaning given by section 761A.
CGS depository interest information website has the meaning given by subsection 1020AH(1).
Chapter 5 body corporate means a body corporate:
(a) that is being wound up; or
(aa) that is a CCIV of which one or more sub‑funds is being wound up; or
(b) in respect of property of which a receiver, or a receiver and manager, has been appointed (whether or not by a court) and is acting; or
(c) that is under administration; or
(d) that has executed a deed of company arrangement that has not yet terminated; or
(da) that is under restructuring; or
(db) that has made a restructuring plan that has not yet terminated; or
(e) that has entered into a compromise or arrangement with another person the administration of which has not been concluded.
charge means a charge created in any way and includes a mortgage and an agreement to give or execute a charge or mortgage, whether on demand or otherwise.
chief executive function has the meaning given by section 295A.
chief financial officer function has the meaning given by section 295A.
child: without limiting who is a child of a person for the purposes of this Act, someone is the child of a person if he or she is a child of the person within the meaning of the Family Law Act 1975.
choice product has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
circulating security interest means a security interest that is:
(a) a PPSA security interest, if:
(i) the security interest has attached to a circulating asset within the meaning of the Personal Property Securities Act 2009; and
(ii) the grantor (within the meaning of that Act) has title to the asset; or
(b) a floating charge.
Note: Security interests are either PPSA security interests, or charges, liens or pledges: see security interest.
civil matter means a matter other than a criminal matter.
civil penalty order means any of the following:
(a) a declaration of contravention under section 1317E;
(b) a pecuniary penalty order under section 1317G;
(baa) a relinquishment order under section 1317GAB;
(ba) a refund order under section 1317GA or 1317GB;
(c) a compensation order under section 961M, 1317H, 1317HA, 1317HB, 1317HC or 1317HE;
(d) an order under section 206C disqualifying a person from managing corporations.
civil penalty provision has the meaning given in subsection 1317E(3).
claimant intermediary has the meaning given by section 761CAA.
claims handling and settling service has the meaning given by section 766G.
class has:
(a) in relation to shares in a CCIV—a meaning affected by sections 57 and 1230A; and
(b) in relation to shares (other than shares in a CCIV) or interests in a managed investment scheme—a meaning affected by section 57; and
(c) when used in relation to securities for the purposes of Chapter 6, 6A or 6C—a meaning affected by subsection 605(2); and
(d) in relation to financial products or financial services—has a meaning affected by regulations made for the purposes of section 761CA.
class of product advice has the meaning given by section 910A.
clawback requirements has the meaning given by subsection 963BA(3).
clearing and settlement arrangements for transactions effected through a financial market has the meaning given by section 790A.
clearing and settlement facility:
(a) has the meaning given by section 768A; and
(b) in relation to an Australian CS facility licence—has a meaning affected by section 824E.
clearing requirements, in relation to derivative transactions, has the meaning given by subsection 901A(7).
client:
(a) for an issue situation—has the meaning given by paragraph 1012B(2)(c); and
(b) for a recommendation situation—has the meaning given by paragraph 1012A(2)(c); and
(c) for a sale situation—has the meaning given by paragraph 1012C(2)(c); and
(d) of a trustee company—has the meaning given by subsection 601RAB(3); and
Note: See also retail client and wholesale client.
client money reporting rules has the meaning given by section 981J.
climate statements means annual climate statements under sections 296A and 296B.
closed, in relation to a CSF offer, has the meaning given by subsection 738N(3).
closely related party of a member of the key management personnel for an entity means:
(a) a spouse or child of the member; or
(b) a child of the member’s spouse; or
(c) a dependant of the member or of the member’s spouse; or
(d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealings with the entity; or
(e) a company the member controls; or
(f) a person prescribed by the regulations for the purposes of this paragraph.
coastal sea:
(a) in relation to Australia—means:
(i) the territorial sea of Australia; and
(ii) the sea on the landward side of the territorial sea of Australia and not within the limits of a State or internal Territory;
and includes the airspace over, and the sea‑bed and subsoil beneath, any such sea; and
(b) in relation to a State or Territory—means so much of the coastal sea of Australia as is within the area described in Schedule 1 to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 under the heading that refers to that State or Territory.
code of conduct means a code of conduct that relates to any aspect of the activities of:
(a) financial services licensees; or
(b) authorised representatives of financial services licensees; or
(c) issuers of financial products;
being activities in relation to which ASIC has a regulatory responsibility.
Code of Ethics means the Code of Ethics in force under section 921E.
collective investment fund has the meaning given by subsection 1212(1).
commence, in relation to a winding up, has the meaning given by Division 1A of Part 5.6.
commencement, in relation to an accounting standard or a sustainability standard, means:
(a) in the case of an accounting standard or a sustainability standard as originally in effect—the time when the accounting standard or sustainability standard took effect; or
(b) in the case of an accounting standard or a sustainability standard as varied by a particular provision of an instrument made under section 334 or 336A—the time when that provision took effect.
common fund, in Chapter 5D (licensed trustee companies), has the meaning given by subsection 601SCA(2).
Commonwealth means the Commonwealth of Australia and, when used in a geographical sense, includes each Territory.
Note: The Australian Capital Territory, the Jervis Bay Territory, the Northern Territory, Norfolk Island and the Territories of Christmas Island and of Cocos (Keeling) Islands are covered by the definition of Territory in this section.
Commonwealth authority means an authority or other body (whether incorporated or not) that is established or continued in existence by or under an Act.
Commonwealth body means:
(a) an Agency (within the meaning of the Public Service Act 1999); or
(b) a body, whether incorporated or not, established for a public purpose by or under a law of the Commonwealth; or
(c) a person:
(i) holding or performing the duties of an office established by or under a law of the Commonwealth; or
(ii) holding an appointment made under a law of the Commonwealth.
communication facility, in relation to a CSF offer, has the meaning given by subsection 738ZA(5).
company means a company registered under this Act and:
(c) in Parts 5.7B and 5.8 (except sections 595 and 596), includes a Part 5.7 body; and
(d) in Part 5B.1, includes an unincorporated registrable body.
company limited by guarantee means a company formed on the principle of having the liability of its members limited to the respective amounts that the members undertake to contribute to the property of the company if it is wound up.
company limited by shares means a company formed on the principle of having the liability of its members limited to the amount (if any) unpaid on the shares respectively held by them.
compelled financial benchmark rules means rules made under section 908CD.
compensation arrangements has the meaning given by section 880B.
compensation proceedings has the meaning given by section 1317DAAA.
compensation rules has the meaning given by section 880B.
complaint, in Part 7.8A (design and distribution requirements), has the meaning given by subsection 994A(2).
complete, in relation to a CSF offer, has the meaning given by subsection 738N(7).
compliance committee means a compliance committee established under section 601JA.
compliance period for an infringement notice issued under section 1317DAC has the meaning given by section 1317DAH.
compulsory transfer determination has the meaning given by subsection 601WBA(1).
concurrent wrongdoer, in Division 2A (proportionate liability for misleading and deceptive conduct) of Part 7.10, has the meaning given by subsection 1041L(3).
condition, in relation to a licence, means a condition or restriction to which the licence is subject, or will be subject, as the case requires.
conflicted remuneration has the meaning given by section 963A, as affected by sections 963AA, 963B and 963C.
conflict of interest situation, in Chapter 2M (financial reports and audit), has the meaning given by section 324CD.
connected with a corporation: see section 64B.
consideration period for a notice of intention to offer interests in a foreign passport fund in this jurisdiction has the meaning given by section 1213D.
consolidated entity means a company, registered scheme, registrable superannuation entity or disclosing entity together with all the entities it is required by the accounting standards to include in consolidated financial statements.
constitution means (depending on the context):
(a) a company’s constitution, which (where relevant) includes rules and consequential amendments that are part of the company’s constitution because of the Life Insurance Act 1995; or
(b) a managed investment scheme’s constitution; or
(c) in relation to any other kind of body:
(i) the body’s charter or memorandum; or
(ii) any instrument or law (other than this Act) constituting, or defining the constitution of, the body or governing the activities of the body or its members.
Note 1: The Life Insurance Act 1995 has rules about how benefit fund rules become part of a company’s constitution. They override this Act. See Subdivision 2 of Division 4 of Part 2A of that Act.
Note 2: The constituent document (as defined in the Passport Rules for this jurisdiction) for a notified foreign passport fund is taken under section 1213E to be the constitution of the fund as a managed investment scheme.
consumer credit insurance has the same meaning as in the Insurance Contracts Act 1984.
continuous disclosure notice means:
(a) a document used to notify a market operator of information relating to a body under provisions of the market’s listing rules referred to in subsections 674(1) and 674A(1); or
(b) a document under section 675 or 675A lodged in relation to the body.
continuously quoted securities are securities that:
(a) are in a class of securities that were quoted ED securities at all times in the 3 months before the date of the prospectus or Product Disclosure Statement; and
(b) are securities of an entity in relation to which the following subparagraphs are satisfied during the shorter of the period during which the class of securities were quoted, and the period of 12 months before the date of the prospectus or Product Disclosure Statement:
(i) no exemption under section 111AS or 111AT, or modification under section 111AV, covered the entity, or any person as director or auditor of the entity;
(ii) no exemption under paragraph 741(1)(a), or declaration under paragraph 741(1)(b), relating to a provision that is a disclosing entity provision for the purposes of Division 4 of Part 1.2A covered the entity, or any person as director or auditor of the entity;
(iii) no order under section 340, 340A, 341 or 341A covered the entity, or any person as director or auditor of the entity;
and, for these purposes, securities are not in different classes merely because of a temporary difference in the dividend, or distribution rights, attaching to the securities or because different amounts have been paid up on the securities.
contract of insurance, in Division 4 (special provisions relating to insurance) of Part 7.8, has a meaning affected by subsection 985A(1).
contravene, in relation to a civil penalty provision, has a meaning affected by subsection 1317E(4).
contravention proceedings means proceedings under section 1101B by a person referred to in paragraph 1101B(1)(b) or (d).
contribution plan means a plan in respect of which the following conditions are met:
(a) regular deductions are made from the wages or salary of an employee or director (the contributor) to acquire financial products that are offered for issue or sale to the contributor under a scheme for employees or directors of a company to acquire any of the following financial products of the company:
(i) fully paid ordinary shares;
(ii) options, offered for no more than nominal consideration, for the issue or transfer of fully paid ordinary shares;
(iii) units in fully paid ordinary shares;
(b) the deductions are authorised by the contributor in a form which is included in, or accompanies, the disclosure document or the Product Disclosure Statement for the scheme;
(c) before acquiring the financial products under the scheme, the deductions are held on trust in an account with an Australian ADI that is kept solely for that purpose;
(d) the contributor may elect to discontinue the deductions at any time;
(e) if the contributor so elects, the amount of the deductions standing, at that time, to the credit of the account for the contributor, and any interest on that amount, is repaid to the contributor;
(f) the scheme does not involve the offer to the contributor of a loan or similar financial assistance for the purpose of, or in connection with, the acquisition of the financial products that are offered under the scheme.
contributory means:
(a) in relation to a company (other than a no liability company):
(i) a person liable as a member or past member to contribute to the property of the company if it is wound up; and
(ii) for a company with share capital—a holder of fully paid shares in the company; and
(iii) before the final determination of the persons who are contributories because of subparagraphs (i) and (ii)—a person alleged to be such a contributory; and
(b) in relation to a Part 5.7 body:
(i) a person who is a contributory by virtue of section 586; and
(ii) before the final determination of the persons who are contributories by virtue of that section—a person alleged to be such a contributory; and
(c) in relation to a no liability company—subject to subsection 254M(2), a member of the company; and
(d) in relation to a sub‑fund of a CCIV—a person who is a contributory of the CCIV under paragraph (a), if the person is liable as mentioned in subparagraph (a)(i) as a member or past member of the sub‑fund, or is a holder of shares referable to the sub‑fund.
control:
(a) unless paragraph (b) applies—has the meaning given by section 50AA; and
(b) when used in Part 7.6—has the meaning given by section 910B.
control day, in relation to a controller of property of a corporation, means:
(a) unless paragraph (b) applies:
(i) in the case of a receiver, or receiver and manager, of that property—the day when the receiver, or receiver and manager, was appointed; or
(ii) in the case of any other person who is in possession, or has control, of that property for the purpose of enforcing a security interest—the day when the person entered into possession, or took control, of property of the corporation for the purpose of enforcing that security interest; or
(b) if the controller became a controller of property of the corporation:
(i) to act with an existing controller of such property; or
(ii) in place of a controller of such property who has died or ceased to be a controller of such property;
the day that is, because of any other application or applications of this definition, the control day in relation to the controller referred to in subparagraph (i) or (ii).
controlled Australian financial body has the meaning given by subsection 852DA(2).
controller, in relation to property of a corporation, means:
(a) a receiver, or receiver and manager, of that property; or
(b) anyone else who (whether or not as agent for the corporation) is in possession, or has control, of that property for the purpose of enforcing a security interest;
and has a meaning affected by paragraph 434F(b) (which deals with 2 or more persons appointed as controllers).
convertible note has the same meaning as in Division 3A of Part III of the Income Tax Assessment Act 1936.
convertible securities: securities are convertible into another class of securities if the holder may, by the exercise of rights attached to those securities:
(a) have the other class of securities issued to them; or
(b) have the securities transform into securities of that other class.
An option may be a convertible security even if it is non‑renounceable.
core obligation has the meaning given by subsection 912D(3).
core officer, of a corporation (other than a CCIV), means a person covered by paragraph 9AD(1)(a) or (b).
corporate collective investment vehicle or CCIV means a company that is registered as a corporate collective investment vehicle under this Act.
corporate director of a CCIV has the meaning given by subsection 1224(3).
corporate responsibility provision has the meaning given by section 188.
corporation has the meaning given by section 57A.
corporation/scheme civil penalty provision has the meaning given by subsection 1317E(3).
Corporations legislation means:
(a) this Act; and
(b) the ASIC Act; and
(c) rules of court made by the Federal Court, the Supreme Court of the Australian Capital Territory, or Judges of the Federal Circuit and Family Court of Australia (Division 1), because of a provision of this Act; and
(d) rules of court applied by the Supreme Court, or a State Family Court, of a State, or by the Supreme Court of the Northern Territory or of Norfolk Island, when exercising jurisdiction conferred by Division 1 of Part 9.6A (including jurisdiction conferred by virtue of any previous application or applications of this paragraph).
court has the meaning given by section 58AA.
Court has the meaning given by section 58AA.
CPD provision (short for continuing professional development provision) means:
(a) subsection 921BA(4); or
(b) subsection 921BB(3).
CPD year (short for continuing professional development year) has the meaning given by section 910A.
credit licensee means a licensee within the meaning of the National Consumer Credit Protection Act 2009.
creditor of a sub‑fund of a CCIV means a creditor of the CCIV, if the debt or claim is, to any extent, a liability of the sub‑fund.
creditor‑defeating disposition has the meaning given by section 588FDB.
creditors’ voluntary winding up means a winding up under Part 5.5, other than a members’ voluntary winding up.
crowd‑funding service that a person provides has the meaning given by section 766F.
CSF is short for crowd‑sourced funding.
Note: Crowd‑sourced funding is dealt with in Part 6D.3A.
CS facility licensee means a person who holds an Australian CS facility licence.
CS facility rules means rules made under section 826H.
CSF audit threshold means:
(a) unless paragraph (b) applies—$3 million; or
(b) any amount prescribed by the regulations for the purposes of this paragraph.
CSF intermediary has the meaning given by section 738C.
CSF offer has the meaning given by section 738B.
CSF offer document, in relation to a CSF offer, has the meaning given by subsection 738J(1).
CSF shareholder, of a proprietary company, means an entity that holds one or more securities of the company due to being issued with the securities pursuant to a CSF offer by the company.
CSLR operator (short for financial services compensation scheme of last resort operator) means the person for whom an authorisation under section 1060 is in force.
CSLR staff member means:
(a) a director, officer or employee of the CSLR operator; or
(b) a person engaged as a consultant to, or to perform services for, the CSLR operator for the purposes of the financial services compensation scheme of last resort.
CS service has the meaning given by section 828.
CS services rules: see subsection 828A(1).
current LVR:
(a) of a standard margin lending facility—has the meaning given by subsection 761EA(3); and
(b) of a non‑standard margin lending facility—has the meaning given by subsection 761EA(6).
custodial arrangement, in Subdivision A (volume‑based shelf‑space fees) of Division 5 of Part 7.7A, has the meaning given by subsection 964(2).
Note: Subsection 964(2) incorporates a modified version of the definition of custodial arrangement in section 1012IA.
custodial or depository service that a person provides has the meaning given by section 766E.
custodian, in relation to a registrable superannuation entity, has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
data standards means standards made by the Registrar under section 1270G.
date of a takeover bid is:
(a) for an off‑market bid—the date on which offers are first made under the bid; or
(b) for a market bid—the date on which the bid is announced to the relevant financial market.
dealing in a financial product:
(a) except in Part 7.8A—has the meaning given by section 766C; and
(b) in Part 7.8A (design and distribution requirements)—has the meaning given by subsection 994A(2);
and deal in a financial product has corresponding meanings.
death benefit decision‑maker has the meaning given by section 761A.
debenture of a body means a chose in action that includes an undertaking by the body to repay as a debt money deposited with or lent to the body. The chose in action may (but need not) include a security interest over property of the body to secure repayment of the money. However, a debenture does not include:
(a) an undertaking to repay money deposited with or lent to the body by a person if:
(i) the person deposits or lends the money in the ordinary course of a business carried on by the person; and
(ii) the body receives the money in the ordinary course of carrying on a business that neither comprises nor forms part of a business of borrowing money and providing finance; or
(b) an undertaking by an Australian ADI to repay money deposited with it, or lent to it, in the ordinary course of its banking business; or
Note: This paragraph has an extended meaning in relation to Chapter 8 (see subsection 1200A(2)).
(c) an undertaking to pay money under:
(i) a cheque; or
(ii) an order for the payment of money; or
(iii) a bill of exchange; or
(e) an undertaking by a body corporate to pay money to a related body corporate; or
(f) an undertaking to repay money that is prescribed by the regulations.
For the purposes of this definition, if a chose in action that includes an undertaking by a body to pay money as a debt is offered as consideration for the acquisition of securities under an off‑market takeover bid, or is issued under a compromise or arrangement under Part 5.1, the undertaking is taken to be an undertaking to repay as a debt money deposited with or lent to the body.
decision, in Part 9.4A (review by Administrative Review Tribunal), has the meaning given by section 1317A.
decision period, for a secured party in relation to a security interest in property (including PPSA retention of title property) of a company means:
(a) in relation to a company under administration—the period beginning on the day when:
(i) a notice of appointment of the administrator must be given to the secured party under subsection 450A(3)—such notice is so given; or
(ii) otherwise—the administration begins;
and ending at the end of the thirteenth business day after that day; and
(b) in relation to a company under restructuring—the period beginning on the day when:
(i) a notice of appointment of the restructuring practitioner must be given to the secured party under the regulations—such notice is so given; or
(ii) otherwise—the restructuring begins;
and ending at the end of the thirteenth business day after that day.
declaration of indemnities, in relation to an administrator of a company under administration, means a written declaration:
(a) stating whether the administrator has, to any extent, been indemnified (otherwise than under section 443D), in relation to that administration, for:
(i) any debts for which the administrator is, or may become, liable under Subdivision A of Division 9 of Part 5.3A; or
(ii) any debts for which the administrator is, or may become, liable under a remittance provision as defined in section 443BA; or
(iii) the remuneration to which he or she is entitled under section 60‑5 of Schedule 2 (external administrator’s remuneration); and
(b) if so, stating:
(i) the identity of each indemnifier; and
(ii) the extent and nature of each indemnity.
declaration of relevant relationships has the meaning given by section 60.
declared financial market has the meaning given by subsection 9D(1).
deed includes a document having the effect of a deed.
deed of company arrangement means a deed of company arrangement executed under Part 5.3A or such a deed as varied and in force from time to time.
defeating condition for a takeover bid means a condition that:
(a) will, in circumstances referred to in the condition, result in the rescission of, or entitle the bidder to rescind, a takeover contract; or
(b) prevents a binding takeover contract from resulting from an acceptance of the offer unless or until the condition is fulfilled.
defect, in relation to a statutory demand, includes:
(a) an irregularity; and
(b) a misstatement of an amount or total; and
(c) a misdescription of a debt or other matter; and
(d) a misdescription of a person or entity.
defective:
(a) in relation to a CSF offer document, has the meaning given by subsection 738U(1); and
(b) in relation to a disclosure document or statement:
(i) in Subdivision A (financial services disclosure offences) of Division 7 of Part 7.7—has the meaning given by subsection 952B(1); and
(ii) in Subdivision B (financial services disclosure civil lability) of Division 7 of Part 7.7—has the meaning given by subsection 953A(1); and
(iii) in Subdivision A (financial product disclosure offences) of Division 7 of Part 7.9—has the meaning given by subsection 1021B(1); and
(iv) in Subdivision B (financial product disclosure civil lability) of Division 7 of Part 7.9—has the meaning given by subsection 1022A(1).
deposit product means a financial product described in paragraph 764A(1)(i).
deregistered means:
(a) in relation to a company—deregistered under Chapter 5A; and
(b) in relation to any other body corporate—deregistered in a way that results in the body corporate ceasing to exist.
derivative (except for the purposes of Chapter 8A) has the meaning given by section 761D.
derivative retail client money has the meaning given by section 761A.
derivative trade data has the meaning given by section 761A.
derivative trade repository:
(a) means a facility to which information about derivative transactions, or about positions relating to derivative transactions, can be reported (whether or not other information or data can also be reported to the facility); and
(b) in relation to an Australian derivative trade repository licence—has a meaning affected by subsection 905E(2).
derivative trade repository licensee means a person who holds an Australian derivative trade repository licence.
derivative trade repository rules means rules made by ASIC under subsection 903A(1).
derivative transaction means:
(a) the entry into of an arrangement (as defined in subsection 761B(1)) that is a derivative; or
(b) the modification or termination of such an arrangement; or
(c) the assignment, by a party to such an arrangement, of some or all of the party’s rights and obligations under the arrangement; or
(d) any other transaction that relates to a derivative and that is in a class of transactions prescribed by the regulations for the purposes of this paragraph.
derivative transaction rules means rules made by ASIC under subsection 901A(1).
designated secrecy provision has the meaning given by subsection 1270M(3).
detriment, in sections 1317AC and 1317AD, has a meaning affected by section 1317ADA.
director has the meaning given by section 9AC.
director identification number means a director identification number given under:
(a) section 1272; or
(b) section 308‑5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
directors’ report means:
(a) an annual directors’ report required by section 292; or
(b) a half‑year directors’ report required by section 302.
disclosing entity has the meaning given by section 111AC.
disclosing entity provisions has the meaning given by section 111AR.
disclosure document for an offer of securities means:
(a) a prospectus for the offer; or
(b) a profile statement for the offer; or
(c) an offer information statement for the offer.
disclosure document or statement:
(a) in Subdivision A (financial services disclosure offences) of Division 7 of Part 7.7—has the meaning given by subsection 952B(1); and
(b) in Subdivision B (financial services disclosure civil lability) of Division 7 of Part 7.7—has the meaning given by subsection 953A(1); and
(c) in Subdivision A (financial product disclosure offences) of Division 7 of Part 7.9—has the meaning given by subsection 1021B(1); and
(d) in Subdivision B (financial product disclosure civil lability) of Division 7 of Part 7.9—has the meaning given by subsection 1022A(1).
disclosure framework means the disclosure framework made by the Registrar under section 1270K.
dishonest means dishonest according to the standards of ordinary people.
dispose has a meaning affected by the following paragraphs:
(a) when used in relation to financial products, otherwise than in a situation to which paragraph (b) applies, dispose includes terminate or close out the legal relationship that constitutes the financial product;
(b) for the purposes of Chapter 6, a person who has a relevant interest in securities disposes of the securities if, and only if, they cease to have a relevant interest in the securities.
disqualified individual has the meaning given by section 853A.
distribution condition has the meaning given by paragraph 994B(5)(c).
distribution information, in relation to a financial product, has the meaning given by subsection 994F(3).
Division 3 arrangements has the meaning given by section 880B.
Note: This definition refers to Division 3 (approved compensation arrangements) of Part 7.5.
Division 3 financial products has the meaning given by subsection 1042A(1).
Note 1: This definition refers to Division 3 (insider trading prohibitions) of Part 7.10.
Note 2: In Part 7.10 (market misconduct etc.) bank accepted bills and negotiable certificates of deposit are treated as if they were Division 3 financial products: see section 1040B.
Division 3 loss has the meaning given by section 880B.
Note: This definition refers to Division 3 (approved compensation arrangements) of Part 7.5.
Division 4 arrangements has the meaning given by section 880B.
Note: This definition refers to Division 4 (NGF Compensation regime) of Part 7.5.
doing an act or thing includes causing or authorising the act or thing to be done.
domestic corporation means a corporation that is incorporated or formed in Australia or an external Territory.
ED securities has the meaning given by section 111AD.
education and training standards has the meaning given by section 921B.
electronic communication means:
(a) a communication of information in the form of data, text or images by means of guided and/or unguided electromagnetic energy; or
(b) a communication of information in the form of speech by means of guided and/or unguided electromagnetic energy, where the speech is processed at its destination by an automated voice recognition system.
eligibility criteria:
(a) for restructuring a company—has the meaning given by section 453C; and
(b) for the simplified liquidation process—has the meaning given by section 500AA.
eligible applicant, in relation to a corporation, means:
(a) ASIC; or
(b) a liquidator or provisional liquidator of the corporation; or
(c) an administrator of the corporation; or
(d) an administrator of a deed of company arrangement executed by the corporation; or
(da) a restructuring practitioner for the corporation; or
(db) a restructuring practitioner for a restructuring plan made by the corporation; or
(e) a person authorised in writing by ASIC to make:
(i) applications under the Division of Part 5.9 in which the expression occurs; or
(ii) such an application in relation to the corporation.
eligible CSF company has the meaning given by section 738H.
eligible employee creditor, in relation to a company, means a creditor whose debt or claim would, in a winding up of the company, be payable in priority to other unsecured debts and claims in accordance with paragraph 556(1)(e), (g) or (h) or section 560 or 561.
eligible for temporary restructuring relief has the meaning given by section 458E.
eligible international emissions unit has the same meaning as in the Australian National Registry of Emissions Units Act 2011.
eligible money market dealer means a body corporate in respect of which a declaration is in force under section 65.
eligible officer has the meaning given by section 1272B.
eligible recipient has the meaning given by section 1317AAC.
eligible unsecured creditor has the meaning given by section 579Q.
eligible whistleblower has the meaning given by section 1317AAA.
employee of a company, in Part 5.8A (employee entitlements), has the meaning given by subsections 596AA(4) and (5).
employee entitlements contribution order has the meaning given by subsection 588ZA(1).
employee share buy‑back means a buy‑back under a scheme that:
(a) has as its purpose the acquisition of shares in a company by, or on behalf of:
(i) employees of the company, or of a related body corporate; or
(ii) directors of the company, or a related body corporate, who hold a salaried employment or office in the company or in a related body corporate; and
(b) has been approved by the company in general meeting.
employee share scheme: see subsection 1100L(1).
employer‑sponsor has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
end of administration return has the same meaning as in Schedule 2.
enforce, in relation to a security interest in property of a company under administration, includes:
(a) appoint a receiver of property of the company under a power contained in an instrument relating to the security interest; or
(b) obtain an order for the appointment of a receiver of such property for the purpose of enforcing the security interest; or
(c) enter into possession, or assume control, of such property for that purpose; or
(d) appoint a person so to enter into possession or assume control (whether as agent for the secured party or for the company); or
(e) exercise, in relation to property including PPSA retention of title property, as the secured party or as a receiver or person so appointed, a right, power or remedy existing because of the security interest, arising:
(i) under an agreement or instrument relating to the security interest; or
(ii) in the case of a PPSA security interest—under an agreement or instrument relating to a transaction or dealing giving rise to the security interest; or
(iii) under a written or unwritten law; or
(iv) in any other way.
enforceable code provision means a provision of an approved code of conduct identified by ASIC under subsection 1101A(2).
enforcement proceedings means proceedings under section 793C by a person referred to in paragraph 793C(1)(b), (c) or (d).
enforcement process, in relation to property, means:
(a) execution against that property; or
(b) any other enforcement process in relation to that property that involves a court or a sheriff.
engage in audit activity: an individual auditor, audit firm or audit company engages in audit activity in relation to an audited body for an audit if the individual auditor, audit firm or audit company:
(a) consents to be appointed as auditor of the audited body for a financial year; or
(b) acts as the auditor of the audited body for a financial year; or
(c) prepares a report in relation to the audited body that is required by this Act to be prepared by:
(i) a registered company auditor; or
(ii) an auditor of the audited body in relation to a financial year or half‑year.
engage in conduct means:
(a) do an act; or
(b) omit to perform an act.
enter into: a person who:
(a) enters into, or becomes a party to, a relevant agreement in relation to shares or other securities; or
(b) exercises an option to have shares or other securities allotted, issued or granted;
is taken to enter into a transaction in relation to the shares or securities.
entitlements of an employee of a company has the meaning given by subsections 596AA(2) and (3).
entity: for the purposes of Chapters 2E, 8A and 8B, an entity is any of the following:
(a) a body corporate;
(b) a partnership;
(c) an unincorporated body;
(d) an individual;
(e) for a trust that has only 1 trustee—the trustee;
(f) for a trust that has more than 1 trustee—the trustees together.
Otherwise, entity has the meaning given by section 64A.
equal access scheme has the meaning given by subsections 257B(2) and (3).
equal reduction has the meaning given by subsection 256B(2).
equity interest has the same meaning as in the Income Tax Assessment Act 1997.
ESS contribution plan: see section 1100T.
essential service means:
(a) electricity; or
(b) gas; or
(c) water; or
(d) a carriage service (within the meaning of the Telecommunications Act 1997).
ESS interest: see section 1100M.
ESS participant: see subsection 1100L(2).
estate assets and liabilities has the meaning given by section 601WAA.
estate management functions has the meaning given by subsection 601RAC(2).
estate that is administered or managed has the meaning given by subsection 601SBB(1A).
event includes any happening, circumstance or state of affairs.
examinable affairs, in relation to a corporation means:
(a) the promotion, formation, management, administration, restructuring or winding up of the corporation; or
(b) any other affairs of the corporation (including anything that is included in the corporation’s affairs because of section 53); or
(c) the business affairs of any of the following, in so far as those business affairs are, or appear to be, relevant to the corporation or to anything that is included in the corporation’s examinable affairs because of paragraph (a) or (b):
(i) a body corporate that is, or has been, related to the corporation;
(ii) an entity that is, or has been, connected with the corporation.
examinable assets and liabilities, in relation to an entity, means all of the following:
(a) the entity’s property and assets:
(i) whether present or future; and
(ii) whether held alone or jointly with any other person or persons; and
(iii) whether or not held as agent, bailee or trustee;
(b) the entity’s liabilities:
(i) whether present or future; and
(ii) whether actual or contingent; and
(iii) whether owed alone or jointly with any other person or persons; and
(iv) whether or not owed as trustee.
examinable operations, in relation to an entity, means all of the following:
(a) the entity’s business, trading, transactions and dealings:
(i) whether alone or jointly with any other entity or entities; and
(ii) whether or not as agent, bailee or trustee;
(b) the entity’s profits, income and receipts;
(c) the entity’s losses, outgoings and expenditure.
excluded conduct has the meaning given by subsection 994A(1).
excluded security means:
(a) where:
(i) there is attached to a share or debenture a right to participate in a retirement village scheme; and
(ii) each of the other rights, and each interest (if any), attached to the share or debenture is a right or interest that is merely incidental to the right referred to in subparagraph (i);
the share or debenture or a unit in the share or debenture; or
(b) an interest in a managed investment scheme constituted by a right to participate in a retirement village scheme.
execution requirements, in relation to derivative transactions, has the meaning given by subsection 901A(5).
exempt body corporate of a State or Territory has the meaning given by section 66A.
exempt public authority means a body corporate that is incorporated within Australia or an external Territory and is:
(a) a public authority; or
(b) an instrumentality or agency of the Crown in right of the Commonwealth, in right of a State or in right of a Territory.
exempt public sector superannuation scheme has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
expectation:
(a) a person has an expectation that a managed investment scheme or a sub‑fund of a CCIV will become an Australian passport fund only as set out in section 1216B; and
(b) a person has an expectation that a fund will become a notified foreign passport fund only as set out in section 1216G.
expert, in relation to a matter, means a person whose profession or reputation gives authority to a statement made by him or her in relation to that matter.
extend, in relation to a period:
(a) includes further extend; and
(b) has a meaning affected by section 70.
external administrator:
(a) other than in Chapter 5 and Part 7.3B—has the same meaning as in Schedule 2; and
(b) in Part 7.3B:
(i) subject to subparagraph (ii)—means an external administrator (within the meaning of Schedule 2 to this Act), a receiver, manager, managing controller, receiver and manager or other controller; and
(ii) does not include a statutory manager (within the meaning of this Act) or a Banking Act statutory manager (within the meaning of the Banking Act 1959).
external Territory:
(a) means a Territory referred to in section 122 of the Constitution, where an Act makes provision for the government of the Territory as a Territory; but
(b) does not include a Territory covered by the definition of Territory in this section.
Note: The Australian Capital Territory, the Jervis Bay Territory, the Northern Territory, Norfolk Island and the Territories of Christmas Island and of Cocos (Keeling) Islands are covered by the definition of Territory in this section.
extract of particulars for a company, registered scheme or notified foreign passport fund means a statement given by ASIC that contains either or both of the following:
(a) some or all of the particulars in relation to the company, scheme or fund that are recorded in a register that ASIC maintains, or ensures is maintained, under subsection 1214(1) or 1274(1);
(b) a requirement to provide a particular under section 346B.
extraordinary resolution, in relation to a registered scheme, a CCIV or a sub‑fund of a CCIV, means a resolution of the members of the registered scheme that complies with subsection 253LA(2).
facility has a meaning affected by section 762C.
Federal Court means the Federal Court of Australia.
fee recipient has the meaning given by section 962C.
fees, in Chapter 5D (licensed trustee companies), has the meaning given by section 601RAA.
fidelity fund has the meaning given by section 880B.
financed emissions has the meaning given by the sustainability standards.
financial benchmark:
(a) has the meaning given by section 908AB; and
(b) in relation to a benchmark administrator licence—has a meaning affected by section 908BE.
financial benchmark data means:
(a) information obtained to generate or administer a financial benchmark; or
(b) information (including statistical data) that is created or derived from information referred to in paragraph (a).
financial benchmark rules means rules made under section 908CA.
financial benefit: see giving a financial benefit.
financial investment: see makes a financial investment.
financial market (except for the purposes of Chapter 8A) has the meaning given by section 767A.
financial product has the meaning given by Division 3 of Part 7.1 and:
(a) in Part 7.8A (design and distribution requirements)—has a meaning affected by subsection 994AA(1); and
(b) in Part 7.9A (product intervention orders)—has a meaning affected by section 1023B.
Note: In Part 7.10 (market misconduct etc.) bank accepted bills and negotiable certificates of deposit are treated as if they were financial products: see section 1040B.
financial product advice has the meaning given by section 766B.
financial records includes:
(a) invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers; and
(b) documents of prime entry; and
(c) working papers and other documents needed to explain:
(i) the methods by which financial statements are made up; and
(ii) adjustments to be made in preparing financial statements.
financial report means:
(a) an annual financial report required by or under section 292, 293, 294, 294A or 294B; or
(b) a half‑year financial report required by section 302.
financial reporting requirements for a financial report means the requirements imposed under:
(a) section 296 or 297 if the financial report is an annual financial report; or
(b) section 304 or 305 if the financial report is a half‑year financial report.
financial risk: see manages financial risk.
financial service has the meaning given by Division 4 of Part 7.1.
Financial Services and Credit Panel means a panel convened under subsection 139(1) of the ASIC Act.
financial services civil penalty provision has the meaning given by subsection 1317E(3).
financial services compensation scheme of last resort means the financial services compensation scheme of last resort established under Part 7.10B.
financial services compensation scheme of last resort operator: see CSLR operator.
Financial Services Guide means a Financial Services Guide required by section 941A or 941B to be given in accordance with Division 2 of Part 7.7.
financial services law has the meaning given by section 761A.
financial services licensee means a person who holds an Australian financial services licence.
financial statements means annual financial statements under section 295 or half‑year financial statements under section 303.
financial year:
(a) of a company, registered scheme or disclosing entity (other than a notified foreign passport fund)—has the meaning given by section 323D; and
(b) of a notified foreign passport fund—has the meaning given by section 323DAA; and
(c) of a financial services licensee that is a body corporate and is not covered by paragraph (a)—means a financial year of the body corporate; and
(d) for a financial services licensee that is not covered by paragraph (a) or (c)—means a year ending on 30 June.
find, in the case of a reference to a court finding a person guilty of an offence, has a meaning affected by section 73A.
firm, in relation to an administrator, restructuring practitioner or liquidator, means:
(a) if the administrator, restructuring practitioner or liquidator is a partner or employee of a partnership (the partnership firm) that provides advice or other services in relation to Chapter 5 bodies corporate—the partnership firm; or
(b) if the administrator, restructuring practitioner or liquidator is an officer or employee of a body corporate (the body corporate firm) that provides advice or other services in relation to Chapter 5 bodies corporate—the body corporate firm.
first levy period has the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy Act 2023.
floating charge includes a charge that conferred a floating security at the time of its creation but has since become a fixed or specific charge.
FMI banning order (short for financial market infrastructure banning order) means an order made under subsection 853H(1).
FMI licensee means:
(a) a market licensee; or
(b) a CS facility licensee; or
(c) a derivative trade repository licensee; or
(d) a benchmark administrator licensee.
for, in relation to a fee or tax, includes in respect of.
foreign company means:
(a) a body corporate that is incorporated in an external Territory, or outside Australia and the external Territories, and is not:
(i) a corporation sole; or
(ii) an exempt public authority; or
(b) an unincorporated body that:
(i) is formed in an external Territory or outside Australia and the external Territories; and
(ii) under the law of its place of formation, may sue or be sued, or may hold property in the name of its secretary or of an officer of the body duly appointed for that purpose; and
(iii) does not have its head office or principal place of business in Australia.
foreign exchange contract has the meaning given by section 761A.
foreign holder of securities means a holder of the securities whose address, as shown in the register in which details of their holding is recorded, is a place outside Australia and the external Territories.
foreign law has the same meaning as in the Income Tax Assessment Act 1997.
foreign passport fund means a passport fund the home economy for which is not Australia.
foreign passport fund product means a financial product described in paragraph 764A(1)(bb).
foreign qualification has the meaning given by section 910A.
foreign recognition scheme has the meaning given by subsection 1200A(1).
franchise means an arrangement under which a person earns profits or income by exploiting a right, conferred by the owner of the right, to use a trade mark or design or other intellectual property or the goodwill attached to it in connection with the supply of goods or services. An arrangement is not a franchise if the person engages the owner of the right, or an associate of the owner, to exploit the right on the person’s behalf.
fully paid share means a share on which no amount remains unpaid.
function includes a duty.
fund property of a notified foreign passport fund means:
(a) contributions of money or money’s worth to the fund; and
(b) money that forms part of the fund property under provisions of this Act or the ASIC Act; and
(c) money borrowed or raised by the operator of the fund for the purposes of the fund; and
(d) property acquired, directly or indirectly, with, or with the proceeds of, contributions or money referred to in paragraph (a), (b) or (c); and
(e) income and property derived, directly or indirectly, from contributions, money or property referred to in paragraph (a), (b), (c) or (d).
Note: Paragraph (a)—if what a member contributes to a fund is rights over property, the rights in the property that the member retains do not form part of the fund property.
funeral benefit has the meaning given by section 761A.
further market‑related advice means advice to which subsection 946B(1) applies.
Gazette notice means a notice published in the Gazette.
general advice has the meaning given by subsection 766B(4).
general CSF risk warning has the meaning given by subsection 738ZA(2).
general insurance product means a financial product described in paragraph 764A(1)(d).
Note: See also insurance product and risk insurance product.
general law means the principles and rules of the common law and equity.
generally available in relation to information:
(a) for the purposes of sections 674, 674A, 675 and 675A (continuous disclosure)—has the meaning given by section 676; and
(b) for the purposes of Division 3 (insider trading prohibitions) of Part 7.10—has the meaning given by section 1042C.
giving a financial benefit has a meaning that is affected by section 229.
government entity has the meaning given by section 41 of the A New Tax System (Australian Business Number) Act 1999.
guarantor, in relation to a debenture, means a body that has guaranteed, or has agreed to guarantee, the repayment of any money deposited or lent to the borrower under the debenture.
guilty, in the case of a reference to a court finding a person guilty of an offence, has a meaning affected by section 73A.
half‑year has the meaning given by subsection 323D(5).
highest outside purchase price for a takeover bid is the highest amount paid or payable by the bidder for a security in the bid class under a purchase made outside the bid and during the bid period.
holder:
(a) in relation to a financial product—means the person to whom the financial product was issued, or if it has (since issue) been disposed of to another person who has not themselves disposed of it, that other person; and
(b) in relation to an RSA—has the same meaning as in the Retirement Savings Accounts Act 1997;
and hold has corresponding meanings.
holding company, in relation to a body corporate, means a body corporate of which the first body corporate is a subsidiary.
home economy for a passport fund means:
(a) if the passport fund is a regulated CIS, or a sub‑fund of a regulated CIS, in only one participating economy—that participating economy; and
(b) if the passport fund is a regulated CIS, or a sub‑fund of a regulated CIS, in more than one participating economy—the participating economy in which the fund is first registered or approved as a regulated CIS (however that registration or approval is described).
home regulator for a passport fund means the entity that is the Passport Regulator for the home economy for the passport fund under the Passport Rules for this jurisdiction.
host economy: a participating economy is a host economy for a passport fund if:
(a) the participating economy is not the home economy for the fund; and
(b) either:
(i) it is permitted under the law of the participating economy to offer interests in the fund in that economy, on the basis that the fund is a passport fund; or
(ii) an application has been made under the law of the participating economy for permission to offer interests in the fund in that economy, on the basis that the fund is a passport fund.
hosting arrangement, in relation to a CSF offer, has the meaning given by subsection 738L(2).
host regulator for a passport fund means the entity that is the Passport Regulator for a host economy for the passport fund under the Passport Rules for this jurisdiction.
immediate family member for a person means:
(a) the person’s spouse; or
(b) a person who is wholly or partly dependent on the person for financial support.
in Australia has the meaning given by section 102C.
incentive right: see subsection 1100M(4).
included, in relation to an official list, has the meaning given by section 75.
income year has the same meaning as in the Income Tax Assessment Act 1997.
incorporated in Australia, in relation to a body corporate, includes incorporated by or under a law of:
(a) the Commonwealth; or
(b) a State; or
(c) an internal Territory.
incorporation:
(a) of a company—means the company’s first registration under this Act; and
(b) of any other incorporated body—means the body’s incorporation by or under a law (other than this Act).
in default:
(a) an officer of a body corporate who is in default, in relation to a contravention, includes an officer of the body corporate who is involved in the contravention (including a person who later ceases to be such an officer); and
(b) a person who is in default, in relation to a contravention, includes a person who is involved in the contravention.
independent person, in Part 2G.7 (independent reports on polls), has the meaning given by section 253UA.
individual auditor means an individual who consents to be appointed, or is appointed, as auditor of a company, registered scheme or registrable superannuation entity.
individual fine formula means the formula set out in subsection 1311B(3).
industrial instrument means:
(a) a contract of employment; or
(b) a law, award, determination or agreement relating to terms or conditions of employment.
information, in Division 3 (insider trading prohibitions) of Part 7.10, has a meaning affected by subsection 1042A(2).
information statement for a class of CGS depository interests has the meaning given by subsection 1020AH(1).
infringement notice:
(a) in Part 7.5B—means an infringement notice issued under Part 5 of the Regulatory Powers Act; and
(b) in Part 9.1A—means an infringement notice under Part 5 of the Regulatory Powers Act; and
(c) in Part 9.4AA and Chapter 6CA—means an infringement notice issued under section 1317DAC; and
(d) in Part 9.4AB, Part 7.6 and Part 9.4B—means an infringement notice given under section 1317DAM.
Note: For the provisions subject to the infringement notice:
(a) in Part 7.5B, see section 908CH; and
(b) in Part 9.1A, see section 1272F;
(c) for an infringement notice issued under section 1317DAC, see section 1317DAC; and
(d) for an infringement notice given under section 1317DAM, see section 1317DAN (under which the provisions include all strict liability offences and absolute liability offences against this Act and certain other offences and civil penalty provisions).
injury compensation means compensation payable under any law relating to workers compensation.
inside information has the meaning given by subsection 1042A(1).
Insolvency Practice Rules means the rules made by the Minister under section 105‑1 of Schedule 2.
insolvent:
(a) in relation to a person—has the meaning given by subsection 95A(2); and
(b) in relation to a sub‑fund of a CCIV—has the meaning given by subsection 1231A(3).
insolvent transaction has the meaning given by section 588FC.
insolvent under administration means:
(a) a person who, under the Bankruptcy Act 1966, is a bankrupt in respect of a bankruptcy from which the person has not been discharged; or
(b) a person who, under the law of a foreign country, has the status of an undischarged bankrupt; or
(c) a person any of whose property is subject to control under:
(i) section 50 or Division 2 of Part X of the Bankruptcy Act 1966; or
(ii) a corresponding provision of the law of a foreign country; or
(d) a person who has executed a personal insolvency agreement under:
(i) Part X of the Bankruptcy Act 1966; or
(ii) the corresponding provisions of the law of a foreign country;
where the terms of the agreement have not been fully complied with; or
(e) a person who is a party (as a debtor) to a debt agreement under:
(i) Part IX of the Bankruptcy Act 1966; or
(ii) the corresponding provisions of the law of a foreign country.
insurance claims manager has the meaning given by section 761DA.
insurance product means a financial product described in paragraph 764A(1)(d), (e) or (f).
Note: See also general insurance product, investment life insurance product, life risk insurance product and risk insurance product.
insure:
(a) in relation to a contract of life insurance—insured, for the purposes of Division 4 (special provisions relating to insurance) of Part 7.8, has the meaning given by section 985A; and
(b) in relation to a superannuation complaint—insurer has the meaning given by section 761A.
interest:
(a) interest in relation to land includes:
(i) a legal or equitable estate or interest in the land; or
(ii) a right, power or privilege over, or in relation to, the land; and
(b) interest in a managed investment scheme (including a notified foreign passport fund) means a right to benefits produced by the scheme (whether the right is actual, prospective or contingent and whether it is enforceable or not); and
(c) in Part 5D.5 (limit on control of licensed trustee companies) interests of clients of a licensed trustee company—has a meaning affected by section 601VCB.
in this jurisdiction or elsewhere has a meaning affected by subsection 102B(1).
investment in a company, disclosing entity or other body means:
(a) a share in the company, disclosing entity or body; or
(b) a debenture of the company, disclosing entity or body; or
(c) a legal or equitable interest in:
(i) a share in the company, disclosing entity or body; or
(ii) a debenture of the company, disclosing entity or body; or
(d) an option to acquire (whether by way of issue or transfer) an investment in the company, disclosing entity or body covered by paragraph (a), (b) or (c); or
(e) an option to dispose of an investment in the company, disclosing entity or body covered by paragraph (a), (b) or (c); or
(f) an interest a person holds under an arrangement that is a derivative if:
(i) the consideration to be provided under the arrangement; or
(ii) the value of the arrangement;
is ultimately determined, derived from or varies by reference to an investment in the company, disclosing entity or body covered by paragraph (a), (b), (c), (d) or (e).
To avoid doubt, the consideration to be provided under, or the value of, an arrangement in relation to an index is not ultimately determined, derived from or varies by reference to an investment in the company merely because the investment is taken into account in determining the value of the index.
investment in a notified foreign passport fund means:
(a) an interest in the fund; or
(b) a legal or equitable interest in an interest in the fund; or
(c) an option to acquire (whether by way of issue or transfer) an investment in the fund covered by paragraph (a) or (b); or
(d) an option to dispose of an investment in the fund covered by paragraph (a) or (b); or
(e) an interest a person holds under an arrangement that is a derivative if:
(i) the consideration to be provided under the arrangement; or
(ii) the value of the arrangement;
is ultimately determined, derived from or varies by reference to an investment in the fund covered by paragraph (a), (b), (c) or (d); or
(f) an investment in the operator of the fund.
To avoid doubt, the consideration to be provided under, or the value of, an arrangement in relation to an index is taken not to be ultimately determined, derived from or vary by reference to an investment in the fund merely because the investment is taken into account in determining the value of the index.
investment in a registered scheme means:
(a) an interest in the scheme; or
(b) a legal or equitable interest in an interest in the scheme; or
(c) an option to acquire (whether by way of issue or transfer) an investment in the scheme covered by paragraph (a) or (b); or
(d) an option to dispose of an investment in the scheme covered by paragraph (a) or (b); or
(e) an interest a person holds under an arrangement that is a derivative if:
(i) the consideration to be provided under the arrangement; or
(ii) the value of the arrangement;
is ultimately determined, derived from or varies by reference to an investment in the scheme covered by paragraph (a), (b), (c) or (d); or
(f) an investment in the responsible entity of the scheme.
To avoid doubt, the consideration to be provided under, or the value of, an arrangement in relation to an index is taken not to be ultimately determined, derived from or vary by reference to an investment in the scheme merely because the investment is taken into account in determining the value of the index.
investment contract means any contract, scheme or arrangement that, in substance and irrespective of its form, involves the investment of money in or under such circumstances that the investor acquires or may acquire an interest in, or right in respect of, property, whether in this jurisdiction or elsewhere, that, under, or in accordance with, the terms of investment will, or may at the option of the investor, be used or employed in common with any other interest in, or right in respect of, property, whether in this jurisdiction or elsewhere, acquired in or under like circumstances.
investment life insurance product means a financial product described in paragraph 764A(1)(f).
Note: See also insurance product.
involved:
(a) in a contravention—has the meaning given by section 79; and
(b) in a market licensee, CS facility licensee, derivative trade repository licensee or a benchmark administrator licensee, or in an applicant for such a licence—has the meaning given by section 853B.
issue:
(a) issue includes:
(i) in relation to interests in a managed investment scheme—make available; and
(ii) otherwise—circulate, distribute and disseminate; and
(b) in relation to a financial product—issue has the meaning given by section 761E.
issue situation has the meaning given by paragraph 1012B(2)(a).
issue Statement has the meaning given by subsection 1013A(1).
judgment means a judgment, decree or order, whether final or interlocutory.
key management personnel for an entity has the same meaning as in the accounting standards.
kind, in relation to financial products or financial services, has a meaning affected by regulations made for the purposes of section 761CA.
large proprietary company has the meaning given by subsection 45A(3).
law:
(a) law of a State or Territory means a law of, or in force in, the State or Territory; and
(b) in Chapter 5D (licensed trustee companies)—law has the meaning given by section 601RAA.
Note: The definition in paragraph (a) does not affect the meaning of law when used otherwise than in a phrase such as “law of a State or Territory”. Examples of such a use are in the phrase “any provision of any law” in section 100A and the phrase “law of the Commonwealth” in section 156.
law of a recognised jurisdiction has the meaning given by subsection 1200A(1).
lawyer means a duly qualified legal practitioner and, in relation to a person, means such a practitioner acting for the person.
lead auditor has the meaning given by section 324AF.
lease does not include a lease of goods that gives rise to a PPSA security interest in the goods.
Note: An interest that arises under a lease of goods that in substance secures the payment or performance of an obligation, or that arises under a PPS lease within the meaning of the Personal Property Securities Act 2009, may be a PPSA security interest (see sections 12 and 13 of that Act and the definition of PPSA security interest in this section).
leave of absence means long service leave, extended leave, recreation leave, annual leave, sick leave or any other form of leave of absence from employment.
levy period has the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy Act 2023.
liability:
(a) liability (except in relation to a sub‑fund of a CCIV):
(i) includes a duty or obligation of any kind (whether arising under an instrument or otherwise, and whether actual, contingent or prospective); and
(ii) in relation to a CCIV—has a meaning affected by section 1233A; and
(b) liabilities, in relation to a sub‑fund of a CCIV, has the meaning given by section 1233L.
licensed CS facility means a clearing and settlement facility the operation of which is authorised by an Australian CS facility licence.
licensed derivative trade repository has the meaning given by section 761A.
licensed market means a financial market the operation of which is authorised by an Australian market licence.
licensed trustee company means a trustee company that holds an Australian financial services licence covering the provision of one or more traditional trustee company services.
Note: Traditional trustee company services are financial services: see subsection 766A(1A).
life policy has the same meaning as in the Life Insurance Act 1995.
life policy fund has the meaning given by section 761A.
life risk insurance product means a financial product described in paragraph 764A(1)(e).
Note: See also insurance product and risk insurance product.
limit of a margin lending facility has the meaning given by subsection 761EA(11).
limited company means:
(a) a company limited by shares; or
(b) a company limited by guarantee; or
(c) a company limited both by shares and guarantee;
but does not include a no liability company.
limited‑service time‑sharing adviser has the meaning given by section 910A.
linked:
(a) the incurring of a debt and a contravention of subsection 596AC(1), (2), (3) or (4) are linked if they are linked under subsection 596AC(10); and
(b) the disposition of a company’s property and a contravention of subsection 596AC(1), (2), (3) or (4) are linked if they are linked under subsection 596AC(10A).
linked to a refusal or failure to give effect to a determination made by AFCA has the meaning given by section 910C.
liquid:
(a) for a registered scheme—has the meaning given by subsection 601KA(4); and
(b) for a sub‑fund—has the meaning given by subsection 1230H(1).
liquidator:
(a) has a meaning affected by paragraph 530(b) (which deals with 2 or more persons appointed as liquidators); and
(b) in Chapter 7, includes a provisional liquidator.
liquidity period, for an ESS interest: see subsection 1100ZB(7).
listed:
(a) a company, managed investment scheme or other body is listed if it is included in the official list of a declared financial market operated in this jurisdiction; and
(b) a retail CCIV that is not listed because of paragraph (a) is listed if:
(i) the retail CCIV has only one sub‑fund; and
(ii) that sub‑fund is included in the official list of a declared financial market operated in this jurisdiction; and
(c) a sub‑fund of a retail CCIV is listed if:
(i) the sub‑fund is included in the official list of a declared financial market operated in this jurisdiction; or
(ii) the retail CCIV is listed because of paragraph (a).
listed corporation means a body corporate that is included in an official list of a declared financial market.
listed disclosing entity has the meaning given by section 111AL.
listing market, in relation to a listed disclosing entity, has the meaning given by subsection 111AE(1), (1A), (1B) or (1C).
listing rules of a financial market, or proposed financial market, means any rules (however described) that are made by the operator of the market, or contained in the operator’s constitution, and that deal with:
(a) admitting entities to, or removing entities from, the market’s official list, whether for the purpose of enabling financial products of those entities to be traded on the market or for other purposes; or
(b) the activities or conduct of entities that are included on that list.
local agent, in relation to a foreign company, means a person who is a local agent of the foreign company by virtue of subsection 601CG(5).
lodge:
(a) means lodge with ASIC in this jurisdiction; and
(b) in relation to a document lodged with ASIC in a prescribed form—has a meaning affected by subsection 350(2).
lower court means a court of a State or Territory that is not a superior court.
made, in relation to a CSF offer, has the meaning given by subsection 738N(1).
makes a financial investment has the meaning given by section 763B.
makes a market for a financial product has the meaning given by section 766D.
makes non‑cash payments has the meaning given by section 763D.
managed investment product means a financial product described in paragraph 764A(1)(b).
managed investment scheme means:
(a) a scheme that has the following features:
(i) people contribute money or money’s worth as consideration to acquire rights (interests) to benefits produced by the scheme (whether the rights are actual, prospective or contingent and whether they are enforceable or not);
(ii) any of the contributions are to be pooled, or used in a common enterprise, to produce financial benefits, or benefits consisting of rights or interests in property, for the people (the members) who hold interests in the scheme (whether as contributors to the scheme or as people who have acquired interests from holders);
(iii) the members do not have day‑to‑day control over the operation of the scheme (whether or not they have the right to be consulted or to give directions); or
(b) a time‑sharing scheme;
but does not include the following:
(c) a partnership that has more than 20 members but does not need to be incorporated or formed under an Australian law because of regulations made for the purposes of subsection 115(2);
(d) a body corporate (other than a body corporate that operates as a time sharing scheme);
(e) a scheme in which all the members are bodies corporate that are related to each other and to the body corporate that promotes the scheme;
(f) a franchise;
(g) a statutory fund maintained under the Life Insurance Act 1995;
(h) a regulated superannuation fund, an approved deposit fund, a pooled superannuation trust or a public sector superannuation scheme;
(i) a scheme operated by an Australian ADI in the ordinary course of its banking business;
(j) the issue of debentures or convertible notes by a body corporate;
(k) a barter scheme under which each participant may obtain goods or services from another participant for consideration that is wholly or substantially in kind rather than in cash;
(l) a retirement village scheme operating within or outside Australia:
(i) under which the participants, or a majority of them, are provided, or are to be provided, with residential accommodation within a retirement village (whether or not the entitlement of a participant to be provided with accommodation derives from a proprietary interest held by the participant in the premises where the accommodation is, or is to be, provided); and
(ii) which is not a time‑sharing scheme;
(m) a scheme that is operated by a co‑operative company registered under Part VI of the Companies (Co‑operative) Act 1943 of Western Australia or under a previous law of Western Australia that corresponds to that Part;
(ma) a contribution plan;
(maa) an ESS contribution plan for an offer of ESS interests that is eligible to be made under Division 1A of Part 7.12;
(mb) the provision of a crowd‑funding service;
(n) a scheme of a kind declared by the regulations not to be a managed investment scheme.
Note 1: Paragraph (c)—A partnership with less than 20 members will usually not require registration because of paragraph 601ED(1)(a) and under section 115 a partnership with more than 20 members can only operate if covered by regulations made for the purposes of subsection 115(2).
Note 2: Paragraphs (c) and (i) have an extended meaning in relation to Chapter 8 (see subsection 1200A(3)).
Note 3: Under section 1213E, a notified foreign passport fund is to be treated as a managed investment scheme for the purposes of this Act.
manager has a meaning affected by section 90.
managerial or executive office has the meaning given by section 200AA.
manages financial risk has the meaning given by section 763C.
managing controller, in relation to property of a corporation, means:
(a) a receiver and manager of that property; or
(b) any other controller of that property who has functions or powers in connection with managing the corporation;
and has a meaning affected by paragraph 434G(b) (which deals with 2 or more persons appointed as managing controllers).
mandatory code of conduct means a code of conduct that is declared by regulations under section 1101AE to be mandatory.
margin call:
(a) in relation to a standard margin lending facility—has the meaning given by subsection 761EA(4); and
(b) in relation to a non‑standard margin lending facility—has the meaning given by subsection 761EA(7); and
(c) in relation to a facility that ASIC has declared to be a margin lending facility under subsection 761EA(8)—has the meaning given in the declaration.
margin lending facility has the meaning given by subsection 761EA(1).
market, in relation to an Australian market licence, has a meaning affected by section 795E.
Note: See also makes a market.
marketable securities means debentures, stocks, shares or bonds of any Government, of any local government authority or of any body corporate, association or society, and includes any right or option in respect of shares in any body corporate and any interest in a managed investment scheme.
market bid means a takeover bid made under Chapter 6 as a market bid (see section 616).
market integrity rules means the rules made by ASIC under section 798G.
market licensee means a person who holds an Australian market licence.
market traded option means an option declared by an operator of a declared financial market to be a market traded option.
material effect, for the purposes of Division 3 (insider trading prohibitions) of Part 7.10, has the meaning given by section 1042D.
maximum subscription amount, in relation to a CSF offer, has the meaning given by subsection 738L(7).
MCI (short for mutual capital instrument) has the meaning given by section 167AD.
MCI amendment resolution has the meaning given by section 167AI.
MCI mutual entity has the meaning given by section 167AC.
member:
(a) in relation to a managed investment schememeans a person who holds an interest in the scheme; or
(c) in relation to a sub‑fund of a CCIV—means a person who is a member under subsection 1222Q(3); or
(e) in relation to a company—a person who is a member under section 231.
members’ voluntary winding up means a winding up under Part 5.5 where a declaration has been made and lodged pursuant to section 494.
Memorandum of Cooperation means the Memorandum of Cooperation on the Establishment and Implementation of the Asia Region Funds Passport signed on behalf of Australia on 28 April 2016, as it applies in relation to Australia from time to time.
minerals means minerals in any form, whether solid, liquefied or gaseous and whether organic or inorganic.
minimum holding buy‑back means a buy‑back of all of a holder’s shares in a listed corporation if the shares are less than a marketable parcel within the meaning of the rules of the relevant financial market.
minimum subscription amount, in relation to a CSF offer, has the meaning given by subsection 738L(8).
mining purposes means any or all of the following purposes:
(a) prospecting for ores, metals or minerals;
(b) obtaining, by any mode or method, ores, metals or minerals;
(c) the sale or other disposal of ores, metals, minerals or other products of mining;
(d) the carrying on of any business or activity necessary for, or incidental to, any of the foregoing purposes;
whether in Australia or elsewhere, but does not include quarrying operations for the sole purpose of obtaining stone for building, roadmaking or similar purposes.
misconduct includes fraud, negligence, default, breach of trust and breach of duty.
modifications includes additions, omissions and substitutions.
money includes a payment order.
mortgage broker has the same meaning as in the National Consumer Credit Protection Act 2009.
mortgage intermediary has the same meaning as in the National Consumer Credit Protection Act 2009.
mutual entity has the meaning given by section 51M.
MySuper product has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
NCSC means the National Companies and Securities Commission.
necessary transfer documents for the transfer of securities to a person means the documents that are sufficient to enable the person to become the holder of the securities.
negative, in relation to a document, means a transparent negative photograph used, or intended to be used, as a medium for reproducing the contents of the document, and includes a transparent photograph made from surface contact with the original negative photograph.
negative solvency resolution means a resolution by the directors of a company that, in their opinion, there are not reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
negotiable instrument, in relation to a body corporate, means:
(a) a bill of exchange, promissory note, cheque or other negotiable instrument; or
(b) an indorsement on, or order in, a bill of exchange, promissory note, cheque or other negotiable instrument; or
(c) a letter of credit;
of, or purporting to be issued or signed by or on behalf of, the body.
NGF means the National Guarantee Fund that continues in existence under section 889A.
no liability company means a company that is registered as, or converts to, a no liability company under this Act.
Note 1: A no liability company can be registered under section 118 or 601BD. A company can convert to a no liability company under Part 2B.7.
Note 2: A no liability company must have solely mining purposes and have no contractual right to recover unpaid calls (see subsection 112(2)).
nominated electronic address, in relation to the addressee of an electronic communication, means:
(a) the most recent electronic address nominated by the addressee to the originator of the electronic communication as the electronic address for receiving electronic communications; or
(b) if:
(i) the addressee has nominated an electronic address as mentioned in paragraph (a) and the originator knows, or there are reasonable grounds to believe, that the address is not a current electronic address for the addressee; or
(ii) the addressee has not nominated an electronic address as mentioned in paragraph (a);
an electronic address that the originator believes on reasonable grounds to be a current electronic address for the addressee for receiving electronic communications.
non‑audit services provider for an auditor conducting an audit means a person who:
(a) is not a professional member of the audit team conducting the audit of the audited body; and
(b) is either:
(i) if the auditor is an individual auditor—an employee of the individual auditor (or of an entity acting for, or on behalf of, the individual auditor); or
(ii) if the auditor is an audit firm—a member of the audit firm or senior manager of the audit firm (or of an entity acting for, or on behalf of, the audit firm); or
(iii) if the auditor is an audit company—a director of the audit company or a senior manager of the audit company (or of an entity acting for, or on behalf of, the audit company); and
(c) provides, or has provided, services (other than services related to the conduct of an audit) to the audited body.
non‑cash payments: see makes non‑cash payments.
non‑shareholder mutual member of an MCI mutual entity means a person who is a member of the entity otherwise than as a holder of a share (whether or not the person also holds one or more shares in the entity).
non‑standard margin lending facility has the meaning given by subsection 761EA(5).
notice includes a circular and an advertisement.
notified foreign passport fund: see section 1213C.
number of shares, in relation to a body corporate, has a meaning affected by section 101.
of, in relation to financial products, means, in the case of interests in a managed investment scheme, made available by.
offence means an offence against a law of the Commonwealth or a State or Territory.
offence based on a particular provision of this Act means, unless a contrary intention appears:
(a) if that provision creates an offence—an offence against that provision, or an offence against section 1314 that relates to that provision; or
(b) if section 1311 creates an offence relating to that provision—an offence against section 1311 or 1314 that relates to that provision; or
(c) if another provision creates an offence relating to that provision—an offence against that other provision or section 1314 that relates to that other provision.
offer:
(a) offer a security (other than a financial product) includes:
(i) invite applications for the issue of the security; and
(ii) invite offers to purchase the security; and
(b) offer to issue or sell a financial product, for the purposes of Part 7.8A (design and distribution requirements) and Part 7.9 (financial product disclosure), has a meaning affected by subsection 1010C(2); and
(c) the person who offers a security:
(i) (unless subparagraph (ii) applies) is the person who has the capacity, or who agrees, to issue or transfer the security if the offer is accepted; or
(ii) for the purposes of Chapter 8 (mutual recognition of securities offers), if the offer is an offer of a kind prescribed by the regulations for the purposes of this subparagraph—is a person of a kind prescribed by the regulations for the purposes of this subparagraph;
and that person is the offeror of the security.
Note: Section 1010C applies for the purposes of Part 7.8A: see subsection 994A(3).
offer information statement means an offer information statement that is lodged with ASIC.
offer of simple corporate bonds has the meaning given by section 713A.
offer period for a takeover bid is the period for which offers under the bid remain open.
offer platform, in relation to a CSF offer, has the meaning given by subsection 738L(6).
offer‑specific prospectus, in relation to an offer of simple corporate bonds, has the meaning given by subsection 713D(1).
officer has the meaning given by section 9AD.
officer of the Commonwealth has the same meaning as in paragraph 75(v) of the Constitution.
official employment means:
(a) appointment or employment by the Commonwealth, or the performance of services for the Commonwealth; or
(b) the exercise of powers or performance of functions under a delegation by the Registrar.
off‑market bid means a takeover bid made under Chapter 6 as an off‑market bid (see section 616).
old Corporations Law, in relation to a State or Territory, has the same meaning as it has in Part 10.1.
old Division 12 of Part 11.2 transitionals means the following:
(a) the provisions of Division 12 of Part 11.2 of the old Corporations Law of each State or Territory in this jurisdiction, to the extent they continue to have effect because of section 1408 of this Act; and
(b) if regulations for the purposes of subsection 1408(3) deal with a matter or matters dealt with in those provisions—the regulations that so deal with the matter or matters.
on a financial market: see subsection 767A(3).
on behalf of includes on the instructions of.
ongoing fee has the meaning given by section 962B.
ongoing fee arrangement has the meaning given by section 962A.
on‑market: a transaction of any kind is an on‑market transaction if it is effected on a declared financial market and is:
(a) an on‑market transaction as defined in the rules governing the operation of the market; or
(b) if those rules do not define on‑market transactions—effected in the ordinary course of trading on the market.
on‑market buy‑back means a buy‑back by a listed corporation on a declared financial market in the ordinary course of trading on that market.
open, in relation to a CSF offer, has the meaning given by subsection 738N(2).
operated in this jurisdiction:
(a) in relation to a financial market—has a meaning affected by section 791D; and
(b) in relation to a clearing and settlement facility—has a meaning affected by section 820D.
operating rules:
(a) of a clearing and settlement facility, or proposed clearing and settlement facility—means any rules (however described) made by the operator of the facility, or contained in the operator’s constitution, that deal with:
(i) the activities or conduct of the facility; or
(ii) the activities or conduct of persons in relation to the facility;
but does not include any such rules that deal with matters in respect of which licensed CS facilities must have written procedures under regulations made for the purposes of subsection 822A(2); and
(b) of a financial market, or proposed financial market—means any rules (however described), including the market’s listing rules (if any), that are made by the operator of the market, or contained in the operator’s constitution, and that deal with:
(i) the activities or conduct of the market; or
(ii) the activities or conduct of persons in relation to the market;
but does not include:
(iii) any such rules that deal with matters in respect of which licensed markets must have written procedures under regulations made for the purposes of subsection 793A(2); or
(iv) compensation rules; and
(c) of the SEGC—means the rules referred to in section 890D.
operator of a passport fund means the entity that is the operator of the fund under the Passport Rules for this jurisdiction.
outside this jurisdiction has a meaning affected by subsection 102B(2).
outstanding property, in relation to a body corporate that has been dissolved or deregistered, means outstanding property (other than unpaid capital, whether called or uncalled) that was vested in the body, to which it was entitled, or over which it had a disposing power, when it was dissolved or deregistered, but that neither the body nor its liquidator got in, realised on or otherwise disposed of or dealt with.
paid parental leave employer has the meaning given by subsection 600AA(2).
parent: without limiting who is a parent of a person for the purposes of this Act, someone is the parent of a person if the person is his or her child because of the definition of child in this section.
Part 5.1 body means:
(a) a company; or
(b) a registrable body that is registered under Division 1 or 2 of Part 5B.2.
Part 5.7 body means:
(a) a registrable body that is a registrable Australian body and:
(i) is registered under Division 1 of Part 5B.2; or
(ii) is not registered under that Division but carries on business in this jurisdiction and outside its place of origin; or
(b) a registrable body that is a foreign company and:
(i) is registered under Division 2 of Part 5B.2; or
(ii) is not registered under that Division but carries on business in Australia; or
(c) a partnership, association or other body (whether a body corporate or not) that consists of more than 5 members and that is not a registrable body;
but does not include an Aboriginal and Torres Strait Islander corporation.
Note: The winding up of Aboriginal and Torres Strait Islander corporations is dealt with in Part 11‑5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
Part 7.5 authority has the meaning given by section 892A.
Part 7.5 regulated fund has the meaning given by section 892A.
Part 10.1 transitionals means the provisions of Part 10.1 and of regulations for the purposes of those provisions.
participant:
(a) in a clearing and settlement facility—has the meaning given by subsections 768A(3) and (4); and
(b) in a financial market—has the meaning given by subsections 767A(4) and (5).
participating economy has the meaning given by section 1210.
party, in relation to a transaction that has been completed, given effect to, or terminated, includes a person who was a party to the transaction.
passes the legitimate control test has the meaning given by section 852DC.
passport fund means a regulated CIS, or a sub‑fund of a regulated CIS, registered as a passport fund in a participating economy.
Passport Rules: see section 1211A.
payment (when used in Division 2 of Part 2D.2 (sections 200 to 200J) includes a payment by way of damages for breach of contract.
payment order means a cheque (including a cheque that a bank or other institution draws on itself), bank draft, money order or postal order.
payment period, in relation to an infringement notice issued under Part 9.4AB, has the meaning given by section 1317DAQ.
pecuniary penalty applicable:
(a) to the contravention of a civil penalty provision by an individual—has the meaning given by section 1317G; and
(b) to the contravention of a civil penalty provision by a body corporate—has the meaning given by section 1317G.
penalty applicable:
(a) to an offence committed by an individual—has the meaning given by section 1311B; and
(b) to an offence committed by a body corporate—has the meaning given by section 1311C; and
(c) in section 1314 (continuing offences)—has the meaning given by subsection 1314(5).
pension has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
person:
(a) in Division 2 of Part 2D.2—includes a superannuation fund; and
(b) for the purposes of Chapter 5 and Part 9.2—has a meaning affected by subsection 6(1) (which deals with Part 5.7 bodies); and
(c) in applying Chapter 7 and Part 6D.3A—has a meaning affected by section 761F (which deals with partnerships) and section 761FA (which deals with multiple trustees).
personal advice has the meaning given by subsections 766B(3) and (3A).
person with a proper interest, in relation to an estate, has a meaning affected by section 601RAD.
place of origin:
(a) in relation to a body corporate at a particular time, means:
(i) in the case of a body incorporated at that time in a State or Territory—that State or Territory; or
(ii) otherwise—the place of the body’s incorporation at that time; or
(b) in relation to an unincorporated body—the State or Territory, or other place, in which the body is formed.
platform includes a website or other electronic facility.
play a significant role: a person plays a significant role in the audit of a company, a registered scheme or a registrable superannuation entity for a financial year if:
(a) the person is appointed as an individual auditor of the company, scheme or entity for that financial year and:
(i) acts as an auditor for the company, scheme or entity for that financial year; or
(ii) prepares an auditor’s report for the company, scheme or entity in relation to a financial report of the company, scheme or entity for that financial year or for a half‑year falling within that financial year; or
(b) a firm or company is appointed as an auditor of the company, scheme or entity for that financial year and the person:
(i) is a registered company auditor; and
(ii) acts, on behalf of the firm or company, as a lead auditor, or review auditor, in relation to an audit of the company, scheme or entity for that financial year or for a half‑year falling within that financial year.
policy cost for a life risk insurance product, or life risk insurance products, for a year has the meaning given by subsections 963B(3B) and (3C).
pooled superannuation trust has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
pooling determination means a determination under subsection 571(1).
pooling order means an order under subsection 579E(1).
positive solvency resolution means a resolution by the directors of a company that, in their opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
possession has a meaning affected by section 86.
possessory security interest, in relation to property, means a security interest that is:
(a) a PPSA security interest in the property that is perfected by possession or control, within the meaning of the Personal Property Securities Act 2009; or
(b) a lien or a pledge in relation to the property.
Note: Security interests are either PPSA security interests, or charges, liens or pledges: see security interest.
power includes an authority.
PPSA retention of title property (short for Personal Property Security Act retention of title property) has the meaning given by section 51F.
PPSA security interest (short for Personal Property Securities Act security interest) means a security interest within the meaning of the Personal Property Securities Act 2009 and to which that Act applies, other than a transitional security interest within the meaning of that Act.
Note 1: The Personal Property Securities Act 2009 applies to certain security interests in personal property: see the following provisions of that Act:
(a) section 8 (interests to which the Act does not apply);
(b) section 12 (meaning of security interest);
(c) Chapter 9 (transitional provisions).
Note 2: For the meaning of transitional security interest, see section 308 of the Personal Property Securities Act 2009.
pre‑CSLR complaint has the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2023.
premises includes:
(a) a structure, building, aircraft, vehicle or vessel; and
(b) any land or place (whether enclosed or built on or not); and
(c) a part of a structure, building, aircraft, vehicle or vessel or of such a place.
prescribed CS facility means a licensed CS facility that is prescribed by regulations made for the purposes of this definition.
prescribed derivative trade repository means a facility that is (or that is in a class that is) prescribed by the regulations for the purposes of paragraph 901A(6)(b).
prescribed form: see section 350.
printed includes type‑written, lithographed or reproduced by any mechanical means.
procure for the purposes of Division 3 (insider trading prohibitions) of Part 7.10 has a meaning affected by section 1042F.
Product Disclosure Statement:
(a) means a Product Disclosure Statement:
(i) required by section 1012A, 1012B, 1012C, 1012I or 1012IA to be given in accordance with Division 2 of Part 7.9; or
(ii) that section 1012H requires an issuer of a financial product to take reasonable steps to ensure is given to a new group member in accordance with Division 2 of Part 7.9; and
(b) has a meaning affected by section 1014J (about Replacement Product Disclosure Statements).
product intervention order means an order made under subsection 1023D(1) or (3).
professional accounting body has the same meaning as in the ASIC Act.
professional employee of an individual auditor, audit firm or audit company means an employee of the auditor, firm or company who participates in the conduct of the audits on behalf of the auditor, firm or company and, in the course of doing so, exercises professional judgment in relation to the application of or compliance with:
(a) accounting standards; or
(b) auditing standards; or
(c) the provisions of this Act dealing with financial reporting and the conduct of audits.
professional investor means a person in relation to whom one or more of the following paragraphs apply:
(a) the person is a financial services licensee whose Australian financial services licence covers the provision of financial services that are not limited to claims handling and settling services;
(b) the person is a body regulated by APRA, other than a trustee of any of the following:
(i) a superannuation fund;
(ii) an approved deposit fund;
(iii) a pooled superannuation trust;
(iv) a public sector superannuation scheme;
(c) the person is a registered entity within the meaning of the Financial Sector (Collection of Data) Act 2001;
(d) the person is the trustee of:
(i) a superannuation fund; or
(ii) an approved deposit fund; or
(iii) a pooled superannuation trust; or
(iv) a public sector superannuation scheme;
and the fund, trust or scheme has net assets of at least $10 million;
(e) the person controls at least $10 million (including any amount held by an associate or under a trust that the person manages);
(f) the person is a listed entity, or a related body corporate of a listed entity;
(g) the person is an exempt public authority;
(h) the person is a body corporate, or an unincorporated body, that:
(i) carries on a business of investment in financial products, interests in land or other investments; and
(ii) for those purposes, invests funds received (directly or indirectly) following an offer or invitation to the public, within the meaning of section 82, the terms of which provided for the funds subscribed to be invested for those purposes;
(i) the person is a foreign entity that, if established or incorporated in Australia, would be covered by one of the preceding paragraphs.
Note: A CCIV can also be a professional investor, see section 1241K.
professional member of the audit team for an audit has the meaning given by section 324AE.
profile statement means a profile statement that is lodged with ASIC.
prohibition end day, in relation to a registration prohibition order, has the meaning given by subparagraph 921L(1)(c)(ii).
property means any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and includes a thing in action, and:
(aaa) in Part 5.2 (receivers, and other controllers, of property of corporations)—has a meaning affected by section 416; and
(a) in Part 5.3A (administration)—has a meaning affected by section 435B; and
(aa) in Part 5.3B (restructuring)—has a meaning affected by section 452B; and
(b) in Part 5.4B (winding up in insolvency or by the Court)—has a meaning affected by section 465; and
(c) in Part 5.5 (voluntary winding up)—has a meaning affected by section 489F; and
(d) in Part 5.6 (winding up generally)—has a meaning affected by section 513AA; and
(e) in Part 5.7B (recovering property or compensation for creditors of insolvent company)—has a meaning affected by section 588C; and
(f) in Part 5.8 (offences relating to external administration)—has a meaning affected by subsection 589(5); and
(g) in Part 5A.1 (deregistration, and transfer of registration, of companies)—has a meaning affected by section 601; and
(h) in Part 5B.2 (registrable bodies)—has a meaning affected by section 601C; and
(ha) in Part 7.3B (crisis resolution for CS facility licensees)—has a meaning affected by subsection 833A(4); and
(i) in Part 8B.5 (operation of a CCIV)—has a meaning affected by section 1233; and
(j) in Part 8B.6 (external administration and deregistration of CCIVs)—has a meaning affected by section 1236A.
Note: A reference in this Act to the property of a corporation does not include a reference to any PPSA retention of title property of the corporation, unless provided otherwise expressly or by necessary implication (see section 51F). The sections mentioned in paragraphs (a) to (i) extend references to property of a corporation in Parts of this Act to PPSA retention of title property (or to certain PPSA retention of title property).
property recovery provisions has the meaning given by subsection 1238A(2).
proportional takeover approval provisions, in relation to a company, means provisions of the kind referred to in subsection 648D(1) that are contained in, or that it is proposed to insert in, the constitution of the company.
proportional takeover bid means an off‑market bid for a specified proportion of the securities in the bid class (see paragraph 618(1)(b)).
proposed action notice has the meaning given by subsection 921P(1).
proposed licensed trustee company means a company:
(a) that is a trustee company, or a corporation to which paragraph 51(xx) of the Constitution applies that proposes to become a trustee company; and
(b) that proposes to apply for an Australian financial services licence covering the provision of one or more traditional trustee company services.
proposed operator of a collective investment fund has the meaning given by subsection 1212(1).
proprietary company has the meaning given by subsection 45A(1).
prospectus means a prospectus that is lodged with ASIC.
protected information means information:
(a) obtained by a person in the course of the person’s official employment; and
(b) disclosed to the person or another person, or obtained by the person or another person:
(i) under, or in relation to, this Act; or
(ii) under another law of the Commonwealth;
in connection with particular functions or powers of the Registrar.
prove includes establish in any way (for example, but without limitation, through the operation of a presumption for which this Act or a law of a State or Territory provides).
provide:
(a) in relation to a financial product—provide has a meaning affected by section 761E; and
(b) in Subdivision A (volume‑based shelf‑space fees) of Division 5 of Part 7.7A—provider has the meaning given by subsection 964(2).
providing finance means:
(a) lending money; or
(b) giving guarantees or security for loans made by someone else; or
(c) drawing, accepting, indorsing, negotiating or discounting a bill of exchange, cheque, payment order or promissory note so that someone can obtain funds.
provision of a law includes:
(a) a subsection, section, Subdivision, Division, Part or Chapter of the law; and
(b) a Schedule, or an item in a Schedule, to the law.
provisional liquidator has a meaning affected by paragraph 530AA(b) (which deals with 2 or more persons appointed as provisional liquidators).
provisional relevant provider means a relevant provider who is undertaking work and training in accordance with subsection 921B(4).
public company means a company other than a proprietary company or a CCIV and:
(a) in section 195 and Chapter 2E, includes a body corporate (other than a prescribed body corporate) that:
(i) is incorporated in a State or an internal Territory, but not under this Act; and
(ii) is included in the official list of a declared financial market; and
(b) in Chapter 2E does not include a company that is not required to have “Limited” in its name because of section 150 or 151.
public document, in relation to a body, has the meaning given by section 88A.
public interest proceedings means proceedings under section 50 of the ASIC Act.
public sector superannuation scheme has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
publish:
(a) in relation to a notice—means, in Chapter 7, publish by any means, including in a newspaper or periodical, on the internet, by broadcasting or televising or in a cinematograph film; and
(b) in any case—includes issue.
purchase of a financial product, for the purposes of Part 7.8A (design and distribution requirements) and Part 7.9 (financial product disclosure), has the meaning given by subsection 1010C(1).
Note: Section 1010C applies for the purposes of Part 7.8A: see subsection 994A(3).
qualified accountant has the meaning given by section 88B.
qualified privilege has the meaning given by section 89.
qualified tax relevant provider has the meaning given by section 910A.
quotation, in relation to financial products or in relation to a financial market, includes the displaying or providing, on a financial market, of information concerning:
(a) if offers to dispose of, purchase or exchange the financial product at particular prices, or for particular consideration, are made or accepted on that financial market—those prices or that consideration; or
(b) if offers or invitations are made on that financial market, being offers or invitations that are intended, or may reasonably be expected, to result in the making or acceptance of offers to dispose of, purchase or exchange the financial products at particular prices, or for particular consideration—those prices or that consideration; or
(c) in any case—the price at which, or the consideration for which, particular persons, or particular classes of persons, propose, or may reasonably be expected, to dispose of, purchase or exchange the financial products.
quoted ED securities has the meaning given by section 111AM.
quoted security means a security that is quoted on a declared financial market.
reasonable investigation into financial products has a meaning affected by section 961D.
reasonably apparent:
(a) for the purposes of Division 2 (best interests obligations) of Part 7.7A—has the meaning given by section 961C; and
(b) for the purposes of Subdivision B (asset‑based fees on borrowed amounts) of Division 5 of Part 7.7A—has the meaning given by section 964H.
recapitalisation direction means a direction given under subsection 823F(1), to the extent that the direction deals with a matter in paragraph 823F(1)(c).
recapitalises: a body corporate recapitalises if the body corporate:
(a) increases the body corporate’s level of share capital; or
(b) issues one or more classes of shares, or one or more classes of rights to acquire shares, in the body corporate; or
(c) issues capital instruments; or
(d) acquires, cancels or sells:
(i) shares in the body corporate; or
(ii) rights to acquire shares in the body corporate; or
(e) reduces the body corporate’s share capital; or
(f) varies or cancels rights or restrictions attached to shares in a class of shares in the body corporate.
receive, in relation to an electronic communication, has a meaning affected by section 105A.
receiver has a meaning affected by paragraph 434D(b) (which deals with 2 or more persons appointed as receivers) and:
(a) in Part 5.2 (receivers, and other controllers, of property)—has a meaning affected by section 416; and
(b) in Part 5.3A (deeds of company arrangement)—has a meaning affected by section 435B; and
(c) in Part 8B.6 (external administration and deregistration of CCIVs)—has a meaning affected by section 1236A.
receiver and manager has a meaning affected by section 90 and has a meaning affected by paragraph 434E(b) (which deals with 2 or more persons appointed as receivers and managers).
receiving company has the meaning given by subsection 601WBA(1).
recent advising history has the meaning given by section 922G.
recognised jurisdiction has the meaning given by subsection 1200A(1).
recognised offer has the meaning given by section 1200B.
recommendation situation has the meaning given by paragraph 1012A(2)(a).
redeemable preference share means a preference share in a body corporate that is, or at the body’s option is to be, liable to be redeemed.
redeemable share, in a CCIV, has the meaning given by subsection 1230B(4).
referable:
(a) in relation to a sub‑fund, and a share in a CCIV—has the meaning given by subsection 1230(1); and
(b) in relation to a sub‑fund, and a class of shares in a CCIV—has the meaning given by subsection 1230A(2); and
(c) in relation to a sub‑fund, and a debenture issued by a CCIV—has the meaning given by subsection 1231N(1).
Reference Checking and Information Sharing Protocol means the protocol determined by ASIC under subsection 912A(3A).
referring State has the meaning given by section 4.
register:
(a) register means register under this Act; and
(b) register kept by ASIC under this Act has a meaning affected by subsection 1214(4) (about the Register of Passport Funds).
Note: See also Business Names Register and Register of Relevant Providers.
registered Australian body means a registrable Australian body that is registered under Division 1 of Part 5B.2.
registered body means a registered Australian body or a registered foreign company.
registered company auditor:
(a) means a person registered as an auditor under Part 9.2; and
(b) in relation to a body corporate that is not a company—includes a person qualified to act as the body’s auditor under the law of the body’s incorporation.
registered foreign company means a foreign company that is registered under Division 2 of Part 5B.2.
registered liquidator has the same meaning as in section 5‑5 of Schedule 2.
registered office, in relation to a company or registered body, means the registered office of the company or body under section 142 or 601CT, as the case requires.
registered scheme means a managed investment scheme that is registered under section 601EB.
registered tax agent has the same meaning as in the Tax Agent Services Act 2009.
registered tax agent or BAS agent has the same meaning as in the Tax Agent Services Act 2009.
Register of Relevant Providers means the Register of Relevant Providers maintained under section 922Q.
registrable Australian body means:
(a) a body corporate, not being:
(i) a company; or
(ii) an exempt public authority; or
(iii) a corporation sole; or
(b) an unincorporated body that, under the law of its place of formation:
(i) may sue or be sued; or
(ii) may hold property;
in the name of its secretary or of an officer of the body duly appointed for that purpose;
but does not include a foreign company.
registrable body means a registrable Australian body or a foreign company.
registrable superannuation entity:
(a) when used in a provision outside Chapter 2M or an associated definition—has the same meaning as in the Superannuation Industry (Supervision) Act 1993; and
(b) when used in Chapter 2M or an associated definition—means a registrable superannuation entity (within the meaning of the Superannuation Industry (Supervision) Act 1993), but does not include the following:
(i) an exempt public sector superannuation scheme;
(ii) an excluded approved deposit fund (within the meaning of the Superannuation Industry (Supervision) Act 1993);
(iii) a small APRA fund (within the meaning of section 1017BB).
For the purposes of this definition, each of the following is an associated definition:
(a) the definition of audit company;
(b) the definition of audit‑critical employee;
(c) the definition of audited body;
(d) the definition of audit firm;
(e) the definition of consolidated entity;
(f) the definition of director;
(g) the definition of financial year;
(h) the definition of individual auditor;
(i) the definition of officer;
(j) the definition of play a significant role;
(k) the definition of RSE remuneration report.
Registrar means:
(a) if only one Commonwealth body is appointed as Registrar under section 1270—that body; or
(b) if more than one Commonwealth body is appointed under section 1270:
(i) for a reference in a provision that relates to one or more particular functions or powers—any Commonwealth body so appointed with any of those particular functions or powers; or
(ii) otherwise—any of the Commonwealth bodies appointed under section 1270.
registration prohibition order has the meaning given by paragraph 921L(1)(c).
registration suspension order has the meaning given by paragraph 921L(1)(b).
regulated CIS has the same meaning as in the Passport Rules for this jurisdiction.
regulated entity has the meaning given by section 1317AAB.
regulated person:
(a) in relation to a financial product:
(i) in Part 7.8A (design and distribution requirements)—has the meaning given by subsection 994A(2); and
(ii) in Divisions 2 (Product Disclosure Statements) and 7 (enforcement) of Part 7.9—has the meaning given by section 1011B; and
(c) in relation to a CGS depository interest, in Division 5C (information about CGS depository interests) of Part 7.9—has the meaning given by subsection 1020AH(2).
regulated sale means a sale:
(a) that, under subsection 707(2), (3) or (5), needs disclosure to investors under Part 6D.2; or
(b) in relation to which a Product Disclosure Statement must be given under subsection 1012C(5), (6) or (8); or
(c) made in circumstances prescribed by regulations made for the purposes of this paragraph.
regulated superannuation fund has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
Regulatory Powers Act means the Regulatory Powers (Standard Provisions) Act 2014.
related body corporate, in relation to a body corporate, means a body corporate that is related to the first‑mentioned body, as determined in accordance with section 50.
related entity, in relation to a body corporate, means any of the following:
(a) a promoter of the body;
(b) a relative of such a promoter;
(c) a relative of a spouse of such a promoter;
(d) a director or member of the body or of a related body corporate;
(e) a relative of such a director or member;
(f) a relative of a spouse of such a director or member;
(g) a body corporate that is related to the first‑mentioned body;
(h) a beneficiary under a trust of which the first‑mentioned body is or has at any time been a trustee;
(i) a relative of such a beneficiary;
(j) a relative of a spouse of such a beneficiary;
(k) a body corporate one of whose directors is also a director of the first‑mentioned body;
(l) a trustee of a trust under which a person is a beneficiary, where the person is a related entity of the first‑mentioned body because of any other application or applications of this definition.
related party:
(a) when used in Chapter 2E (other than in relation to a CCIV) has the meaning given by section 228; and
(aa) when used in Chapters 2E and 8B, in relation to a CCIV, has the meaning given by section 1227E; and
(b) when used in Part 6D.3A—has the meaning given by subsection 738G(3); and
(c) when used in Division 2 of Part 5C.10, Chapter 8A and the Passport Rules for this jurisdiction—has the meaning given by the Passport Rules for this jurisdiction.
relation‑back day has the meaning given by section 91.
relative, in relation to a person, means the spouse, parent or remoter lineal ancestor, child or remoter issue, or brother or sister of the person.
relevant AFCA determination has the meaning given by section 1065.
relevant agreement means an agreement, arrangement or understanding:
(a) whether formal or informal or partly formal and partly informal; and
(b) whether written or oral or partly written and partly oral; and
(c) whether or not having legal or equitable force and whether or not based on legal or equitable rights.
relevant conduct:
(a) for an issue situation—has the meaning given by paragraph 1012B(2)(b); and
(b) for a recommendation situation—has the meaning given by paragraph 1012A(2)(b); and
(c) for a sale situation—has the meaning given by paragraph 1012C(2)(b).
relevant date, in relation to a winding up, means the day on which the winding up is taken because of Division 1A of Part 5.6 to have begun.
Note: Subsection 553(1B) modifies the operation of this definition for debts and claims that arise while a company is under a deed of company arrangement if the deed terminates immediately before the winding up.
relevant Division 3 financial products has the meaning given by subsection 1042A(1).
Note: This definition refers to Division 3 (insider trading prohibitions) of Part 7.10.
relevant financial market, for a listed company, listed registered scheme or listed notified foreign passport fund means:
(a) the declared financial market on which the company, scheme or fund is listed; or
(b) if the company, scheme or fund is listed on 2 or more prescribed financial markets—each of those markets.
relevant financial products has the meaning given by section 910A.
relevant interest, in relation to securities, has a meaning given by sections 608 to 609B.
relevant market operator, for a listed company, listed registered scheme or listed notified foreign passport fund means:
(a) if there is only one relevant financial market for the company, scheme or fund—the operator of that relevant financial market; or
(b) if there is 2 or more relevant financial markets for the company, scheme or fund—each of the operators of each of those relevant financial markets.
relevant personal circumstances has the meaning given by section 761A.
relevant provider has the meaning given by section 910A.
relinquishment order has the meaning given by subsection 1317GAB(1).
remedial order means an order that:
(a) restrains a person from exercising any voting or other rights attached to securities; or
(b) directs a body corporate not to make or to defer payment of an amount due from the body corporate in respect of securities; or
(c) restrains a person from acquiring securities or an interest in securities; or
(d) directs a person to dispose of, or not to dispose of, securities or interests in securities; or
(e) directs the disposal referred to in paragraph (d):
(i) to be made within a specified time; or
(ii) to be made subject to specified conditions; or
(iii) not to be made to a specified person or persons or to a specified class or classes of persons;
(f) directs a specified person to pay to the body corporate an amount equal to any profit or benefit that the person obtains because of the disposal referred to in paragraph (d); or
(g) vests securities, or an interest in securities, in ASIC; or
(h) directs a body corporate not to register the transfer or transmission of securities; or
(i) cancels securities issued as consideration for offers under a takeover bid; or
(j) declares that an exercise of the voting or other rights attached to securities be disregarded; or
(k) cancels or declares voidable:
(i) an agreement or offer relating to a takeover bid, or a proposed takeover bid; or
(ii) any other agreement or offer in connection with the acquisition of securities or relevant interests in securities;
(l) directs a person to give specified information to the holders of securities of a body corporate; or
(m) directs a body corporate not to issue securities to a person; or
(n) if an order of a kind referred to in paragraphs (a) to (m) is in force in respect of securities—directs the registered holder of the securities to give written notice of the order to any person whom the holder knows to be entitled to exercise a right to vote attached to those securities; or
(o) directs a body corporate to repeal or modify its existing constitution or adopt a particular constitution; or
(p) if a person has failed to comply with a requirement of Chapter 6, 6A, 6B or 6C—directs that person to comply with that requirement.
remuneration of an officer or employee of a corporation. A benefit given to an officer or employee of a corporation is remuneration if and only if the benefit, were it received by a director of the corporation, would be remuneration of the director for the purposes of an accounting standard that deals with disclosure in companies’ financial reports of information about directors’ remuneration. For the purposes of this definition, the following are not officers of a corporation:
(a) a receiver, or receiver and manager, of the property of the corporation;
(b) an administrator of the corporation;
(c) an administrator of a deed of company arrangement executed by the corporation;
(ca) a restructuring practitioner for the corporation;
(cb) a restructuring practitioner for a restructuring plan made by the corporation;
(d) a liquidator of the corporation;
(e) a trustee or other person administering a compromise or arrangement made between the corporation and someone else.
remuneration committee has the meaning given by paragraph 206K(2)(b).
remuneration consultant means a person:
(a) who makes a remuneration recommendation under a contract for services with the company to whose key management personnel the recommendation relates; and
(b) who is not an officer or employee of the company.
remuneration recommendation has the meaning given by section 9B.
remuneration report means the section of the directors’ report for a financial year for a listed public company that is included under subsection 300A(1).
replaceable rule: see section 135.
Replacement Product Disclosure Statement has the meaning given by section 1014H.
reportable situation has the meaning given by section 912D.
reporting period, in Part 7.8A (design and distribution requirements), has the meaning given by subsection 994A(2).
reporting requirements, in relation to derivative transactions, has the meaning given by subsection 901A(6).
representative of a person means:
(a) if the person is a financial services licensee:
(i) an authorised representative of the licensee; or
(ii) an employee or director of the licensee; or
(iii) an employee or director of a related body corporate of the licensee; or
(iv) any other person acting on behalf of the licensee; or
(b) in any other case:
(i) an employee or director of the person; or
(ii) an employee or director of a related body corporate of the person; or
(iii) any other person acting on behalf of the person.
reproduction, in relation to a document, means:
(a) a copy made of the document by any machine in which, or process by which, an image of the contents of the document is reproduced; or
(b) a print made from a negative of the document.
Reserve Bank means the Reserve Bank of Australia.
Reserve Bank staff member means staff member of the Reserve Bank Service (within the meaning of the Reserve Bank Act 1959).
resolution, in relation to creditors or contributories, means a resolution passed at a meeting of the creditors or contributories.
resolution for voluntary winding up means the special resolution referred to in section 491.
response period for a proposed action notice has the meaning given by paragraph 921P(2)(b).
responsible entity of a registered scheme means the company named in ASIC’s record of the scheme’s registration as the responsible entity or temporary responsible entity of the scheme.
responsible holding party for an Australian passport fund or a notified foreign passport fund means the responsible holding party of the assets of the fund under the Passport Rules for this jurisdiction.
responsible intermediary, in relation to a CSF offer, has the meaning given by subsection 738L(5).
responsible licensee, in relation to a contravention of a provision of Part 7.7A, has the meaning given by section 961P.
responsible person for a Product Disclosure Statement has the meaning given by subsection 1013A(3).
restricted civil penalty provision has the meaning given by subsection 921Q(3).
restructuring, in relation to a company, has the meaning (except in paragraph 588GA(2)(e) or section 821H) given by section 453A.
restructuring plan means a plan executed under Part 5.3B or such a plan as varied and in force from time to time.
restructuring practitioner:
(a) in relation to a company but not in relation to a restructuring plan:
(i) means a small business restructuring practitioner for the company appointed under Part 5.3B; and
(ii) if 2 or more persons are appointed under that Part as small business restructuring practitioners for the company—has a meaning affected by paragraph 456M(2)(b); or
(b) in relation to a restructuring plan:
(i) means a small business restructuring practitioner for the plan appointed under Part 5.3B; and
(ii) if 2 or more persons are appointed under that Part as small business restructuring practitioners for the plan—has a meaning affected by paragraph 456N(2)(b).
restructuring relief period has the meaning given by section 458D.
result includes:
(a) when used as a verb—result indirectly; and
(b) when used as a noun—an indirect result.
retail CCIV has the meaning given by subsection 1222J(1).
retail client:
(a) except in relation to a CSF offer—has the meaning given by sections 761G and 761GA; and
(b) in relation to a CSF offer—has the meaning given by section 738D.
retail product distribution conduct has the meaning given by subsection 994A(1).
retention of title clause: property is subject to a retention of title clause under a contract for the sale of property:
(a) if the contract contains a provision the effect of which is that the seller retains title in the property until the purchase price, or another amount, has been paid in full; and
(b) if the purchase price, or the other amount, as the case may be, has not been paid in full; and
(c) to the extent that the contract does not give rise to a PPSA security interest in the property.
Note: See also PPSA retention of title property and PPSA security interest.
retirement village scheme means a scheme, undertaking or enterprise (in this definition called the relevant scheme), whether in Australia or elsewhere, that is being, or is proposed to be, carried out or undertaken with the intention that the participants, or a majority of the participants, in the relevant scheme be provided, in connection with the relevant scheme, with residential accommodation within a retirement community, whether or not the entitlement of a participant to be provided with such accommodation derives from a proprietary interest held by the participant in the premises where the accommodation is provided, but does not include a time‑sharing scheme.
return of particulars for a company, registered scheme or notified foreign passport fund means a statement given by ASIC that contains any or all of the following:
(a) some or all of the particulars in relation to the company, scheme or fund that are recorded in a register that ASIC maintains, or ensures is maintained, under subsection 1214(1) or 1274(1);
(b) a requirement to provide a particular under section 348B;
(c) a requirement to comply with a subsection of section 348C (and, if applicable, pass a resolution).
review auditor has the meaning given by section 324AF.
review date has the meaning given by section 345A.
review fee has the same meaning as in the Corporations (Review Fees) Act 2003.
review period for a target market determination has the meaning given by subsection 994A(1).
review triggers for a target market determination has the meaning given by paragraph 994B(5)(d).
revised claims, fees and costs estimate has the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy Act 2023.
revoke, in relation to an accounting standard, means, in the case of a provision of an accounting standard, vary the last‑mentioned accounting standard by omitting the provision.
rights issue has the meaning given by subsections 9A(1) and (2).
risk insurance product means a financial product described in paragraph 764A(1)(d) or (e).
Note: See also general insurance product, insurance product and life risk insurance product.
RSA has the same meaning as in the Retirement Savings Accounts Act 1997.
Note: RSA is short for retirement savings account.
RSA provider has the same meaning as in the Retirement Savings Accounts Act 1997.
Note: RSA is short for retirement savings account.
RSE licensee has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
Note: RSE is short for registrable superannuation entity.
RSE licensee law has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
RSE remuneration report means the section of the directors’ report for a financial year for a registrable superannuation entity that is included under subsection 300C(1).
rules of court means:
(a) rules of the Federal Court; or
(b) rules of a State or Territory Supreme Court; or
(c) rules of the Federal Circuit and Family Court of Australia (Division 1);
as the case requires.
sale:
(a) in relation to an annuity policy—has the meaning given by section 761A; and
(b) of a financial product, for the purposes of Part 7.8A (design and distribution requirements) and Part 7.9 (financial product disclosure)—has the meaning given by subsection 1010C(1).
Note: Section 1010C applies for the purposes of Part 7.8A: see subsection 994A(3).
sale situation has the meaning given by paragraph 1012C(2)(a).
sale Statement has the meaning given by subsection 1013A(2).
scheme property of a registered scheme means:
(a) contributions of money or money’s worth to the scheme; and
(b) money that forms part of the scheme property under provisions of this Act or the ASIC Act; and
(c) money borrowed or raised by the responsible entity for the purposes of the scheme; and
(d) property acquired, directly or indirectly, with, or with the proceeds of, contributions or money referred to in paragraph (a), (b) or (c); and
(e) income and property derived, directly or indirectly, from contributions, money or property referred to in paragraph (a), (b), (c) or (d).
Note 1: Paragraph (a)—if what a member contributes to a scheme is rights over property, the rights in the property that the member retains do not form part of the scheme property.
Note 2: For provisions that are relevant to paragraph (b), see subsections 177(4), 1317HA(1A), 1317HB(3) and 1317HD(3) of this Act and subsection 93A(5) of the ASIC Act.
scope 1 greenhouse gas emissions has the meaning given by the sustainability standards.
scope 2 greenhouse gas emissions has the meaning given by the sustainability standards.
scope 3 greenhouse gas emissions has the meaning given by the sustainability standards.
scrip means documents that are, or are documents of title to, securities.
secrecy provision has the meaning given by subsection 1270M(2).
section 486B warrant means a warrant issued under section 486B.
section 513CA day has the meaning given by section 513CA.
section 513C day, in relation to the administration of a company, has the meaning given by section 513C.
section 1020B products has the meaning given by subsection 1020B(1).
secured creditor:
(a) of a corporation—means a creditor of the corporation, if the debt owing to the creditor is secured by a security interest; and
(b) of a sub‑fund of a CCIV—means a secured creditor of the CCIV, if the debt owing to the creditor is, to any extent, a liability of the sub‑fund.
secured party, in relation to a security interest, means:
(a) if the security interest is a PPSA security interest—a secured party within the meaning of the Personal Property Securities Act 2009; or
(b) if the security interest is not a PPSA security interest, but consists of a charge, lien or pledge in relation to the property—a chargee (including a person in whose favour a charge is to be given or executed, whether on demand or otherwise, under an agreement), lienee or pledgee in relation to the charge, lien or pledge.
Note: Security interests are either PPSA security interests, or charges, liens or pledges: see security interest.
securities has the meaning given by section 92.
securities lending arrangement (except for the purposes of Chapter 8A) has the meaning given by section 1020AA.
security interest means:
(a) a PPSA security interest; or
(b) a charge, lien or pledge.
SEGC (short for Securities Exchanges Guarantee Corporation) has the meaning given by section 880B.
selective buy‑back means a buy‑back that is none of the following:
(a) a buy‑back under an equal access scheme within the meaning of subsections 257B(2) and (3);
(b) a minimum holding buy‑back;
(c) an on‑market buy‑back;
(d) an employee share buy‑back.
selective reduction has the meaning given by subsection 256B(2).
Note: For the purposes of applying this definition to an MCI mutual entity, see subsection 258G(2).
self managed superannuation fund has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
senior manager:
(a) in relation to a corporation—means a person (other than a director or secretary of the corporation) who:
(i) makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or
(ii) has the capacity to affect significantly the corporation’s financial standing; and
(b) in relation to a partnership—means a person (other than a partner) who:
(i) makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the partnership; or
(ii) has the capacity to affect significantly the partnership’s financial standing; and
(c) in relation to a trust—means a person (other than a trustee) who:
(i) makes, or participates in making, decisions that affect the whole, or a substantial part, of the business or affairs of the trust; or
(ii) has the capacity to affect significantly the financial standing of the trust; and
(d) in relation to a joint venture—means a person (other than a director or secretary of a corporation participating in the joint venture) who:
(i) makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the joint venture; or
(ii) has the capacity to affect significantly the financial standing of the joint venture.
sent, in relation to an electronic communication, has a meaning (except in Chapters 6 and 6A) affected by section 105A.
serious fraud means an offence involving fraud or dishonesty, being an offence:
(a) against an Australian law or any other law; and
(b) punishable by imprisonment for life or for a period, or maximum period, of at least 3 months.
shareholder:
(a) in Part 2J.1 (share capital reductions and share buy‑backs)—has a meaning affected by section 258G (about MCI mutual entities); and
(b) in Part 2J.3 (transactions affecting share capital)—has a meaning affected by section 260DA (about MCI mutual entities).
shares: see number of shares.
sheriff includes a person charged with the execution of a writ or other process.
significant financial benchmark has the meaning given by section 908AC.
simple corporate bonds has the meaning given by section 713A.
simple corporate bonds depository interest means a beneficial interest in simple corporate bonds, where the interest is or was issued by a simple corporate bonds depository nominee (as a simple corporate bonds depository nominee).
simple corporate bonds depository nominee means a person who:
(a) issues to someone else one or more beneficial interests in simple corporate bonds that the person:
(i) owns legally; or
(ii) would own beneficially, apart from the issue of those interests; or
(iii) has a beneficial interest in; and
(b) does so with the agreement of the body that issued the bonds.
simplified liquidation process has the meaning given by section 500AE.
sinking fund policy has the same meaning as in the Life Insurance Act 1995.
small company limited by guarantee has the meaning given by section 45B.
small proprietary company has the meaning given by subsection 45A(2).
solvency resolution means a resolution by the directors of a company as to whether or not, in their opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
solvent:
(a) in relation to a person—has the meaning given by subsection 95A(1); and
(b) in relation to a sub‑fund of a CCIV—has the meaning given by subsection 1231A(2).
special resolution means:
(a) in relation to a company—a resolution of the company that complies with section 250MA; or
(b) in relation to a registered scheme, a CCIV or a sub‑fund of a CCIV—a resolution of the members of the registered scheme that complies with subsection 253LA(1).
specified, in relation to a penalty for an offence, has the meaning given by section 1311E.
spill meeting has the meaning given by subsection 250V(1).
spill resolution has the meaning given by subsection 250V(1).
spouse of a person includes a de facto partner of the person within the meaning of the Acts Interpretation Act 1901.
staff member, in relation to ASIC, means a person who is a staff member for the purposes of the ASIC Act.
standard employer‑sponsor has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
standard employer‑sponsored fund has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
standard employer‑sponsored member has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
standard margin lending facility has the meaning given by subsection 761EA(2).
standard opening hours means 10 am to 12 noon and 2 pm to 4 pm each business day.
State, when used in a geographical sense, includes the coastal sea of the State.
State Fair Trading Act means the following Acts for each State and Territory:
State Family Court, in relation to a State, means a court of that State to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.
Statement of Advice means a Statement of Advice required by section 946A to be given in accordance with Subdivisions C and D of Division 3 of Part 7.7.
State or Territory court means:
(a) a court of a State, the Australian Capital Territory or the Northern Territory; or
(b) the Supreme Court of Norfolk Island.
State or Territory Supreme Court means any of the following:
(a) the Supreme Court of a State;
(b) the Supreme Court of the Australian Capital Territory;
(c) the Supreme Court of the Northern Territory;
(d) the Supreme Court of Norfolk Island.
statutory demand means:
(a) a document that is, or purports to be, a demand served under section 459E; or
(b) such a document as varied by an order under subsection 459H(4).
statutory management has the meaning given by subsections 832C(3) and (4).
statutory manager of a body corporate means:
(a) if the Reserve Bank is in control of the body corporate’s business under Part 7.3B—the Reserve Bank; and
(b) each person appointed by the Reserve Bank to take control of a body corporate’s business under Part 7.3B.
Note: See section 836B for when there are 2 or more statutory managers of a body corporate.
statutory minimum means:
(a) if an amount greater than $2,000 is prescribed—the prescribed amount; or
(b) otherwise—$2,000.
statutory period means:
(a) if a period longer than 21 days is prescribed—the prescribed period; or
(b) otherwise—21 days.
sub‑fund:
(a) of a CCIV—has the meaning given by subsection 1222Q(1); and
(b) in relation to a regulated CIS—has the same meaning as in the Passport Rules for this jurisdiction.
subject to an infringement notice under Part 9.4AB has a meaning given by section 1317DAN.
subscriber, in relation to an approved code of conduct:
(a) means a person or entity that agrees, in a way required by the applicant for the code’s approval, to be bound by the code; and
(b) if a person or entity no longer agrees to be bound by the code—includes the person or entity during the period that the person or entity did agree to be so bound.
subsection 1337B(3) proceeding means a proceeding with respect to a matter referred to in subsection 1337B(3).
sub‑sector has the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy Act 2023.
sub‑sector levy cap has the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy Act 2023.
subsidiary, in relation to a body corporate, means a body corporate that is a subsidiary of the first‑mentioned body by virtue of Division 6.
substantial holding: a person has a substantial holding in a body corporate, listed registered scheme or listed notified foreign passport fund, if:
(a) the total votes attached to voting shares in the body or voting interests in the scheme or fund, in which they or their associates:
(i) have relevant interests; and
(ii) would have a relevant interest but for subsection 609(6) (market traded options and derivatives), 609(7) (conditional agreements) or 609(9B) (securities escrowed under listing rules) or section 609B (securities subject to escrow agreement in connection with initial public offer etc.);
is 5% or more of the total number of votes attached to voting shares in the body or interests in the scheme or fund; or
(b) the person has made a takeover bid for voting shares in the body or voting interests in the scheme, and the bid period has started and not yet ended.
Note 1: For relevant interest, see section 608.
Note 2: Paragraph (b) does not apply in relation to a notified foreign passport fund.
substantial interest has a meaning affected by section 602A.
substantial part, in relation to activities, includes the whole of those activities.
substantive provision, of a sustainability report, means anything required to be included in the sustainability report under subsection 296A(1), other than the directors’ declaration mentioned in paragraph 296A(1)(e).
superannuation complaint has the meaning given by section 1053.
superannuation entity has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
superannuation guarantee charge has the same meaning as in the Superannuation Guarantee (Administration) Act 1992.
superannuation guarantee shortfall has the same meaning as in the Superannuation Guarantee (Administration) Act 1992.
superannuation product means a superannuation interest within the meaning of the Superannuation Industry (Supervision) Act 1993.
superannuation provider means a person who is a superannuation provider within the meaning of:
(a) the Superannuation Contributions Tax (Assessment and Collection) Act 1997; or
(b) the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997.
superannuation trustee service that a person provides has the meaning given by section 766H.
superior court means the Federal Court of Australia, the Supreme Court of a State or Territory, the Federal Circuit and Family Court of Australia (Division 1) or a State Family Court.
superior court matter means a civil matter that this Act clearly intends (for example, by use of the expression the Court) to be dealt with only by a superior court.
supervisor of a provisional relevant provider has the meaning given by subsection 921F(2).
Supplementary Financial Services Guide has the meaning given by section 943A.
Supplementary Product Disclosure Statement has the meaning given by section 1014A.
suspended, in relation to a CSF offer, has the meaning given by subsection 738N(6).
suspension period, in relation to a registration suspension order, has the meaning given by paragraph 921L(1)(b).
sustainability records includes documents and working papers needed to explain the methods, assumptions and evidence from which the substantive provisions of sustainability reports are made up.
sustainability report means an annual sustainability report required under section 292A.
Note: Sections 296A, 296B and 296D deal with the contents of annual sustainability reports.
sustainability standard means:
(a) a standard in force under section 336A; or
(b) a provision of such a standard as it so has effect.
takeover bid means an off‑market bid or market bid made under Chapter 6.
takeover contract means a contract that results from the acceptance of an offer made under a takeover bid.
Takeovers Panel means the Takeovers Panel continued in existence by section 261 of the ASIC Act.
target for a takeover bid means the company, listed body or managed investment scheme whose securities are to be acquired under the bid.
target market for a financial product means the class of retail clients described in the target market determination for the product under paragraph 994B(5)(b).
target market determination means a determination that:
(a) is made as required by section 994B; and
(b) meets the requirements of subsections 994B(5) and (8).
target’s statement means a target’s statement under sections 638 to 640 as supplemented.
taxation law has the same meaning as in the Income Tax Assessment Act 1997.
tax (financial) advice service has the same meaning as in the Tax Agent Services Act 2009.
Tax Practitioners Board means the Tax Practitioners Board established by section 60‑5 of the Tax Agent Services Act 2009.
Territory:
(a) means the following:
(i) the Australian Capital Territory;
(ii) the Jervis Bay Territory;
(iii) the Northern Territory;
(iv) Norfolk Island;
(v) the Territory of Christmas Island;
(vi) the Territory of Cocos (Keeling) Islands; and
(b) when used in a geographical sense—includes the Territory’s coastal sea (if any).
Note: The term external Territory is defined in this subsection to be any Territory, other than a Territory covered by this definition, that is referred to in section 122 of the Constitution, where an Act makes provision for the government of the Territory as a Territory.
this Act includes the regulations, the Insolvency Practice Rules and the Passport Rules for this jurisdiction.
this jurisdiction means the geographical area that consists of:
(a) each referring State (including its coastal sea); and
(b) each Territory (including its coastal sea, if any); and
(d) also, for the purposes of the application of a provision of Chapter 7 or an associated provision (as defined in section 5)—any external Territory in which the provision applies because of subsection 5(9) (but only to the extent provided for in that subsection).
time‑sharing scheme means a scheme, undertaking or enterprise, whether in Australia or elsewhere:
(a) participants in which are, or may become, entitled to use, occupy or possess, for 2 or more periods during the period for which the scheme, undertaking or enterprise is to operate, property to which the scheme, undertaking or enterprise relates; and
(b) that is to operate for a period of not less than 3 years.
title document for a financial product has the meaning given by section 761A.
trade, in relation to financial products, in relation to a financial market, includes:
(a) make or accept on that financial market an offer to dispose of, acquire or exchange the financial products; and
(b) make on that financial market an offer or invitation that is intended, or may reasonably be expected, to result in the making or acceptance of an offer to dispose of, acquire or exchange the financial products.
trading day of a financial market means a day on which the market is open for trading in financial products.
traditional trustee company services has the meaning given by subsection 601RAC(1).
transaction, in Part 5.7B, in relation to a body corporate or Part 5.7 body, means a transaction to which the body is a party, for example (but without limitation):
(a) a conveyance, transfer or other disposition by the body of property of the body; and
(b) a security interest granted by the body in its property (including a security interest in the body’s PPSA retention of title property); and
(c) a guarantee given by the body; and
(d) a payment made by the body; and
(e) an obligation incurred by the body; and
(f) a release or waiver by the body; and
(g) a loan to the body;
and includes such a transaction that has been completed or given effect to, or that has terminated.
transfer of a financial product, in Divisions 3 (transfer of certain securities) and 4 (transfer of certain financial products) of Part 7.11, has the meaning given by section 1073B.
transfer determination has the meaning given by subsection 601WBA(1).
transferring company has the meaning given by subsection 601WBA(1).
transmission means a transmission, by means of electric or electromagnetic energy, of:
(a) sounds, including speech and music; or
(b) visual images; or
(c) signals for the communication, whether as between persons and persons, persons and things or things and things, of any matter otherwise than in the form of sounds or visual images; or
(d) signals for the actuation or control of machinery or apparatus.
transparency, in relation to a document, means:
(a) a developed negative or positive photograph of that document (in this definition called an original photograph) made, on a transparent base, by means of light reflected from, or transmitted through, the document; or
(b) a copy of an original photograph made by the use of photo‑sensitive material (being photo‑sensitive material on a transparent base) placed in surface contact with the original photograph; or
(c) any one of a series of copies of an original photograph, the first of the series being made by the use of photo‑sensitive material (being photo‑sensitive material on a transparent base) placed in surface contact with a copy referred to in paragraph (b), and each succeeding copy in the series being made, in the same manner, from any preceding copy in the series.
transparency reporting auditor has the meaning given by subsection 332(1).
transparency reporting year has the meaning given by subsection 332(2).
Tribunal means the Administrative Review Tribunal.
triggering event has the meaning given by section 500AAA.
trustee:
(a) in relation to a superannuation entity—means the person who is the trustee of the entity for the purposes of the Superannuation Industry (Supervision) Act 1993; or
(b) in relation to the scheme provided for by the Australian Defence Force Cover Act 2015—means CSC (within the meaning of the Governance of Australian Government Superannuation Schemes Act 2011).
trustee company has the meaning given by subsection 601RAB(1).
trustee company provisions has the meaning given by section 601RAE.
ultimate holding company, in relation to a body corporate, means a body corporate that:
(a) is a holding company of the first‑mentioned body; and
(b) is itself a subsidiary of no body corporate.
unacceptable control situation:
(a) in relation to a licensed trustee company or a proposed licensed trustee company—has the meaning given by section 601VAA; and
(b) in relation to a widely held market body—has the meaning given by subsection 850B(1); and
(c) in relation to a controlled Australian financial body—has the meaning given by section 852DB.
unclaimed property means:
(a) property paid or transferred to ASIC under a provision of this Act that provides for property to be transferred, or for the Court to direct that property be transferred, to ASIC to be dealt with under Part 9.7; or
(b) any other property that a provision of this Act provides for ASIC to deal with under Part 9.7; or
(c) property that vests in ASIC under section 1404; or
(d) an accretion to, or substitution for, property that is unclaimed property because of any other application or applications of this definition.
uncommercial transaction has the meaning given by section 588FB.
underlying securities means:
(a) in relation to an option over securities—those securities; and
(b) in relation to scrip that is constituted by documents that are, or are documents of title to, securities—those securities.
undertaking, in relation to a managed investment scheme, means the undertaking, scheme, enterprise, contract or arrangement to which the scheme relates.
underwrite includes sub‑underwrite.
unfair loan has the meaning given by section 588FD.
unfair preference has the meaning given by section 588FA.
unit, in relation to a share, debenture or other interest, means a right or interest, whether legal or equitable, in the share, debenture or other interest, by whatever term called, and includes an option to acquire such a right or interest in the share, debenture or other interest.
unlimited company means a company whose members have no limit placed on their liability.
unreasonable director‑related transaction has the meaning given by section 588FDA.
unsecured, in relation to a debt, has in Part 5.7B a meaning affected by section 588D.
unsolicited contact has the meaning given by subsection 992A(4).
value, in relation to an asset, includes amount.
virtual meeting technology means any technology that allows a person to participate in a meeting without being physically present at the meeting.
volume‑based shelf‑space fee has a meaning affected by section 964A.
voluntary transfer determination has the meaning given by subsection 601WBA(1).
voting interest, in relation to a managed investment scheme (including a notified foreign passport fund), means an issued interest in the scheme that confers a right to vote, not being a right to vote that is exercisable only in one or more of the following circumstances:
(a) on a proposal that affects rights attached to the interests;
(b) on a proposal to wind up the scheme;
(c) on a proposal for the disposal of the whole of the scheme or fund property, business and undertaking;
(d) during the winding up of the scheme.
voting power in a body or managed investment scheme has the meaning given by section 610.
voting share in a body corporate means an issued share in the body that carries any voting rights beyond the following:
(a) a right to vote while a dividend (or part of a dividend) in respect of the share is unpaid;
(b) a right to vote on a proposal to reduce the body’s share capital;
(c) a right to vote on a resolution to approve the terms of a buy‑back agreement;
(d) a right to vote on a proposal that affects the rights attached to the share;
(e) a right to vote on a proposal to wind the body up;
(f) a right to vote on a proposal for the disposal of the whole of the body’s property, business and undertaking;
(g) a right to vote during the body’s winding up.
wages, in relation to a company, means amounts payable to or in respect of an employee of the company (whether the employee is remunerated by salary, wages, commission or otherwise) under an industrial instrument, including amounts payable by way of allowance or reimbursement but excluding amounts payable in respect of leave of absence.
website disclosure information has the meaning given by section 943J.
wholesale CCIV has the meaning given by subsection 1222J(2).
wholesale client has the meaning given by section 761G.
wholly‑owned subsidiary, in relation to a body corporate, means a body corporate none of whose members is a person other than:
(a) the first‑mentioned body; or
(b) a nominee of the first‑mentioned body; or
(c) a subsidiary of the first‑mentioned body, being a subsidiary none of whose members is a person other than:
(i) the first‑mentioned body; or
(ii) a nominee of the first‑mentioned body; or
(d) a nominee of such a subsidiary.
widely held market body has the meaning given by subsection 850A(2).
will includes a codicil and any other testamentary writing.
winding up by the Court includes winding up in insolvency.
winding up provisions has the meaning given by subsection 1237B(2).
within authority, in Division 6 (liability of financial services licensees for representatives) of Part 7.6, has a meaning given by subsections 917A(2) and (3).
wound up by the Court includes wound up in insolvency.
9AA Certain family relationships
For the purposes of this Act, relationships (including the relationship of being family) are taken to include:
(a) relationships between de facto partners (within the meaning of the Acts Interpretation Act 1901); and
(b) relationships of child and parent that arise:
(i) if someone is an exnuptial or adoptive child of a person; or
(ii) if someone is the child of a person because of the definition of child in this Act; and
(c) relationships traced through relationships referred to in paragraphs (a) and (b).
9AB Meaning of asset
(1) An asset (except in relation to a sub‑fund of a CCIV) is property, or a right, of any kind, and includes:
(a) any legal or equitable estate or interest (whether present or future, vested or contingent, tangible or intangible, in real or personal property) of any kind; and
(b) any chose in action; and
(c) any right, interest or claim of any kind including rights, interests or claims in or in relation to property (whether arising under an instrument or otherwise, and whether liquidated or unliquidated, certain or contingent, accrued or accruing); and
(d) any CGT asset within the meaning of the Income Tax Assessment Act 1997.
(2) The assets of a financial services licensee are all the licensee’s assets (as defined in subsection (1)), whether or not the assets are used in connection with the licensee’s Australian financial services licence.
(3) An asset of a sub‑fund of a CCIV has the meaning given by section 1233H.
9AC Meaning of director
(1) A director of a company or other body is:
(a) a person who:
(i) is appointed to the position of a director; or
(ii) is appointed to the position of an alternate director and is acting in that capacity;
regardless of the name that is given to their position; and
(b) unless the contrary intention appears, a person who is not validly appointed as a director if:
(i) they act in the position of a director; or
(ii) the directors of the company or body are accustomed to act in accordance with the person’s instructions or wishes (excluding advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the corporation).
Note: Examples of provisions for which a person would not be a director because of paragraph (b) of this subsection include:
(a) section 205B (notice to ASIC of change of address); and
(b) section 249C (power to call meetings of a company’s members); and
(c) subsection 251A(3) (signing minutes of meetings).
(2) In Part 5.1 (arrangements and reconstructions), the meaning of directors (as defined in subsection (1)) is affected by section 410.
(3) For the purposes of Chapter 2M, a director of a registrable superannuation entity is:
(a) if the RSE licensee for the entity is a constitutional corporation (within the meaning of the Superannuation Industry (Supervision) Act 1993) or a body corporate—a director of the constitutional corporation or body corporate; or
(b) if the RSE licensee for the entity is a group of individual trustees—each of those trustees.
9AD Meaning of officer
(1) An officer of a corporation (other than a CCIV) is:
(a) a director or secretary of the corporation; or
(b) a person:
(i) who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or
(ii) who has the capacity to affect significantly the corporation’s financial standing; or
(iii) in accordance with whose instructions or wishes the directors of the corporation are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the corporation); or
(c) a receiver, or receiver and manager, of the property of the corporation; or
(d) an administrator of the corporation; or
(e) an administrator of a deed of company arrangement executed by the corporation; or
(f) a restructuring practitioner for the corporation; or
(g) a restructuring practitioner for a restructuring plan made by the corporation; or
(h) a liquidator of the corporation; or
(i) a trustee or other person administering a compromise or arrangement made between the corporation and someone else.
Note: Section 201B contains rules about who can be a director of a corporation.
(2) An officer of a corporation that is a CCIV has the meaning given by section 1224B.
(3) Subject to subsection (4), an officer of an entity that is neither an individual nor a corporation is:
(a) if the entity is a partnership—a partner in the partnership; or
(b) if the entity is an unincorporated association—an office holder of the unincorporated association; or
(c) in any case—a person:
(i) who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the entity; or
(ii) who has the capacity to affect significantly the entity’s financial standing.
(4) For the purposes of Chapter 2M, an officer of a registrable superannuation entity is:
(a) if the RSE licensee for the entity is a constitutional corporation (within the meaning of the Superannuation Industry (Supervision) Act 1993) or a body corporate—an officer of the constitutional corporation or body corporate; or
(b) if the RSE licensee for the entity is a group of individual trustees:
(i) each of those trustees; or
(ii) a person who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the entity; or
(iii) a person who has the capacity to affect significantly the entity’s financial standing.
9A Meaning of rights issue
(1) A rights issue is an offer of a body’s securities for issue in respect of which the following conditions are met:
(a) the securities being offered for issue are in a particular class;
(b) either:
(i) the offer is made to every person who holds securities in that class to issue them, or their assignee, with the percentage of the securities to be issued that is the same as the percentage of the securities in that class that they hold before the offer; or
(ii) if the conditions in subsection (3) are met—such an offer is made to every person with a registered address in Australia or New Zealand who holds securities in that class;
(c) the terms of each offer are the same.
(2) A rights issue is an offer of interests in a registered scheme or notified foreign passport fund for issue in respect of which the following conditions are met:
(a) the interests being offered for issue are in a particular class;
(b) either:
(i) the offer is made to every person who holds interests in that class to issue them, or their assignee, with the percentage of the interests to be issued that is the same as the percentage of the interests in that class that they hold before the offer; or
(ii) if the conditions in subsection (3) are met—such an offer is made to every person with a registered address in Australia or New Zealand who holds interests in that class;
(c) the terms of each offer are the same.
(3) The conditions in this subsection are met if:
(a) the offering entity decides that it is unreasonable to offer securities or interests (as the case requires) for issue to persons (the non‑residents) with a registered address in a place outside Australia or New Zealand, after taking into account the following matters:
(i) the number of non‑residents, in that place, to whom offers would otherwise be made;
(ii) the number and value of the securities or interests that would otherwise be offered for issue;
(iii) the cost of complying with the laws, and any requirements of any regulatory authority, of the place where the securities or interests would otherwise be offered for issue; and
(b) the offering entity:
(i) sends details of the offer to each non‑resident in that place; and
(ii) advises each non‑resident in that place that the non‑resident will not be offered the securities or interests; and
(c) if the invitation to apply for, or the right to be issued with, the securities or interests is able to be assigned—the offering entity:
(i) advises each non‑resident in that place that a nominee will be appointed to sell the invitation or right that would otherwise have been offered to the non‑resident; and
(ii) advises each non‑resident that the nominee will send the non‑resident any net proceeds from the sale of that invitation or those rights; and
(iii) appoints a nominee in Australia to carry out the obligations referred to in subparagraphs (i) and (ii).
(3A) For the purposes of subsection (3), offering entity means the following:
(a) in relation to an offer of securities in a body that is not a registered scheme or a notified foreign passport fund—the body;
(b) in relation to an offer of interests in a registered scheme—the responsible entity of the scheme;
(c) in relation to an offer of interests in a notified foreign passport fund—the operator of the fund.
(4) For the purposes of this section, a reference to an offer of securities includes a reference to an invitation to apply for the issue of securities.
9B Meaning of remuneration recommendation
(1) A remuneration recommendation is:
(a) a recommendation about either or both of the following:
(i) how much the remuneration should be;
(ii) what elements the remuneration should have;
for one or more members of the key management personnel for a company; or
(b) a recommendation or advice about a matter or of a kind prescribed by the regulations.
(2) None of the following is a remuneration recommendation (even if it would otherwise be covered by subsection (1)):
(a) advice about the operation of the law (including tax law);
(b) advice about the operation of accounting principles (for example, about how options should be valued);
(c) advice about the operation of actuarial principles and practice;
(d) the provision of facts;
(e) the provision of information of a general nature relevant to all employees of the company;
(f) a recommendation, or advice or information, of a kind prescribed by the regulations.
(3) Subsection (2) does not limit the things that are not remuneration recommendations, nor does it mean that something specified in that subsection would otherwise be a remuneration recommendation within the meaning of subsection (1).
(4) ASIC may by writing declare that subsection (1) does not apply to a specified recommendation or specified advice, but may do so only if ASIC is satisfied that it would be unreasonable in the circumstances for the advice or recommendation to be a remuneration recommendation. The declaration has effect accordingly. The declaration is not a legislative instrument.
9D Meaning of declared financial market
(1) A declared financial market is a financial market declared under subsection (2).
(2) ASIC may, by legislative instrument, declare a specified financial market for the purposes of subsection (1).
(3) ASIC must not make a declaration under subsection (2) unless the Minister has approved it in writing.
Division 2—Meaning of associate
10 Effect of Division
(1) This Division has effect for the purposes of interpreting a reference (in this Division called the associate reference), in relation to a person (in this Division called the primary person), to an associate.
(2) A person is not an associate of the primary person except as provided in this Division.
(3) Nothing in this Division limits the generality of anything else in it.
11 Associates of bodies corporate
If the primary person is a body corporate, the associate reference includes a reference to:
(a) a director or secretary of the body; and
(b) a related body corporate; and
(c) a director or secretary of a related body corporate.
12 References in Chapters 6 to 6C, and other references relating to voting power and takeovers etc.
(1) Subject to subsection 16(1), but despite anything else in this Part, this section applies for the purposes of interpreting a reference to an associate (the associate reference), in relation to a designated body, if:
(a) the reference occurs in a provision of Chapter 6, 6A, 6B or 6C; or
(b) the reference occurs in a provision outside those Chapters that relates to any of the following matters:
(i) the extent, or restriction, of a power to exercise, or to control the exercise of, the votes attached to voting shares in the designated body;
(ii) the primary person’s voting power in the designated body;
(iii) relevant interests in securities in the designated body;
(iv) a substantial holding in the designated body;
(v) a takeover bid for securities in the designated body;
(vi) the compulsory acquisition, or compulsory buy‑out, of securities in the designated body.
(2) For the purposes of the application of the associate reference in relation to the designated body, a person (the second person) is an associate of the primary person if, and only if, one or more of the following paragraphs applies:
(a) the primary person is a body corporate and the second person is:
(i) a body corporate the primary person controls; or
(ii) a body corporate that controls the primary person; or
(iii) a body corporate that is controlled by an entity that controls the primary person;
(b) subject to subsection (2A), the second person is a person with whom the primary person has, or proposes to enter into, a relevant agreement for the purpose of controlling or influencing the composition of the designated body’s board or the conduct of the designated body’s affairs;
(c) subject to subsection (2A), the second person is a person with whom the primary person is acting, or proposing to act, in concert in relation to the designated body’s affairs.
(2A) For the purposes of paragraphs (2)(b) and (c), the second person is not an associate of the primary person in relation to a designated body merely because:
(a) they have entered or propose to enter into a relevant agreement; and
(b) one of them has or will have a right under the relevant agreement (whether the right is enforceable presently or in the future and whether or not on the fulfilment of a condition) to dispose of securities in the designated body or control the exercise of a power to dispose of the securities.
(3) For the purposes of the application of this section in relation to a designated body that is a managed investment scheme:
(a) a reference to controlling or influencing the composition of the designated body’s board is taken to be a reference to controlling or influencing:
(i) if the scheme is a registered scheme—whether a particular company becomes or remains the scheme’s responsible entity; or
(ii) if the scheme is not a registered scheme—whether a particular person is appointed, or remains appointed, to the office (by whatever name it is known) in relation to the scheme that corresponds most closely to the office of responsible entity of a registered scheme; and
(b) a reference to voting shares in the designated body is taken to be a reference to voting interests in the managed investment scheme.
(4) In relation to a matter relating to securities in a designated body, a person may be an associate of the body and the body may be an associate of the person.
(5) In this section:
designated body means:
(a) a body; or
(b) a managed investment scheme.
13 References in Chapter 7
If the associate reference occurs in Chapter 7, it includes a reference to:
(a) a person in partnership with whom the primary person carries on a financial services business; and
(b) subject to subsection 16(2), a person who is a partner of the primary person otherwise than because of carrying on a financial services business in partnership with the primary person; and
(c) a trustee of a trust in relation to which the primary person benefits, or is capable of benefiting, otherwise than because of transactions entered into in the ordinary course of business in connection with the lending of money; and
(d) a director of a body corporate of which the primary person is also a director and that carries on a financial services business; and
(e) subject to subsection 16(2), a director of a body corporate of which the primary person is also a director and that does not carry on a financial services business.
15 General
(1) The associate reference includes a reference to:
(a) a person in concert with whom the primary person is acting, or proposes to act; and
(b) a person who, under the regulations, is, for the purposes of the provision in which the associate reference occurs, an associate of the primary person; and
(c) a person with whom the primary person is, or proposes to become, associated, whether formally or informally, in any other way;
in respect of the matter to which the associate reference relates.
(2) If the primary person has entered, or proposes to enter, into a transaction, or has done, or proposes to do, any act or thing, in order to become associated with another person as mentioned in an applicable provision of this Division, the associate reference includes a reference to that other person.
16 Exclusions
(1) A person is not an associate of another person by virtue of section 12 or subsection 15(1), or by virtue of subsection 15(2) as it applies in relation to section 12 or subsection 15(1), merely because of one or more of the following:
(a) one gives advice to the other, or acts on the other’s behalf, in the proper performance of the functions attaching to a professional capacity or a business relationship;
(b) one, a client, gives specific instructions to the other, whose ordinary business includes dealing in financial products, to acquire financial products on the client’s behalf in the ordinary course of that business;
(c) one had sent, or proposes to send, to the other an offer under a takeover bid for shares held by the other;
(d) one has appointed the other, otherwise than for valuable consideration given by the other or by an associate of the other, to vote as a proxy or representative at a meeting of members, or of a class of members, of a body corporate.
(2) For the purposes of proceedings under this Act in which it is alleged that a person was an associate of another person by virtue of paragraph 13(b) or (e), the first‑mentioned person is not taken to have been an associate of the other person in relation to a matter by virtue of that paragraph unless it is proved that the first‑mentioned person knew, or ought to have known, at that time, the material particulars of that matter.
17 Associates of composite person that carries on a financial services business
A reference to an associate, in relation to an entity (other than a body corporate) that carries on a financial services business, is, if 2 or more persons constitute the entity, a reference to an associate of any of those persons.
Division 3—Carrying on business
18 Carrying on business: otherwise than for profit
A reference to a person carrying on business, carrying on a business, or carrying on a business of a particular kind, includes a reference to the person carrying on business, carrying on a business, or carrying on a business of that kind, as the case may be:
(a) in any case—otherwise than for profit; or
(b) in the case of a body corporate—otherwise than for the profit of the members or corporators of the body.
19 Businesses of a particular kind
A reference to a business of a particular kind includes a reference to a business of that kind that is part of, or is carried on in conjunction with, any other business.
20 Carrying on a business: alone or together with others
A reference in this Act to a person carrying on a business, or a business of a particular kind, is a reference to the person carrying on a business, or a business of that kind, whether alone or together with any other person or persons.
21 Carrying on business in Australia or a State or Territory
(1) A body corporate that has a place of business in Australia, or in a State or Territory, carries on business in Australia, or in that State or Territory, as the case may be.
(2) A reference to a body corporate carrying on business in Australia, or in a State or Territory, includes a reference to the body:
(a) establishing or using a share transfer office or share registration office in Australia, or in the State or Territory, as the case may be; or
(b) administering, managing, or otherwise dealing with, property situated in Australia, or in the State or Territory, as the case may be, as an agent, legal personal representative or trustee, whether by employees or agents or otherwise.
(3) Despite subsection (2), a body corporate does not carry on business in Australia, or in a State or Territory, merely because, in Australia, or in the State or Territory, as the case may be, the body:
(a) is or becomes a party to a proceeding or effects settlement of a proceeding or of a claim or dispute; or
(b) holds meetings of its directors or shareholders or carries on other activities concerning its internal affairs; or
(c) maintains a bank account; or
(d) effects a sale through an independent contractor; or
(e) solicits or procures an order that becomes a binding contract only if the order is accepted outside Australia, or the State or Territory, as the case may be; or
(f) creates evidence of a debt, or creates a security interest in property, including PPSA retention of title property of the body; or
(g) secures or collects any of its debts or enforces its rights in regard to any securities relating to such debts; or
(h) conducts an isolated transaction that is completed within a period of 31 days, not being one of a number of similar transactions repeated from time to time; or
(j) invests any of its funds or holds any property.
(4) In working out whether someone carries on a financial services business disregard paragraph (3)(e).
Note: See also section 911D for when a financial services business is taken to be carried on in this jurisdiction.
Division 5A—Types of company
45A Meaning of proprietary company, small proprietary company and large proprietary company
(1) A proprietary company is a company that is registered as, or converts to, a proprietary company under this Act.
Note 1: A proprietary company can be registered under section 118 or 601BD. A company can convert to a proprietary company under Part 2B.7.
Note 2: A proprietary company needs to be limited by shares or be an unlimited company with a share capital (see subsection 112(1)).
Note 3: A proprietary company needs to:
(a) have no more than 50 shareholders, although employee shareholders and shareholders connected with CSF offers do not count for this purpose; and
(b) not do anything to require disclosure to investors under Chapter 6D (except in limited circumstances);
(see section 113).
Small proprietary company
(2) A proprietary company is a small proprietary company for a financial year if it satisfies at least 2 of the following paragraphs:
(a) the consolidated revenue for the financial year of the company and the entities it controls (if any) is less than $25 million, or any other amount prescribed by the regulations for the purposes of this paragraph;
(b) the value of the consolidated gross assets at the end of the financial year of the company and the entities it controls (if any) is less than $12.5 million, or any other amount prescribed by the regulations for the purposes of this paragraph;
(c) the company and the entities it controls (if any) have fewer than 50, or any other number prescribed by the regulations for the purposes of this paragraph, employees at the end of the financial year.
Note: A small proprietary company generally has reduced financial reporting requirements (see subsection 292(2)).
Large proprietary company
(3) A proprietary company is a large proprietary company for a financial year if it satisfies at least 2 of the following paragraphs:
(a) the consolidated revenue for the financial year of the company and the entities it controls (if any) is $25 million, or any other amount prescribed by the regulations for the purposes of paragraph (2)(a), or more;
(b) the value of the consolidated gross assets at the end of the financial year of the company and the entities it controls (if any) is $12.5 million, or any other amount prescribed by the regulations for the purposes of paragraph (2)(b), or more;
(c) the company and the entities it controls (if any) have 50, or any other number prescribed by the regulations for the purposes of paragraph (2)(c), or more employees at the end of the financial year.
When a company controls an entity
(4) For the purposes of this section, the question whether a proprietary company controls an entity is to be decided in accordance with the accounting standards made for the purposes of paragraph 295(2)(b) (even if the standards do not otherwise apply to the company).
Counting employees
(5) In counting employees for the purposes of subsections (2) and (3), take part‑time employees into account as an appropriate fraction of a full‑time equivalent.
Accounting standards
(6) Consolidated revenue and the value of consolidated gross assets are to be calculated for the purposes of this section in accordance with accounting standards in force at the relevant time (even if the standard does not otherwise apply to the financial year of some or all of the companies concerned).
45B Meaning of small company limited by guarantee
(1) A company is a small company limited by guarantee in a particular financial year if:
(a) it is a company limited by guarantee for the whole of the financial year; and
(b) it is not a deductible gift recipient (within the meaning of the Income Tax Assessment Act 1997) at any time during the financial year; and
(c) either:
(i) where the company is not required by the accounting standards to be included in consolidated financial statements—the revenue of the company for the financial year is less than the threshold amount; or
(ii) where the company is required by the accounting standards to be included in consolidated financial statements—the consolidated revenue of the consolidated entity for the financial year is less than the threshold amount; and
(d) it is not one of the following:
(i) a Commonwealth company for the purposes of the Public Governance, Performance and Accountability Act 2013;
(ii) a subsidiary of a Commonwealth company for the purposes of that Act;
(iii) a subsidiary of a corporate Commonwealth entity for the purposes of that Act; and
(e) it has not been a transferring financial institution of a State or Territory within the meaning of clause 1 of Schedule 4 to this Act; and
(f) it is not a company that is permitted to use the expression building society, credit society or credit union under section 66 of the Banking Act 1959 at any time during the financial year.
(2) The threshold amount, for the purposes of subparagraphs (1)(c)(i) and (ii), is $250,000, or any other amount prescribed by the regulations for the purposes of this subsection.
(3) Revenue and consolidated revenue are to be calculated for the purposes of this section in accordance with accounting standards in force at the relevant time (even if the standard does not otherwise apply to the financial year of some or all of the companies concerned).
Division 6—Subsidiaries and related bodies corporate
46 Meaning of subsidiary—general
A body corporate (in this section called the first body) is a subsidiary of another body corporate if, and only if:
(a) the other body:
(i) controls the composition of the first body’s board; or
(ii) is in a position to cast, or control the casting of, more than one‑half of the maximum number of votes that might be cast at a general meeting of the first body; or
(iii) holds more than one‑half of the issued share capital of the first body (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or
(b) the first body is a subsidiary of a subsidiary of the other body.
47 Control of a body corporate’s board
Without limiting by implication the circumstances in which the composition of a body corporate’s board is taken to be controlled by another body corporate, the composition of the board is taken to be so controlled if the other body, by exercising a power exercisable (whether with or without the consent or concurrence of any other person) by it, can appoint or remove all, or the majority, of the directors of the first‑mentioned body, and, for the purposes of this Division, the other body is taken to have power to make such an appointment if:
(a) a person cannot be appointed as a director of the first‑mentioned body without the exercise by the other body of such a power in the person’s favour; or
(b) a person’s appointment as a director of the first‑mentioned body follows necessarily from the person being a director or other officer of the other body.
48 Matters to be disregarded
(1) This section applies for the purposes of determining whether a body corporate (in this section called the first body) is a subsidiary of another body corporate.
(2) Any shares held, or power exercisable, by the other body in a fiduciary capacity are treated as not held or exercisable by it.
(3) Subject to subsections (4) and (5), any shares held, or power exercisable:
(a) by a person as a nominee for the other body (except where the other body is concerned only in a fiduciary capacity); or
(b) by, or by a nominee for, a subsidiary of the other body (not being a subsidiary that is concerned only in a fiduciary capacity);
are treated as held or exercisable by the other body.
(4) Any shares held, or power exercisable, by a person by virtue of the provisions of debentures of the first body, or of a trust deed for securing an issue of such debentures, are to be disregarded.
(5) Any shares held, or power exercisable, otherwise than as mentioned in subsection (4), by, or by a nominee for, the other body or a subsidiary of it are to be treated as not held or exercisable by the other body if:
(a) the ordinary business of the other body or that subsidiary, as the case may be, includes lending money; and
(b) the shares are held, or the power is exercisable, only by way of security given for the purposes of a transaction entered into in the ordinary course of business in connection with lending money, not being a transaction entered into with an associate of the other body, or of that subsidiary, as the case may be.
(6) Any shares in the first body that are MCIs, and any powers exercisable by a person by virtue of such shares, are to be disregarded.
49 References in this Division to a subsidiary
A reference in paragraph 46(b) or 48(3)(b) or subsection 48(5) to being a subsidiary, or to a subsidiary, of a body corporate includes a reference to being a subsidiary, or to a body corporate that is a subsidiary, as the case may be, of the first‑mentioned body by virtue of any other application or applications of this Division.
50 Meaning of related body corporate
Where a body corporate is:
(a) a holding company of another body corporate; or
(b) a subsidiary of another body corporate; or
(c) a subsidiary of a holding company of another body corporate;
the first‑mentioned body and the other body are related to each other.
50AAA Meaning of associated entity
(1) One entity (the associate) is an associated entity of another entity (the principal) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.
(2) This subsection is satisfied if the associate and the principal are related bodies corporate.
(3) This subsection is satisfied if the principal controls the associate.
(4) This subsection is satisfied if:
(a) the associate controls the principal; and
(b) the operations, resources or affairs of the principal are material to the associate.
(5) This subsection is satisfied if:
(a) the associate has a qualifying investment (see subsection (8)) in the principal; and
(b) the associate has significant influence over the principal; and
(c) the interest is material to the associate.
(6) This subsection is satisfied if:
(a) the principal has a qualifying investment (see subsection (8)) in the associate; and
(b) the principal has significant influence over the associate; and
(c) the interest is material to the principal.
(7) This subsection is satisfied if:
(a) an entity (the third entity) controls both the principal and the associate; and
(b) the operations, resources or affairs of the principal and the associate are both material to the third entity.
(8) For the purposes of this section, one entity (the first entity) has a qualifying investment in another entity (the second entity) if the first entity:
(a) has an asset that is an investment in the second entity; or
(b) has an asset that is the beneficial interest in an investment in the second entity and has control over that asset.
50AA Meaning of control
(1) For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.
(2) In determining whether the first entity has this capacity:
(a) the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and
(b) any practice or pattern of behaviour affecting the second entity’s financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).
(3) The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.
(4) If the first entity:
(a) has the capacity to influence decisions about the second entity’s financial and operating policies; and
(b) is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity’s members;
the first entity is taken not to control the second entity.
Division 7—Meaning of some other expressions
51F Meaning of PPSA retention of title property
Definition
(1) Property is PPSA retention of title property (short for Personal Property Securities Act retention of title property) of a corporation if:
(a) the property is personal property; and
(b) the property is used or occupied by, or is in the possession of, the corporation; and
(c) the corporation does not have title to the property; and
(d) a PPSA security interest is attached to the property, within the meaning of the Personal Property Securities Act 2009; and
(e) the corporation is the grantor in relation to the PPSA security interest, within the meaning of that Act.
Note: Examples: The following personal property is PPSA retention of title property if a PPSA security interest attaches to the property by virtue of the transaction concerned, and the grantor is a corporation:
(a) property that is the subject of an agreement to sell subject to retention of title, or a hire purchase agreement, that secures the payment or performance of an obligation (see subsection 12(2) of the Personal Property Securities Act 2009);
(b) property that is the subject of a lease, or a consignment agreement, that secures the payment or performance of an obligation (see subsection 12(2) of the Personal Property Securities Act 2009);
(c) goods that are the subject of a commercial consignment (see subsection 12(3) of the Personal Property Securities Act 2009);
(d) goods that are leased or bailed under a PPS lease (see subsection 12(3) of the Personal Property Securities Act 2009).
References to property of a corporation
(2) A reference in this Act to the property of a corporation does not include a reference to any PPSA retention of title property of the corporation, unless provided otherwise expressly or by necessary implication.
Note: See also the definition of property in section 9.
References to property of a sub‑fund of a CCIV
(3) A reference in a provision of this Act to property of a sub‑fund of a CCIV (including a substituted reference provided for by Part 8B.6) is a reference to something that is:
(a) property of the CCIV (within the meaning of the provision); and
(b) an asset of the sub‑fund of the CCIV.
Note: For assets of a sub‑fund of a CCIV, see section 1233H.
51M Meaning of mutual entity
(1) A company is a mutual entity if:
(a) the company is registered under this Act; and
(b) the company’s constitution provides that a person has no more than one vote at a general meeting of the company for each capacity in which the person is a member of the company.
(2) To avoid doubt:
(a) the requirement in paragraph (1)(b) does not fail to be satisfied merely because the company’s constitution provides that:
(i) 2 or more persons may together be joint members of the company; and
(ii) those persons each have one vote at a general meeting of the company; and
(b) that requirement does not fail to be satisfied merely because the company’s constitution provides that:
(i) a person may vote as proxy or representative at a general meeting of the company; and
(ii) as a result of voting as a proxy or representative, the person may have more than one vote at a general meeting of the company.
52A Signing
Without affecting the law on agency, if this Act requires that something be signed, it can be signed by an individual using a power of attorney from the person required to sign.
53 Meaning of affairs—body corporate other than a CCIV
For the purposes of the definition of examinable affairs in section 9, section 53AA, 232, 233 or 234, paragraph 461(1)(e), section 487, subsection 1307(1) or section 1309, or of a prescribed provision of this Act, the affairs of a body corporate (other than a CCIV) include:
(a) the promotion, formation, membership, control, business, trading, transactions and dealings (whether alone or jointly with any other person or persons and including transactions and dealings as agent, bailee or trustee), property (whether held alone or jointly with any other person or persons and including property held as agent, bailee or trustee), liabilities (including liabilities owed jointly with any other person or persons and liabilities as trustee), profits and other income, receipts, losses, outgoings and expenditure of the body; and
(b) in the case of a body corporate (not being a licensed trustee company or the Public Trustee of a State or Territory) that is a trustee (but without limiting the generality of paragraph (a))—matters concerned with the ascertainment of the identity of the persons who are beneficiaries under the trust, their rights under the trust and any payments that they have received, or are entitled to receive, under the terms of the trust; and
(c) the internal management and proceedings of the body; and
(d) any act or thing done (including any contract made and any transaction entered into) by or on behalf of the body, or to or in relation to the body or its business or property, at a time when:
(i) a receiver, or a receiver and manager, is in possession of, or has control over, property of the body; or
(ii) the body is under administration; or
(iia) a deed of company arrangement executed by the body has not yet terminated; or
(iib) the body is under restructuring; or
(iic) a restructuring plan made by the body has not yet terminated; or
(iii) a compromise or arrangement made between the body and any other person or persons is being administered; or
(iv) the body is being wound up;
and, without limiting the generality of the foregoing, any conduct of such a receiver or such a receiver and manager, of an administrator of the body, of an administrator of such a deed of company arrangement, of a restructuring practitioner for the body, of a restructuring practitioner for such a restructuring plan, of a person administering such a compromise or arrangement or of a liquidator or provisional liquidator of the body; and
(e) the ownership of shares in, debentures of, and interests in a managed investment scheme made available by, the body; and
(f) the power of persons to exercise, or to control the exercise of, the rights to vote attached to shares in the body or to dispose of, or to exercise control over the disposal of, such shares; and
(g) matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the body or are or have been able to control or materially to influence the policy of the body; and
(h) the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of, or interests in a managed investment scheme made available by, the body; and
(j) where the body has made available interests in a managed investment scheme—any matters concerning the financial or business undertaking, scheme, common enterprise or investment contract to which the interests relate; and
(k) matters relating to or arising out of the audit of, or working papers or reports of an auditor concerning, any matters referred to in a preceding paragraph.
53AAA Meaning of affairs—CCIV
(1) For the purposes of the provisions referred to in subsection (3), the affairs of a body corporate that is a CCIV include anything that would be included in the affairs of a body corporate under section 53.
(2) In applying paragraph 53(d) to the CCIV:
(a) disregard subparagraphs (ii) and (iia); and
(b) treat the reference in subparagraph (iv) to the body as instead being a reference to a sub‑fund of the CCIV; and
(c) treat the reference to a liquidator or provisional liquidator of the body as instead being a reference to a liquidator or provisional liquidator of a sub‑fund of the CCIV.
(3) The provisions for subsection (1) are the following:
(a) a provision referred to in section 53;
(b) a provision prescribed for the purposes of section 53;
(c) section 1222 (about requirements for registration as a CCIV);
(d) section 1224F (about who can be the director of a CCIV);
(e) section 1224J (about corporate director must operate the CCIV);
(f) section 1237V (about Court order imposing liability on unlicensed person operating CCIV);
(g) section 1241C (about extra kinds of financial services relating to CCIVs);
(h) section 1241E (about when conduct does not constitute providing a custodial or depository service in relation to a CCIV);
(i) section 1241F (about Australian financial services licences to conduct the affairs of a CCIV);
(j) section 1241L (about financial services disclosure does not apply to conducting the affairs of CCIVs);
(k) a provision of this Act prescribed by the regulations for the purposes of this paragraph.
53AA Meaning of business affairs—body corporate
A body corporate’s business affairs include (without limitation):
(a) any of the body’s affairs (including anything that is included in the body’s affairs because of section 53 or 53AAA); and
(b) matters concerned with ascertaining the corporations with which the body is or has been connected.
53AB Meaning of business affairs—natural person
A natural person’s business affairs include (without limitation):
(a) the person’s examinable operations and examinable assets and liabilities; and
(b) any act done (including any contract made and any transaction entered into) by or on behalf of the person, or to or in relation to the person or his or her business or property, at a time when:
(i) the person was, under the Bankruptcy Act 1966 or the law of an external Territory, a bankrupt in respect of a bankruptcy from which the person had not been discharged; or
(ii) the person had, under a law of an external Territory or of a foreign country, the status of an undischarged bankrupt; or
(iii) the person’s property was subject to control under Division 2 of Part X of the Bankruptcy Act 1966 because of an authority given by the person under section 188 of that Act; or
(iv) a personal insolvency agreement under Part X of the Bankruptcy Act 1966 or under the corresponding provisions of the law of an external Territory or of a foreign country was in effect in relation to the person or the person’s property; and
(c) without limiting the generality of paragraph (b), any conduct of the trustee of such a bankrupt estate or of such a personal insolvency agreement or a person acting under such an authority; and
(d) matters concerned with ascertaining the corporations with which the person is or has been connected.
53AC Meaning of business affairs—partnership
A partnership’s business affairs include (without limitation):
(a) the partnership’s promotion, formation, membership, control, examinable operations and examinable assets and liabilities; and
(b) the partnership’s management and proceedings; and
(c) any act done (including any contract made and any transaction entered into) by or on behalf of the partnership, or to or in relation to the partnership, at a time when the partnership is being wound up; and
(d) matters concerned with ascertaining the corporations with which the partnership is or has been connected.
53AD Meaning of business affairs—trust
A trust’s business affairs include (without limitation):
(a) the creation of the trust; and
(b) matters arising under, or otherwise relating to, the terms of the trust; and
(c) the appointment and removal of a trustee of the trust; and
(d) the business, trading, transactions and dealings of the trustee of the trust; and
(e) the profits, income and receipts of the trustee of the trust; and
(f) the losses, outgoings and expenditure of the trustee of the trust; and
(g) the trust property, including transactions and dealings in, and the income arising from, the trust property; and
(h) the liabilities of the trustee of the trust; and
(j) the management of the trust; and
(k) any act done (including any contract made and any transaction entered into) by or on behalf of the trustee of the trust, or to or in relation to the trust, at a time when the trust is being wound up; and
(l) matters concerned with ascertaining the corporations with which the trust is or has been connected.
57 Classes of shares or interests in managed investment schemes
(1) The shares in a body corporate, if not divided into 2 or more classes, constitute a class.
Note: A CCIV must have a minimum of one class of shares per sub‑fund: see section 1230A.
(2) If the interests in a managed investment scheme to which an undertaking relates are not divided into 2 or more classes, they constitute a class.
57A Meaning of corporation
(1) Subject to this section, in this Act, corporation includes:
(a) a company; and
(b) any body corporate (whether incorporated in this jurisdiction or elsewhere); and
(c) an unincorporated body that under the law of its place of origin, may sue or be sued, or may hold property in the name of its secretary or of an office holder of the body duly appointed for that purpose.
(2) Neither of the following is a corporation:
(a) an exempt public authority;
(b) a corporation sole.
(3) To avoid doubt, an Aboriginal and Torres Strait Islander corporation is taken to be a corporation for the purposes of this Act.
Note: Various provisions of this Act that generally apply to corporations do not apply to Aboriginal and Torres Strait Islander corporations because of express provisions to that effect: see section 190B, subsection 197(5), section 206HB and subsections 599(2), 1309(6), 1318(5) and 1335(3).
58AA Meaning of court and Court
(1) Subject to subsection (2), in this Act:
court means any court.
Court means any of the following courts:
(a) the Federal Court;
(b) the Supreme Court of a State or Territory;
(c) the Federal Circuit and Family Court of Australia (Division 1);
(d) a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.
(2) Except where there is a clear expression of a contrary intention (for example, by use of the expression “the Court”), proceedings in relation to a matter under this Act may, subject to Part 9.6A, be brought in any court.
Note: The matters dealt with in Part 9.6A include the applicability of limits on the jurisdictional competence of courts.
58B Discharge of obligations under this Act
(2) Subject to subsection (3), an act required to be done under this Act may, for the purposes of this Act, be done anywhere in Australia, whether in or outside this jurisdiction.
(3) Nothing in subsection (2) affects the operation of any provision of this Act that:
(a) expressly requires a particular act to be done in this jurisdiction; or
(b) expressly or by implication permits a particular act to be done outside Australia.
59 Debentures as consideration for acquisition of shares
A reference to a body corporate that offers debentures as consideration for the acquisition of shares in a body corporate includes a reference to a body corporate that offers a cash sum as consideration for the acquisition of shares where it is to be a term of the contract for the acquisition of those shares that the offeree makes, or that the sum is applied in whole or in part in making, a payment by way of deposit with, or loan to, the body corporate that offers the sum.
60 Declaration of relevant relationships
Administrator
(1) In this Act, a declaration of relevant relationships, in relation to an administrator of a company under administration, means a written declaration:
(a) stating whether any of the following:
(i) the administrator;
(ii) if the administrator’s firm (if any) is a partnership—a partner in that partnership;
(iii) if the administrator’s firm (if any) is a body corporate—that body corporate or an associate of that body corporate;
has, or has had within the preceding 24 months, a relationship with:
(iv) the company; or
(v) an associate of the company; or
(vi) a former liquidator, or former provisional liquidator, of the company; or
(via) a former restructuring practitioner for the company, or a restructuring plan of the company; or
(vii) a person who is entitled to enforce a security interest in the whole, or substantially the whole, of the company’s property (including any PPSA retention of title property); and
(b) if so, stating the administrator’s reasons for believing that none of the relevant relationships result in the administrator having a conflict of interest or duty.
Restructuring practitioner
(1A) In this Act, a declaration of relevant relationships, in relation to a restructuring practitioner for a company under restructuring, means a written declaration:
(a) stating whether any of the following:
(i) the restructuring practitioner;
(ii) if the restructuring practitioner’s firm (if any) is a partnership—a partner in that partnership;
(iii) if the restructuring practitioner’s firm (if any) is a body corporate—that body corporate or an associate of that body corporate;
has, or has had within the preceding 24 months, a relationship with:
(iv) the company; or
(v) an associate of the company; or
(vi) a former liquidator, or former provisional liquidator, of the company; or
(vii) a person who is entitled to enforce a security interest in the whole, or substantially the whole, of the company’s property (including any PPSA retention of title property); and
(b) if so, stating the restructuring practitioner’s reasons for believing that none of the relevant relationships result in the restructuring practitioner having a conflict of interest or duty.
Liquidator
(2) In this Act, a declaration of relevant relationships, in relation to a liquidator of a company, means a written declaration:
(a) stating whether any of the following:
(i) the liquidator;
(ii) if the liquidator’s firm (if any) is a partnership—a partner in that partnership;
(iii) if the liquidator’s firm (if any) is a body corporate—that body corporate or an associate of that body corporate;
has, or has had within the preceding 24 months, a relationship with:
(iv) the company; or
(v) an associate of the company; or
(vi) a former liquidator, or former provisional liquidator, of the company; or
(vii) a former administrator of the company; or
(viii) a former administrator of a deed of company arrangement executed by the company; or
(ix) a former restructuring practitioner for the company; or
(x) a former restructuring practitioner for a restructuring plan made by the company; and
(b) if so, stating the liquidator’s reasons for believing that none of the relevant relationships result in the liquidator having a conflict of interest or duty.
64A Meaning of entity
Except in Chapters 2E, 8A and 8B, a reference to an entity:
(a) is a reference to a natural person, a body corporate (other than an exempt public authority), a partnership or a trust; and
(b) includes, in the case of a trust, a reference to the trustee of the trust.
64B Entities connected with a corporation
Body corporate
(1) A body corporate is connected with a corporation if, and only if, the corporation:
(a) can control, or influence materially, the body’s activities or internal affairs; or
(b) is a member of the body; or
(c) is in a position to cast, or to control the casting of, a vote at a general meeting of the body; or
(d) has power to dispose of, or to exercise control over the disposal of, a share in the body; or
(e) is financially interested in the body’s success or failure or apparent success or failure; or
(f) is owed a debt by the body; or
(g) is engaged by the body under a contract for services; or
(h) acts as agent for the body in any transaction or dealing.
Natural person
(2) A natural person is connected with a corporation if, and only if, the corporation:
(a) is a trustee of a trust under which the person is capable of benefiting; or
(b) is engaged by the person under a contract for services; or
(c) acts as agent for the person in any transaction or dealing; or
(d) is an attorney of the person under a power of attorney; or
(e) has appointed the person as the corporation’s attorney under a power of attorney; or
(f) is given financial, business or legal advice by the person in the performance of the functions attaching to the person’s professional capacity.
Partnership
(3) A partnership is connected with a corporation if, and only if, the corporation:
(a) is a partner in the partnership; or
(b) can control, or influence materially, the partnership’s activities or internal affairs; or
(c) is financially interested in the partnership’s success or failure or apparent success or failure; or
(d) is a creditor of the partnership; or
(e) is engaged by the partnership under a contract for services; or
(f) acts as agent for the partnership in any transaction or dealing.
Trust
(4) A trust is connected with a corporation if, and only if, the corporation:
(a) is the settlor, or one of the settlors, of the trust; or
(b) has power under the terms of the trust to appoint or remove a trustee of the trust or to vary, or cause to be varied, any of the terms of the trust; or
(c) is a trustee of the trust; or
(d) can control, or influence materially, the activities of the trust; or
(e) is capable of benefiting under the trust; or
(f) is a creditor of the trustee of the trust; or
(g) is engaged by the trustee of the trust under a contract for services; or
(h) acts as agent for the trustee of the trust in any transaction or dealing.
65 Eligible money market dealer
ASIC may declare a body corporate to be an authorised dealer in the short term money market by notice published in the Gazette.
66A Meaning of exempt body corporate
A body corporate is an exempt body corporate of a State or Territory if, and only if, it:
(a) is not a company; and
(b) is incorporated by or under a law of the State or Territory.
70 Extension of period for doing an act
Where this Act confers power to extend the period for doing an act, an application for the exercise of the power may be made, and the power may be exercised, even if the period, or the period as last extended, as the case requires, has ended.
73A When a court is taken to find a person guilty of an offence
An Australian court finds a person guilty of an offence if, and only if:
(a) the court convicts the person of the offence; or
(b) the person is charged before the court with the offence and is found in the court to have committed the offence, but the court does not proceed to convict the person of the offence.
75 Inclusion in official list
A reference to a body corporate or other person included in an official list of a body corporate is a reference to:
(a) a body corporate or other person whose name is included in that official list; or
(b) a body corporate or other person whose name has been changed but whose previous name was included in that official list immediately before the change and is still so included.
79 Involvement in contraventions
A person is involved in a contravention if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention; or
(b) has induced, whether by threats or promises or otherwise, the contravention; or
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention; or
(d) has conspired with others to effect the contravention.
80 Jervis Bay Territory taken to be part of the Australian Capital Territory
The Jervis Bay Territory is taken to be part of the Australian Capital Territory.
82 Offers and invitations to the public
A reference in this Act to, or to the making of, an offer to the public or to, or to the issuing of, an invitation to the public is, unless the contrary intention appears, to be construed as including a reference to, or to the making of, an offer to any section of the public or to, or to the issuing of, an invitation to any section of the public, as the case may be, whether selected as clients of the person making the offer or issuing the invitation or in any other manner and notwithstanding that the offer is capable of acceptance only by each person to whom it is made or that an offer or application may be made pursuant to the invitation only by a person to whom the invitation is issued, but a bona fide offer or invitation is not taken to be an offer or invitation to the public if it:
(a) is an offer or invitation to enter into an underwriting agreement; or
(b) is made or issued to a person whose ordinary business is to buy or sell shares, debentures or interests in managed investment schemes, whether as principal or agent; or
(c) is made or issued to existing members or debenture holders of a corporation and relates to shares in, or debentures of, that corporation; or
(d) is made or issued to existing members of a company in connection with a proposal referred to in section 507 and relates to shares in that company.
86 Possession
A thing that is in a person’s custody or under a person’s control is in the person’s possession.
88A Meaning of public document
(1) Subject to this section, public document, in relation to a body, means:
(a) an instrument of, or purporting to be signed, issued or published by or on behalf of, the body that:
(i) when signed, issued or published, is intended to be lodged or is required by or under this Act or the ASIC Act to be lodged; or
(ii) is signed, issued or published under or for the purposes of this Act, the ASIC Act or any other Australian law; or
(b) an instrument of, or purporting to be signed or issued by or on behalf of, the body that is signed or issued in the course of, or for the purposes of, a particular transaction or dealing; or
(c) without limiting paragraph (a) or (b), a business letter, statement of account, invoice, receipt, order for goods, order for services or official notice of, or purporting to be signed or issued by or on behalf of, the body.
(2) A thing is not a public document of a body if it:
(a) is applied, or is intended or required to be applied:
(i) to goods; or
(ii) to a package, label, reel or thing in or with which goods are, or are to be, supplied; and
(b) is so applied, or is intended or required to be so applied, for a purpose connected with the supply of the goods.
(3) In subsection (2):
apply to includes print on, weave in, impress on, work into, or annex, affix or attach to.
label includes a band or ticket.
package includes:
(a) a covering, stopper, glass, bottle, vessel, box, capsule, case, frame or wrapper; or
(b) any other container or thing in which goods are, or are to be, packed.
88B Meaning of qualified accountant
(1) For the purposes of this Act, a qualified accountant is a person covered by a declaration in force under subsection (2).
(2) ASIC may, in writing, declare that all members of a specified professional body, or all persons in a specified class of members of a specified professional body, are qualified accountants for the purposes of this Act.
(3) ASIC may, in writing, vary or revoke a declaration made under subsection (2).
89 Meaning of qualified privilege
(1) Where this Act provides that a person has qualified privilege in respect of an act, matter or thing, the person:
(a) has qualified privilege in proceedings for defamation; or
(b) is not, in the absence of malice on the person’s part, liable to an action for defamation at the suit of a person;
as the case requires, in respect of that act, matter or thing.
(2) In subsection (1):
malice includes ill will to the person concerned or any other improper motive.
(3) Neither this section nor a provision of this Act that provides as mentioned in subsection (1) limits or affects any right, privilege or immunity that a person has, apart from this section or such a provision, as defendant in proceedings, or an action, for defamation.
90 Receivers and managers
A receiver of property of a body corporate is also a manager if the receiver manages, or has under the terms of the receiver’s appointment power to manage, affairs of the body.
91 Meaning of relation‑back day
For the purposes of this Act, the following table sets out the meaning of relation‑back day in relation to a winding up of a company or Part 5.7 body.
<table cellspacing="0" cellpadding="0" style="margin-left:0.25pt; border-collapse:collapse"><thead><tr><td colspan="3" style="width:343.5pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Relation</span><span>‑</span><span>back day</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Item</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>If:</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>the </span><span style="font-style:italic">relation</span><span style="font-style:italic">‑</span><span style="font-style:italic">back day</span><span> is:</span></p></td></tr></thead><tbody><tr><td style="width:24.9pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:148.5pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the Court orders under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up; and</span></p><p class="Tablea"><span>(b) immediately before the order was made, the company was under administration; and</span></p><p class="Tablea"><span>(c) the order was made in response to an application filed at or after the beginning of the administration;</span></p></td><td style="width:148.5pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the section</span><span> </span><span>513C day in relation to the administration.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the Court orders under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up; and</span></p><p class="Tablea"><span>(b) immediately before the order was made, the company was under administration; and</span></p><p class="Tablea"><span>(c) the order was made in response to an application filed before the beginning of the administration;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the day on which that application was filed.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the Court orders under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up; and</span></p><p class="Tablea"><span>(b) immediately before the order was made, a deed of company arrangement had been executed by the company and had not yet terminated; and</span></p><p class="Tablea"><span>(c) the order was made in response to an application filed at or after the beginning of the administration that ended when the deed was executed;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the section</span><span> </span><span>513C day in relation to that administration.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the Court orders under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up; and</span></p><p class="Tablea"><span>(b) immediately before the order was made, a deed of company arrangement had been executed by the company and had not yet terminated; and</span></p><p class="Tablea"><span>(c) the order was made in response to an application filed before the beginning of the administration that ended when the deed was executed;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the day on which that application was filed.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>5</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the company resolves by special resolution that it be wound up voluntarily; and</span></p><p class="Tablea"><span>(b) immediately before the resolution was passed, the company was under administration; and</span></p><p class="Tablea"><span>(c) no application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the administration;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the section</span><span> </span><span>513C day in relation to the administration.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>6</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the company resolves by special resolution that it be wound up voluntarily; and</span></p><p class="Tablea"><span>(b) immediately before the resolution was passed, the company was under administration; and</span></p><p class="Tablea"><span>(c) an application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the administration, but that application was dismissed or withdrawn before the administration commenced;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the section</span><span> </span><span>513C day in relation to the administration.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>7</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the company resolves by special resolution that it be wound up voluntarily; and</span></p><p class="Tablea"><span>(b) immediately before the resolution was passed, the company was under administration; and</span></p><p class="Tablea"><span>(c) an application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the administration; and</span></p><p class="Tablea"><span>(d) that application had not been dismissed or withdrawn before the administration commenced;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the day on which that application was filed.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>8</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company, the company is taken to have passed a special resolution that it be wound up voluntarily because, at a meeting convened by the administrator of a deed of company arrangement executed by the company, the company’s creditors:</span></p><p class="Tablea"><span>(a) passed a resolution terminating the deed of company arrangement; and</span></p><p class="Tablea"><span>(b) also resolved under section</span><span> </span><span>445E that the company be wound up;</span></p><p class="Tabletext"><span>and either:</span></p><p class="Tablea"><span>(c) no application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the administration that ended when the deed was executed; or</span></p><p class="Tablea"><span>(d) an application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the administration that ended when the deed was executed, but that application was dismissed or withdrawn before the administration commenced;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the section</span><span> </span><span>513C day in relation to the administration that ended when the deed was executed.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>9</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company, the company is taken to have passed a special resolution that it be wound up voluntarily because, at a meeting convened by the administrator of a deed of company arrangement executed by the company, the company’s creditors:</span></p><p class="Tablea"><span>(a) passed a resolution terminating the deed of company arrangement; and</span></p><p class="Tablea"><span>(b) also resolved under section</span><span> </span><span>445E that the company be wound up;</span></p><p class="Tabletext"><span>and both:</span></p><p class="Tablea"><span>(c) an application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the administration that ended when the deed was executed; and</span></p><p class="Tablea"><span>(d) that application has not been dismissed or withdrawn before the first</span><span>‑</span><span>mentioned resolution is taken to have been passed;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the day on which that application was filed.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span>10</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span>in the case of a company, the company is taken to have passed a special resolution that it be wound up voluntarily because the Court made an order under section</span><span> </span><span>445D terminating a deed of company arrangement executed by the company, and either:</span></p><p class="Tablea" style="page-break-after:avoid"><span>(a) no application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the administration that ended when the deed was executed; or</span></p><p class="Tablea" style="page-break-after:avoid"><span>(b) an application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the administration that ended when the deed was executed, but that application was dismissed or withdrawn before the administration commenced;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span>the section</span><span> </span><span>513C day in relation to the administration that ended when the deed was executed.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>11</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the company is taken to have passed a special resolution that it be wound up voluntarily because the Court made an order under section</span><span> </span><span>445D terminating a deed of company arrangement executed by the company; and</span></p><p class="Tablea"><span>(b) an application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the administration that ended when the deed was executed; and</span></p><p class="Tablea"><span>(c) that application has not been dismissed or withdrawn before the resolution is taken to have been passed;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the day on which that application was filed.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>12</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company, the company is taken to have passed a special resolution that it be wound up voluntarily because:</span></p><p class="Tablea"><span>(a) a deed of company arrangement executed by the company specifies particular circumstances in which the deed is to terminate and the company is to be wound up; and</span></p><p class="Tablea"><span>(b) those circumstances exist at a particular time;</span></p><p class="Tabletext"><span>and either:</span></p><p class="Tablea"><span>(c) no application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the administration that ended when the deed was executed; or</span></p><p class="Tablea"><span>(d) an application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the administration that ended when the deed was executed, but that application was dismissed or withdrawn before the administration commenced;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the section</span><span> </span><span>513C day in relation to the administration that ended when the deed was executed.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span>13</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span>in the case of a company, the company is taken to have passed a special resolution that it be wound up voluntarily because:</span></p><p class="Tablea" style="page-break-after:avoid"><span>(a) a deed of company arrangement executed by the company specifies particular circumstances in which the deed is to terminate and the company is to be wound up; and</span></p><p class="Tablea" style="page-break-after:avoid"><span>(b) those circumstances exist at a particular time;</span></p><p class="Tabletext" style="page-break-after:avoid"><span>and both:</span></p><p class="Tablea" style="page-break-after:avoid"><span>(c) an application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the administration that ended when the deed was executed; and</span></p><p class="Tablea" style="page-break-after:avoid"><span>(d) that application had not been dismissed or withdrawn before the resolution is taken to have been passed;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span>the day on which that application was filed.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>14</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>because of Division</span><span> </span><span>1A of Part</span><span> </span><span>5.6, the winding up is taken to have begun on the day when an order that the company or body be wound up was made;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the day on which the application for the order was filed.</span></p></td></tr><tr><td style="width:24.9pt; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>16</span></p></td><td style="width:148.5pt; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the Court orders under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up; and</span></p><p class="Tablea"><span>(b) immediately before the order was made, the company was under restructuring; and</span></p><p class="Tablea"><span>(c) the order was made in response to an application filed at or after the beginning of the restructuring;</span></p></td><td style="width:148.5pt; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the section</span><span> </span><span>513CA day in relation to the restructuring.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>17</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the Court orders under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up; and</span></p><p class="Tablea"><span>(b) immediately before the order was made, the company was under restructuring; and</span></p><p class="Tablea"><span>(c) the order was made in response to an application filed before the beginning of the restructuring;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the day on which that application was filed.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>18</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the Court orders under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up; and</span></p><p class="Tablea"><span>(b) immediately before the order was made, a restructuring plan had been made by the company and had not yet terminated; and</span></p><p class="Tablea"><span>(c) the order was made in response to an application filed at or after the beginning of the restructuring that ended when the plan was made;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the section</span><span> </span><span>513CA day in relation to that restructuring.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>19</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the Court orders under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up; and</span></p><p class="Tablea"><span>(b) immediately before the order was made, a restructuring plan had been made by the company and had not yet terminated; and</span></p><p class="Tablea"><span>(c) the order was made in response to an application filed before the beginning of the restructuring that ended when the plan was made;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the day on which that application was filed.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>20</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the company resolves by special resolution that it be wound up voluntarily; and</span></p><p class="Tablea"><span>(b) immediately before the resolution was passed, the company was under restructuring; and</span></p><p class="Tablea"><span>(c) no application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the restructuring;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the section</span><span> </span><span>513CA day in relation to the restructuring</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>21</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the company resolves by special resolution that it be wound up voluntarily; and</span></p><p class="Tablea"><span>(b) immediately before the resolution was passed, the company was under restructuring; and</span></p><p class="Tablea"><span>(c) an application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the restructuring, but that application was dismissed or withdrawn before the restructuring commenced;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the section</span><span> </span><span>513CA day in relation to the restructuring.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>22</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>in the case of a company:</span></p><p class="Tablea"><span>(a) the company resolves by special resolution that it be wound up voluntarily; and</span></p><p class="Tablea"><span>(b) immediately before the resolution was passed, the company was under restructuring; and</span></p><p class="Tablea"><span>(c) an application for an order under section</span><span> </span><span>233, 459A, 459B or 461 that the company be wound up was filed before the beginning of the restructuring; and</span></p><p class="Tablea"><span>(d) that application had not been dismissed or withdrawn before the restructuring commenced;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the day on which that application was filed.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>23</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>any other case applies;</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the day on which the winding up is taken, because of Division</span><span> </span><span>1A of Part</span><span> </span><span>5.6, to have begun.</span></p></td></tr></tbody></table>
92 Meaning of securities
(1) Subject to this section, securities means:
(a) debentures, stocks or bonds issued or proposed to be issued by a government; or
(b) shares in, or debentures of, a body; or
(c) interests in a managed investment scheme; or
(d) units of such shares;
but does not include:
(f) a derivative (as defined in section 761D), other than an option to acquire by way of transfer a security covered by paragraph (a), (b), (c) or (d); or
(g) an excluded security.
Note: A derivative does not include an option to acquire a security by way of issue (see the combined effect of paragraph 761D(3)(c), paragraph 764A(1)(a) and paragraph (5)(d) of this section).
(2) The expression securities, when used in relation to a body, means:
(a) shares in the body; or
(b) debentures of the body; or
(c) interests in a managed investment scheme made available by the body; or
(d) units of such shares;
but does not include:
(e) a derivative (as defined in section 761D), other than an option to acquire by way of transfer a security covered by paragraph (a), (b), (c) or (d); or
(f) an excluded security.
Note: A derivative does not include an option to acquire a security by way of issue (see the note to subsection (1)).
(2A) In Part 1.2A, securities means:
(a) shares in a body; or
(b) debentures of a body; or
(c) interests in a registered scheme or a notified foreign passport fund; or
(d) legal or equitable rights or interests in:
(i) shares; or
(ii) debentures; or
(iii) interests in a registered scheme or a notified foreign passport fund; or
(e) options to acquire (whether by way of issue or transfer) a security covered by paragraph (a), (b), (c) or (d).
It does not cover:
(f) a derivative (as defined in section 761D), other than an option to acquire by way of transfer a security covered by paragraph (a), (b), (c) or (d); or
(g) a market traded option.
Note 1: A derivative does not include an option to acquire a security by way of issue (see the note to subsection (1)).
Note 2: Section 9 defines body.
(3) In Chapters 6 to 6CA (inclusive) and Part 8B.7:
securities means:
(a) shares in a body; or
(b) debentures of a body; or
(c) interests in a registered scheme; or
(d) when used in Chapter 6C—an interest in a listed notified foreign passport fund; or
(e) legal or equitable rights or interests in:
(i) shares; or
(ii) debentures; or
(iii) interests in a registered scheme or interests in a fund mentioned in paragraph (d); or
(f) options to acquire (whether by way of issue or transfer) a security covered by paragraph (a), (b), (c), (d) or (e).
It does not cover:
(g) a derivative (as defined in section 761D), other than an option to acquire by way of transfer a security covered by paragraph (a), (b), (c), (d) or (e); or
(h) a market traded option; or
(i) when used outside Chapter 6C—an interest in a notified foreign passport fund.
Note 1: A derivative does not include an option to acquire a security by way of issue (see the note to subsection (1)).
Note 2: Section 9 defines body.
(4) In Chapter 6D, securities has the meaning given by section 700.
Note: However, in Chapter 6D, securities does not include securities in a CCIV: see section 1240G.
(5) In Chapter 7 (except Part 7.11), security means:
(a) a share in a body; or
(b) a debenture of a body; or
(c) a legal or equitable right or interest in a security covered by paragraph (a) or (b); or
(d) an option to acquire, by way of issue, a security covered by paragraph (a), (b) or (c); or
(e) a right (whether existing or future and whether contingent or not) to acquire, by way of issue, the following under a rights issue:
(i) a security covered by paragraph (a), (b), (c) or (d);
(ii) a managed investment product;
(iii) a foreign passport fund product;
(iv) an interest or right covered by paragraph 764A(ba); or
(f) a CGS depository interest; or
(g) a simple corporate bonds depository interest;
but does not include an excluded security or a foreign passport fund product.
(6) In Part 7.11, security means:
(a) a security as defined in subsection (5); or
(b) a managed investment product; or
(c) a foreign passport fund product.
(7) In Chapter 8, securities means:
(a) a share in a body; or
(b) a debenture of a body; or
(c) an interest in a managed investment scheme; or
(d) a legal or equitable right or interest in a security or interest covered by paragraph (a), (b) or (c); or
(e) an option to acquire, by way of issue, an interest or right covered by paragraph (a), (b), (c) or (d).
95A Meaning of solvent and insolvent
(1) A person is solvent if, and only if, the person is able to pay all the person’s debts, as and when they become due and payable.
(2) A person who is not solvent is insolvent.
Note: A company is taken to be insolvent if the company proposes a restructuring plan to creditors (see subsection 455A(2)).
Division 8—Miscellaneous interpretation rules
100 Address of registered office etc.
(1) Where a provision of this Act requires a notice to be lodged of, or information in an application to specify:
(a) the address of an office, or of a proposed office, of a body corporate or other person; or
(b) a change in the situation of an office of a body corporate or other person;
the notice:
(c) must specify the full address, or the full new address, as the case requires, of the relevant office including, where applicable, the number of the room and of the floor or level of the building on which the office is situated; and
(d) where the notice or application relates to the address or situation of an office of a body corporate and the address specified in accordance with paragraph (a) is the address of premises that are not to be occupied by the body corporate—must include a written statement to the effect that the person who occupies those premises has consented in writing to the address being specified in the notice or application and has not withdrawn that consent.
(2) ASIC may require a person who has lodged a notice or application that includes a statement under paragraph (1)(d) to produce to ASIC the consent referred to in the statement.
100A Operation of certain laws relating to instruments on which stamp duty has not been paid
Nothing in this Act affects the operation of any provision of any law:
(a) relating to the admissibility in evidence, or any other use, in any proceedings, of a document in respect of which any applicable stamp duty has not been paid; or
(b) prohibiting the registration by a company of a transfer of securities if any stamp duty applicable in respect of the transfer has not been paid.
101 Amount of stock representing a number of shares
In relation to a body corporate the whole or a portion of whose share capital consists of stock, a reference to a number of shares (including a number expressed as a percentage) is, in relation to an amount of stock, a reference to the amount of stock that represents that number of shares.
102 Applications to be in writing
An application to ASIC for the issuing of a document or the doing of any other act or thing by ASIC under this Act must be in writing.
Note: For electronic lodgment of documents with ASIC, see section 352.
102B Meaning of in this jurisdiction or elsewhere and outside this jurisdiction
(1) The expression ‘in Australia or elsewhere’, or a similar expression, does not limit the generality of the expression in this jurisdiction or elsewhere or a similar expression.
(2) The expression outside this jurisdiction includes places outside Australia.
102C Meaning of in Australia
In Australia means in Australia (whether in this jurisdiction or not).
Note: This definition is needed if there is a State that is not a referring State. If all the States are referring States, every place in Australia will also be in this jurisdiction.
103 Effect of certain contraventions of this Act
(1) This section has effect except so far as this Act otherwise provides.
(2) An act, transaction, agreement, instrument, matter or thing is not invalid merely because of:
(a) a contravention of section 115, 208, 209, 601CA or 601CD; or
(b) a failure to comply with a requirement of this Act that a person cause a notice, or a copy of a document, to be published.
Note: Section 1101H provides that a failure to comply with requirements of Chapter 7 generally does not affect the validity or enforceability of any transaction, contract or other arrangement.
(4) In this section:
invalid includes void, voidable and unenforceable.
(5) Nothing in this section limits the generality of anything else in it.
104 Effect of provisions empowering a person to require or prohibit conduct
Where, in accordance with a provision of this Act other than the replaceable rules, a person requires another person to do, or prohibits another person from doing, a particular act, that provision is taken to require the other person to comply with the requirement or prohibition, as the case may be.
105 Calculation of time
(1) A period of time referred to in the Corporations legislation, or an instrument made under the Corporations legislation, dating from a given day, act or event, is to be calculated exclusive of such day or of the day of such act or event.
(2) Without limiting subsection (1), in calculating how many days a particular day, act or event is before or after another day, act or event:
(a) the first‑mentioned day, or the day of the first‑mentioned act or event, is to be counted; and
(b) the other day, or the day of the other act or event, is not to be counted.
(3) If:
(a) the Corporations legislation, or an instrument made under the Corporations legislation, requires or allows a thing to be done within a specified period; and
(b) the last day of the period is not a business day in the place where the thing must or may be done;
then the thing may instead be done on the next day that is a business day in that place.
105A When is an electronic communication sent and received
(1) This section applies in relation to an electronic communication unless otherwise agreed between the originator and the addressee of the electronic communication.
(2) An electronic communication is sent:
(a) when the electronic communication leaves an information system under the control of the originator or of the party who sent it on behalf of the originator; or
(b) if the electronic communication has not left an information system under the control of the originator or of the party who sent it on behalf of the originator—when the electronic communication is received by the addressee.
Note 1: Paragraph (b) would apply to a case where the parties exchange electronic communications through the same information system.
Note 2: The meaning of sent in Chapters 6 and 6A is not affected by this section: see the definition of sent in section 9.
(3) Subsection (2) applies even though the place where the information system supporting an electronic address is located may be different from the place where the electronic communication is taken to have been sent under section 105B.
(4) An electronic communication is received when the electronic communication becomes capable of being retrieved by the addressee at the addressee’s nominated electronic address.
(5) It is to be assumed that an electronic communication is capable of being retrieved by the addressee when it reaches the addressee’s nominated electronic address.
(6) Subsection (4) applies even though the place where the information system supporting an electronic address is located may be different from the place where the electronic communication is taken to have been received under section 105B.
105B Place where an electronic communication is sent or received
(1) This section applies in relation to an electronic communication unless otherwise agreed between the originator and the addressee of the electronic communication.
(2) An electronic communication is taken to have been sent:
(a) if the addressee is a company or registered scheme and the originator is a member of the company or registered scheme—from the address of the originator as contained on the register of members of the company or registered scheme at the time the communication is sent; and
(b) if the originator has a registered office and paragraph (a) does not apply—from the registered office of the originator; and
(ba) if the originator has a principal place of business in Australia and neither paragraph (a) nor (b) applies—the address of the originator’s principal place of business in Australia; and
(c) otherwise:
(i) from the most recent physical address nominated by the originator to the addressee; or
(ii) if the originator has not nominated a physical address as mentioned in subparagraph (i)—from the originator’s usual residential address in Australia.
(3) An electronic communication is taken to have been received:
(a) if the originator is a company or registered scheme and the addressee is a member of the company or registered scheme—at the address of the addressee as contained on the register of members of the company or registered scheme at the time the communication is received; and
(b) if the addressee has a registered office and paragraph (a) does not apply—at the registered office of the addressee; and
(ba) if the addressee has a principal place of business in Australia and neither paragraph (a) nor (b) applies—the address of the addressee’s principal place of business in Australia; and
(c) otherwise:
(i) at the most recent physical address nominated by the addressee to the originator; or
(ii) if the addressee has not nominated a physical address as mentioned in subparagraph (i)—at the addressee’s usual residential address in Australia.
107 Notice in relation to top 20 members of a class
For the purposes of subsection 163(3B), section 178B and paragraph 601BC(2)(lc), if 2 or more members in the top 20 members of a class of shares each hold the same number of shares, details of each of those members must be included in any notice given in relation to those provisions.
108 Parts of dollar to be disregarded in determining majority in value of creditors etc.
In determining whether a majority in value of creditors, or a particular proportion in value of creditors, has passed a resolution or done any other act or thing, if a creditor’s debt consists of a number of whole dollars and a part of a dollar, the part of the dollar is to be disregarded.
109 References to persons, things and matters
(1) Except so far as the contrary intention appears, a provision of this Act is to be interpreted in such a manner that any 2 or more references in the provision are capable of having the same referent or referents, or of having a referent or referents in common, as the case requires.
(2) In subsection (1), referent, in relation to a reference in a provision, means:
(a) in so far as the reference is interpreted as being in the singular number—a person to whom, or a thing or matter to which; or
(b) in so far as the reference is interpreted as being in the plural number—any one or 2 or more persons to whom, or of 2 or more things or matters to which;
the reference is taken, in the application of the provision, to refer.
109X Service of documents
(1) For the purposes of any law, a document may be served on a company by:
(a) leaving it at, or posting it to, the company’s registered office; or
(b) delivering a copy of the document personally to a director of the company who resides in Australia or in an external Territory; or
(c) if a liquidator of the company has been appointed—leaving it at, or posting it to, the address of the liquidator’s office in the most recent notice of that address lodged with ASIC; or
(d) if an administrator of the company has been appointed—leaving it at, or posting it to, the address of the administrator in the most recent notice of that address lodged with ASIC; or
(e) if a restructuring practitioner for the company has been appointed—leaving it at, or posting it to, the address of the restructuring practitioner in the most recent notice of that address lodged with ASIC.
(2) For the purposes of any law, a document may be served on a director or company secretary by leaving it at, or posting it to, the alternative address notified to ASIC under subsection 5H(2), 117(2), 205B(1) or (4) or 601BC(2). However, this only applies to service on the director or company secretary:
(a) in their capacity as a director or company secretary; or
(b) for the purposes of a proceeding in respect of conduct they engaged in as a director or company secretary.
(3) Subsections (1) and (2) do not apply to a process, order or document that may be served under section 9 of the Service and Execution of Process Act 1992.
(6) This section does not affect:
(a) any other provision of this Act, or any provision of another law, that permits; or
(b) the power of a court to authorise;
a document to be served in a different way.
(7) This section applies to provisions of a law dealing with service whether it uses the expression “serve” or uses any other similar expression such as “give” or “send”.
Part 1.2AA—Signing and sending documents
Division 1—Technology neutral signing
110 When this Division applies
Signing of documents under this Act
(1) This Division applies to a document (including a deed) required or permitted to be signed by a person under this Act.
Note 1: A document is any record of information: see the definition of document in section 2B of the Acts Interpretation Act 1901.
Note 2: This Division provides that a person may sign a document in physical form or electronic form: see subsection 110A(1).
Signing of documents by or on behalf of company
(2) Without limiting subsection (1), this Division applies to a document (including a deed) to be signed by a person:
(a) exercising the powers of a company under section 126 (making of contracts and execution of documents by an agent); or
(b) under section 127 (execution of documents by a company).
Other ways of signing documents not limited
(4) This Division does not limit the ways in which a person may sign a document (including a deed).
Note: For example, a company’s constitution may set out ways in which a document (including a deed) may be executed or signed in addition to the ways a document (including a deed) may be executed in accordance with sections 126 and 127 or signed in accordance with this Division.
110A Technology neutral signing
(1) A person may sign a document to which this Division applies:
(a) by signing a physical form of the document by hand; or
(b) by signing an electronic form of the document using electronic means;
if the method of signing satisfies subsection (2).
Note: A document (including a deed) may be executed by or on behalf of a company without the use of paper, parchment or vellum: see subsections 126(6) and 127(3A).
(2) A method of signing satisfies this subsection if:
(a) the method identifies the person and indicates the person’s intention in respect of the information recorded in the document; and
(b) the method was either:
(i) as reliable as appropriate for the purpose for which the information was recorded, in light of all the circumstances, including any relevant agreement; or
(ii) proven in fact to have fulfilled the functions described in paragraph (a), by itself or together with further evidence.
What information the intention must cover
(3) For the purposes of paragraph (2)(a), the person is not required to indicate an intention in relation to:
(a) any material identifying another person signing the document or indicating another person’s intention in respect of the information recorded; or
(b) the signature of another person signing the document; or
(c) if a common seal is fixed to the document—the seal; or
(d) any immaterial information in a form of the document generated for the purposes of signing and which arises in the normal course of communication, storage or display.
Note: This subsection allows minor differences that arise from the way a document is signed to be disregarded. For example, a person can sign to witness the fixing of a common seal to a document, and it is not necessary for the signed document to include the common seal (as long as a method is used to indicate that the person observed the fixing of the seal, as required by paragraph 127(2A)(c)).
Avoidance of doubt
(4) To avoid doubt, this section does not require:
(a) a person to sign the same form of the document as another person; or
(b) a person to sign the same page of the document as another person; or
(c) a person to use the same method to sign the document as another person; or
(d) all the information recorded in the document to be included in the form of the document signed by a person as mentioned in paragraph (1)(a) or (b).
Note: For example, a company may execute a document by one director signing a physical form of the document by hand, and another director signing an electronic form of the document by electronic means.
Persons signing in different capacities
(5) For the purposes of this section, a person who is to sign a document in more than one capacity:
(a) is treated as a different person in each such capacity they sign the document; and
(b) may sign the document in some or all of those capacities by signing the document once, if the document:
(i) requires or permits the person to do so; and
(ii) states the capacities in which the person is signing the document.
Note: Example 1: If a signature block in a document requires or permits a person to sign once as the sole director and sole company secretary of a company, the person may sign the document as the sole director and sole company secretary by signing that signature block.
Note: Example 2: If a signature block in a document requires or permits a person to sign once on behalf of 2 companies as an agent for both those companies, the person may sign the document as an agent for both those companies by signing that signature block.
Note: Example 3: A person who is to sign a document in their capacity as the director of one company and their capacity as the company secretary of another company must sign the document twice if:
(a) one signature block in the document requires or permits the person to sign as the director of the first company; and
(b) another signature block in the document requires or permits the person to sign as the company secretary of the second company.
110B Lodgement of documents
If:
(a) under this Act, the signature of a person is required or permitted on a document; and
(b) the person signs the document in accordance with section 110A; and
(c) the person or another person submits the document for lodgement; and
(d) the signature complies with any requirements relating to that lodgement under this Act or an instrument made under this Act;
ASIC or the Registrar (as the case requires) must not refuse to receive or register the document on the basis that the document has not been signed.
Note: This section does not prevent ASIC or the Registrar from refusing to receive or register the document on any other basis. For example, if the lodgement requirements mentioned in paragraph (d) (such as those under Chapter 2P) are not met, ASIC or the Registrar may refuse to receive or register the document.
Division 2—Technology neutral sending of documents, and related matters
110C Documents to which this Division applies
Sending documents
(1) This Division applies to any document covered by subsection (3) or (4) that is required or permitted under this Act to be sent by a person or entity (the sender) to another person or entity (the recipient).
(2) A reference in subsection (1) to an entity includes a reference to a disclosing entity.
Covered documents
(3) This subsection covers a document that is required or permitted be sent by the sender to the recipient under:
(a) this Chapter; or
(b) Chapters 2A to 2M; or
(c) Chapters 5 to 5D; or
(d) Chapter 6, 6A, 6B or 6C; or
(da) Division 3 of Part 7.7A; or
(e) Chapter 8A or 8B; or
(f) Chapter 9; or
(g) Schedule 2; or
(h) any other provision of this Act, to the extent that it relates to the provisions mentioned in paragraphs (a) to (g).
(4) This subsection covers a document that is in a class of documents specified in regulations made for the purposes of this subsection.
(5) However, this Division does not apply to a document that is required or permitted under this Act to be sent by or to ASIC, the Registrar or the Takeovers Panel.
References to sending documents
(6) This Division applies to a requirement or permission to send a document, whether the expression send, give, serve or dispatch, or any other expression, is used.
(7) To avoid doubt, for the purposes of this Division, a document is not a document that is required or permitted under this Act to be sent merely because section 109X, 601CX or 1200R provides that the document may be served in a particular way.
110D Technology neutral sending of documents
(1) The document may be sent to the recipient:
(a) by sending the document in a physical form; or
(b) if subsection (2) is satisfied—by sending the recipient sufficient information in physical form to allow the recipient to access the document electronically; or
(c) if subsection (2) is satisfied—by sending the document in electronic form by means of an electronic communication; or
(d) if subsection (2) is satisfied—by sending the recipient sufficient information in electronic form, by means of an electronic communication, to allow the recipient to access the document electronically; or
(e) if subsection (2) is satisfied and the document is covered by subsection (3)—by making the document readily available in electronic form on a website.
Note: A requirement for the sender to send a document to which this Division applies is met if the document is sent in accordance with this section and in accordance with any timing requirements under this Act.
(2) This subsection is satisfied if, at the time the document is sent, it is reasonable to expect that the document would be readily accessible so as to be useable for subsequent reference.
Documents that may be sent by publication on a website
(3) This subsection covers a document that:
(a) is a report mentioned in section 314 or 314A (which deal with annual financial reporting to members); or
(b) is in a class of documents specified in regulations made for the purpose of this paragraph.
Other ways of sending documents not limited
(4) Subsection (1) does not limit the ways in which a person may send a document.
Note: For example, a company’s constitution may set out other ways in which a document may be sent.
Address for sending document
(5) Paragraphs (1)(a) and (b) apply only if:
(a) where the recipient is covered by subsection (7)—the sending of the document mentioned in paragraph (1)(a), or the sending of the information mentioned in paragraph (1)(b), is to an address known to the sender because the recipient is a member or holder of securities mentioned in whichever of paragraphs (7)(a) to (f) applies; or
(b) the recipient is not covered by subsection (7).
(6) Paragraphs (1)(c) and (d) apply only if:
(a) where the recipient is covered by subsection (7):
(i) the sending of the document mentioned in paragraph (1)(c), or the sending of the information mentioned in paragraph (1)(d), is to an address known to the sender because the recipient is a member or holder of securities mentioned in whichever of paragraphs (7)(a) to (f) applies; and
(ii) that address is a nominated electronic address of the recipient; or
(b) where the recipient is not covered by subsection (7)—the sending of the document mentioned in paragraph (1)(c), or the sending of the information mentioned in paragraph (1)(d), is to a nominated electronic address of the recipient.
(7) For the purposes of subsections (5) and (6), this subsection covers the recipient if:
(a) the recipient is a member of the sender; or
(b) where the sender is the responsible entity of a registered scheme—the recipient is a member of the scheme; or
(c) where the sender is the corporate director of a CCIV—the recipient is a member of the CCIV; or
(d) where the sender is a disclosing entity mentioned in subsection 111AC(2)—the recipient is a member of the managed investment scheme mentioned in that subsection; or
(e) where the sender is the operator of a notified foreign passport fund—the recipient is an Australian member of the fund; or
(f) where the sender is the bidder under a takeover bid—the recipient is a holder of securities in the target for the bid.
110E Election to be sent documents in physical form or electronic form, or not to be sent documents
(1) This section applies if:
(a) where the sender is a company—the recipient is a member of the company; or
(b) where the sender is the responsible entity of a registered scheme—the recipient is a member of the scheme; or
(ba) where the sender is the corporate director of a CCIV—the recipient is a member of the CCIV; or
(c) where the sender is a disclosing entity mentioned in subsection 111AC(1)—the recipient is a member of the disclosing entity; or
(d) where the sender is a disclosing entity mentioned in subsection 111AC(2)—the recipient is a member of the managed investment scheme mentioned in that subsection; or
(e) where the sender is the operator of a notified foreign passport fund—the recipient is an Australian member of the fund; or
(f) where the sender is the bidder under a takeover bid—the recipient is a holder of securities in the target for the bid; or
(g) the recipient is of a kind specified in regulations made for the purposes of this paragraph.
Election to be sent documents in physical form or electronic form
(2) The recipient may elect to be sent documents to which this Division applies:
(a) in physical form; or
(b) in electronic form;
by notifying the sender (whether or not in writing) of the election.
Note 1: Section 110F requires the sender to comply with an election to be sent documents to which this Division applies in a particular form.
Note 2: Regardless of any election under this section, if the sender is required under this Act to send a document to which this Division applies to the recipient, that requirement is met if the document is sent in accordance with section 110D and in accordance with any timing requirements under this Act.
(3) An election under subsection (2) may be made in relation to:
(a) all documents to which this Division applies; or
(b) a specified class or classes of documents to which this Division applies.
Note: The documents in relation to which an election may be made include, for example, documents required or permitted to be sent under this Act in relation to a takeover bid: see section 648CB.
Election not to be sent documents
(4) The recipient may elect not to be sent documents covered by subsection (5) by notifying the sender (whether or not in writing) of the election.
(5) This subsection covers the following documents:
(a) reports mentioned in section 314 or 314A (which deal with annual financial reporting to members);
(b) documents to which this Division applies that are prescribed by the regulations for the purposes of this paragraph.
(6) An election under subsection (4) may be made in relation to:
(a) all of the documents covered by subsection (5); or
(b) a specified class or classes of documents covered by subsection (5).
When an election is in force
(7) An election under subsection (2) or (4) is in force in relation to those documents during the period:
(a) beginning on:
(i) unless subparagraph (ii) or (iii) applies—the first business day after the day on which the sender receives notice (whether or not in writing) of the election from the recipient; or
(ii) unless subparagraph (iii) applies, where the recipient, in notifying the sender of the election, specifies a later day—the first business day after that later day; or
(iii) if regulations made for the purposes of this subparagraph specify another day—that other day; and
(b) ending on:
(i) unless subparagraph (ii) or (iii) applies—the first business day after the day on which the sender receives notice (whether or not in writing) from the recipient withdrawing the election; or
(ii) unless subparagraph (iii) applies, where the recipient, in notifying the sender of the withdrawal, specifies a later day—the first business day after that later day; or
(iii) if regulations made for the purposes of this subparagraph specify another day—that other day.
(8) However, an election under subsection (2) to be sent documents to which this Division applies in physical form is not in force in relation to a document if:
(a) the sender is required or permitted under this Act to send the document by a particular day; and
(b) the sender receives notice of the election from the recipient on or after the day that is 30 days immediately before the day mentioned in paragraph (a) of this subsection.
110F Failure to comply with member’s election to be sent document in particular form
(1) This section applies if:
(a) an election by the recipient to be sent documents by the sender in physical form or electronic form is in force in relation to a document under section 110E; and
(b) the sender sends the document to the recipient in a manner that does not comply with the election (otherwise than by way of giving it to the recipient personally); and
(c) no determination is in force under section 1345 allowing the document to be sent by the sender in that manner (see subsections 1345(2) and (3A)).
(2) The sender contravenes this subsection if the sender does not take reasonable steps to send the document in a manner that complies with the election:
(a) unless paragraph (b) applies—before, or within a reasonable time after, sending the document as mentioned in paragraph (1)(b); or
(b) if the sender is required or permitted under this Act to send the document to the recipient by a particular time—by that time.
(3) A person commits an offence of strict liability if the person contravenes subsection (2).
(4) For the purposes of this section, the following manners of sending the document comply with the election:
(a) for an election to be sent documents in physical form—the manner mentioned in paragraph 110D(1)(a);
(b) for an election to be sent documents in electronic form—a manner mentioned in paragraph 110D(1)(c) or (d).
No current address for sending documents in elected manner
(4A) Subsection (2) does not apply if:
(a) the sender reasonably believes that none of the addresses (including any electronic addresses) for the recipient that are:
(i) known to the sender; and
(ii) where the recipient is covered by subsection (4B)—so known because the recipient is a member or holder of securities mentioned in whichever of paragraphs (4B)(a) to (f) applies;
are a current address for the recipient to be sent the document in a manner that complies with the election; and
(b) the sender sends the document to the recipient in a manner that does not comply with the election, as mentioned in paragraph (1)(b), other than in the manner mentioned in paragraph 110D(1)(e); and
(c) if the document is a report mentioned in section 314A (annual reporting by notified foreign passport funds)—the requirement (if applicable) in paragraph 314A(4)(b) (about sending report in elected language) is satisfied.
Note: A defendant bears an evidential burden in relation to the matter in subsection (4A), see subsection 13.3(3) of the Criminal Code.
(4B) For the purposes of subparagraph (4A)(a)(ii), this subsection covers the recipient if:
(a) the recipient is a member of the sender; or
(b) where the sender is the responsible entity of a registered scheme—the recipient is a member of the scheme; or
(c) where the sender is the corporate director of a CCIV—the recipient is a member of the CCIV; or
(d) where the sender is a disclosing entity mentioned in subsection 111AC(2)—the recipient is a member of the managed investment scheme mentioned in that subsection; or
(e) where the sender is the operator of a notified foreign passport fund—the recipient is an Australian member of the fund; or
(f) where the sender is the bidder under a takeover bid—the recipient is a holder of securities in the target for the bid.
Effect of contravention
(5) A contravention of subsection (2) by the sender does not affect the validity of any act, transaction, agreement, instrument, resolution or other thing.
Note: In particular, the validity of the sending of the document as mentioned in paragraph (1)(b) is not affected. Regardless of any contravention of subsection (2), if the sender is required under another provision of this Act to send a document to which this Division applies, that requirement is met if the document is sent in accordance with section 110D and in accordance with any timing requirements under that other provision.
110G Failure to comply with member’s election not to be sent documents
(1) This section applies if:
(a) an election by the recipient not to be sent documents from the sender is in force in relation to a document under section 110E; and
(b) the sender sends the document to the recipient, other than in the manner mentioned in paragraph 110D(1)(e).
(2) The sender contravenes this subsection if the sender did not take reasonable steps to avoid sending the document as mentioned in paragraph (1)(b).
(3) A person commits an offence of strict liability if the person contravenes subsection (2).
110H Effect of election not to be sent documents
(1) This section applies if:
(a) the sender is required or permitted to send a document to which this Division applies to the recipient in accordance with a provision of this Act (other than this Division); and
(b) an election under section 110E not to be sent documents is in force in relation to the document.
(2) For the purposes of the provision mentioned in paragraph (1)(a) of this section:
(a) the sender is taken to send the document, as required or permitted in accordance with that provision, at the later of:
(i) the time the recipient’s election mentioned in paragraph (1)(b) came into force; and
(ii) the earliest time at which the sender could have sent the document in accordance with the provision mentioned in paragraph (1)(a); and
(b) the recipient is taken to receive the document when it is taken to be sent under paragraph (a) of this subsection.
110J Ad hoc requests to be sent documents in a particular form
(1) This section applies if:
(a) the recipient is covered by subsection (3); and
(b) the recipient requests (whether or not in writing) the sender to send a particular document to which this Division applies to the recipient in physical form, or in electronic form; and
(c) either:
(i) the sender is required or permitted under this Act to send the document to the recipient by a particular time; or
(ii) if subparagraph (i) does not apply—the sender has sent the document to the recipient in a manner that would not comply with the request; and
(d) the request is made:
(i) if subparagraph (c)(i) applies—within a reasonable time before the particular time mentioned in that subparagraph; or
(ii) if subparagraph (c)(ii) applies—within a reasonable time after the sender sends the document as mentioned in that subparagraph; and
(e) at the time the request is made:
(i) the sender has not yet sent the document to the recipient in a manner that would comply with the request; and
(ii) no determination is in force under section 1345 allowing the document to be sent by the sender in a manner that would not comply with the request (see subsections 1345(2) and (3A)).
(2) The sender must take reasonable steps to send the document to the recipient in a manner that complies with the request by the later of the following:
(a) 3 business days after the day on which the sender received the request;
(b) if the sender is required or permitted under this Act to send the document by a particular time—that time.
Note: A determination under section 1345 may extend the time within which a document is required to be sent by the sender to the recipient.
(3) The recipient is covered by this subsection if:
(a) where the sender is a company—the recipient is a member of the company; or
(b) where the sender is the responsible entity of a registered scheme—the recipient is a member of the scheme; or
(ba) where the sender is the corporate director of a CCIV—the recipient is a member of the CCIV; or
(c) where the sender is a disclosing entity mentioned in subsection 111AC(1)—the recipient is a member of the disclosing entity; or
(d) where the sender is a disclosing entity mentioned in subsection 111AC(2)—the recipient is a member of the managed investment scheme mentioned in that subsection; or
(e) where the sender is the operator of a notified foreign passport fund—the recipient is an Australian member of the fund; or
(f) where the sender is the bidder under a takeover bid—the recipient is a holder of securities in the target for the bid; or
(g) the recipient is of a kind specified in regulations made for the purposes of this paragraph.
(4) For the purposes of subparagraph (1)(e)(i) and subsection (2), a physical form of the document is taken to have been sent to the recipient:
(a) when the document is posted; or
(b) if the document is sent by courier—when the document is given to the courier.
(5) An offence based on subsection (2) is an offence of strict liability.
(6) For the purposes of this section, the following manners of sending the document comply with the request:
(a) for a request to be sent the document in physical form—the manner mentioned in paragraph 110D(1)(a);
(b) for a request to be sent the document in electronic form—a manner mentioned in paragraph 110D(1)(c) or (d).
110JA Sender does not need to send document if member uncontactable
Sender taken to send document
(1) This section applies if:
(a) the sender is required or permitted to send a document to which this Division applies to the recipient under a provision of this Act; and
(b) the conditions in subsection (3) are satisfied; and
(c) any of the following apply:
(i) where the sender is a company—the recipient is a member of the company;
(ii) where the sender is the responsible entity of a registered scheme—the recipient is a member of the scheme;
(iii) where the sender is the corporate director of a CCIV—the recipient is a member of the CCIV;
(iv) where the sender is a disclosing entity mentioned in subsection 111AC(1)—the recipient is a member of the disclosing entity;
(v) where the sender is a disclosing entity mentioned in subsection 111AC(2)—the recipient is a member of the managed investment scheme mentioned in that subsection; and
(d) the sender sends the document in accordance with the provision mentioned in paragraph (a) to one or more other members of a kind mentioned in whichever of subparagraphs (c)(i) to (v) applies.
(2) For the purposes of the provision mentioned in paragraph (1)(a):
(a) the sender is taken to send the document, as required or permitted in accordance with that provision, at the later of:
(i) the time all of the conditions in paragraphs (3)(a), (b) and (c) are first satisfied; and
(ii) the time the sender first sends the document to one or more other members as mentioned in paragraph (1)(d); and
(b) the recipient is taken to receive the document when it is taken to be sent under paragraph (a) of this subsection.
Conditions for relief
(3) For the purposes of paragraph (1)(b), the conditions are that:
(a) the sender has received notification in relation to each of the following addresses that indicates it is not a current address for the recipient:
(i) if the sender is a company, responsible entity of a registered scheme or corporate director of a CCIV—the recipient’s address in the company, scheme or CCIV’s register of members;
(ii) any other addresses for the recipient, including any electronic addresses for receiving electronic communications, known to the sender because the recipient is a member mentioned in whichever of subparagraphs (1)(c)(i) to (v) applies; and
(b) the sender reasonably believes that none of those addresses are a current address for the recipient; and
(c) the sender is unable, after taking reasonable steps, to ascertain a current address for the recipient.
(4) For the purposes of paragraph (3)(c), the sender has not taken reasonable steps unless the sender has attempted to communicate with the recipient using all contact details for the recipient that are known to the sender because the recipient is a member mentioned in whichever of subparagraphs (1)(c)(i) to (v) applies.
Sender must send notice for relief to continue to apply after period of 18 months
(5) Subsection (6) applies if the period of 18 months starting on the day all of the conditions in paragraphs (3)(a), (b) and (c) are first satisfied has ended.
(6) Subsection (2) does not apply to the sending of a document mentioned in paragraph (1)(d) if, within the last 12 months of that period, the sender did not take reasonable steps to advise the recipient that:
(a) the sending of documents to which this Division applies to the recipient by the sender is suspended; and
(b) although that sending has been suspended, it will be resumed if the recipient provides a current address (which may be an electronic address) for being sent those documents.
110K Obligation to give notice of members’ rights
(1) A public company must:
(a) send the members of the company, at least once in each financial year, a notice setting out the matters mentioned in subsection (4); or
(b) make such a notice readily available on a website.
(2) The responsible entity of a registered scheme must:
(a) send the members of the scheme, at least once in each financial year, a notice setting out the matters mentioned in subsection (4); or
(b) make such a notice readily available on a website.
(2A) A CCIV must:
(a) send the members of the CCIV, at least once in each financial year, a notice setting out the matters mentioned in subsection (4); or
(b) make such a notice readily available on a website.
(3) A disclosing entity must:
(a) send the members mentioned in subsection (3A) in relation to the disclosing entity, at least once in each financial year, a notice setting out the matters mentioned in subsection (4); or
(b) make such a notice readily available on a website.
(3A) For the purposes of paragraph (3)(a), the members are:
(a) for a disclosing entity mentioned in subsection 111AC(1)—the members of the disclosing entity; and
(b) for a disclosing entity mentioned in subsection 111AC(2)—the members of the managed investment scheme mentioned in that subsection.
(3B) The operator of a notified foreign passport fund must:
(a) send the Australian members of the fund, at least once in each financial year, a notice setting out the matters mentioned in subsection (4); or
(b) make such a notice readily available on a website.
(4) For the purposes of subsections (1), (2), (2A) and (3), the matters required to be set out in the notice are:
(a) members’ rights to elect under section 110E, and to request under section 110J, to be sent documents in physical form; and
(b) members’ rights to elect under section 110E, and to request under section 110J, to be sent documents in electronic form; and
(c) members’ rights to elect under section 110E not to be sent documents covered by subsection 110E(5); and
(d) for the operator of a notified foreign passport fund—Australian members’ rights to elect to be sent reports mentioned in section 314A in English or in an official language of the home economy of the fund (see subsections 314A(3) and (4)).
(5) An offence based on subsection (1), (2), (2A) or (3) is an offence of strict liability.
Part 1.2A—Disclosing entities
Division 1—Object of Part
111AA Object of Part
The object of this Part is:
(a) to define disclosing entity and other key terms relevant to disclosing entities (this is done in Division 2); and
(b) to outline the significance for this Act of being a disclosing entity (this is done in Division 3); and
(c) to provide for exemptions from, and modifications of, the special requirements imposed by this Act in relation to disclosing entities (this is done in Division 4).
Division 2—Meaning of disclosing entity and related terms
111AC Meaning of disclosing entity
(1) If any securities of a body (except interests in a managed investment scheme) are ED securities, the body is a disclosing entity for the purposes of this Act.
(2) If any interests in a managed investment scheme are ED securities, the undertaking to which the interests relate is a disclosing entity for the purposes of this Act.
111AD Meaning of ED securities
(1) Securities of a body are ED securities (short for “enhanced disclosure securities”) for the purposes of this Act if, and only if:
(a) they are ED securities under section 111AE, 111AF, 111AFA, 111AFB, 111AG or 111AI; and
(b) they are not declared under section 111AJ not to be ED securities.
(2) For the purposes of sections 111AE, 111AF, 111AG and 111AI, a class of shares or debentures is taken to include units of shares or debentures in that class.
111AE Securities of bodies or undertakings included in a licensed market’s official list
(1) If:
(a) a body corporate (other than a notified foreign passport fund) is, with its agreement, consent or acquiescence, included in the official list of a declared financial market; and
(b) the market’s listing rules (according to their terms) apply to the body in relation to a class (which may be some or all) of securities issued by the body;
securities issued by the body in that class are ED securities, and that market is a listing market in relation to that body.
(1A) If:
(a) an undertaking to which interests in a registered scheme relates is, with the agreement, consent or acquiescence of the responsible entity, included in the official list of a declared financial market; and
(b) the market’s listing rules (according to their terms) apply to the undertaking in relation to a class (which may be some or all) of managed investment products that relate to the scheme;
managed investment products in that class that relate to the scheme are ED securities, and that market is a listing market in relation to the undertaking.
(1B) If:
(a) an undertaking to which interests in a notified foreign passport fund relate is, with the agreement, consent or acquiescence of the operator of the fund, included in the official list of a declared financial market; and
(b) the market’s listing rules (according to their terms) apply to the fund in relation to a class (which may be some or all) of foreign passport fund products that relate to the fund;
foreign passport fund products in that class that relate to the fund are ED securities, and that market is a listing market in relation to the fund.
(1C) If:
(a) subsection (1) does not apply to securities issued by a CCIV; and
(b) a sub‑fund of the CCIV is, with the agreement, consent or acquiescence of the CCIV, included in the official list of a declared financial market; and
(c) the market’s listing rules (according to their terms) apply to the sub‑fund in relation to a class of securities issued by the CCIV that are referable to the sub‑fund;
securities in that class that are referable to the sub‑fund are ED securities, and that market is a listing market in relation to the CCIV.
Note: Subsection (1) may apply to a CCIV instead of this subsection if the CCIV, and not a sub‑fund, is included in the official list of a declared financial market.
(2) Subsections (1) and (1A) do not apply to securities of a body if:
(a) the body is a public authority of the Commonwealth or an instrumentality or agency of the Crown in right of the Commonwealth; and
(b) the only securities issued by the body that would otherwise be ED securities because of subsection (1) or (1A) are debentures; and
(c) both the repayment of principal, and the payment of interest, in respect of those debentures is guaranteed by the Commonwealth.
(3) Subsections (1) and (1A) do not apply to securities of a body that is:
(a) a public authority of a State or Territory; or
(b) an instrumentality or agency of the Crown in right of a State or Territory.
111AF Securities (except debentures and managed investment products) held by 100 or more persons
(1) Securities (except debentures or managed investment products) in a class of securities of a body are ED securities if:
(a) a disclosure document in relation to securities in that class has been lodged with ASIC under Chapter 6D; and
(b) securities in that class have been issued pursuant to the disclosure document; and
(c) after an issue of securities in that class pursuant to the disclosure document, 100 or more persons held securities in that class; and
(d) securities in that class have been held by 100 or more persons at all times since the issue of securities referred to in paragraph (c).
(2) Securities (except debentures and managed investment products) in a class of securities of a body are ED securities if securities in that class have been issued under a recognised offer and the offeror’s records indicate that 100 or more people who reside in this jurisdiction have held securities in that class (whether or not as a result of the recognised offer) at all times since the issue.
(3) Securities (except debentures) in a class of securities of a CCIV are ED securities if 100 or more people hold securities in that class as a result of offers that gave rise to obligations to give Product Disclosure Statements (whether or not all in the same terms) under Chapter 7 (as that Chapter applies to those securities under Division 4 of Part 8B.7).
111AFA Managed investment products held by 100 or more persons
(1) Managed investment products in a class of managed investment products issued by a body are ED securities if 100 or more people hold managed investment products in that class as a result of offers that gave rise to obligations to give Product Disclosure Statements (whether or not all in the same terms) under Chapter 7.
(2) Interests in a class of interests in a managed investment scheme issued by a body are ED securities if interests in that class have been issued under a recognised offer and the offeror’s records indicate that 100 or more people who reside in this jurisdiction have held interests in that class (whether or not as a result of the recognised offer) at all times since the issue.
111AFB Foreign passport fund products held by 100 or more persons
Foreign passport fund products in a class of foreign passport fund products issued by a body are ED securities if 100 or more people who reside in this jurisdiction hold foreign passport fund products in that class.
111AG Securities issued as consideration for an acquisition under an off‑market takeover bid or Part 5.1 compromise or arrangement
(1) Securities (except debentures) in a class of securities of a body are ED securities if:
(a) securities in that class have been issued by the body as consideration for offers under an off‑market bid; and
(b) after an issue of securities in that class under the off‑market bid, 100 or more persons held securities in that class; and
(c) securities in that class have been held by 100 or more persons at all times since the issue of securities referred to in paragraph (b).
(2) Securities in a class of securities of a body are ED securities if:
(a) securities in that class have been issued as consideration for the acquisition or cancellation of securities of another body pursuant to a compromise or arrangement under Part 5.1; and
(b) securities in that class, or those or any other securities of the other body, were ED securities immediately before securities in that class were first issued pursuant to the compromise or arrangement; and
(c) after an issue of securities in that class pursuant to the compromise or arrangement, 100 or more persons held securities in that class; and
(d) securities in that class have been held by 100 or more persons at all times since the issue of securities referred to in paragraph (c).
111AH When a person holds securities for the purposes of sections 111AF, 111AFA, 111AFB and 111AG
(1) For the purposes of sections 111AF, 111AFA and 111AG, a person holds securities if, and only if:
(a) the person is registered as the holder of the securities in a register under section 169, 170, 171 or 601CZB; or
(b) the person is entitled to be so registered.
(1A) For the purposes of section 111AFB, a person holds securities in a notified foreign passport fund if, and only if:
(a) the person is registered as the holder of securities in the fund on a register maintained by the operator of the fund under the law of the home economy for the fund; or
(b) the person is entitled to be so registered.
(2) For the purposes of sections 111AF, 111AFA, 111AFB and 111AG, joint holders of securities count as one person.
111AI Debentures
Debentures of a borrower are ED securities if:
(a) section 283AA requires the borrower to appoint a trustee; or
(b) section 283AA does not apply to the borrower only because the offer of the debentures to which section 283AA would otherwise have applied is a recognised offer.
111AJ Regulations may declare securities not to be ED securities
(1) The regulations may declare specified securities of bodies not to be ED securities.
(2) Regulations in force for the purposes of subsection (1) have effect accordingly, despite anything else in this Division.
111AK ED securities of a disclosing entity
For the purposes of this Act, ED securities because of which (having regard to section 111AC) a disclosing entity is such an entity are ED securities of the entity.
111AL Meaning of listed disclosing entity
A disclosing entity is a listed disclosing entity if all or any ED securities of the entity are quoted ED securities.
111AM Meaning of quoted ED securities
For the purposes of this Act, ED securities are quoted ED securities if they are ED securities because of section 111AE.
Division 3—Significance of being a disclosing entity
111AN Division contains outline of significance of being a disclosing entity
This Division outlines the significance for this Act of being a disclosing entity.
111ANA Requirements relating to remuneration recommendations in relation to key management personnel
There are special requirements in Part 2D.8 for remuneration recommendations in relation to key management personnel for disclosing entities that are companies.
111AO Accounting requirements
A disclosing entity incorporated or formed in Australia has to prepare financial statements and reports for half‑years as well as full financial years. These requirements are set out in Chapter 2M.
111AP Continuous disclosure requirements
(1) A disclosing entity is subject to the continuous disclosure requirements of sections 674, 674A, 675 and 675A.
111AQ Prospectus relief
Section 713 applies (subject to certain qualifications) to prospectuses for quoted ED securities of disclosing entities. The section’s requirements for the content of prospectuses are less comprehensive than those that apply to other prospectuses under section 710.
111AQA Product Disclosure Statement relief
Obligations that apply to disclosing entities can be taken into account in deciding what information should be included in a Product Disclosure Statement—see section 1013FA and paragraph 1013F(2)(d).
Division 4—Exemptions and modifications
111AR Meaning of disclosing entity provisions
(1) The disclosing entity provisions are the provisions of the following:
(a) Chapter 2M as it applies to disclosing entities;
(d) sections 674, 674A, 675 and 675A;
(e) Division 4 of Part 8B.4 as it applies to disclosing entities;
(f) Division 2 of Part 8B.7 as it applies to disclosing entities.
(2) A reference in subsection (1) to a Part, Division or section includes a reference to regulations in force for the purposes of the Part, Division or section.
111AS Exemptions by regulations
(1) The regulations may exempt specified persons from all or specified disclosing entity provisions:
(a) either generally or as otherwise specified; and
(b) either unconditionally or subject to specified conditions.
(2) Without limiting subsection (1), an exemption may relate to specified securities.
111AT Exemptions by ASIC
(1) ASIC may, by writing, exempt specified persons from all or specified disclosing entity provisions:
(a) either generally or as otherwise specified; and
(b) either unconditionally or subject to specified conditions.
(2) Without limiting subsection (1), an exemption may relate to specified securities.
(3) ASIC must cause a copy of an exemption to be published in the Gazette.
111AU Enforcing conditions of exemptions
(1) A person must not intentionally or recklessly contravene a condition to which an exemption under section 111AS or 111AT is subject.
(2) If a person contravenes such a condition, the Court may, on the application of ASIC, order the person to comply with the condition.
111AV Modifications by regulations
(1) The regulations may make modifications of all or specified disclosing entity provisions.
(2) Without limiting subsection (1), a modification may relate to specified securities.
111AW Exemptions and modifications have effect
Exemptions and modifications under this Division have effect accordingly.
111AX Effect of Division
Nothing in this Division limits, or is limited by, any other exemption or modification power (for example, section 340, 340A, 341, 341A or 741).
Part 1.4—Technical provisions about aids for readers
111J Small business guide
(1) If, because of:
(a) regulations made under this Act; or
(b) instruments issued by ASIC under this Act;
the small business guide as set out in Part 1.5 has become out of date, the regulations may set out modifications of the guide that would bring it up to date. The guide then is to be read as if it were so modified.
(2) The small business guide is divided into sections (numbered 1, 2, 3…) and the sections are divided into paragraphs (numbered 1.1, 1.2, 1.3…). For example, a reference in the guide to 3.1 is a reference to paragraph 3.1 of the guide.
Part 1.5—Small business guide
This guide summarises the main rules in the Corporations Act (the Corporations Act 2001) that apply to proprietary companies limited by shares—the most common type of company used by small business. The guide gives a general overview of the Corporations Act as it applies to those companies and directs readers to the operative provisions in the Corporations Act.
The notes in square brackets at the end of paragraphs in the guide indicate the main provisions of the Corporations Act, the regulations made under the Corporations Act, and ASIC Practice Notes that are relevant to the information in the paragraphs.
Other Commonwealth, State and Territory laws also impose obligations on proprietary companies and their operators.
1 What registration means
1.1 Separate legal entity that has its own powers
As far as the law is concerned, a company has a separate legal existence that is distinct from that of its owners, managers, operators, employees and agents. A company has its own property, its own rights and its own obligations. A company’s money and other assets belong to the company and must be used for the company’s purposes.
A company has the powers of an individual, including the powers to:
• own and dispose of property and other assets
• enter into contracts
• sue and be sued.
Once a company is registered, its separate legal status, property, rights and liabilities continue until ASIC (Australian Securities and Investments Commission) deregisters the company.
[sections 119, 124—125, 601AA—601AD]
1.2 Limited liability of shareholders
Shareholders of a company are not liable (in their capacity as shareholders) for the company’s debts. As shareholders, their only obligation is to pay the company any amount unpaid on their shares if they are called upon to do so. However, particularly if a shareholder is also a director, this limitation may be affected by other laws and the commercial practices discussed in 1.3 and 1.4.
[section 516]
1.3 Director’s liability for company’s debts
A director of a company may be liable for debts incurred by the company at a time when the company itself is unable to pay those debts as they fall due.
A director of a company may be liable to compensate the company for any losses the company suffers from a breach of certain of the director’s duties to the company (see 5.3).
In addition to having liability for the company’s debts or to pay compensation to the company, a director may also be subject to a civil penalty.
If a company holds property on trust, a director of the company may be liable in some circumstances for liabilities incurred by the company as trustee.
[sections 197, 344, 588G, 588J, 588M, 1317H]
1.4 Director’s liability as guarantor/security over personal assets
As a matter of commercial practice, a bank, trade creditor or anyone else providing finance or credit to a company may ask a director of the company:
• for a personal guarantee of the company’s liabilities; and
• for some form of security over their house or personal assets to secure the performance by the company of its obligations.
The director of a company may, for example, be asked by a bank to give a mortgage over their house to secure the company’s repayment of a loan. If the company does not repay the loan as agreed with the bank, the director may lose the house.
1.5 Continuous existence
A company continues to exist even if 1 or more of its shareholders or directors sells their shares, dies or leaves the company. If a company has only 1 shareholder who is also the only director of the company and that person dies, their personal representative is able to ensure that the company continues to operate.
[sections 119, 224A]
1.6 Rules for the internal management of a company
The Corporations Act contains a basic set of rules for the internal management of a company (appointments, meetings etc.).
Some of these rules are mandatory for all companies. There are a few special rules for single shareholder/single director companies.
Other internal management rules in the Corporations Act are replaceable rules. The replaceable rules do not apply to:
• a single shareholder/single director company; or
• a company that had a constitution before the introduction of the replaceable rules regime and has not repealed it.
A company does not need to have a separate constitution of its own; it can simply take advantage of the rules in the Corporations Act. The company will need a constitution only if it wants to displace, modify or add to the replaceable rules.
[sections 134‑141 and 198E]
1.7 How a company acts
A company does not have a physical existence. It must act through other people.
Individual directors, the company secretary, company employees or agents may be authorised to enter into contracts that bind the company (see 7).
In some circumstances, a company will be bound by something done by another person (see 1.8).
1.8 Directors
The directors of a company are responsible for managing the company’s business. It is a replaceable rule (see 1.6) that generally the directors may exercise all the powers of the company except a power that the Corporations Act, a replaceable rule or a provision of the company’s constitution (if any) requires the company to exercise in general meeting.
The only director of a company who is also the only shareholder is responsible for managing the company’s business and may exercise all of the company’s powers.
The Corporations Act sets out rules dealing with the calling and conduct of directors’ meetings. Directors must keep a written record (minutes) of their resolutions and meetings.
There are 2 ways that directors may pass resolutions:
• at a meeting; or
• by having all of the directors record and sign their decision.
If a company has only 1 director, the sole director may also pass a resolution by recording and signing their decision.
1.9 Shareholders
The shareholders of a company own the company, but the company has a separate legal existence and the company’s assets belong to the company.
Shareholders can make decisions about the company by passing a resolution, usually at a meeting. A “special resolution” usually involves more important questions affecting the company as a whole or the rights of some or all of its shareholders.
There are 2 ways that shareholders may pass a resolution:
• at a meeting; or
• by having all of the shareholders record and sign their decision.
If a meeting is held, an ordinary resolution must be passed by a majority of the votes cast by shareholders of the company entitled to vote on the resolution at the meeting in person or by proxy (if proxies are allowed). A special resolution must be passed by at least 75% of the votes cast by shareholders of the company entitled to vote on the resolution and who vote at the meeting in person or by proxy (if proxies are allowed).
The sole shareholder of a company may pass a resolution by recording and signing their decision.
A company must keep a written record (minutes) of the members’ resolutions and meetings.
1.10 What others can assume about the company
Anyone who does any business with the company is entitled to assume that the company has a legal right to conduct that business unless the person knows, or suspects, otherwise. For example, an outsider dealing with the company is entitled to assume:
• that a person who is shown in a notice lodged with ASIC as being the director or company secretary of a company has been properly appointed and is authorised to act for the company; and
• that a person who is held out by the company to be a director, company secretary or agent of the company has been properly appointed and is authorised to act for the company.
[sections 128—130]
2 The company structure for small business
2.1 Proprietary company for small business
Generally, a proprietary company limited by shares is the most suitable company for use by small business. Such a proprietary company must have a least 1 shareholder but no more than 50 shareholders (not counting employee shareholders, CSF shareholders, or holders of shares issued pursuant to CSF offers that have yet to be traded in certain ways). It may have 1 or more directors.
[sections 112—113]
3 Setting up a new company
The operators of small businesses can either buy “shelf” companies or set up new companies themselves.
3.1 “Shelf” companies
The operator of a small business may find it more convenient to buy a “shelf” company (a company that has already been registered but has not traded) from businesses which set up companies for this purpose or from some legal or accounting firms.
3.2 Setting up a company
To set up a new company themselves, the operator must apply to ASIC for registration of the company.
A proprietary company limited by shares must have at least 1 shareholder.
To obtain registration, a person must lodge a properly completed application form with ASIC. The form must set out certain information including details of every person who has consented to be a shareholder, director or company secretary of the company.
The company comes into existence when ASIC registers it.
[sections 117—119, 135—136, 140]
3.3 ACN and name
When a company is registered, ASIC allocates to it a unique 9 digit number called the Australian Company Number (ACN). (For use of the ACN see 4.1).
In practice, a new company must have a name that is different from the name of a company that is already registered. A proprietary company limited by shares must have the words “Proprietary Limited” as part of its name. Those words can be abbreviated to “Pty Ltd”.
A proprietary company may adopt its ACN as its name. If it does so, its name must also contain the words “Australian Company Number” (which can be abbreviated to “ACN”). For example, the company’s name might be “ACN 123 456 789 Pty Ltd”.
[sections 119, 147—161]
3.4 Contracts entered into before the company is registered
A company can ratify a contract entered into by someone on its behalf or for its benefit before it was registered. If the company does not ratify the contract, the person who entered into the contract may be personally liable.
[sections 131—133]
3.5 First shareholders, directors and company secretary
A person listed with their consent as a shareholder, director or company secretary in the application for registration of the company becomes a shareholder, director or company secretary of the company on its registration.
The same person may be both a director of the company and the company secretary.
See 5.1 and 5.2 for directors and 5.4 for company secretaries. See 6.1 for shareholders.
[section 120]
3.6 Issuing shares
It is a replaceable rule (see 1.6) that, before issuing new shares, a company must first offer them to the existing shareholders in the proportions that the shareholders already hold. A company may issue shares at a price it determines.
[sections 254B, 254D]
3.7 Registered office
A company must have a registered office in Australia and must inform ASIC of the location of the office. A post office box cannot be the registered office of a company. The purpose of the registered office is to have a place where all communications and notices to the company may be sent.
If the company does not occupy the premises where its registered office is located, the occupier of the premises must agree in writing to having the company’s registered office located there.
A proprietary company is not required to open its registered office to the public but this does not affect its obligation to make documents available for inspection.
The company must notify ASIC of any change of address of its registered office.
[sections 100, 142, 143, 173, 1300]
3.8 Principal place of business
If a company has a principal place of business that is different from its registered office, it must notify ASIC of the address of its principal place of business and of any changes to that address.
[sections 117, 146]
3.9 Registers kept by the company
A company must keep registers, including a register of shareholders. A company must keep its registers at:
• the company’s registered office; or
• the company’s principal place of business; or
• a place (whether on premises of the company or of someone else) where the work in maintaining the register is done; or
• another place approved by ASIC.
A register may be kept either in a bound or looseleaf book or on computer.
If a register is kept on computer, its contents must be capable of being printed out in hard copy.
[sections 172, 1300, 1301, 1306]
3.10 Register of shareholders
A company must keep in its register of shareholders such information as:
• the names and addresses of its shareholders; and
• details of shares held by individual shareholders.
[sections 168—169]
4 Continuing obligations after the company is set up
The Corporations Act and other laws impose obligations on companies themselves and on their directors and company secretaries. Some of the more important obligations imposed under the Corporations Act are discussed below.
4.1 Use of company name and ACN
The name of a company must be shown at all the company’s business premises (including its registered office) that are open to the public. The company’s name and its ACN or ABN (if the last 9 digits are the same, and in the same order, as the last 9 digits of its ACN) must appear:
• on some of its public documents; and
• on its cheques and negotiable instruments; and
• on all documents lodged with ASIC; and
• if it has one, on its common seal.
[sections 123, 144, 147—156,
ASIC Practice Note 47]
4.2 Extract of particulars
Each year, ASIC issues each company with an extract of particulars within 2 weeks of the company’s review date (which is generally the anniversary of the company’s registration). The extract includes details recorded on ASIC’s database such as:
• names and addresses of each director and company secretary;
• issued shares and options granted;
• details of its shareholders;
• address of its registered office;
• address of its principal place of business.
If any of the details are not correct as at the date the extract is received, the company must correct those details.
The correction may be lodged with ASIC on a printed form or, if an agreement is in place to lodge electronically, in accordance with the agreement.
[Sections 346A and 346C, 352]
4.3 Review fee
A company must pay a review fee to ASIC each year.
[Corporations (Review Fees) Act 2003]
4.4 Notification to ASIC of changes
The company must notify ASIC if certain basic changes to the company occur. The following table sets out these notification requirements.
<table cellspacing="0" cellpadding="0" style="width:360.1pt; border-collapse:collapse"><thead><tr><td colspan="4" style="width:349.3pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Notification requirements</span></p></td></tr><tr><td style="width:16.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold"></span></p></td><td style="width:137.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">If...</span></p></td><td style="width:104.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">the company must notify ASIC of the change...</span></p></td><td style="width:57.8pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">see section...</span></p></td></tr></thead><tbody><tr><td style="width:16.7pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:137.7pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>a company issues shares</span></p></td><td style="width:104.7pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>within 28 days after the issue</span></p></td><td style="width:57.8pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>254X</span></p></td></tr><tr><td style="width:16.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:137.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>a company changes the location of a register</span></p></td><td style="width:104.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>within 7 days after the change</span></p></td><td style="width:57.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>172</span></p></td></tr><tr><td style="width:16.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:137.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>a company changes the address of its registered office or principal place of business</span></p></td><td style="width:104.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>within 28 days after the change</span></p></td><td style="width:57.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>142, 146</span></p></td></tr><tr><td style="width:16.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:137.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>a company changes its directors or company secretary</span></p></td><td style="width:104.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>within 28 days after the change (unless the director or company secretary has notified ASIC of the change)</span></p></td><td style="width:57.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>205B</span></p></td></tr><tr><td style="width:16.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>5</span></p></td><td style="width:137.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>there is a change in the name or address of the company’s directors or secretary</span></p></td><td style="width:104.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>within 28 days after the change</span></p></td><td style="width:57.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>205B</span></p></td></tr><tr><td style="width:16.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>7</span></p></td><td style="width:137.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>a company has a new ultimate holding company, or details about the ultimate holding company change</span></p></td><td style="width:104.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>within 28 days after the change happens</span></p></td><td style="width:57.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>349A</span></p></td></tr><tr><td style="width:16.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>8</span></p></td><td style="width:137.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>any of the changes in items</span><span> </span><span>1 to 7 means that:</span></p><p class="Tablea"><span>(a) the company must add or alter particulars in its member register kept under section</span><span> </span><span>169; or</span></p><p class="Tablea"><span>(b) the company must add or alter particulars in its member register kept under section</span><span> </span><span>169, and as a result, details about the number and class of shares on issue, or the amount paid and unpaid on the shares, alter.</span></p></td><td style="width:104.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>within the time determined under the table in section</span><span> </span><span>178D</span></p></td><td style="width:57.8pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>178A</span></p><p class="Tabletext"><span>178C</span></p></td></tr></tbody></table>
5 Company directors and company secretaries
5.1 Who can be a director
Only an individual who is at least 18 years old can be a director. If a company has only 1 director, they must ordinarily reside in Australia. If a company has more than 1 director, at least 1 of the directors must ordinarily reside in Australia.
A director must consent in writing to holding the position of director. The company must keep the consent and must notify ASIC of the appointment.
In some circumstances, the Corporations Act imposes the duties and obligations of a director on a person who, although not formally appointed as a director of a company, nevertheless acts as a director or gives instructions to the formally appointed directors as to how they should act.
The Court or ASIC may prohibit a person from being a director or from otherwise being involved in the management of a company if, for example, the person has breached the Corporations Act.
A person needs the Court’s permission to be a director if the person has been convicted of certain offences or is, in some circumstances, unable to pay their debts as they fall due.
Generally, a director may resign by giving notice of the resignation to the company. A director who resigns may notify ASIC of the resignation. If the director does not do so, the company must notify ASIC of the director’s resignation.
[sections 9, 201A, 201B, 201D, 205A, 205B and 206A‑206G, 228‑230 and 242 and subsection 1317EA(3)]
5.2 Appointment of new directors
It is a replaceable rule (see 1.6) that shareholders may appoint directors by resolution at a general meeting.
[section 201G]
5.3 Duties and liabilities of directors
In managing the business of a company (see 1.7), each of its directors is subject to a wide range of duties under the Corporations Act and other laws. Some of the more important duties are:
• to act in good faith
• to act in the best interests of the company
• to avoid conflicts between the interests of the company and the director’s interests
• to act honestly
• to exercise care and diligence
• to prevent the company trading while it is unable to pay its debts
• if the company is being wound up—to report to the liquidator on the affairs of the company
• if the company is being wound up—to help the liquidator (by, for example, giving to the liquidator any records of the company that the director has).
A director who fails to perform their duties:
• may be guilty of a criminal offence with a penalty of imprisonment for up to 15 years or a fine, or both (the fine is the greater of 4,500 penalty units and 3 times the amount of the benefit derived and detriment avoided because of the offence); and
• may contravene a civil penalty provision (and the Court may order the person to pay the Commonwealth an amount equal to the greater of 5,000 penalty units and 3 times the amount of the benefit derived and detriment avoided because of the contravention); and
• may be personally liable to compensate the company or others for any loss or damage they suffer; and
• may be prohibited from managing a company.
A director’s obligations may continue even after the company has been deregistered.
5.4 Company secretaries
A company other than a proprietary company must have a company secretary. However, a proprietary company may choose to have a company secretary. The directors appoint the company secretary. A company secretary must be at least 18 years old. If a company has only 1 company secretary, they must ordinarily reside in Australia. If a company has more than 1 company secretary, at least 1 of them must ordinarily reside in Australia.
A company secretary must consent in writing to holding the position of company secretary. The company must keep the consent and must notify ASIC of the appointment.
The same person may be both a director of a company and the company secretary.
Generally, a company secretary may resign by giving written notice of the resignation to the company. A company secretary who resigns may notify ASIC of the resignation. If the company secretary does not do so, the company must notify ASIC of the company secretary’s resignation.
The company secretary is an officer of the company and, in that capacity, may be subject to the requirements imposed by the Corporations Act on company officers.
The company secretary has specific responsibilities under the Corporations Act, including responsibility for ensuring that the company:
• notifies ASIC about changes to the identities, names and addresses of the company’s directors and company secretaries; and
• notifies ASIC about changes to the register of members; and
• notifies ASIC about changes to any ultimate holding company; and
• responds, if necessary, to an extract of particulars that it receives and that it responds to any return of particulars that it receives.
A company secretary’s obligations may continue even after the company has been deregistered.
A proprietary company limited by shares must have a share capital and at least 1 shareholder. ASIC may apply to a Court to have a company wound up if it does not have any shareholders.
[sections 461—462]
6.1 Becoming a shareholder and ceasing to be a shareholder
A person may become a shareholder of a company in several ways, including the following:
• the person being listed as a shareholder of the company in the application for registration of the company
• the company issuing shares to the person
• the person buying shares in the company from an existing shareholder and the company registering the transfer.
Some of the ways in which a person ceases to be a shareholder are:
• the person sells all of their shares in the company and the company registers the transfer of the shares
• the company buys back all the person’s shares
• ASIC cancels the company’s registration.
[sections 117, 120, 601AA—601AD]
6.2 Classes of shares
A company may have different classes of shares. The rights and restrictions attached to the shares in a class distinguish it from other classes of shares.
[sections 254A—254B]
6.3 Meetings of shareholders
Directors have the power to call meetings of all shareholders or meetings of only those shareholders who hold a particular class of shares.
Shareholders who hold at least 5% of the votes which may be cast at a general meeting of a company have the power to call and hold a meeting themselves or to require the directors to call and hold a meeting. Meetings may be held regularly or to resolve specific questions about the management or business of the company.
The Corporations Act sets out rules dealing with shareholders’ meetings.
A shareholder of a company may ask the company for a copy of the record of a meeting or of a decision of shareholders taken without a meeting.
[sections 249A—251B]
6.4 Voting rights
Different rights to vote at meetings of shareholders may attach to different classes of shares. It is a replaceable rule (see 1.6) that, subject to those different rights, each shareholder has 1 vote on a show of hands and, on a poll, 1 vote for each share held.
[sections 250E, 254A—254B]
6.5 Buying and selling shares
A shareholder may sell their shares but only if the sale would not breach the company’s constitution (if any). It is a replaceable rule (see 1.6) that the directors have a discretion to refuse to register a transfer of shares.
[sections 1091D—1091E]
7 Signing company documents
A company’s power to sign, discharge and otherwise deal with contracts, or execute documents, can be exercised by an individual acting with the company’s authority and on its behalf. A company can deal with contracts without using a common seal.
A company may execute a document by having it signed by:
• 2 directors of the company; or
• a director and the company secretary; or
• for a company with a sole director who is also the sole secretary—that director; or
• for a company with a sole director and no company secretary—that director.
If the document is to have effect as a deed, it should be expressed to be a deed.
[sections 126—127]
A company is not required to have a common seal. If it does, the seal must show the company’s name and its ACN or ABN (if the last 9 digits are the same, and in the same order, as the last 9 digits of its ACN). The seal is equivalent to the company’s signature and may be used on important company documents such as mortgages.
[sections 123, 127(2)]
8 Funding the company’s operations
The shareholders may fund the company’s operations by lending money to the company or by taking up other shares in the company. Except if it is raising funds from its own employees or shareholders or under a CSF offer, a proprietary company must not engage in any fundraising activity that would require disclosure to investors under Chapter 6D (for example, advertising in a newspaper inviting people to invest in the company).
The company may also borrow money from banks and other financial organisations.
Anyone who has lent money, or provided credit, to the company may ask for a security interest in the company’s assets to secure the performance by the company of its obligations.
[sections 113, 124]
9 Returns to shareholders
Shareholders can take money out of the company in a number of ways, but only if the company complies with its constitution (if any), the Corporations Act and all other relevant laws. If a company pays out money in a way that results in the company being unable to pay its debts as they fall due, its directors may be liable:
• to pay compensation; and
• for criminal and civil penalties.
[sections 588G, 1317E, 1317G, 1317H, 1317P]
9.1 Dividends
Dividends are payments to shareholders. They can only be paid if:
• the company’s assets are sufficiently in excess of its liabilities immediately before the dividend is declared; and
• the payment of the dividend is fair and reasonable to the company’s shareholders as a whole and does not materially prejudice the company’s ability to pay its creditors.
It is a replaceable rule (see 1.6) that the directors decide whether the company should pay a dividend.
[sections 254T, 254U]
9.2 Buy‑back of shares
A company can buy back shares from shareholders.
[sections 257A—257J]
9.4 Distribution of surplus assets on winding up
If a company is wound up and there are any assets left over after all the company’s debts have been paid, the surplus is distributed to shareholders in accordance with the rights attaching to their shares.
10 Annual financial reports and audit
10.1 The small/large distinction
The accounting requirements imposed on a proprietary company under the Corporations Act depend on whether the company is classified as small or large. A company’s classification can change from 1 financial year to another as its circumstances change.
A company is classified as small for a financial year if it satisfies at least 2 of the following tests:
• gross operating revenue of less than $10 million for the year
• gross assets of less than $5 million at the end of the year
• fewer than 50 employees at the end of the year.
A company that does not satisfy at least 2 of these tests is classified as large.
[section 45A]
As the great majority of proprietary companies are small under these tests, the discussion below deals mainly with the accounting requirements for small proprietary companies.
[sections 286—301]
10.2 Financial records
Under the Corporations Act, all proprietary companies must keep sufficient financial records to record and explain their transactions and financial position and to allow true and fair financial statements to be prepared and audited. Financial record here means some kind of systematic record of the company’s financial transactions—not merely a collection of receipts, invoices, bank statements and cheque butts. Financial records may be kept on computer.
[sections 286—289]
10.3 Preparing annual financial reports and directors’ reports
The Corporations Act requires a small proprietary company to prepare an annual financial report (an annual profit and loss statement, a balance sheet and a statement of cash flows) and a directors’ report (about the company’s operations, dividends paid or recommended, options issued etc.) if:
• the shareholders with at least 5% of the votes in the company direct it to do so; or
• ASIC directs it to do so; or
• it has one or more CSF shareholders at any time during the financial year.
Unless the shareholders’ direction specifies otherwise, the company must prepare the annual financial report in accordance with the applicable accounting standards.
Although the Corporations Act itself may not require a small proprietary company to prepare a financial report except in the circumstances mentioned, the company may need to prepare the annual financial reports for the purposes of other laws (for example, income tax laws). Moreover, good business practice may also make it advisable for the company to prepare the financial reports so that it can monitor and better manage its financial position.
Large proprietary companies must prepare annual financial reports and a directors’ report, have the financial report audited and send both reports to shareholders. They must also lodge the annual financial reports with ASIC unless exempted.
[sections 286—301, 319—320]
11 Disagreements within the company
11.1 Special problems faced by minority shareholders
There are remedies available to a shareholder of a company if:
• the affairs of the company are being conducted in a way that is unfair to that shareholder or to other shareholders of the company; or
• the affairs of the company are being conducted in a way that is against the interests of the company as a whole.
A Court may, for example, order the winding up of a company or the appointment of a receiver.
[sections 232‑235, 461]
11.2 Buy—back of shares
A company may buy back the shares of a shareholder who wants to sever their relationship with the company.
[sections 257A—257J]
11.3 Selling shares
A shareholder in a company who wants to sever their relationship with the company may decide to sell their shares. However, the shareholder may not be able to sell their shares readily—particularly if they want to sell their shares to someone who is not an existing shareholder. Some of the difficulties they may face in that case are:
• under the replaceable rules the directors have a discretion to refuse to transfer the shares; and
• restrictions in the company’s constitution (if any) on transferring shares.
[sections 707, 1041H, 1091D‑1091E]
12 Companies in financial trouble
12.1 Voluntary administration
If a company experiences financial problems, the directors may appoint an administrator to take over the operations of the company to see if the company’s creditors and the company can work out a solution to the company’s problems.
If the company’s creditors and the company cannot agree, the company may be wound up (see 12.3).
[Part 5.3A]
12.1A Restructuring
If a company experiences financial problems, the directors may appoint a small business restructuring practitioner to help the company develop a plan to restructure.
If the company’s creditors do not agree to the plan, the company may be placed in voluntary administration (see 12.1) or wound up (see 12.3).
[Part 5.3B]
12.2 Receivers
A receiver, or receiver and manager, may be appointed by order of a Court or under an agreement with a secured creditor to take over some or all of the assets of a company. Generally this would occur if the company is in financial difficulty. A receiver may be appointed, for example, because an amount owed to a secured creditor is overdue.
[Part 5.2]
12.3 Winding up and distribution
A company may be wound up by order of a Court, or voluntarily if the shareholders of the company pass a special resolution to do so.
A liquidator is appointed:
• when a Court orders a company to be wound up; or
• the shareholders of a company pass a resolution to wind up the company.
[Parts 5.4, 5.4B, 5.5].
12.4 Liquidators
A liquidator is appointed to administer the winding up of a company. The liquidator’s main functions are:
• to take possession of the company’s assets; and
• to determine debts owed by the company and pay the company’s creditors; and
• to distribute to shareholders any assets of the company left over after paying creditors (any distribution to shareholders is made according to the rights attaching to their shares); and
• finally, to have the company deregistered.
[Parts 5.4B, 5.6]
12.5 Order of payment of debts
Generally, creditors who hold security interests in company assets are paid first.
[Division 6 of Part 5.6]
12.6 Cancellation of registration
If a company has ceased trading or has been wound up, it remains on the register until ASIC cancels the company’s registration. Once a company is deregistered, it ceases to exist.
[sections 601AA—601AB, 601AH]
Part 1.6—Interaction with Australian Charities and Not‑for‑profits Commission Act 2012
111K Bodies corporate registered under the Australian Charities and Not‑for‑profits Commission Act 2012
This Part applies to a body corporate that:
(a) is registered under the Australian Charities and Not‑for‑profits Commission Act 2012; and
(b) is none of the following:
(i) a Commonwealth company for the purposes of the Public Governance, Performance and Accountability Act 2013;
(ii) a subsidiary of a Commonwealth company for the purposes of that Act;
(iii) a subsidiary of a corporate Commonwealth entity for the purposes of that Act.
111L Provisions not applicable to the body corporate
(1) A provision of this Act mentioned in the following table does not apply to the body corporate, subject to any conditions prescribed by the regulations for the purposes of this subsection in relation to the provision:
<table cellspacing="0" cellpadding="0" style="margin-left:0.25pt; border-collapse:collapse"><thead><tr><td colspan="3" style="width:343.5pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Provisions of this Act that do not apply to bodies corporate registered under the ACNC Act</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Item</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Column 1</span></p><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Provision(s)</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Column 2</span></p><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Topic</span></p></td></tr></thead><tbody><tr><td style="width:24.9pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:148.5pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>subsection</span><span> </span><span>136(5)</span></p></td><td style="width:148.5pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Public company must lodge with ASIC a copy of a special resolution adopting, modifying or repealing its constitution</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>138</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>ASIC may direct company to lodge consolidated constitution</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>139</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Company must send copy of constitution to member</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>subsection</span><span> </span><span>142(2), section</span><span> </span><span>146 and subsection</span><span> </span><span>146A(2)</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Company must notify ASIC of changes of address</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>5</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tablea"><span>(a) sections</span><span> </span><span>180 to 183; and</span></p><p class="Tabletext" style="margin-left:14.65pt; text-indent:-14.65pt"><span>(b) section</span><span> </span><span>185, to the extent that it relates to sections</span><span> </span><span>180 to 183</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Duties of directors etc.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>6</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>188, to the extent it relates to a provision mentioned in another item of this table</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Responsibility of secretaries and directors for certain contraventions</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>7</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>sections</span><span> </span><span>191 to 194</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Interests of directors</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>8</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tablea"><span>(a) sections</span><span> </span><span>201L and 205A to 205C; and</span></p><p class="Tablea"><span>(b) section</span><span> </span><span>205D, to the extent it relates to section</span><span> </span><span>205B; and</span></p><p class="Tablea"><span>(c) section</span><span> </span><span>205E</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Public information about directors etc.</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>9</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tablea"><span>(a) Part</span><span> </span><span>2G.2 (other than sections</span><span> </span><span>249R, 249RA, 249S,</span><span> </span><span>250PAA and 250PAB); and</span></p><p class="Tablea"><span>(b) Part</span><span> </span><span>2G.3, to the extent that it relates to meetings of the body corporate’s members</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Meetings of members</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>10</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tablea"><span>(a) Parts</span><span> </span><span>2M.1 and 2M.2; and</span></p><p class="Tablea"><span>(b) Part</span><span> </span><span>2M.3</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Financial reports and audit</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>11</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Chapter</span><span> </span><span>2N</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Updating ASIC information about companies, registered schemes and notified foreign passport funds</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>12</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>sections</span><span> </span><span>601CDA, 601CK and 601CTA</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Foreign companies</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>13</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>subsection</span><span> </span><span>601CT(3), section</span><span> </span><span>601CV and subsections</span><span> </span><span>601DH(1) and (1A)</span></p></td><td style="width:148.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Registered body must notify ASIC of certain changes</span></p></td></tr></tbody></table>
(2) Regulations made for the purposes of subsection (1) may be indefinite or limited to a specified period.
Reporting by debenture issuers
(3) Item 10 of the table in subsection (1) does not apply in relation to a financial year if the body corporate was a borrower in relation to debentures at the end of the year.
Prescribed provisions
(4) A provision of this Act prescribed by the regulations for the purposes of this subsection does not apply to the body corporate.
(5) Regulations made for the purposes of subsection (4) may:
(a) be expressed to be subject to conditions; and
(b) be indefinite or limited to a specified period; and
(c) specify a provision even if the provision is mentioned in another section of this Part.
111M Member approval
(1) This section applies if:
(a) a provision of this Act provides that one or more conditions must be satisfied for there to be member approval (however described) in relation to the body corporate; and
Example: Division 3 of Part 2E.1.
(b) the governance standards (within the meaning of the Australian Charities and Not‑for‑profits Commission Act 2012) provide that one or more conditions must be satisfied for there to be such member approval.
(2) Paragraph (1)(a) does not apply to a condition that a person give to another person particular information that relates to the matter that is the subject of the member approval.
Note: Example: Paragraph 218(1)(b).
(3) The provision mentioned in paragraph (1)(a) has effect, in relation to the body corporate, as if it, instead of providing for the conditions mentioned in that paragraph, provided for the conditions mentioned in paragraph (1)(b).
111N Notices
Notice of change of address
(1) For the purposes of subsection 142(3), the body corporate is treated as having lodged with ASIC on a day a notice that the address of its registered office has changed to a new address, if, on that day, the body corporate notifies the Commissioner of the ACNC, in accordance with the Australian Charities and Not‑for‑profits Commission Act 2012, that the body corporate’s address for service has changed to that new address.
(2) The Commissioner must give a copy of the notice to ASIC.
Notice of change of name—registered Australian bodies and registered foreign companies
(3) For the purpose of subsection 601DH(2), the body corporate is treated as having given ASIC on a day written notice of a change to its name if, on that day, the body corporate gives the Commissioner of the ACNC, in accordance with the Australian Charities and Not‑for‑profits Commission Act 2012, notice of the change.
(4) The Commissioner must give a copy of the notice to ASIC.
Notice of resignation of directors—responsible entities
(5) Subsections (6), (7) and (8) of this section apply if:
(a) the Commissioner of the ACNC is notified (the ACNC notice) for the purposes of the Australian Charities and Not‑for‑profits Commission Act 2012 that a person has ceased to be a responsible entity (within the meaning of that Act) of the body corporate; and
(b) the person was a responsible entity of the body corporate because the person was a director (within the meaning of this Act) of the body corporate; and
(c) the body corporate is a company (within the meaning of this Act).
(6) For the purposes of paragraph 203AA(1)(b) of this Act:
(a) treat a written notice stating that the person has stopped being a director of the body corporate as having been lodged with ASIC; and
(b) if the ACNC notice complied with paragraph 65‑5(4)(b) or (c) of the Australian Charities and Not‑for‑profits Commission Act 2012—treat the notice as having been lodged with ASIC on the day the person ceased to be a responsible entity of the body corporate; and
(c) if the ACNC notice did not comply with paragraph 65‑5(4)(b) or (c) of that Act—treat the notice as having been lodged with ASIC on the day it was given to the Commissioner of the ACNC.
(7) The Commissioner of the ACNC must give ASIC details of the ACNC notice.
(8) If:
(a) paragraph (6)(c) of this section applies; and
(b) either:
(i) the Court fixes the resignation day as the day the person’s resignation takes effect under subsection 203AA(2) of this Act; or
(ii) ASIC fixes the resignation day as the day the person’s resignation takes effect under subsection 203AA(2) of this Act;
then:
(c) ASIC must give the Commissioner of the ACNC a copy of the order made by the Court that fixes the day; or
(d) ASIC must give the Commissioner of the ACNC details of the resignation day that ASIC fixed.
Notice of resignation of directors—acting responsible entities
(9) If:
(a) a person is a director (within the meaning of this Act) of the body corporate because the person is an acting responsible entity (within the meaning of section 100‑30 of the Australian Charities and Not‑for‑profits Commission Act 2012) of the body corporate; and
(b) the person resigns their appointment as an acting responsible entity of the body corporate by giving the Commissioner of the ACNC on a day a written resignation in accordance with subsection 100‑50(1) of that Act; and
(c) the body corporate is a company (within the meaning of this Act);
then:
(d) ASIC is treated as being notified on that day of the person’s resignation as a director of the body corporate; and
(e) subsection 203AA(1) of this Act is treated as providing that the person’s resignation as a director of the body corporate takes effect at the same time as the person’s resignation as an acting responsible entity takes effect under subsection 100‑50(2) of that Act; and
(f) the Commissioner of the ACNC must give ASIC details of the written resignation.
111P Annual general meetings
(1) An order made under section 250PAA applies to a requirement in the governance standards (within the meaning of the Australian Charities and Not‑for‑profits Commission Act 2012) for the holding of an annual general meeting in the same way as the order applies to the requirement in section 250N.
(2) An exemption under section 250PAB applies to a provision of the governance standards (within the meaning of the Australian Charities and Not‑for‑profits Commission Act 2012) that requires the holding of an annual general meeting in the same way as the exemption applies to section 250N.
111Q Presumptions to be made in recovery proceedings
(1) Paragraphs 588E(4)(a) and (4A)(a) and subsection 588E(5) apply to the body corporate as if the references in those provisions to subsection 286(1) were references to subsections 55‑5(1) to (3) of the Australian Charities and Not‑for‑profits Commission Act 2012.
(2) Paragraphs 588E(4)(b) and (4A)(b) and subsection 588E(6) apply to the body corporate as if the references in those provisions to subsection 286(2) were references to subsections 55‑5(4) and (5) of the Australian Charities and Not‑for‑profits Commission Act 2012.
Chapter 2A—Registering a company
Part 2A.1—What companies can be registered
112 Types of companies
Types of companies
(1) The following types of companies can be registered under this Act:
Proprietary companies
Limited by shares
Unlimited with share capital
Public companies
Limited by shares
Limited by guarantee
Unlimited with share capital
No liability company
Corporate collective investment vehicles
Limited by shares
Note 1: Other types of companies that were previously allowed continue to exist under the Part 10.1 transitionals.
Note 2: For corporate collective investment vehicles, see Chapter 8B.
No liability companies
(2) A company may be registered as a no liability company only if:
(a) the company has a share capital; and
(b) the company’s constitution states that its sole objects are mining purposes; and
(c) the company has no contractual right under its constitution to recover calls made on its shares from a shareholder who fails to pay them.
Note 1: Section 9 defines mining purposes and minerals.
Note 2: Special provisions on no liability companies are found in the provisions referred to in the following table:
(3) A no liability company must not engage in activities that are outside its mining purposes objects.
(4) The directors of a no liability company must not:
(a) let the whole or proportion of a mine or claim on tribute; or
(b) make any contract for working any land on tribute;
unless:
(c) the letting or contract is approved by a special resolution; or
(d) no such letting or contract has been made within the period of 2 years immediately preceding the proposed letting or contract.
(5) An act or transaction is not invalid merely because of a contravention of subsection (3) or (4).
113 Proprietary companies
(1) A company must have no more than 50 non—employee shareholders if it is to:
(a) be registered as a proprietary company; or
(b) change to a proprietary company; or
(c) remain registered as a proprietary company.
Note: Proprietary companies have different financial reporting obligations depending on whether they are small proprietary companies or large proprietary companies (see section 45A and Part 2M.3).
(2) In applying subsection (1):
(a) count joint holders of a particular parcel of shares as 1 person; and
(b) an employee shareholder is:
(i) a shareholder who is an employee of the company or of a subsidiary of the company; or
(ii) a shareholder who was an employee of the company, or of a subsidiary of the company, when they became a shareholder; and
(c) do not count as a shareholder any CSF shareholder of the company; and
(d) do not count as a shareholder an entity, in relation to a security of the company held by the entity, if:
(i) that security was originally issued to another entity pursuant to a CSF offer by the company; and
(ii) unless the circumstances (if any) prescribed by the regulations for the purposes of this subparagraph exist—no securities of the company have been traded on a financial market (whether in Australia or elsewhere); and
(iii) all the other requirements (if any) prescribed by the regulations for the purposes of this subparagraph are met.
(3) A proprietary company must not engage in any activity that would require disclosure to investors under Chapter 6D, except for:
(a) an offer of its shares, or of options in respect of its shares, to:
(i) existing shareholders of the company; or
(ii) employees of the company or of a subsidiary of the company; or
(b) a CSF offer.
(3A) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) An act or transaction is not invalid merely because of a contravention of subsection (3).
Note: If a proprietary company contravenes this section, ASIC may require it to change to a public company (see section 165).
114 Minimum of 1 member
A company needs to have at least 1 member.
115 Restrictions on size of partnerships and associations
(1) A person must not participate in the formation of a partnership or association that:
(a) has as an object gain for itself or for any of its members; and
(b) has more than 20 members;
unless the partnership or association is incorporated or formed under an Australian law.
Note: For the effect of a contravention of this section, see section 103.
(2) The regulations may specify a higher number that is higher than the number specified in paragraph (1)(b) for the purposes of the application of that paragraph to a particular kind of partnership or association.
(3) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
116 Trade unions cannot be registered
A trade union cannot be registered under this Act.
Part 2A.2—How a company is registered
117 Applying for registration
Lodging application
(1) To register a company, a person must lodge an application with ASIC.
Note 1: For the types of companies that can be registered, see section 112.
Note 2: For modifications applicable to applications to register a CCIV, see section 1222A.
Contents of the application
(2) The application must state the following:
(a) the type of company that is proposed to be registered under this Act;
(b) the company’s proposed name (unless the ACN is to be used in its name);
(c) the name and address of each person who consents to become a member;
(d) the present given and family name, all former given and family names and the date and place of birth of each person who consents in writing to become a director;
(e) the present given and family name, all former given and family names and the date and place of birth of each person who consents in writing to become a company secretary;
(f) the address of each person who consents in writing to become a director or company secretary;
(g) the address of the company’s proposed registered office;
(h) for a public company—the proposed opening hours of its registered office (if they are not the standard opening hours);
(j) the address of the company’s proposed principal place of business (if it is not the address of the proposed registered office);
(k) for a company limited by shares or an unlimited company—the following:
(i) the number and class of shares each member agrees in writing to take up;
(ii) the amount (if any) each member agrees in writing to pay for each share;
(iia) whether the shares each member agrees in writing to take up will be fully paid on registration;
(iii) if that amount is not to be paid in full on registration—the amount (if any) each member agrees in writing to be unpaid on each share;
(iv) whether or not the shares each member agrees in writing to take up will be beneficially owned by the member on registration;
(l) for a public company that is limited by shares or is an unlimited company, if shares will be issued for non‑cash consideration—the prescribed particulars about the issue of the shares, unless the shares will be issued under a written contract and a copy of the contract is lodged with the application;
(m) for a company limited by guarantee—the proposed amount of the guarantee that each member agrees to in writing;
(ma) whether or not, on registration, the company will have an ultimate holding company;
(mb) if, on registration, the company will have an ultimate holding company—the following:
(i) the name of the ultimate holding company;
(ii) if the ultimate holding company is registered in Australia—its ABN, ACN or ARBN;
(iii) if the ultimate holding company is not registered in Australia—the place at which it was incorporated or formed;
(n) the State or Territory in this jurisdiction in which the company is to be taken to be registered.
Note 1: Paragraph (b)—sections 147 and 152 deal with the availability and reservation of names.
Note 2: Paragraph (f)—the address that must be stated is usually the residential address, although an alternative address can sometimes be stated instead (see section 205D).
Note 3: Paragraph (g)—if the company is not to be the occupier of premises at the address of its registered office, the application must state that the occupier has consented to the address being specified in the application and has not withdrawn that consent (see section 100).
Note 4: Paragraph (h)—for standard opening hours, see section 9.
(3) If the company is to be a public company and is to have a constitution on registration, a copy of the constitution must be lodged with the application.
(4) The application must be in the prescribed form.
(5) An applicant must have the consents and agreements referred to in subsection (2) when the application is lodged. After the company is registered, the applicant must give the consents and agreements to the company. The company must keep the consents and agreements.
(6) An offence based on subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
118 ASIC gives company ACN, registers company and issues certificate
Registration
(1) If an application is lodged under section 117, ASIC may:
(a) give the company an ACN; and
(b) register the company; and
(c) issue a certificate that states:
(i) the company’s name; and
(ii) the company’s ACN; and
(iii) the company’s type; and
(iv) that the company is registered as a company under this Act; and
(v) the State or Territory in this jurisdiction in which the company is taken to be registered; and
(vi) the date of registration.
Note 1: For the evidentiary value of a certificate of registration, see subsection 1274(7A).
Note 2: For modifications applicable to applications to register a CCIV, see section 1222C.
ASIC must keep record of registration
(2) ASIC must keep a record of the registration. Subsections 1274(2) and (5) apply to the record as if it were a document lodged with ASIC.
119 Company comes into existence on registration
A company comes into existence as a body corporate at the beginning of the day on which it is registered. The company’s name is the name specified in the certificate of registration.
Note: The company remains in existence until it is deregistered (see Chapter 5A).
119A Jurisdiction of incorporation and jurisdiction of registration
Jurisdiction in which company incorporated
(1) A company is incorporated in this jurisdiction.
Jurisdiction of registration
(2) A company is taken to be registered in:
(a) the State or Territory specified:
(i) in the application for the company’s registration under paragraph 117(2)(n) (registration of company under this Part); or
(ii) in the application for the company’s registration under paragraph 601BC(2)(o) (registration of registrable body as company under Part 5B.1); or
(b) the State or Territory in which the company is taken to be registered under paragraph 5H(4)(b) (registration of body as company on basis of State or Territory law).
This subsection has effect subject to subsection (3).
Note 1: ASIC must specify the State or Territory in which the company is taken to be registered in the company’s certificate of registration (see paragraph 118(1)(c)(v) and 601BD(1)(c)(v)).
Note 2: The company’s legal capacity and powers do not depend in any way on the particular State or Territory it is taken to be registered in (see section 124).
Note 3: A law of a State or Territory may impose obligations, or confer rights or powers, on a person by reference to the State or Territory in which a company is taken to be registered for the purposes of this Act. For example, a State or Territory law dealing with stamp duty on share transfers might impose duty on transfers of shares in companies that are taken to be registered in that State or Territory for the purposes of this Act.
(3) The State or Territory in which a company is taken to be registered changes to the State or Territory in this jurisdiction nominated by the company if:
(a) either:
(i) the relevant Minister of the State or Territory in which the company is taken to be registered before the change approves the change; or
(ii) the State in which the company is taken to be registered ceases to be a referring State; and
(b) the procedural requirements specified in the regulations are satisfied.
(4) A company continues to be registered under this Act even if the State in which the company is taken to be registered ceases to be a referring State.
120 Members, directors and company secretary of a company
(1) A person becomes a member, director or company secretary of a company on registration if the person is specified in the application with their consent as a proposed member, director or company secretary of the company.
Note: For the equivalent provision for a CCIV, see section 1222D.
(2) The shares to be taken up by the members as specified in the application are taken to be issued to the members on registration of the company.
Note: A member’s name must be entered in the register of members (see section 169).
121 Registered office
The address specified in the application for registration for the company’s proposed registered office becomes the address of the company’s registered office on registration.
122 Expenses incurred in promoting and setting up company
The expenses incurred before registration in promoting and setting up a company may be paid out of the company’s assets.
123 Company may have common seal
(1) A company may have a common seal. If a company does have a common seal, the company must set out on it:
(a) for a company that has its ACN in its name—the company’s name; or
(b) otherwise—the company’s name and either:
(i) the expression “Australian Company Number” and the company’s ACN; or
(ii) if the last 9 digits of the company’s ABN are the same, and in the same order, as the last 9 digits of its ACN—the expression “Australian Business Number” and the company’s ABN.
Note 1: A company may make contracts and execute documents without using a seal (see sections 126 and 127).
Note 2: For abbreviations that can be used on a seal, see section 149.
(2) A company may have a duplicate common seal. The duplicate must be a copy of the common seal with the words “duplicate seal”, “share seal” or “certificate seal” added.
(3) A person must not use, or authorise the use of, a seal that purports to be the common seal of a company or a duplicate if the seal does not comply with the requirements set out in subsection (1) or (2).
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Chapter 2B—Basic features of a company
Part 2B.1—Company powers and how they are exercised
124 Legal capacity and powers of a company
(1) A company has the legal capacity and powers of an individual both in and outside this jurisdiction. A company also has all the powers of a body corporate, including the power to:
(a) issue and cancel shares in the company;
(b) issue debentures (despite any rule of law or equity to the contrary, this power includes a power to issue debentures that are irredeemable, redeemable only if a contingency, however remote, occurs, or redeemable only at the end of a period, however long);
(c) grant options over unissued shares in the company;
(d) distribute any of the company’s property among the members, in kind or otherwise;
(e) grant a security interest in uncalled capital;
(f) grant a circulating security interest over the company’s property;
(g) arrange for the company to be registered or recognised as a body corporate in any place outside this jurisdiction;
(h) do anything that it is authorised to do by any other law (including a law of a foreign country).
A company limited by guarantee does not have the power to issue shares.
Note 1: For a company’s power to issue bonus, partly—paid, preference and redeemable preference shares, see section 254A.
Note 2: A CCIV’s power to issue shares is affected by sections 1230 and 1230B.
(2) A company’s legal capacity to do something is not affected by the fact that the company’s interests are not, or would not be, served by doing it.
(3) For the avoidance of doubt, this section does not:
(a) authorise a company to do an act that is prohibited by a law of a State or Territory; or
(b) give a company a right that a law of a State or Territory denies to the company.
(4) Subsection (1) does not prevent a mutual entity that is a company limited by guarantee issuing MCIs.
125 Constitution may limit powers and set out objects
(1) If a company has a constitution, it may contain an express restriction on, or a prohibition of, the company’s exercise of any of its powers. The exercise of a power by the company is not invalid merely because it is contrary to an express restriction or prohibition in the company’s constitution.
(2) If a company has a constitution, it may set out the company’s objects. An act of the company is not invalid merely because it is contrary to or beyond any objects in the company’s constitution.
126 Agent exercising a company’s power to make contracts and execute documents (including deeds)
(1) A company’s power to make, vary, ratify or discharge a contract, or execute a document (including a deed), may be exercised by an individual acting with the company’s express or implied authority and on behalf of the company.
Note 1: If a company executes a document in this way, people will be able to rely on the assumptions in subsection 129(3) for dealings in relation to the company.
Note 2: For provisions about technology neutral signing, see Division 1 of Part 1.2AA.
(2) The power may be exercised without using a common seal.
(3) This section does not affect the operation of a law that requires a particular procedure to be complied with in relation to the contract or document (including a deed), other than to the extent that the law is inconsistent with this section.
(4) The individual mentioned in subsection (1) need not be appointed by a deed.
(5) In exercising the company’s powers in accordance with subsection (1), the individual may execute a document as a deed if the document is expressed to be executed as a deed.
(6) In exercising the company’s powers in accordance with subsection (1), the individual may execute a document as a deed:
(a) without that execution being witnessed; and
(b) regardless of whether the document signed by the individual is in physical form or electronic form.
Note: An effect of paragraph (b) of this subsection is that, despite any common law rule, the document may be executed without the use of paper, parchment or vellum.
(7) Delivery is not necessary if the individual executes a document as a deed in the exercise of the company’s powers in accordance with subsection (1).
(8) This section does not limit the ways in which the individual may execute a document (including a deed).
Note: For example, a company’s constitution may set out other ways in which a document (including a deed) may be executed.
127 Execution of documents (including deeds) by the company itself
Executing a document without a common seal
(1) A company may execute a document without using a common seal if the document is signed by:
(a) 2 directors of the company; or
(b) a director and a company secretary of the company; or
(c) for a proprietary company that has a sole director—that director, if:
(i) the director is also the sole company secretary; or
(ii) the company does not have a company secretary.
Note 1: If a company executes a document in this way, people will be able to rely on the assumptions in subsection 129(5) for dealings in relation to the company.
Note 2: The requirement to sign may be satisfied electronically: see Division 1 of Part 1.2AA (about technology neutral signing).
Note 3: Because a CCIV has no natural person directors and no company secretary, it executes documents through the directors and company secretary of its corporate director: see section 1223.
Executing a document with a common seal
(2) A company with a common seal may execute a document if the seal is fixed to the document and the fixing of the seal is witnessed by:
(a) 2 directors of the company; or
(b) a director and a company secretary of the company; or
(c) for a proprietary company that has a sole director—that director, if:
(i) the director is also the sole company secretary; or
(ii) the company does not have a company secretary.
Note 1: If a company executes a document in this way, people will be able to rely on the assumptions in subsection 129(6) for dealings in relation to the company.
Note 2: Because a CCIV has no natural person directors and no company secretary, it executes documents through the directors and company secretary of its corporate director: see section 1223.
(2A) For the purposes of subsection (2), the fixing of a common seal to a document is taken to have been witnessed by a person mentioned in paragraph (a), (b) or (c) of that subsection if:
(a) the person observes, by electronic means or by being physically present, the fixing of the seal; and
(b) the person signs the document; and
(c) a method is used to indicate that the person observed the fixing of the seal to the document.
Note: For provisions about technology neutral signing, see Division 1 of Part 1.2AA.
Executing a document as a deed
(3) A company may execute a document as a deed if the document is expressed to be executed as a deed and is executed in accordance with subsection (1) or (2).
Note: For provisions about technology neutral signing, see Division 1 of Part 1.2AA.
(3A) A company may execute a document as a deed in accordance with subsection (1):
(a) without that execution being witnessed; and
(b) regardless of whether the document signed by the director or company secretary of the company, as applicable, is in physical form or electronic form.
Note: An effect of paragraph (b) of this subsection is that, despite any common law rule, the document may be executed without the use of paper, parchment or vellum.
(3B) Delivery is not necessary if a company executes a document as a deed in accordance with subsection (1) or (2).
Other ways of executing documents not limited
(4) This section does not limit the ways in which a company may execute a document (including a deed).
Note: For example, a company’s constitution may set out other ways in which a document (including a deed) may be executed.
Part 2B.2—Assumptions people dealing with companies are entitled to make
128 Entitlement to make assumptions
(1) A person is entitled to make the assumptions in section 129 in relation to dealings with a company. The company is not entitled to assert in proceedings in relation to the dealings that any of the assumptions are incorrect.
(2) A person is entitled to make the assumptions in section 129 in relation to dealings with another person who has, or purports to have, directly or indirectly acquired title to property from a company. The company and the other person are not entitled to assert in proceedings in relation to the dealings that any of the assumptions are incorrect.
(3) The assumptions may be made even if an officer or agent of the company acts fraudulently, or forges a document, in connection with the dealings.
(4) A person is not entitled to make an assumption in section 129 if at the time of the dealings they knew or suspected that the assumption was incorrect.
129 Assumptions that can be made under section 128
Constitution and replaceable rules complied with
(1) A person may assume that the company’s constitution (if any), and any provisions of this Act that apply to the company as replaceable rules, have been complied with.
Director or company secretary
(2) A person may assume that anyone who appears, from information provided by the company that is available to the public from ASIC, to be a director or a company secretary of the company:
(a) has been duly appointed; and
(b) has authority to exercise the powers and perform the duties customarily exercised or performed by a director or company secretary of a similar company.
Officer or agent
(3) A person may assume that anyone who is held out by the company to be an officer or agent of the company:
(a) has been duly appointed; and
(b) has authority to exercise the powers and perform the duties customarily exercised or performed by that kind of officer or agent of a similar company.
Proper performance of duties
(4) A person may assume that the officers and agents of the company properly perform their duties to the company.
Document duly executed without seal
(5) A person may assume that a document has been duly executed by the company if the document appears to have been signed in accordance with subsection 127(1). For the purposes of making the assumption, a person may also assume that, if any person who signs the document states next to their signature that:
(a) they are a director of the company—that is the case; or
(b) they are the company secretary of the company—that is the case; or
(c) they are the sole director of the company and that the company does not have a company secretary—that is the case; or
(d) they are the sole director and sole company secretary of the company—that is the case.
Note: For provisions about technology neutral signing, see Division 1 of Part 1.2AA.
Document duly executed with seal
(6) A person may assume that a document has been duly executed by the company if:
(a) the company’s common seal appears to have been fixed to the document in accordance with subsection 127(2); and
(b) the fixing of the common seal appears to have been witnessed in accordance with that subsection and subsection 127(2A).
For the purposes of making the assumption, a person may also assume that, if any person who witnesses the fixing of the common seal states next to their signature that:
(c) they are a director of the company—that is the case; or
(d) they are the company secretary of the company—that is the case; or
(e) they are the sole director of the company and that the company does not have a company secretary—that is the case; or
(f) they are the sole director and sole company secretary of the company—that is the case.
Note: For provisions about technology neutral signing, see Division 1 of Part 1.2AA.
Officer or agent with authority to warrant that document is genuine or true copy
(7) A person may assume that an officer or agent of the company who has authority to issue a document or a certified copy of a document on its behalf also has authority to warrant that the document is genuine or is a true copy.
(8) Without limiting the generality of this section, the assumptions that may be made under this section apply for the purposes of this section.
130 Information available to the public from ASIC does not constitute constructive notice
A person is not taken to have information about a company merely because the information is available to the public from ASIC.
Part 2B.3—Contracts before registration
131 Contracts before registration
(1) If a person enters into, or purports to enter into, a contract on behalf of, or for the benefit of, a company before it is registered, the company becomes bound by the contract and entitled to its benefit if the company, or a company that is reasonably identifiable with it, is registered and ratifies the contract:
(a) within the time agreed to by the parties to the contract; or
(b) if there is no agreed time—within a reasonable time after the contract is entered into.
(2) The person is liable to pay damages to each other party to the pre‑registration contract if the company is not registered, or the company is registered but does not ratify the contract or enter into a substitute for it:
(a) within the time agreed to by the parties to the contract; or
(b) if there is no agreed time—within a reasonable time after the contract is entered into.
The amount that the person is liable to pay to a party is the amount the company would be liable to pay to the party if the company had ratified the contract and then did not perform it at all.
(3) If proceedings are brought to recover damages under subsection (2) because the company is registered but does not ratify the pre‑registration contract or enter into a substitute for it, the court may do anything that it considers appropriate in the circumstances, including ordering the company to do 1 or more of the following:
(a) pay all or part of the damages that the person is liable to pay;
(b) transfer property that the company received because of the contract to a party to the contract;
(c) pay an amount to a party to the contract.
(4) If the company ratifies the pre—registration contract but fails to perform all or part of it, the court may order the person to pay all or part of the damages that the company is ordered to pay.
132 Person may be released from liability but is not entitled to indemnity
(1) A party to the pre—registration contract may release the person from all or part of their liability under section 131 to the party by signing a release.
(2) Despite any rule of law or equity, the person does not have any right of indemnity against the company in respect of the person’s liability under this Part. This is so even if the person was acting, or purporting to act, as trustee for the company.
133 This Part replaces other rights and liabilities
This Part replaces any rights or liabilities anyone would otherwise have on the pre—registration contract.
Part 2B.4—Replaceable rules and constitution
134 Internal management of companies
A company’s internal management may be governed by provisions of this Act that apply to the company as replaceable rules, by a constitution or by a combination of both.
Note: There are additional rules about internal management in ordinary provisions of this Act and also in the common law.
135 Replaceable rules
Companies to which replaceable rules apply
(1) A section or subsection (except subsection 129(1), this section and sections 140 and 141) whose heading contains the words:
(a) replaceable rule—applies as a replaceable rule to:
(i) each company that is or was registered after 1 July 1998; and
(ii) any company registered before 1 July 1998 that repeals or repealed its constitution after that day; and
(b) replaceable rule for proprietary companies and mandatory rule for public companies—applies:
(i) as a replaceable rule to any proprietary company that is or was registered after 1 July 1998; and
(ii) as a replaceable rule to any company that is or was registered after 1 July 1998 and that changes or changed to a proprietary company (but only while it is a proprietary company); and
(iii) as a replaceable rule to any proprietary company that is or was registered before 1 July 1998 that repeals or repealed its constitution after that day; and
(iv) as an ordinary provision of this Act to any public company whenever registered.
The section or subsection does not apply to a proprietary company while the same person is both its sole director and sole shareholder.
Note 1: See sections 198E, 201F and 202C for the special provisions that apply to a proprietary company while the same person is both its sole director and sole shareholder.
Note 2: A company may include in its constitution (by reference or otherwise) a replaceable rule that does not otherwise apply to it.
Note 3: Paragraph (a) does not apply for CCIVs: see section 1223A.
Company’s constitution can displace or modify replaceable rules
(2) A provision of a section or subsection that applies to a company as a replaceable rule can be displaced or modified by the company’s constitution.
Failure to comply with replaceable rules
(3) A failure to comply with the replaceable rules as they apply to a company is not of itself a contravention of this Act (so the provisions about criminal liability, civil liability and injunctions do not apply).
Note: Replaceable rules that apply to a company have effect as a contract (see section 140).
136 Constitution of a company
(1) A company adopts a constitution:
(a) on registration—if each person specified in the application for the company’s registration as a person who consents to become a member agrees in writing to the terms of a constitution before the application is lodged; or
(b) after registration—if the company passes a special resolution adopting a constitution or a court order is made under section 233 that requires the company to adopt the constitution.
Note 1: The Life Insurance Act 1995 has rules about how benefit fund rules become part of a company’s constitution and about amending those rules. They override this Act (see section 1348 of this Act). Consequential amendments to the rest of the company’s constitution can be made under that Act or this Act (see Subdivision 2 of Division 4 of Part 2A of that Act).
Note 2: Section 1223B applies instead of this section in relation to the constitution of a CCIV (see also subsection 1223D(6)).
(2) The company may modify or repeal its constitution, or a provision of its constitution, by special resolution.
Note: The company may need leave of the Court to modify or repeal its constitution if it was adopted as the result of a Court order (see subsection 233(3)).
(3) The company’s constitution may provide that the special resolution does not have any effect unless a further requirement specified in the constitution relating to that modification or repeal has been complied with.
(4) Unless the constitution provides otherwise, the company may modify or repeal a further requirement described in subsection (3) only if the further requirement is itself complied with.
(5) A public company must lodge with ASIC a copy of a special resolution adopting, modifying or repealing its constitution within 14 days after it is passed. The company must also lodge with ASIC within that period:
(a) if the company adopts a constitution—a copy of that constitution; or
(b) if the company modifies its constitution—a copy of that modification.
This also applies to a proprietary company that has applied under Part 2B.7 to change to a public company, while its application has not yet been determined.
(6) An offence based on subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
137 Date of effect of adoption, modification or repeal of constitution
If a new constitution is adopted or an existing constitution is modified or repealed, that adoption, modification or repeal takes effect:
(a) if it is the result of a special resolution:
(i) on the date on which the resolution is passed if it specified no later date; or
(ii) on a date specified in, or determined in accordance with, the resolution if the relevant date is later than the date on which the resolution is passed; or
(b) if it is the result of a Court order made under section 233:
(i) on the date on which the order is made if it specifies no later date; or
(ii) on a date specified by the order.
138 ASIC may direct company to lodge consolidated constitution
ASIC may direct a company to lodge a consolidated copy of its constitution with ASIC.
139 Company must send copy of constitution to member
(1) A company must send a copy of its constitution to a member of the company within 7 days if the member:
(a) asks the company, in writing, for the copy; and
(b) pays any fee (up to the prescribed amount) required by the company.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
140 Effect of constitution and replaceable rules
(1) A company’s constitution (if any) and any replaceable rules that apply to the company have effect as a contract:
(a) between the company and each member; and
(b) between the company and each director and company secretary; and
(c) between a member and each other member;
under which each person agrees to observe and perform the constitution and rules so far as they apply to that person.
(2) Unless a member of a company agrees in writing to be bound, they are not bound by a modification of the constitution made after the date on which they became a member so far as the modification:
(a) requires the member to take up additional shares; or
(b) increases the member’s liability to contribute to the share capital of, or otherwise to pay money to, the company; or
(c) imposes or increases restrictions on the right to transfer the shares already held by the member, unless the modification is made:
(i) in connection with the company’s change from a public company to a proprietary company under Part 2B.7; or
(ii) to insert proportional takeover approval provisions into the company’s constitution.
141 Table of replaceable rules
The following table sets out the provisions of this Act that apply as replaceable rules.
Part 2B.5—Registered office and places of business
142 Registered office
(1) A company must have a registered office in this jurisdiction. Communications and notices to the company may be addressed to its registered office.
Note 1: A document may be served on a company by leaving it at, or posting it to, the company’s registered office (see subsection 109X(1)).
Note 2: Communications and notices from ASIC may also be addressed to the company’s contact address (see section 146A).
(2) A company must lodge notice of a change of address of its registered office with ASIC not later than 28 days after the date on which the change occurs. The notice must be in the prescribed form.
Note: If the company is not to be the occupier of premises at the address of its new registered office, the notice must state that the occupier has consented to the address being specified in the notice and has not withdrawn that consent (see section 100).
(2A) An offence based on subsection (1) or (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) A notice of change of address takes effect from the later of:
(a) the seventh day after the notice was lodged; or
(b) a later day specified in the notice as the date from which the change is to take effect.
143 ASIC may change address of registered office to a director’s address
(1) A company that does not occupy the premises at the address of its registered office must be able to show to ASIC the occupier’s written consent to the company’s use of those premises as its registered office.
Note: ASIC can require the company to produce the consent (see section 100).
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) If ASIC becomes aware that the occupier of those premises:
(a) has not consented to the use of the premises as the address of the company’s registered office; or
(b) has withdrawn the consent;
ASIC may give written notice to a director of the company who resides in this jurisdiction that ASIC intends to change the address of the company’s registered office to the director’s address.
(3) If ASIC is not notified of the address of the company’s proposed new registered office under subsection 142(2) within 28 days after the notice under subsection (2) is sent, ASIC may change the address of the company’s registered office to the director’s address.
144 Company’s name must be displayed at registered office etc.
(1) A company must display its name prominently at every place at which the company carries on business and that is open to the public.
(2) A public company must also display its name and the words “Registered Office” prominently at its registered office.
(3) An offence based on subsection (1) or (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
145 Opening hours of registered office of public company
(1) The registered office of a public company must be open to the public:
(a) each business day from at least 10 am to 12 noon and from at least 2 pm to 4 pm; or
(b) at least 3 hours chosen by the company between 9 am and 5 pm each business day.
(2) If the company chooses its own opening hours, the hours must be specified:
(a) if the company is to have its own opening hours from its registration—in the application for registration of the company under section 117 (normal registration process) or the notice lodged under section 5H (registration of body as company on basis of State or Territory law); or
(b) if the company changes its opening hours after its registration—in the most recent notice of change of opening hours lodged with ASIC under subsection (3).
(3) The company must lodge notice of a change in the opening hours of its registered office with ASIC before the day on which a change occurs. The notice must be in the prescribed form.
(4) An offence based on subsection (1) or (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
146 Change of address of principal place of business
(1) A company must lodge with ASIC notice of a change of the address of its principal place of business not later than 28 days after the date on which the change occurs. The notice must be in the prescribed form.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
146A Contact address
(1) A company may have a contact address (whether or not in this jurisdiction). Communications and notices from ASIC to the company may be addressed to its contact address.
(2) If a company is to have a contact address, the company must lodge notice of the address in the prescribed form.
Part 2B.6—Names
Division 1—Selecting and using a name
147 When a name is available
Name is available unless identical or unacceptable
(1) A name is available to a company unless the name is:
(a) identical (under rules set out in the regulations) to a name that is reserved or registered under this Act for another body; or
(b) identical (under rules set out in the regulations) to a name that is held or registered on the Business Names Register in respect of another individual or body who is not the person applying to have the name; or
(c) unacceptable for registration under the regulations.
Minister may consent to a name being available to a company
(2) The Minister may consent in writing to a name being available to a company even if the name is:
(a) identical to a name that is reserved or registered under this Act for another body; or
(b) unacceptable for registration under the regulations.
(3) The Minister’s consent may be given subject to conditions.
Note: If the company breaches a condition, ASIC may direct it to change its name under section 158.
(4) The regulations may specify that a particular unacceptable name is available to a company if:
(a) a specified public authority, or an instrumentality or agency of the Crown in right of the Commonwealth, a State or an internal Territory has consented to the company using or assuming the name; or
(b) the company is otherwise permitted to use or assume the name by or under:
(i) an Act of the Commonwealth, a State or an internal Territory; or
(ii) a specified provision of an Act of the Commonwealth, a State or an internal Territory.
The consent of the authority, instrumentality or agency may be given subject to conditions.
Note: If the consent is withdrawn, the company ceases to be permitted or the company breaches a condition, ASIC may direct it to change its name under section 158.
148 A company’s name
Company may use available name or ACN
(1) A company may have as its name:
(a) an available name; or
(b) the expression “Australian Company Number” followed by the company’s ACN.
The name must also include the words required by subsection (2) or (3).
Limited companies
(2) A limited public company must have the word “Limited” at the end of its name unless section 150 or 151 applies. A limited proprietary company must have the words “Proprietary Limited” at the end of its name.
Unlimited proprietary companies
(3) An unlimited proprietary company must have the word “Proprietary” at the end of its name.
No liability companies
(4) A no liability company must have the words “No Liability” at the end of its name.
Public companies with “Proprietary” included in their name
(5) A public company must not include the word “Proprietary” (or an abbreviation of it) in its name unless:
(a) it was a public company before 1 July 1998; and
(b) the word “Proprietary” (or an abbreviation of it) was included in its name before 1 July 1998.
(6) An offence based on subsection (2), (3), (4) or (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
149 Acceptable abbreviations
(1) The abbreviations set out in the following table may be used:
(a) instead of words that this Act requires to be part of a company’s name or to be included in a document or on a company’s common seal; and
(b) instead of words that are part of a company’s name; and
(c) with or without full stops.
(2) If a company’s name includes any of these abbreviations, the word corresponding to the abbreviation may be used instead.
150 Exception to requirement for using “Limited” in name
Name
(1) A company is not required to have the word “Limited” at the end of its name if:
(a) the company is registered under the Australian Charities and Not‑for‑profits Commission Act 2012 as the type of entity mentioned in column 1 of item 1 of the table in subsection 25‑5(5) of that Act (charity); and
(b) the company’s constitution:
(i) prohibits the company paying fees to its directors; and
(ii) requires the directors to approve all other payments the company makes to directors.
(2) A company that, in accordance with subsection (1), does not have “Limited” at the end of its name must notify ASIC as soon as practicable if:
(a) the company ceases to be registered as mentioned in paragraph (1)(a); or
(b) any of the prohibitions or requirements mentioned in paragraph (1)(b) are not complied with or the company’s constitution is modified to remove any of those prohibitions or requirements.
(3) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) Paragraph 157(1)(a) (company must pass special resolution to change name) does not apply to a change of the name of a company to omit the word “Limited” in accordance with this section.
Name may be stated without “Limited”
(5) If a company:
(a) has the word “Limited” at the end of its name; but
(b) under subsection (1), is not required to do so;
the word “Limited” may be omitted anywhere that the name of the company is required to be used (including on the company’s common seal).
151 Exception to requirement for using “Limited” in name—pre‑existing licences
(1) A licence that:
(a) allowed a company to omit “Limited” from its name; and
(b) was in force immediately before 1 July 1998; and
(c) was in force immediately before the commencement of this section;
continues in force subject to subsection (3).
(2) The company must notify ASIC as soon as practicable if it:
(a) breaches a condition of the licence; or
(b) pursues objects or purposes that would have prevented it being granted the licence; or
(c) applies its profits or other income to promote objects or purposes that would have prevented it being granted the licence; or
(d) pays a dividend to its members; or
(e) modifies its constitution to allow it to do anything set out in paragraphs (a) to (d).
(2AA) If:
(a) a company holds a licence that is in force under this section; and
(b) either the licence or the company’s constitution requires a modification to the constitution to have previously been submitted to, and approved by:
(i) the Minister; or
(ii) another Minister of the Commonwealth, a State or a Territory; or
(iii) an officer, instrumentality or agency of the Commonwealth, a State or a Territory;
then the licence or constitution (as the case requires) is taken instead to require the company to notify ASIC as soon as practicable of the modification.
(2A) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) ASIC may revoke the company’s licence if:
(a) the company does anything set out in paragraphs (2)(a) to (e); or
(b) the company fails to notify ASIC in accordance with subsection (2AA).
152 Reserving a name
(1) A person may lodge an application in the prescribed form with ASIC to reserve a name for a company. If the name is available, ASIC must reserve it.
Note: For available names, see section 147.
(2) The reservation lasts for 2 months from the date when the application was lodged. An applicant may ask ASIC in writing for an extension of the reservation during a period that the name is reserved, and ASIC may extend the reservation for 2 months.
(3) ASIC must cancel a reservation if the applicant asks ASIC in writing to do so.
153 Using a name and ACN on documents
(1) A company must set out its name on all its public documents and negotiable instruments.
(2) Subject to sections 154 and 155, if the company’s ACN is not used in its name, the company must also set out with its name, or with 1 of the references to its name, either:
(a) the expression “Australian Company Number” followed by the company’s ACN; or
(b) if the last 9 digits of the company’s ABN are the same, and in the same order, as the last 9 digits of its ACN—the words “Australian Business Number” followed by the company’s ABN.
If the company’s name appears on 2 or more pages of the document or instrument, this must be done on the first of those pages.
Note 1: If a company has a common seal, its name and ACN or ABN must be set out on the seal (see section 123).
Note 2: A public company must display its name at its registered office. Every company must display its name at places at which the company carries on business and that are open to the public (see section 144).
Note 3: Section 149 provides that “ACN” is an acceptable abbreviation of “Australian Company Number”, and that “ABN” is an acceptable abbreviation of “Australian Business Number”.
Note 4: In any case where the company’s ACN would be used, the company’s ABN may be used instead if section 1344 is satisfied.
(3) An offence based on subsection (1) or (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
154 Exception to requirement to have ACN on receipts
A company does not have to set out the expression “Australian Company Number” followed by its ACN on a receipt (for example, a cash register receipt) that sets out information recorded in the machine that produced the receipt.
155 Regulations may exempt from requirement to set out information on documents
The regulations may exempt a specified company, or a class of companies, from the requirement in subsection 153(2) to set out information on its public documents and negotiable instruments. The exemption may relate to specified documents or instruments, or a class of documents or instruments.
156 Carrying on business using “Limited”, “No Liability” or “Proprietary” in name
(1) A person must not carry on business in this jurisdiction under a name or title that:
(a) has the words “Limited” or “No Liability” (or an abbreviation of those words) at the end; or
(b) includes the word “Proprietary” (or an abbreviation of it).
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) Subsection (1) does not apply to the extent that the person is allowed or required to carry on business in this jurisdiction under the name or title under a law of the Commonwealth or a law of a State or Territory in this jurisdiction.
Note: A defendant bears an evidential burden in relation to the matter in subsection (3), see subsection 13.3(3) of the Criminal Code.
Division 2—Changing a company’s name
157 Company changing its name
(1) If a company wants to change its name, it must:
(a) pass a special resolution adopting a new name; and
(b) lodge an application in the prescribed form with ASIC.
Note: The company may reserve a name before the resolution is passed or the application is lodged (see section 152).
(2) The company must lodge a copy of the special resolution with ASIC within 14 days after it is passed.
(2A) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) If the proposed name is available, ASIC must change the company’s name by altering the details of the company’s registration to reflect the change. The change of name takes effect when ASIC alters the details of the company’s registration.
Note: For available names, see section 147.
157A Change of name of company under external administration
Application by liquidator
(1) The liquidator of a company that is being wound up may lodge an application with ASIC to change the name of the company if the liquidator is satisfied that the proposed change of name is in the interests of the creditors of the company as a whole.
(2) Subsection (1) does not apply to a members’ voluntary winding up.
Application by administrator
(3) The administrator of a company under administration may lodge an application with ASIC to change the name of the company if the administrator is satisfied that the proposed change of name is in the interests of the creditors of the company as a whole.
Application by deed administrator
(4) The administrator of a deed of company arrangement may lodge an application with ASIC to change the name of the company if the administrator is satisfied that the proposed change of name is in the interests of the creditors of the company as a whole.
Application by restructuring practitioner
(4A) The restructuring practitioner for a company under restructuring may lodge an application with ASIC to change the name of the company if the restructuring practitioner is satisfied that the proposed change of name is in the interests of the creditors of the company as a whole.
Application by restructuring practitioner for a restructuring plan
(4B) The restructuring practitioner for a restructuring plan for a company may lodge an application with ASIC to change the name of the company if the restructuring practitioner is satisfied that the proposed change of name is in the interests of the creditors of the company as a whole.
Application by managing controller
(5) If:
(a) a person is the managing controller of property of a company; and
(b) the person is entitled to enforce a security interest in the whole, or substantially the whole, of the company’s property;
the person may lodge an application with ASIC to change the name of the company if the person is satisfied that the proposed change of name is in the interests of the creditors of the company as a whole.
Application by receiver
(6) If:
(a) a person is a receiver of property of a company; and
(b) the property subject to the receivership consists of, or includes, goodwill in relation to the name of the company;
the person may lodge an application with ASIC to change the name of the company if the person is satisfied that the proposed change of name is in the interests of the creditors of the company as a whole.
Change of name
(7) If:
(a) an application is lodged under subsection (1), (3), (4), (5) or (6); and
(b) the proposed name is available;
ASIC must change the company’s name by altering the details of the company’s registration to reflect the change. The change of name takes effect when ASIC alters the details of the company’s registration.
Note: For available names, see section 147.
158 ASIC’s power to direct company to change its name
(1) ASIC may direct a company in writing to change its name within 2 months if:
(a) the name should not have been registered; or
(b) the company has breached a condition under subsection 147(3) on the availability of the name; or
(c) a consent given under subsection 147(4) to use or assume the name has been withdrawn; or
(d) the company has breached a condition on a consent given under subsection 147(4); or
(e) the company ceases to be permitted to use or assume the name (as referred to in paragraph 147(4)(b)).
(2) The company must comply with the direction within 2 months after being given it by doing everything necessary to change its name under section 157.
(2A) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) If the company does not comply with subsection (2), ASIC may change the company’s name to its ACN and any other words that section 148 requires, by altering the details of the company’s registration to reflect the change.
(4) A change of name under subsection (3) takes effect when ASIC alters the details of the company’s registration.
159 ASIC’s power to include “Limited” in company’s name
(1) ASIC may change a company’s name so that it includes the word “Limited” by altering the details of the company’s registration to reflect the change if:
(a) the company contravenes any of the requirements or prohibitions in its constitution referred to in subsection 150(1); or
(b) the company modifies its constitution to remove any of those requirements or prohibitions; or
(c) ASIC revokes a licence referred to in section 151 that applies to the company.
(2) The change of name takes effect when ASIC alters the details of the company’s registration.
160 ASIC must issue new certificate if company’s name changes
If ASIC changes a company’s name, it must give the company a new certificate of registration. The company’s new name is the name specified in the certificate of registration issued under this section.
Note: For the evidentiary value of a certificate of registration, see subsection 1274(7A).
161 Effect of name change
(1) A change of company name does not:
(a) create a new legal entity; or
(b) affect the company’s existing property, rights or obligations; or
(c) render defective any legal proceedings by or against the company.
(2) Any legal proceedings that could have been continued or begun by or against the company in its former name may be continued or begun by or against it in its new name.
161A Company under external administration—former name to be used on documents
(1) This section applies to a company if:
(a) any of the following conditions is satisfied:
(i) the company is being wound up;
(ii) the company is under administration;
(iii) the company has executed a deed of company arrangement that has not yet terminated;
(iiia) the company is under restructuring;
(iiib) the company has made a restructuring plan that has not yet terminated;
(iv) there is a managing controller of property of the company;
(v) there is a receiver of property of the company; and
(b) any of the following conditions is satisfied:
(i) a change of the company’s name takes effect;
(ii) in the case of a company that is being wound up—a change of the company’s name took effect during the 6‑month period ending immediately before the relevant date;
(iii) in the case of a company under administration—a change of the company’s name took effect during the 6‑month period ending immediately before the administration began;
(iv) in the case of a company that has executed a deed of company arrangement—a change of the company’s name took effect during the 6‑month period ending immediately before the beginning of the administration that ended when the deed was executed;
(iva) in the case of a company under restructuring—a change of the company’s name took effect during the 6‑month period ending immediately before the restructuring began;
(ivb) in the case of a company that has made a restructuring plan—a change of the company’s name took effect during the 6‑month period ending immediately before the beginning of the restructuring that ended when the plan was made;
(v) in the case of a company where there is a managing controller—a change in the company’s name took effect during the 6‑month period ending immediately before the appointment of the managing controller;
(vi) in the case of a company where there is a receiver—a change in the company’s name took effect during the 6‑month period ending immediately before the appointment of the receiver.
(2) If subparagraph (1)(b)(i) applies, the company must set out its former name on all its public documents and negotiable instruments.
(3) If subparagraph (1)(b)(ii), (iii), (iv), (iva), (ivb), (v) or (vi) applies, then, except with the leave of the Court, the company must set out its former name on all its public documents and negotiable instruments.
(4) An offence based on subsection (2) or (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) The regulations may exempt a specified company, or a class of companies, from the requirement in subsection (2) or (3). The exemption may relate to specified documents or instruments, or a specified class of documents or instruments.
(6) The Court may only grant leave under subsection (3) on the application of:
(a) if subparagraph (1)(b)(ii) applies—the liquidator of the company; or
(b) if subparagraph (1)(b)(iii) applies—the administrator of the company; or
(c) if subparagraph (1)(b)(iv) applies—the administrator of the deed of company arrangement; or
(ca) if subparagraph (1)(b)(iva) applies—the restructuring practitioner for the company; or
(cb) if subparagraph (1)(b)(ivb) applies—the restructuring practitioner for the restructuring plan; or
(d) if subparagraph (1)(b)(v) applies—the managing controller; or
(e) if subparagraph (1)(b)(vi) applies—the receiver.
(6A) As soon as practicable after applying for leave under subsection (3), the applicant must lodge with ASIC a notice stating that the application has been made. The notice must be in the prescribed form.
(7) The Court may only grant leave under subsection (3) if it is satisfied that the granting of leave will not result in any significant risk to the interests of the company’s creditors (including contingent or prospective creditors) as a whole.
Part 2B.7—Changing company type
162 Changing company type
(1) A company may change to a company of a different type as set out in the following table by:
(a) passing a special resolution resolving to change its type; and
(b) complying with sections 163 and 164.
<table cellspacing="0" cellpadding="0" style="border-collapse:collapse"><thead><tr><td colspan="2" style="width:184.4pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Allowed conversions</span></p></td><td style="width:148.4pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span>[operative table]</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span></span></p></td><td style="width:163.1pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">This type of company may change…</span></p></td><td style="width:148.4pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">…to this type of company</span></p></td></tr></thead><tbody><tr><td style="width:10.5pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:163.1pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>proprietary company limited by shares</span></p></td><td style="width:148.4pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>unlimited proprietary company</span></p><p class="Tabletext"><span>unlimited public company</span></p><p class="Tabletext"><span>public company limited by shares</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:163.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>unlimited proprietary company</span></p></td><td style="width:148.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>proprietary company limited by shares</span><span style="font-style:italic"> (but only if, within the last 3 years, it was not a limited company that became an unlimited company)</span></p><p class="Tabletext"><span>public company limited by shares </span><span style="font-style:italic">(but only if, within the last 3 years, it was not a limited company that became an unlimited company)</span></p><p class="Tabletext"><span>unlimited public company</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:163.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>public company limited by shares</span></p></td><td style="width:148.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>unlimited public company</span></p><p class="Tabletext"><span>unlimited proprietary company</span></p><p class="Tabletext"><span>proprietary company limited by shares</span></p><p class="Tabletext"><span>no liability company (see subsection</span><span> </span><span>(2))</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:163.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>company limited by guarantee</span></p></td><td style="width:148.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>public company limited by shares</span></p><p class="Tabletext"><span>unlimited public company</span></p><p class="Tabletext"><span>proprietary company limited by shares</span></p><p class="Tabletext"><span>unlimited proprietary company</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>5</span></p></td><td style="width:163.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>unlimited public company</span></p></td><td style="width:148.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>public company limited by shares </span><span style="font-style:italic">(but only if, within the last 3 years, it was not a limited company that became an unlimited company)</span></p><p class="Tabletext"><span>proprietary company limited by shares </span><span style="font-style:italic">(but only if, within the last 3 years, it was not a limited company that became an unlimited company)</span></p><p class="Tabletext"><span>unlimited proprietary company</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>6</span></p></td><td style="width:163.1pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>public no liability company</span></p></td><td style="width:148.4pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>public company limited by shares </span><span style="font-style:italic">(but only if all the issued shares are fully paid up)</span></p><p class="Tabletext"><span>proprietary company limited by shares (but only if all the issued shares are fully paid up)</span></p></td></tr></tbody></table>
Note 1: A public company seeking to change to a proprietary company must comply with the requirements for proprietary companies set out in section 113.
Note 2: Other types of companies that were previously allowed can change type under the Part 10.1 transitionals.
(2) A public company limited by shares may only convert to a no liability company if:
(a) the company’s constitution states that its sole objects are mining purposes; and
(b) under the constitution the company has no contractual right to recover calls made on its shares from a shareholder who fails to pay them; and
(c) all the company’s issued shares are fully paid up.
Note: Section 9 defines mining purposes and minerals.
(3) The company must lodge a copy of the special resolution with ASIC within 14 days after it is passed.
(3A) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) A special resolution to change an unlimited company that has share capital to a company limited by shares may also provide that a specified portion of its uncalled share capital may only be called up if the company becomes a Chapter 5 body corporate.
163 Applying for change of type
Lodging application
(1) To change its type, a company must lodge an application with ASIC.
Contents of the application
(2) The application must be accompanied by the following:
(a) a copy of:
(i) the special resolution that resolves to change the type of the company, specifies the new type and the company’s new name (if a change of name is necessary); and
(ii) any other special resolution passed in connection with the change of type;
(b) for a company limited by guarantee changing to a company limited by shares:
(i) a statement signed by the directors of the company that in their opinion the company’s creditors are not likely to be materially prejudiced by the change of type and that sets out their reasons for that opinion; and
(ii) any special resolution dealing with an issue of shares according to section 167;
(c) for a company limited by shares or a company limited by guarantee changing to an unlimited company:
(i) an assent to the change of type in the prescribed form signed by all the members of the company; and
(ii) a statement signed by a director or a company secretary of the company that all the members of the company have signed the assent;
(d) for a proprietary company changing to a public company:
(i) a consolidated copy of the company’s constitution (if any) as at the date of lodgment; and
(ii) a copy of each document (including an agreement or consent) or resolution that is necessary to ascertain the rights attached to issued or unissued shares of the company.
Note 1: The company must lodge a copy of any special resolution modifying its constitution passed after the application is lodged (see subsection 136(5)).
Note 2: The company must lodge information relating to any change of rights attached to its shares, or any division or conversion of its shares into new classes, occurring after the application is lodged (see section 246F).
Company limited by guarantee to company limited by shares
(3) If shares will be issued to persons under paragraph 166(2)(c) on the change of type from a company limited by guarantee to a company limited by shares, the application must state:
(a) that the company has prepared a list that sets out the following details about each person to whom the shares will be issued:
(i) name and address;
(ii) the number and class of shares the person will take up;
(iii) the amount (if any) the person will pay for the shares;
(iv) the amount (if any) that will be unpaid on the shares; and
(b) the number and class of shares those persons will take up; and
(c) the amount (if any) those persons will pay for the shares; and
(ca) the amount (if any) that will be unpaid on the shares; and
(d) if the shares will be issued for non‑cash consideration—the prescribed particulars about the issue of the shares, unless the shares will be issued under a written contract and a copy of the contract is lodged with the application; and
(e) that each of those persons who is not a member of the company when the application is made consents in writing to the inclusion in the list of the details about them that are referred to in paragraph (a).
The shares may be issued to existing members only, to new members only or to existing and new members.
Note: An offer of shares associated with a proposed change of type may need disclosure to investors under Part 6D.2 (see sections 706, 707, 708, 708AA and 708A).
(3A) For a company changing to a proprietary company, if any of the particulars in the register kept by the company under section 169 and mentioned in paragraph 178A(1)(b) are different from the particulars set out:
(a) in the latest extract of particulars received by the company; or
(b) if the company responded to the latest extract it received—in the company’s extract taken together with the company’s response to the extract;
the application must set out those different particulars in addition to the other information required by this section.
(3B) If the company has more than 20 members, the company is only required to set out the different particulars under subsection (3A) that relate to a person who is a top 20 member of a class of the company.
Note: See also section 107.
(3C) If subsection (3A) applies and any details mentioned in subsection 178C(1) are different from the details set out:
(a) in the latest extract of particulars received by the company; or
(b) if the company responded to the latest extract it received—in the company’s extract taken together with the company’s response to the extract;
the application must set out those different details as well.
(4) The application must meet any requirements of the data standards.
(5) The company must have the consents referred to in paragraph (3)(e) (if any) when the application is lodged. The company must keep the consents.
(6) An offence based on subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
164 ASIC changes type of company
(1) ASIC must give notice under subsection (3) that it intends to alter the details of the company’s registration if:
(a) ASIC is satisfied that:
(i) the application complies with section 163; and
(ii) for an application by a company limited by guarantee to change to a company limited by shares—the company’s creditors are not likely to be materially prejudiced by the change; and
(b) for an application by a company limited by guarantee to change to a company limited by shares that is accompanied by a copy of a special resolution dealing with an issue of shares according to section 167—ASIC is not of the opinion that the obligations that would attach to the shares are unreasonable compared with the obligations that attach to membership of the company limited by guarantee.
(2) To make a decision under subparagraph (1)(a)(ii), ASIC may direct the company in writing to:
(a) notify some or all of its creditors of the proposed change in the way ASIC specifies; and
(b) invite those creditors to make submissions to ASIC.
(3) The notice that ASIC intends to alter the details of the company’s registration must be:
(a) included on ASIC database; and
(b) published in the Gazette.
The notice must also state that ASIC will alter the details of the company’s registration 1 month after the notice has been published in the Gazette unless an order by a court or the Administrative Review Tribunal prevents it from doing so.
(4) Subject to an order made by a court or the Administrative Review Tribunal within that month, after that month has passed ASIC must alter the details of the company’s registration to reflect the company’s new type.
(5) A change of type under this section takes effect when ASIC alters the details of the company’s registration. Despite subsection 246D(3) and section 246E, a special resolution passed in connection with the change of type also takes effect when ASIC alters the details of the company’s registration.
(6) ASIC must give the company a new certificate of registration after it alters the details of the company’s registration. The company’s name is the name specified in the certificate of registration issued under this section.
Note: For the evidentiary value of a certificate of registration, see subsection 1274(7A).
(7) If ASIC alters the details of a company’s registration under subsection (4), a court is not to make an order reversing the alteration of the details of the company’s registration.
Note: The Administrative Review Tribunal cannot review the change of the company’s type once ASIC has issued a new certificate of registration to the company (see subsection 1274(7A) and paragraph 1317C(b)).
165 ASIC may direct a proprietary company to change to a public company in certain circumstances
(1) ASIC may direct a proprietary company in writing to change to a public company within 2 months if it is satisfied that the company has contravened section 113 (requirements for proprietary companies).
(2) The company must comply with the direction within 2 months after being given it by doing everything necessary to change to a public company under section 164.
(2A) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) If a proprietary company does not comply with subsection (2), ASIC may change the company from a proprietary to a public company by altering the details of the company’s registration to reflect the company’s new type.
(4) A change of type under this section takes effect when ASIC alters the details of the company’s registration.
(5) ASIC must give the company a new certificate of registration after it alters the details of the company’s registration under subsection (3). The company’s name is the name specified in the certificate of registration issued under this section.
Note: For the evidentiary value of a certificate of registration, see subsection 1274(7A).
166 Effect of change of type
(1) A change of type does not:
(a) create a new legal entity; or
(b) affect the company’s existing property, rights or obligations (except as against the members of the company in their capacity as members); or
(c) render defective any legal proceedings by or against the company or its members.
(2) On the change of type of a company from a company limited by guarantee to a company limited by shares:
(a) the liability of each member and past member as a guarantor on the winding up of the company is extinguished; and
(b) the members cease to be members of the company; and
(c) if shares are to be issued to a person as specified in the list referred to in subsection 163(3):
(i) the shares are taken to be issued to that person; and
(ii) the person is taken to have consented to be a member of the company; and
(iii) the person becomes a member of the company.
Note: The company must maintain a register of members that complies with subsection 169(3).
167 Issue of shares by company or holding company—company limited by guarantee changing to company limited by shares
(1) If:
(a) a company limited by guarantee changes type under this Part to a company limited by shares; and
(b) that company, or another company that beneficially owns all the shares in that company, issues shares to a person who was a member of that company immediately before the change of type took effect;
the person becomes a member of the company issuing the shares if:
(c) the issue of the shares is in accordance with the special resolution that accompanied the application to change type under subparagraph 163(2)(a)(ii); and
(d) the shares are fully paid up; and
(e) the business, assets and liabilities of the issuing company (together with its subsidiaries) when the shares are issued are substantially the same as the business, assets and liabilities of the company changing type (together with its subsidiaries) immediately before the change of type took effect.
(2) If shares are issued according to this section, a court is not to make an order reversing the issue of the shares.
167AA Application of Part to company limited both by shares and by guarantee
(1) A company limited both by shares and by guarantee may change to one of the following types of companies under this Part:
(a) a proprietary company limited by shares;
(b) a public company limited by shares;
(c) a company limited by guarantee.
(2) This Part applies to the change with any modifications that are necessary.
Part 2B.8—Mutual capital instruments (MCIs)
Division 1—Preliminary
167AB Simplified outline of this Part
This Part provides for mutual capital instruments (MCIs).
An MCI is a share in a mutual entity that meets requirements relating to voting rights and other matters. Certain kinds of mutual entities may issue MCIs and become MCI mutual entities.
Division 3 sets out a special procedure for amending the constitution of a mutual entity that proposes to issue MCIs.
Division 2—MCI mutual entities and MCIs
167AC Meaning of MCI mutual entity
A mutual entity is an MCI mutual entity if:
(a) the entity is a public company; and
(b) the entity does not have voting shares (other than MCIs) quoted on a declared financial market; and
(c) the entity is not a registered entity within the meaning of the Australian Charities and Not‑for‑profits Commission Act 2012; and
(d) the entity’s constitution states that the entity is intended to be an MCI mutual entity for the purposes of this Act; and
(e) the entity has issued one or more MCIs.
167AD Meaning of MCI
(1) A share in a mutual entity is an MCI (short for mutual capital instrument) if:
(a) paragraphs 167AC(a), (b), (c) and (d) apply to the entity; and
(b) the share meets the requirements in sections 167AE and 167AF.
(2) To avoid doubt, if a share that is an MCI ceases to meet one or more of those requirements, the share ceases to be an MCI.
(3) Nothing in this Division requires an MCI mutual entity to treat the holders of MCIs in the same way as members of the entity who do not hold MCIs.
Note: For example, this Division does not require an MCI mutual entity that provides services to a class of members to provide those services to holders of MCIs.
167AE MCI requirements—class rights
A share in a mutual entity meets the requirement in this section if the rights attached to the share can be varied or cancelled only by special resolution of the company and either:
(a) by special resolution passed at a meeting of the class of members holding shares in the same class; or
(b) with the written consent of members with at least 75% of the votes in the class.
167AF MCI requirements—other requirements
A share in a mutual entity meets the requirements in this section if the entity’s constitution:
(a) provides that the share can only be issued as a fully paid share; and
(b) provides that dividends in respect of the share are non‑cumulative; and
(c) sets out the rights attached to the share with respect to participation in surplus assets and profits.
167AG MCIs must be cancelled before MCI mutual entity demutualises
A resolution of an MCI mutual entity that would result in the entity ceasing to be an MCI mutual entity can only take effect if:
(a) there are no MCIs in the entity; or
(b) the resolution provides for each MCI to be cancelled at or before the time the entity ceases to be an MCI mutual entity (whether or not the holders of the MCIs to be cancelled are to receive other securities in respect of those MCIs).
Division 3—Special procedure for amending constitution of mutual entity that proposes to issue MCIs
167AH Purpose and application of this Division
(1) This Division sets out a special procedure for the constitution of a mutual entity to be amended to provide for the entity to issue MCIs.
(2) This Division applies to a mutual entity that:
(a) is a public company; and
(b) does not have voting shares quoted on a declared financial market; and
(c) is not a registered entity within the meaning of the Australian Charities and Not‑for‑profits Commission Act 2012.
167AI MCI amendment resolution
(1) An MCI amendment resolution is a resolution of the mutual entity to amend the entity’s constitution for one or more of the following purposes, and for no other purpose:
(a) to include a statement that the entity is intended to be an MCI mutual entity for the purposes of this Act;
(b) to provide for the entity to issue MCIs;
(c) to provide for the rights and obligations attached to MCIs;
(d) to make changes that are incidental or ancillary to the purpose in paragraph (a), (b) or (c).
(2) An MCI amendment resolution must not result in the mutual entity ceasing to be a mutual entity.
167AJ Procedure for MCI amendment resolution
(1) This section applies to a meeting of the mutual entity’s members if:
(a) notice of an MCI amendment resolution to be proposed at the meeting is given in accordance with paragraph 249L(1)(c); and
(b) the meeting is held during the period of 36 months beginning on the day this section commences; and
(c) no more than 2 MCI amendment resolutions have been considered at previous meetings of the mutual entity’s members.
(2) The MCI amendment resolution:
(a) must be passed at the meeting by at least 75% of the votes cast by or on behalf of members who are present at the meeting (including members who have appointed proxies who are present at the meeting) and entitled to vote on the resolution; and
(b) if so passed—has effect as a special resolution despite subsections 136(3) and (4) and anything in the mutual entity’s constitution.
(3) Despite section 135 and anything in the mutual entity’s constitution, section 249T (quorum) applies to the meeting to the extent that the meeting is considering or voting on the MCI amendment resolution.
Chapter 2C—Registers
Part 2C.1—Registers generally
167A Who is covered by this Chapter
(1) This Chapter covers:
(a) all companies; and
(b) all registered schemes.
(2) A registered scheme’s responsible entity:
(a) must perform the obligations imposed under this Chapter in respect of the scheme; and
(b) may exercise the powers given by this Chapter in respect of the scheme.
168 Registers to be maintained
(1) A company or registered scheme must set up and maintain:
(a) a register of members (see section 169); and
(b) if the company or scheme grants options over unissued shares or interests—a register of option holders and copies of options documents (see section 170); and
(c) if the company issues debentures—a register of debenture holders (see section 171).
Note 1A: See also section 672DA (register of relevant interests in listed company, listed registered scheme or listed notified foreign passport fund).
Note 2: The registers may be kept on computer (see section 1306).
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) For the purposes of this Chapter, choses in action (including an undertaking) that fall into one of the exceptions in paragraphs (a), (b), (e) and (f) of the definition of debenture in section 9 must also be entered into the register of debenture holders.
169 Register of members
General requirements
(1) The register of members must contain the following information about each member:
(a) the member’s name and address;
(b) the date on which the entry of the member’s name in the register is made.
Index to register
(2) If the company or scheme has more than 50 members, the company or scheme must include in the register an up‑to‑date index of members’ names. The index must be convenient to use and allow a member’s entry in the register to be readily found. A separate index need not be included if the register itself is kept in a form that operates effectively as an index.
Companies with share capital
(3) If the company has a share capital, the register must also show:
(a) the date on which every allotment of shares takes place; and
(b) the number of shares in each allotment; and
(c) the shares held by each member; and
(d) the class of shares; and
(e) the share numbers (if any), or share certificate numbers (if any), of the shares; and
(ea) the amount paid on the shares; and
(eb) whether or not the shares are fully paid; and
(f) the amount unpaid on the shares (if any).
Note 1: Transfers of shares are entered in the register under section 1071D. Section 1072E 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).
Note 3: A CCIV’s register must also show the sub‑funds relevant to each share: see subsection 1222ZB(1).
(4) The register does not have to show the amount unpaid on the shares (see paragraph (1)(f)) if:
(a) all of the company’s shares were issued before 1 July 1998; and
(b) the register continues to show the par values of the shares as they were immediately before 1 July 1998.
(5) The register does not have to show the amount unpaid on the shares (see paragraph (1)(f)) if:
(a) all of the company’s shares were issued before 1 July 1998; and
(b) the company is not a listed company.
Non‑beneficial ownership—companies other than listed companies
(5A) The register of a company that:
(a) has a share capital; and
(b) is neither a listed company (within the meaning of section 603) nor a company covered by an order under section 707;
must indicate any shares that a member does not hold beneficially.
Note: See also section 1072H (in particular, subsection 1072H(8) which contains relevant presumptions about beneficial ownership).
(6) In deciding for the purposes of subsection (5A) 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 1072H, 672B or 672C.
Proprietary companies that have made CSF offers
(6AA) The register of a proprietary company that has made one or more CSF offers must also show:
(a) the date on which every issue of shares in the company pursuant to each CSF offer takes place; and
(b) the number of shares issued pursuant to each CSF offer; and
(c) the shares issued to each member pursuant to each CSF offer; and
(d) the date on which an entity ceases to be a CSF shareholder of the company for a particular share in the company;
during any period in which the company has one or more CSF shareholders.
Registered schemes
(6A) The register of a registered scheme must also show:
(a) the date on which every issue of interests takes place; and
(b) the number of interests in each issue; and
(c) the interests held by each member; and
(d) the class of interests; and
(e) the amount paid, or agreed to be considered as paid, on the interests.
Former members
(7) A register of members must also show:
(a) the name and details of each person who stopped being a member of the company or scheme within the last 7 years; and
(b) the date on which the person stopped being a member.
The company or scheme may keep these entries separately from the rest of the register.
Joint holders
(8) For the purposes of this section:
(a) 2 or more persons who jointly hold shares in the company or interests in the scheme are taken to be a single member of the company or scheme in relation to those shares or interests; and
(b) 2 or more persons who have given a guarantee jointly are taken to be a single member of the company.
They may also be members of the company or scheme because of shares or interests that they hold, or a guarantee that they have given, in their own right or jointly with others.
170 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 or unissued interests in the scheme:
(a) the option holder’s name and address;
(b) the date on which the entry of the option holder’s name in the register is made;
(c) the date of grant of the options;
(d) the number and description of the shares or interests over which the options were granted;
(e) either:
(i) the period during which the options may be exercised; or
(ii) the time at which the options may be exercised;
(f) any event that must happen before the options can be exercised;
(g) any consideration for the grant of the options;
(h) any consideration for the exercise of the options or the method by which that consideration is to be determined.
Because it is a register of the holders of options that are still exercisable, the register must be updated whenever options are exercised or expire.
Note: A CCIV’s register must also show the sub‑funds relevant to each share or option: see subsection 1222ZB(2).
(2) Information about the grant of an option must be entered in the register within 14 days after the grant of the option.
Copies of options documents
(3) The company or scheme must keep with the register a copy of every document that grants an option over unissued shares or interests.
(3A) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3B) Subsection (3) does not apply if the option is listed for quotation on a declared financial market.
Note: A defendant bears an evidential burden in relation to the matter in subsection (3B), see subsection 13.3(3) of the Criminal Code.
(4) The company or scheme must change the register to reflect the transfer of an option only if the person transferring the option gives the company or scheme written notice of the transfer.
(5) A failure to comply with this section in relation to an option does not affect the option itself.
171 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 1: See subsection 168(2) for the coverage of debenture.
Note 2: A CCIV’s register must also show the sub‑funds relevant to each debenture: see subsection 1222ZB(3).
(2) A company’s failure to comply with this section in relation to a debenture does not affect the debenture itself.
172 Location of registers
(1) A register kept under this Chapter that relates to a company must be kept at:
(a) the company’s registered office; or
(b) the company’s principal place of business in this jurisdiction; or
(c) a place in this jurisdiction (whether of the company or of someone else) where the work involved in maintaining the register is done; or
(d) another place in this jurisdiction approved by ASIC.
(1A) A register kept under this Chapter that relates to a registered scheme must be kept at:
(a) the responsible entity’s registered office; or
(b) an office at the responsible entity’s principal place of business in this jurisdiction; or
(c) an office in this jurisdiction (whether of the responsible entity or of someone else) where the work involved in maintaining the register is done; or
(d) another office in this jurisdiction approved by ASIC.
Notice to ASIC
(2) The company or scheme must lodge with ASIC a notice of the address at which the register is kept within 7 days after the register is:
(a) established at an office that:
(i) is not the registered office of the company or responsible entity; and
(ii) is not at the principal place of business of the company or responsible entity in this jurisdiction; or
(b) moved from one place to another.
Notice is not required for moving the register between the registered office and the principal place of business in this jurisdiction.
(3) An offence based on subsection (1), (1A) or (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
173 Right to inspect and get copies
Right to inspect
(1) A company or registered scheme must allow anyone to inspect a register kept under this Chapter. If the register is not kept on a computer, the person inspects the register itself. If the register is kept on a computer, the person inspects the register by computer.
Note: Other provisions that are relevant to the inspection of registers are:
Note: section 1300 (place and times for inspection)
Note: section 1301 (the location of documents that are kept on computers)
Note: section 1306 (form and evidentiary value).
Inspection fees
(2) A member of a company or a registered scheme, a registered option holder or a registered debenture holder may inspect a register kept under this Chapter without charge. Other people may inspect the register only on payment of any fee (up to the prescribed amount) required by the company or scheme.
Right to get copies
(3) The company or scheme must give a person a copy of the register (or a part of the register) within 7 days if the person:
(a) makes an application to the company or registered scheme in accordance with subsection (3A); and
(b) pays any fee (up to the prescribed amount) required by the company or scheme.
ASIC may allow a longer period to comply with the request. If the register is kept on a computer, the company or registered scheme must give the copy to the person in the prescribed form.
(3A) An application is in accordance with this subsection if:
(a) the application states each purpose for which the person is accessing the copy; and
(b) none of those purposes is a prescribed purpose; and
(c) the application is in the prescribed form.
Note: Sections 137.1 and 137.2 of the Criminal Code create offences for providing false or misleading information or documents.
(4) A person has the same rights to inspect, and obtain copies of, the documents kept under subsection 170(3) as the person has in respect of the register of option holders itself.
(5) The company is not required under subsection (1) or (3) to allow a person to see, or to give a person a copy that contains, share certificate numbers.
ASIC power in relation to register of debenture holders
(6) ASIC may exempt a company from complying with subsections (1) and (3) in relation to information in a register of debenture holders about debentures that are not convertible into shares or options over unissued shares.
(7) The exemption:
(a) must be in writing; and
(b) may be general or limited; and
(c) may be subject to conditions specified in the exemption.
(8) ASIC must publish a copy of the exemption in the Gazette.
(9) A person must not contravene a condition of the exemption.
(9A) An offence based on subsection (1), (3) or (9) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(10) On application by ASIC, the Court may order a person who contravenes a condition of the exemption to comply with the condition.
174 Agent’s obligations
(1) A person who agrees to maintain a register on behalf of a company or registered scheme for the purposes of this Chapter must:
(a) make the register available for inspection under this Chapter; and
(b) provide the copies required by this Chapter.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
175 Correction of registers
(1) A company or registered scheme or a person aggrieved may apply to the Court to have a register kept by the company or scheme under this Part corrected.
(2) If the Court orders the company or scheme to correct the register, it may also order the company or scheme to compensate a party to the application for loss or damage suffered.
(3) If:
(a) the Court orders a company or scheme to correct its register of members; and
(b) the company or scheme has lodged a list of its members with ASIC;
the company or scheme must lodge notice of the correction with ASIC.
Note: A proprietary company may also have to notify certain particulars under Part 2C.2 of this Chapter.
176 Evidentiary value of registers
In the absence of evidence to the contrary, a register kept under this Chapter is proof of the matters shown in the register under this Chapter.
177 Use of information on registers
(1) A person must not:
(a) use information about a person obtained from a register kept under this Chapter to contact or send material to the person; or
(b) disclose information of that kind knowing that the information is likely to be used to contact or send material to the person.
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.
(1AA) A person must not:
(a) use information obtained from a register kept under this Chapter for any purpose prescribed by regulations made for the purposes of paragraph 173(3A)(b); or
(b) disclose information of that kind knowing that the information is likely to be used for any such purpose.
(1A) Subsection (1) does not apply if the use or disclosure of the information is:
(a) relevant to the holding of the interests recorded in the register or the exercise of the rights attaching to them; or
(b) approved by the company or scheme.
Note: A defendant bears an evidential burden in relation to the matter in subsection (1A), see subsection 13.3(3) of the Criminal Code.
(1B) An offence based on subsection (1) or (1AA) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) A person who contravenes subsection (1) or (1AA) 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) or (1AA) owes a debt to the company or the scheme. The amount of the debt is the amount of the profit.
(4) If a person owes a debt under subsection (3) to the scheme:
(a) the debt may be recovered by the responsible entity as a debt due to it; and
(b) any amount paid or recovered in respect of the debt forms part of the scheme property.
178 Overseas branch registers—companies
(1) A company may keep a branch register of members of the company at a place outside Australia.
(2) If a company keeps an overseas branch register under subsection (1):
(a) the company must keep the branch register in the same manner as this Act requires the company to keep the register kept under section 169 (the principal register); and
(b) the company must enter in the principal register the details contained in the branch register; and
(c) the company must distinguish shares that are registered in the branch register from the shares registered in the principal register.
(1) An Australian passport fund may keep a branch register of members of the fund outside Australia.
(2) If an Australian passport fund keeps an overseas branch register under subsection (1):
(a) the fund must keep the branch register in the same manner as this Act requires the fund to keep the register kept under section 169 (the principal register); and
(b) the fund must enter in the principal register the details contained in the branch register; and
(c) the fund must distinguish interests that are registered in the branch register from the interests registered in the principal register.
Part 2C.2—Notice by proprietary companies of changes to member register
178A Notice of change to member register
(1) A proprietary company must notify ASIC within the time determined under section 178D and in the prescribed form, if:
(a) it is required to add or alter a particular in the register it maintains under section 169; and
(b) the particular is one required to be kept under any of the following:
(i) subsection 169(1) (name and address and date of entry of member’s name into register);
(ii) paragraph 169(3)(b) (number of shares in each allotment to the member);
(iii) paragraph 169(3)(c) (the number of shares held by the member);
(iv) paragraph 169(3)(d) (the class of shares held by the member);
(v) paragraph 169(3)(ea) (the amount paid on the member’s shares);
(vi) paragraph 169(3)(eb) (whether the member’s shares are fully paid);
(vii) paragraph 169(3)(f) (the amount unpaid, if any, on the member’s shares);
(viii) subsection 169(5A) (statement whether any of the member’s shares are held beneficially);
(ix) subsection 169(6AA) (shares issued as a result of CSF offers).
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
178B Top 20 only
If a proprietary company has more than 20 members, the company is only required to notify additions or alterations of particulars under section 178A that relate to a person who is, or as a result of the addition or alteration will become, a top 20 member of a class of the company.
Note: See also section 107.
178C Notice of change to share structure
(1) A proprietary company that is required to notify ASIC under section 178A of an addition or alteration must also notify ASIC, at the same time, of any of the following details in relation to the company that are different from the details previously notified to ASIC:
(a) the total number of the company’s shares on issue;
(b) the classes into which the shares are divided;
(c) for each class issued:
(i) the total number of shares for the class;
(ii) the total amount paid up for the class;
(iii) the total amount unpaid for the class;
(d) that the company has started to have one or more CSF shareholders;
(e) that the company has ceased to have any CSF shareholders.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
178D Time within which ASIC must be notified
A proprietary company must notify ASIC under section 178A within the time determined by this table.
<table cellspacing="0" cellpadding="0" style="margin-left:0.25pt; border-collapse:collapse"><thead><tr><td colspan="3" style="width:343.8pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Time within which the company must notify ASIC</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Item</span></p></td><td style="width:148.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">If the need to add or alter a particular arises in connection with this event...</span></p></td><td style="width:148.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">The company must notify ASIC within this time...</span></p></td></tr></thead><tbody><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:148.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the Court orders the company to correct its member register kept under section</span><span> </span><span>169</span></p></td><td style="width:148.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>at the same time that it notifies ASIC of the correction under subsection</span><span> </span><span>175(3)</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:148.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the company divides shares into classes, or converts shares of a class into shares of another class</span></p></td><td style="width:148.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>within the time within which it must notify ASIC of the particulars of the division or conversion under subsection</span><span> </span><span>246F(1)</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:148.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the company issues shares</span></p></td><td style="width:148.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>within the time within which it must notify ASIC of the particulars of the issue under subsection</span><span> </span><span>254X(1)</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:148.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the company reduces its share capital</span></p></td><td style="width:148.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>within the time within which it must notify ASIC of shareholder approval of the reduction under subsection</span><span> </span><span>256C(3)</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>5</span></p></td><td style="width:148.65pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>an event not covered by items</span><span> </span><span>1 to 4</span></p></td><td style="width:148.65pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>within 28 days after the day on which it adds or alters the particular in the register</span></p></td></tr></tbody></table>
Chapter 2D—Officers and employees
Part 2D.1—Duties and powers
179 Simplified outline of this Part
This Part sets out some of the most significant duties of directors, secretaries, other officers and employees of corporations. Other duties are imposed by other provisions of this Act and other laws (including the general law).
Note: For a CCIV there are additional duties, see Divisions 2 and 3 of Part 8B.3.
The officers of a corporation include, as well as its directors and secretaries, some other people who manage the corporation or its property (such as receivers and liquidators).
Note: For the definitions of director and officer, see sections 9AC and 9AD.
Division 1—General duties
Note: This Division applies in relation to CCIVs in a modified form: see sections 1224C.
180 Care and diligence—civil obligation only
Care and diligence—directors and other officers
(1) A director or other officer of a corporation must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they:
(a) were a director or officer of a corporation in the corporation’s circumstances; and
(b) occupied the office held by, and had the same responsibilities within the corporation as, the director or officer.
Note: This subsection is a civil penalty provision (see section 1317E).
Business judgment rule
(2) A director or other officer of a corporation who makes a business judgment is taken to meet the requirements of subsection (1), and their equivalent duties at common law and in equity, in respect of the judgment if they:
(a) make the judgment in good faith for a proper purpose; and
(b) do not have a material personal interest in the subject matter of the judgment; and
(c) inform themselves about the subject matter of the judgment to the extent they reasonably believe to be appropriate; and
(d) rationally believe that the judgment is in the best interests of the corporation.
The director’s or officer’s belief that the judgment is in the best interests of the corporation is a rational one unless the belief is one that no reasonable person in their position would hold.
Note: This subsection only operates in relation to duties under this section and their equivalent duties at common law or in equity (including the duty of care that arises under the common law principles governing liability for negligence)—it does not operate in relation to duties under any other provision of this Act or under any other laws.
(3) In this section:
business judgment means any decision to take or not take action in respect of a matter relevant to the business operations of the corporation.
181 Good faith—civil obligations
Good faith—directors and other officers
(1) A director or other officer of a corporation must exercise their powers and discharge their duties:
(a) in good faith in the best interests of the corporation; and
(b) for a proper purpose.
Note 1: This subsection is a civil penalty provision (see section 1317E).
Note 2: Section 187 deals with the situation of directors of wholly‑owned subsidiaries.
(2) A person who is involved in a contravention of subsection (1) contravenes this subsection.
Note 1: Section 79 defines involved.
Note 2: This subsection is a civil penalty provision (see section 1317E).
182 Use of position—civil obligations
Use of position—directors, other officers and employees
(1) A director, secretary, other officer or employee of a corporation must not improperly use their position to:
(a) gain an advantage for themselves or someone else; or
(b) cause detriment to the corporation.
Note: This subsection is a civil penalty provision (see section 1317E).
(2) A person who is involved in a contravention of subsection (1) contravenes this subsection.
Note 1: Section 79 defines involved.
Note 2: This subsection is a civil penalty provision (see section 1317E).
183 Use of information—civil obligations
Use of information—directors, other officers and employees
(1) A person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to:
(a) gain an advantage for themselves or someone else; or
(b) cause detriment to the corporation.
Note 1: This duty continues after the person stops being an officer or employee of the corporation.
Note 2: This subsection is a civil penalty provision (see section 1317E).
(2) A person who is involved in a contravention of subsection (1) contravenes this subsection.
Note 1: Section 79 defines involved.
Note 2: This subsection is a civil penalty provision (see section 1317E).
184 Good faith, use of position and use of information—criminal offences
Good faith—directors and other officers
(1) A director or other officer of a corporation commits an offence if they:
(a) are reckless; or
(b) are dishonest;
and fail to exercise their powers and discharge their duties:
(c) in good faith in the best interests of the corporation; or
(d) for a proper purpose.
Note: Section 187 deals with the situation of directors of wholly‑owned subsidiaries.
Use of position—directors, other officers and employees
(2) A director, other officer or employee of a corporation commits an offence if they use their position dishonestly:
(a) with the intention of directly or indirectly gaining an advantage for themselves, or someone else, or causing detriment to the corporation; or
(b) recklessly as to whether the use may result in themselves or someone else directly or indirectly gaining an advantage, or in causing detriment to the corporation.
(2A) To avoid doubt, it is not a defence in a proceeding for an offence against subsection (2) that the director, other officer or employee of the corporation uses their position dishonestly:
(a) with the intention of directly or indirectly gaining an advantage for the corporation; or
(b) with the result that the corporation directly or indirectly gained an advantage.
Use of information—directors, other officers and employees
(3) A person who obtains information because they are, or have been, a director or other officer or employee of a corporation commits an offence if they use the information dishonestly:
(a) with the intention of directly or indirectly gaining an advantage for themselves, or someone else, or causing detriment to the corporation; or
(b) recklessly as to whether the use may result in themselves or someone else directly or indirectly gaining an advantage, or in causing detriment to the corporation.
(4) To avoid doubt, it is not a defence in a proceeding for an offence against subsection (3) that the person uses the information dishonestly:
(a) with the intention of directly or indirectly gaining an advantage for the corporation; or
(b) with the result that the corporation directly or indirectly gained an advantage.
185 Interaction of sections 180 to 184 with other laws etc.
Sections 180 to 184:
(a) have effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person because of their office or employment in relation to a corporation; and
(b) do not prevent the commencement of civil proceedings for a breach of a duty or in respect of a liability referred to in paragraph (a).
This section does not apply to subsections 180(2) and (3) to the extent to which they operate on the duties at common law and in equity that are equivalent to the requirements of subsection 180(1).
186 Territorial application of sections 180 to 184
Sections 180 to 184 do not apply to an act or omission by a director or other officer or employee of a foreign company unless the act or omission occurred in connection with:
(a) the foreign company carrying on business in this jurisdiction; or
(b) an act that the foreign company does, or proposes to do, in this jurisdiction; or
(c) a decision by the foreign company whether or not to do, or refrain from doing, an act in this jurisdiction.
187 Directors of wholly‑owned subsidiaries
A director of a corporation that is a wholly‑owned subsidiary of a body corporate is taken to act in good faith in the best interests of the subsidiary if:
(a) the constitution of the subsidiary expressly authorises the director to act in the best interests of the holding company; and
(b) the director acts in good faith in the best interests of the holding company; and
(c) the subsidiary is not insolvent at the time the director acts and does not become insolvent because of the director’s act.
188 Responsibility of secretaries etc. for certain corporate contraventions
Responsibility of company secretaries
(1) A secretary of a company contravenes this subsection if the company contravenes any of the following provisions (each of which is a corporate responsibility provision):
(a) section 142 (registered office);
(b) section 145 (public company’s registered office to be open to public);
(c) section 146 (change of principal place of business);
(d) section 178A (change to proprietary company’s member register);
(e) section 178C (change to proprietary company’s share structure);
(ea) subsection 203AA(6) (notification of resignation day);
(f) section 205B (lodgement of notices with ASIC);
(g) section 254X (issue of shares);
(h) section 319 (lodgement of annual reports with ASIC);
(i) section 320 (lodgement of half‑year reports with ASIC);
(j) section 346C (response to extract of particulars);
(k) section 348D (response to return of particulars);
(l) section 349A (change to proprietary company’s ultimate holding company).
Note 1: See section 204A for the circumstances in which a company must have a secretary.
Note 2: This subsection is a civil penalty provision (see section 1317E).
Note 3: This subsection has an extended operation in relation to the secretary of a corporate director of a CCIV: see sections 1225A and 1225B.
Responsibility of directors of proprietary companies
(2) Each director of a proprietary company contravenes this subsection if:
(a) the proprietary company contravenes a corporate responsibility provision; and
(b) the proprietary company does not have a secretary when it contravenes that provision.
Note 1: See section 204A for the circumstances in which a company must have a secretary.
Note 2: This subsection is a civil penalty provision (see section 1317E).
Defence of reasonable steps
(3) A person does not contravene subsection (1) or (2) in relation to a company’s contravention of a corporate responsibility provision if the person shows that he or she took reasonable steps to ensure that the company complied with the provision.
189 Reliance on information or advice provided by others
If:
(a) a director relies on information, or professional or expert advice, given or prepared by:
(i) an employee of the corporation whom the director believes on reasonable grounds to be reliable and competent in relation to the matters concerned; or
(ii) a professional adviser or expert in relation to matters that the director believes on reasonable grounds to be within the person’s professional or expert competence; or
(iii) another director or officer in relation to matters within the director’s or officer’s authority; or
(iv) a committee of directors on which the director did not serve in relation to matters within the committee’s authority; and
(b) the reliance was made:
(i) in good faith; and
(ii) after making an independent assessment of the information or advice, having regard to the director’s knowledge of the corporation and the complexity of the structure and operations of the corporation; and
(c) the reasonableness of the director’s reliance on the information or advice arises in proceedings brought to determine whether a director has performed a duty under this Part or an equivalent general law duty;
the director’s reliance on the information or advice is taken to be reasonable unless the contrary is proved.
190 Responsibility for actions of delegate
(1) If the directors delegate a power under section 198D, a director is responsible for the exercise of the power by the delegate as if the power had been exercised by the directors themselves.
(2) A director is not responsible under subsection (1) if:
(a) the director believed on reasonable grounds at all times that the delegate would exercise the power in conformity with the duties imposed on directors of the company by this Act and the company’s constitution (if any); and
(b) the director believed:
(i) on reasonable grounds; and
(ii) in good faith; and
(iii) after making proper inquiry if the circumstances indicated the need for inquiry;
that the delegate was reliable and competent in relation to the power delegated.
190A Limited application of Division to registrable Australian bodies
This Division does not apply to an act or omission by a director or other officer or employee of a corporation that is a registrable Australian body unless the act or omission occurred in connection with:
(a) the body carrying on business outside its place of origin; or
(b) an act that the body does or proposed to do outside its place of origin; or
(c) a decision by the body whether or not to do or refrain from doing outside its place of origin.
190B Division does not apply to Aboriginal and Torres Strait Islander corporations
This Division does not apply to a corporation that is an Aboriginal and Torres Strait Islander corporation.
Note: Division 265 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 deals with the general duties of directors, secretaries, officers and employees of Aboriginal and Torres Strait Islander corporations.
190C Division does not apply in relation to notified foreign passport funds or their operators
This Division does not apply to an act or omission by a person, if:
(a) the act or omission is in the person’s capacity as a director, other officer or employee of a notified foreign passport fund; or
(b) the act or omission:
(i) is in the person’s capacity as a director, other officer or employee of the operator of a notified foreign passport fund; and
(ii) is connected with the operation of the fund.
Division 2—Disclosure of, and voting on matters involving, material personal interests
Note: This Division applies in relation to CCIVs in a modified form: see sections 1225C and 1224K.
191 Material personal interest—director’s duty to disclose
Director’s duty to notify other directors of material personal interest when conflict arises
(1) A director of a company who has a material personal interest in a matter that relates to the affairs of the company must give the other directors notice of the interest unless subsection (2) says otherwise.
(1A) For an offence based on subsection (1), strict liability applies to the circumstance, that the director of a company has a material personal interest in a matter that relates to the affairs of the company.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The director does not need to give notice of an interest under subsection (1) if:
(a) the interest:
(i) arises because the director is a member of the company and is held in common with the other members of the company; or
(ii) arises in relation to the director’s remuneration as a director of the company; or
(iii) relates to a contract the company is proposing to enter into that is subject to approval by the members and will not impose any obligation on the company if it is not approved by the members; or
(iv) arises merely because the director is a guarantor or has given an indemnity or security for all or part of a loan (or proposed loan) to the company; or
(v) arises merely because the director has a right of subrogation in relation to a guarantee or indemnity referred to in subparagraph (iv); or
(vi) relates to a contract that insures, or would insure, the director against liabilities the director incurs as an officer of the company (but only if the contract does not make the company or a related body corporate the insurer); or
(vii) relates to any payment by the company or a related body corporate in respect of an indemnity permitted under section 199A or any contract relating to such an indemnity; or
(viii) is in a contract, or proposed contract, with, or for the benefit of, or on behalf of, a related body corporate and arises merely because the director is a director of the related body corporate; or
(b) the company is a proprietary company and the other directors are aware of the nature and extent of the interest and its relation to the affairs of the company; or
(c) all the following conditions are satisfied:
(i) the director has already given notice of the nature and extent of the interest and its relation to the affairs of the company under subsection (1);
(ii) if a person who was not a director of the company at the time when the notice under subsection (1) was given is appointed as a director of the company—the notice is given to that person;
(iii) the nature or extent of the interest has not materially increased above that disclosed in the notice; or
(d) the director has given a standing notice of the nature and extent of the interest under section 192 and the notice is still effective in relation to the interest.
Note: Subparagraph (c)(ii)—the notice may be given to the person referred to in this subparagraph by someone other than the director to whose interests it relates (for example, by the secretary).
(3) The notice required by subsection (1) must:
(a) give details of:
(i) the nature and extent of the interest; and
(ii) the relation of the interest to the affairs of the company; and
(b) be given at a directors’ meeting as soon as practicable after the director becomes aware of their interest in the matter.
The details must be recorded in the minutes of the meeting.
Effect of contravention by director
(4) A contravention of this section by a director does not affect the validity of any act, transaction, agreement, instrument, resolution or other thing.
Section does not apply to single director proprietary company
(5) This section does not apply to a proprietary company that has only 1 director.
192 Director may give other directors standing notice about an interest
Power to give notice
(1) A director of a company who has an interest in a matter may give the other directors standing notice of the nature and extent of the interest in the matter in accordance with subsection (2). The notice may be given at any time and whether or not the matter relates to the affairs of the company at the time the notice is given.
Note: The standing notice may be given to the other directors before the interest becomes a material personal interest.
(2) The notice under subsection (1) must:
(a) give details of the nature and extent of the interest; and
(b) be given:
(i) at a directors’ meeting (either orally or in writing); or
(ii) to the other directors individually in writing.
The standing notice is given under subparagraph (b)(ii) when it has been given to every director.
Standing notice must be tabled at meeting if given to directors individually
(3) If the standing notice is given to the other directors individually in writing, it must be tabled at the next directors’ meeting after it is given.
Nature and extent of interest must be recorded in minutes
(4) The director must ensure that the nature and extent of the interest disclosed in the standing notice is recorded in the minutes of the meeting at which the standing notice is given or tabled.
Dates of effect and expiry of standing notice
(5) The standing notice:
(a) takes effect as soon as it is given; and
(b) ceases to have effect if a person who was not a director of the company at the time when the notice was given is appointed as a director of the company.
A standing notice that ceases to have effect under paragraph (b) commences to have effect again if it is given to the person referred to in that paragraph.
Note: The notice may be given to the person referred to in paragraph (b) by someone other than the director to whose interests it relates (for example, by the secretary).
Effect of material increase in nature or extent of interest
(6) The standing notice ceases to have effect in relation to a particular interest if the nature or extent of the interest materially increases above that disclosed in the notice.
Effect of contravention by director
(7) A contravention of this section by a director does not affect the validity of any act, transaction, agreement, instrument, resolution or other thing.
193 Interaction of sections 191 and 192 with other laws etc.
Sections 191 and 192 have effect in addition to, and not in derogation of:
(a) any general law rule about conflicts of interest; and
(b) any provision in a company’s constitution (if any) that restricts a director from:
(i) having a material personal interest in a matter; or
(ii) holding an office or possessing property;
involving duties or interests that conflict with their duties or interests as a director.
194 Voting and completion of transactions—directors of proprietary companies (replaceable rule—see section 135)
If a director of a proprietary company has a material personal interest in a matter that relates to the affairs of the company and:
(a) under section 191 the director discloses the nature and extent of the interest and its relation to the affairs of the company at a meeting of the directors; or
(b) the interest is one that does not need to be disclosed under section 191;
then:
(c) the director may vote on matters that relate to the interest; and
(d) any transactions that relate to the interest may proceed; and
(e) the director may retain benefits under the transaction even though the director has the interest; and
(f) the company cannot avoid the transaction merely because of the existence of the interest.
If disclosure is required under section 191, paragraphs (e) and (f) apply only if the disclosure is made before the transaction is entered into.
Note: A director may need to give notice to the other directors if the director has a material personal interest in a matter relating to the affairs of the company (see section 191).
195 Restrictions on voting—directors of public companies only
Restrictions on voting and being present
(1) A director of a public company who has a material personal interest in a matter that is being considered at a directors’ meeting must not:
(a) be present while the matter is being considered at the meeting; or
(b) vote on the matter.
(1A) Subsection (1) does not apply if:
(a) subsection (2) or (3) allows the director to be present; or
(b) the interest does not need to be disclosed under section 191.
Note: A defendant bears an evidential burden in relation to the matter in subsection (1A), see subsection 13.3(3) of the Criminal Code.
(1B) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Participation with approval of other directors
(2) The director may be present and vote if directors who do not have a material personal interest in the matter have passed a resolution that:
(a) identifies the director, the nature and extent of the director’s interest in the matter and its relation to the affairs of the company; and
(b) states that those directors are satisfied that the interest should not disqualify the director from voting or being present.
Participation with ASIC approval
(3) The director may be present and vote if they are so entitled under a declaration or order made by ASIC under section 196.
Director may consider or vote on resolution to deal with matter at general meeting
(4) If there are not enough directors to form a quorum for a directors’ meeting because of subsection (1), 1 or more of the directors (including those who have a material personal interest in that matter) may call a general meeting and the general meeting may pass a resolution to deal with the matter.
Effect of contravention by director
(5) A contravention by a director of:
(a) this section; or
(b) a condition attached to a declaration or order made by ASIC under section 196;
does not affect the validity of any resolution.
196 ASIC power to make declarations and class orders
ASIC’s power to make specific declarations
(1) ASIC may declare in writing that a director of a public company who has a material personal interest in a matter that is being, or is to be, considered at a directors’ meeting may, despite the director’s interest, be present while the matter is being considered at the meeting, vote on the matter, or both be present and vote. However, ASIC may only make the declaration if:
(a) the number of directors entitled to be present and vote on the matter would be less than the quorum for a directors’ meeting if the director were not allowed to vote on the matter at the meeting; and
(b) the matter needs to be dealt with urgently, or there is some other compelling reason for the matter being dealt with at the directors’ meeting, rather than by a general meeting called under subsection 195(4).
(2) The declaration may:
(a) apply to all or only some of the directors; or
(b) specify conditions that the company or director must comply with.
ASIC’s power to make class orders
(3) ASIC may make an order in writing that enables directors who have a material personal interest in a matter to be present while the matter is being considered at a directors’ meeting, vote on that matter, or both be present and vote. The order may be made in respect of a specified class of public companies, directors, resolutions or interests.
(4) The order may be expressed to be subject to conditions.
(5) Notice of the making, revocation or suspension of the order must be published in the Gazette.
Division 3—Duty to discharge certain trust liabilities
197 Directors liable for debts and other obligations incurred by corporation as trustee
(1) A person who is a director of a corporation when it incurs a liability while acting, or purporting to act, as trustee, is liable to discharge the whole or a part of the liability if the corporation:
(a) has not discharged, and cannot discharge, the liability or that part of it; and
(b) is not entitled to be fully indemnified against the liability out of trust assets solely because of one or more of the following:
(i) a breach of trust by the corporation;
(ii) the corporation’s acting outside the scope of its powers as trustee;
(iii) a term of the trust denying, or limiting, the corporation’s right to be indemnified against the liability.
The person is liable both individually and jointly with the corporation and anyone else who is liable under this subsection.
Note: The person will not be liable under this subsection merely because there are insufficient trust assets out of which the corporation can be indemnified.
(2) The person is not liable under subsection (1) if the person would be entitled to have been fully indemnified by 1 of the other directors against the liability had all the directors of the corporation been trustees when the liability was incurred.
(3) This section does not apply to a liability incurred outside Australia by a foreign company.
(3A) This section does not apply to a liability incurred by a corporation that is:
(a) a notified foreign passport fund; or
(b) the operator of a notified foreign passport fund acting in that capacity.
(4) This section does not apply to a liability incurred by a registrable Australian body outside its place of origin.
(5) This section does not apply to a corporation that is an Aboriginal and Torres Strait Islander corporation.
Note: Section 271‑1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 deals with the liability of directors of Aboriginal and Torres Strait Islander corporations for debts and other liabilities incurred by those corporations as trustee.
Division 4—Powers
198A Powers of directors (replaceable rule—see section 135)
(1) The business of a company is to be managed by or under the direction of the directors.
Note: See section 198E for special rules about the powers of directors who are the single director/shareholder of proprietary companies.
(2) The directors may exercise all the powers of the company except any powers that this Act or the company’s constitution (if any) requires the company to exercise in general meeting.
Note: For example, the directors may issue shares, borrow money and issue debentures.
(1) Any 2 directors of a company that has 2 or more directors, or the director of a proprietary company that has only 1 director, may sign, draw, accept, endorse or otherwise execute a negotiable instrument.
(2) The directors may determine that a negotiable instrument may be signed, drawn, accepted, endorsed or otherwise executed in a different way.
198C Managing director (replaceable rule—see section 135)
(1) The directors of a company may confer on a managing director any of the powers that the directors can exercise.
(2) The directors may revoke or vary a conferral of powers on the managing director.
198D Delegation
(1) Unless the company’s constitution provides otherwise, the directors of a company may delegate any of their powers to:
(a) a committee of directors; or
(b) a director; or
(c) an employee of the company; or
(d) any other person.
Note 1: The delegation must be recorded in the company’s minute book (see section 251A).
Note 2: If the company is a CCIV, section 1224L applies instead of this section.
(2) The delegate must exercise the powers delegated in accordance with any directions of the directors.
(3) The exercise of the power by the delegate is as effective as if the directors had exercised it.
198E Single director/shareholder proprietary companies
Powers of director
(1) The director of a proprietary company who is its only director and only shareholder may exercise all the powers of the company except any powers that this Act or the company’s constitution (if any) requires the company to exercise in general meeting. The business of the company is to be managed by or under the direction of the director.
Note: For example, the director may issue shares, borrow money and issue debentures.
Negotiable instruments
(2) The director of a proprietary company who is its only director and only shareholder may sign, draw, accept, endorse or otherwise execute a negotiable instrument. The director may determine that a negotiable instrument may be signed, drawn, accepted, endorsed or otherwise executed in a different way.
198F Right of access to company books
Right while director
(1) A director of a company may inspect the books of the company (other than its financial records) at all reasonable times for the purposes of a legal proceeding:
(a) to which the person is a party; or
(b) that the person proposes in good faith to bring; or
(c) that the person has reason to believe will be brought against them.
Note 1: Section 290 gives the director a right of access to financial records.
Note 2: This section also applies to a director of a corporate director of a CCIV: see section 1225D.
Right during 7 years after ceasing to be director
(2) A person who has ceased to be a director of a company may inspect the books of the company (including its financial records) at all reasonable times for the purposes of a legal proceeding:
(a) to which the person is a party; or
(b) that the person proposes in good faith to bring; or
(c) that the person has reason to believe will be brought against them.
This right continues for 7 years after the person ceased to be a director of the company.
Right to take copies
(3) A person authorised to inspect books under this section for the purposes of a legal proceeding may make copies of the books for the purposes of those proceedings.
Company not to refuse access
(4) A company must allow a person to exercise their rights to inspect or take copies of the books under this section.
Interaction with other rules
(5) This section does not limit any right of access to company books that a person has apart from this section.
Division 5—Exercise of powers while company under external administration
198G Exercise of powers while company under external administration
Powers of officers while company under external administration
(1) While a company is under external administration, an officer of the company must not perform or exercise a function or power of that office.
Note: For a CCIV, section 1224Q applies instead of this section.
Offence
(2) A person commits an offence if:
(a) the person is an officer of a company; and
(b) the company is under external administration; and
(c) the person purports to perform or exercise a function or power of that office.
Penalty: 30 penalty units.
Exceptions
(3) Subsections (1) and (2) do not apply to the extent that the officer of the company is acting:
(a) as the external administrator of the company; or
(b) with the written approval of the external administrator of the company or the Court; or
(c) in circumstances in which, despite the fact that the company is under external administration, the officer is permitted by this Act to act.
Note: In proceedings to determine whether a person has committed an offence under subsection (2), a defendant bears an evidential burden in relation to the matters in subsection (3), see subsection 13.3(3) of the Criminal Code.
(4) Subsections (1) and (2) do not apply if the company has executed a deed of company arrangement and the deed has not yet terminated.
Note 1: Section 444G deals with the effect of a deed of company arrangement on various persons.
Note 2: In proceedings to determine whether a person has committed an offence under subsection (2), a defendant bears an evidential burden in relation to the matters in subsection (4), see subsection 13.3(3) of the Criminal Code.
(4A) Subsections (1) and (2) do not apply in relation to:
(a) a company under restructuring; or
(b) a company that has made a restructuring plan that has not yet terminated.
Functions and powers of liquidator or provisional liquidator prevail in case of conflict
(5) If subsection (3) applies and there is a conflict between a function or power of the external administrator of the company and a function or power of the officer in relation to the company, the external administrator’s function or power prevails.
Effect of section
(6) This section does not remove an officer of a company from office.
(7) For the purposes of this section, a person is not an officer of a company merely because he or she is a managing controller, appointed under a power contained in an instrument, of property of the company.
(8) Nothing in this section affects a secured creditor’s right to realise or otherwise deal with the security interest.
Definitions
(9) In this section:
external administration of a company has the same meaning as in Schedule 2.
Part 2D.2—Restrictions on indemnities, insurance and termination payments
Division 1—Indemnities and insurance for officers and auditors
199A Indemnification and exemption of officer or auditor
Exemptions not allowed
(1) A company or a related body corporate must not exempt a person (whether directly or through an interposed entity) from a liability to the company incurred as an officer or auditor of the company.
Note: This section is modified for the director of a wholesale CCIV: see subsection 1224D(7). This section has an extended operation in relation to officers and auditors of the corporate director of a CCIV: see section 1225E.
When indemnity for liability (other than for legal costs) not allowed
(2) A company or a related body corporate must not indemnify a person (whether by agreement or by making a payment and whether directly or through an interposed entity) against any of the following liabilities incurred as an officer or auditor of the company:
(a) a liability owed to the company or a related body corporate;
(b) a liability for a pecuniary penalty order under section 1317G or a compensation order under section 961M, 1317H, 1317HA, 1317HB, 1317HC or 1317HE;
(c) a liability that is owed to someone other than the company or a related body corporate and did not arise out of conduct in good faith.
This subsection does not apply to a liability for legal costs.
When indemnity for legal costs not allowed
(3) A company or related body corporate must not indemnify a person (whether by agreement or by making a payment and whether directly or through an interposed entity) against legal costs incurred in defending an action for a liability incurred as an officer or auditor of the company if the costs are incurred:
(a) in defending or resisting proceedings in which the person is found to have a liability for which they could not be indemnified under subsection (2); or
(b) in defending or resisting criminal proceedings in which the person is found guilty; or
(c) in defending or resisting proceedings brought by ASIC or a liquidator for a court order if the grounds for making the order are found by the court to have been established; or
(d) in connection with proceedings for relief to the person under this Act in which the Court denies the relief.
Paragraph (c) does not apply to costs incurred in responding to actions taken by ASIC or a liquidator as part of an investigation before commencing proceedings for the court order.
Note 1: Paragraph (c)—This includes proceedings by ASIC for an order under section 206C, 206D, 206E or 206EAA (disqualification), section 232 (oppression), section 961M, 1317E, 1317G, 1317H, 1317HA, 1317HB, 1317HC or 1317HE (civil penalties) or section 1324 (injunction).
Note 2: The company may be able to give the person a loan or advance in respect of the legal costs (see section 212).
(4) For the purposes of subsection (3), the outcome of proceedings is the outcome of the proceedings and any appeal in relation to the proceedings.
199B Insurance premiums for certain liabilities of director, secretary, other officer or auditor
(1) A company or a related body corporate must not pay, or agree to pay, a premium for a contract insuring a person who is or has been an officer or auditor of the company against a liability (other than one for legal costs) arising out of:
(a) conduct involving a wilful breach of duty in relation to the company; or
(b) a contravention of section 182 or 183.
This section applies to a premium whether it is paid directly or through an interposed entity.
Note: This section has an extended operation in relation to officers and auditors of the corporate director of a CCIV: see section 1225E.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
199C Certain indemnities, exemptions, payments and agreements not authorised and certain documents void
(1) Sections 199A and 199B do not authorise anything that would otherwise be unlawful.
(2) Anything that purports to indemnify or insure a person against a liability, or exempt them from a liability, is void to the extent that it contravenes section 199A or 199B.
Division 2—Termination payments
200 Interpreting this Division
For the purposes of this Division, in determining whether a benefit is given:
(a) give a broad interpretation to benefits being given, even if criminal or civil penalties may be involved; and
(b) the economic and commercial substance of conduct is to prevail over its legal form.
200AA Meaning of managerial or executive office
If the company is a disclosing entity
(1) For a company to which section 300A applies for the previous financial year for the company, a person holds a managerial or executive office in the company during the current financial year if the person’s details were included in the directors’ report for that previous financial year for the company in accordance with paragraph 300A(1)(c).
Note: A person holding a managerial or executive office ceases to do so if the person’s details are not included in the next directors’ report. However, this is not relevant to whether the person has retired from an office or position in the company (see paragraph 200A(1)(f)).
(2) The person is taken to hold the managerial or executive office for the whole of the current financial year unless and until the person retires from an office or position in the company before the end of that year.
Note: Retires has an extended meaning (see section 200A).
Otherwise
(3) For a body corporate not covered by subsection (1), a managerial or executive office for the body corporate is:
(a) an office of director of the body corporate; or
(b) any other office or position in connection with the management of the body corporate’s affairs that is held by a person who also holds an office of director of the body corporate or a related body corporate.
200AB Meaning of benefit
(1) For the purposes of this Division, a benefit includes any of the following:
(a) a payment or other valuable consideration;
(b) any kind of real or personal property;
(c) any legal or equitable estate or interest in real or personal property;
(d) any legal or equitable right;
(e) a thing specified in regulations made for the purposes of this paragraph.
Note: For specification by class, see subsection 13(3) of the Legislation Act 2003.
(2) However, for the purposes of this Division, a benefit does not include a thing specified in regulations made for the purposes of this subsection.
Note: For specification by class, see subsection 13(3) of the Legislation Act 2003.
200A When benefit given in connection with retirement from an office or position
General rules
(1) For the purposes of this Division:
(a) a benefit is given in connection with a person’s retirement from an office or position if the benefit is given:
(i) by way of compensation for, or otherwise in connection with, the loss by the person of the office or position; or
(ii) in connection with the person’s retirement from the office or position; and
(b) giving a benefit includes:
(i) if the benefit is a payment—making the payment; and
(ii) if the benefit is an interest in property—transferring the interest; and
(c) a person gives a benefit even if the person is obliged to give the benefit under a contract; and
(d) a pension or lump sum is paid or payable in connection with the person’s retirement from an office or position if the pension or lump sum is paid or payable:
(i) by way of compensation for, or otherwise in connection with, the loss by the person of the office or position; or
(ii) in connection with the person’s retirement from the office or position; and
(e) retirement from an office or position includes:
(i) loss of the office or position; and
(ii) resignation from the office or position; and
(iii) death of a person at a time when they hold the office or position; and
(f) when working out whether a person has retired from an office or position, disregard whether or not the person’s details are included in a directors’ report in accordance with paragraph 300A(1)(c).
Rules in regulations
(1A) Without limiting subsection (1), a benefit is given in connection with a person’s retirement from an office or position if the benefit is given in circumstances specified in regulations made for the purposes of this subsection.
Note: For specification by class, see subsection 13(3) of the Legislation Act 2003.
Related benefits
(2) For the purposes of this Division, if:
(a) a person (person A) gives another person a benefit (benefit A); and
(b) person A gives benefit A for the purpose, or for purposes including the purpose, of enabling or assisting someone to give a person a benefit in connection with the retirement of a person (person B) from an office or position;
person A is taken to give benefit A in connection with the person B’s retirement from that office or position.
200B Retirement benefits generally need membership approval
Benefits in connection with retirement if person has held a managerial or executive office
(1) An entity mentioned in subsection (1AA) must not give a person a benefit in connection with a person’s (the retiree’s) retirement from an office, or position of employment, in a company or a related body corporate if:
(a) the office or position is a managerial or executive office; or
(b) the retiree has, at any time during the last 3 years before his or her retirement, held a managerial or executive office in the company or a related body corporate;
unless there is member approval under section 200E for the giving of the benefit.
Note 1: This subsection extends to benefits given by way of compensation for, or otherwise in connection with, a person’s loss of an office or position (see subsections 200A(1) and (3)).
Note 2: Sections 200F, 200G and 200H provide for exceptions to this subsection.
Note 3: The recipient of the benefit need not be the retiree.
Note 4: This section has a modified operation in relation to CCIVs: see section 1224ZD.
(1AA) The entities are as follows:
(a) the company;
(b) an associate of the company (other than a body corporate that is related to the company and is itself a company);
(c) a prescribed superannuation fund in relation to the company.
(1A) For an offence based on subsection (1), strict liability applies to the circumstance, that the benefit is in connection with the retiree’s, or someone else’s, retirement.
Note: For strict liability, see section 6.1 of the Criminal Code.
Prescribed superannuation funds
(2) For the purposes of this section:
(a) a superannuation fund is taken to be a prescribed superannuation fund in relation to a company if the company, or an associate of the company, gives a benefit to the superannuation fund in prescribed circumstances; and
(b) if a prescribed superannuation fund in relation to a company gives a benefit to another superannuation fund in prescribed circumstances, the other superannuation fund is taken to be a prescribed superannuation fund in relation to the company.
Prescribed circumstances
(3) For the purposes of this section, if:
(a) a company, or an associate of a company, gives a benefit to a superannuation fund solely for the purpose of enabling or assisting the superannuation fund to give to a person a benefit in connection with the retiree’s retirement from an office or position in the company or a related body corporate; or
(b) a superannuation fund gives a benefit to another superannuation fund solely for the purpose of enabling or assisting the other superannuation fund to give to a person a benefit in connection with the retiree’s retirement from an office or position in a company or a related body corporate;
the benefit first referred to in paragraph (a) or (b) is taken to be given in prescribed circumstances.
(4) In this section:
superannuation fund means a provident, benefit, superannuation or retirement fund.
200C Benefits on transfer of undertaking or property need membership approval
(1) A person must not give a benefit to a person who:
(a) holds, or has at any previous time held, a managerial or executive office in a company or a related body corporate; or
(b) is the spouse of a person referred to in paragraph (a); or
(c) is a relative of a person referred to in paragraph (a) or of the spouse of such a person; or
(d) is an associate of a person referred to in paragraph (a) or the spouse of an associate of such a person;
in connection with the transfer of the whole or any part of the undertaking or property of the company.
Note: This section has a modified operation in relation to CCIVs: see section 1224ZD.
(2) For an offence based on subsection (1), strict liability applies to the circumstance, that the transfer is in connection with the transfer of the whole or any part of the undertaking or property of the company.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) Subsection (1) does not apply to the extent that there is member approval under section 200E.
Note: A defendant bears an evidential burden in relation to the matter in subsection (3), see subsection 13.3(3) of the Criminal Code.
200D Contravention to receive benefit without member approval
(1) A person who:
(a) holds, or has at any previous time held, a managerial or executive office in a company or related body corporate; or
(b) is the spouse of a person referred to in paragraph (a); or
(c) is a relative of a person referred to in paragraph (a) or of the spouse of such a person; or
(d) is an associate of a person referred to in paragraph (a) or the spouse of an associate of such a person;
must not receive a benefit if the giving of the benefit contravenes section 200B or 200C.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
200E Approval by members
Conditions for member approval
(1) For the purposes of section 200B, the conditions set out in subsections (1B), (2) and (2A) must be satisfied for there to be member approval under this section for the giving of the benefit to the person in connection with the retiree’s retirement from the office or position.
(1A) For the purposes of section 200C, the conditions set out in subsections (1B) and (2) must be satisfied for there to be member approval under this section for the giving of the benefit.
First condition
(1B) The first condition is that the giving of the benefit be approved by a resolution passed at a general meeting of:
(a) the company; and
(b) if the company is a subsidiary of a listed domestic corporation—the listed corporation; and
(c) if the company has a holding company that:
(i) is a domestic corporation that is not listed; and
(ii) is not itself a subsidiary of a domestic corporation;
the holding company.
Second condition
(2) The second condition is that details of the benefit must be set out in, or accompany, the notice of the general meeting that is to consider the resolution. The details must include:
(a) if the proposed benefit is a payment:
(i) the amount of the payment; or
(ii) if that amount cannot be ascertained at the time of the disclosure—the manner in which that amount is to be calculated and any matter, event or circumstance that will, or is likely to, affect the calculation of that amount; and
(b) otherwise:
(i) the money value of the proposed benefit; or
(ii) if that value cannot be ascertained at the time of the disclosure—the manner in which that value is to be calculated and any matter, event or circumstance that will, or is likely to, affect the calculation of that value.
These requirements are in addition to, and not in derogation of, any other law that requires disclosure to be made with respect to giving or receiving a benefit.
Third condition—for approvals relating to section 200B
(2A) The third condition is that at the general meeting, a vote on the resolution must not be cast (in any capacity) by or on behalf of:
(a) the retiree; or
(b) an associate of the retiree.
(2B) Subsection (2A) 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 resolution; and
(b) it is not cast on behalf of the retiree or an associate of the retiree.
(2C) The regulations may prescribe cases where subsection (2A) does not apply.
Meeting may approve a lesser benefit
(3) For the purposes of subsection (1B), the resolution may give approval by approving the giving of another benefit to the person if:
(a) the other benefit is given to the person instead of the proposed benefit; and
(b) the amount or money value of the benefit is less than the amount or money value of the proposed benefit.
Effect of approval on directors’ duties
(4) Member approval under this section does not relieve a director of a body corporate from any duty to the body corporate (whether under section 180, 181, 182, 183 or 184 or otherwise and whether of a fiduciary nature or not) in connection with the giving of the benefit.
200F Exempt benefits and benefits given in certain circumstances
(1) Subsection 200B(1) does not apply to:
(a) a benefit that is a payment made in respect of leave of absence to which the person is entitled under an industrial instrument; or
(aa) a benefit given under an order of a court; or
(b) a benefit given in prescribed circumstances.
(2) Subsection 200B(1) does not apply to a benefit given in connection with a person’s retirement from an office or position in relation to a company if:
(a) the benefit is:
(i) a genuine payment by way of damages for breach of contract; or
(ii) given to the person under an agreement made between the company and the person before the person became the holder of the office or position as the consideration, or part of the consideration, for the person agreeing to hold the office or position; and
(b) the value of the benefit, when added to the value of all other benefits (if any) already given in connection with the person’s retirement from offices or positions in the company and related bodies corporate, does not exceed the amount worked out under whichever of subsections (3) and (4) is applicable.
(3) This subsection applies if the relevant period for the person is less than 1 year. The amount worked out under this subsection is:
Start formula start fraction Estimated annual base salary times Number of days in relevant period over 365 end fraction end formula
where:
estimated annual base salary is a reasonable estimate of the base salary that the person would have received from the company and related bodies corporate during the relevant period if the relevant period had been 1 year.
Note: The relevant period for the person is defined in subsection (5).
(4) This subsection applies in every other case. The amount worked out under this subsection is:
(a) if the relevant period is 1 year—the base salary that the person received from the company and related bodies corporate during the relevant period; or
(b) if the relevant period is more than 1 year but less than 2 years—the average annual base salary that the person received from the company and related bodies corporate during the relevant period, worked out as if:
(i) the relevant period were 2 years; and
(ii) the person’s annual base salary for the second year were a reasonable estimate of what the person would have received as base salary after the first year of the relevant period had the relevant period been 2 years; or
(c) if the relevant period is 2 years—the average annual base salary that the person received from the company and related bodies corporate during the relevant period; or
(d) if the relevant period is more than 2 years but less than 3 years—the average annual base salary that the person received from the company and related bodies corporate during the relevant period, worked out as if:
(i) the relevant period were 3 years; and
(ii) the person’s annual base salary for the third year were a reasonable estimate of what the person would have received as base salary after the second year of the relevant period had the relevant period been 3 years; or
(e) if the relevant period is 3 years or more—the average annual base salary that the person received from the company and related bodies corporate during the last 3 years of the relevant period.
(5) For the purposes of this section, if a person has held a managerial or executive office in relation to a company:
(a) throughout a period; or
(b) throughout a number of periods;
the relevant period for that person is that period or the period consisting of those periods.
200G Genuine payments of pension and lump sum
(1) Subsection 200B(1) does not apply to a benefit if:
(a) the benefit is a payment in connection with a person’s retirement from an office or position in a company or a related body corporate; and
(b) the payment is for past services the person rendered to:
(i) the company; or
(ii) a related body corporate; or
(iii) a body that was a related body corporate of the company when the past services were rendered; and
(c) the value of the benefit, when added to the value of all other benefits (if any) already given in connection with the person’s retirement from offices or positions in the company and related bodies corporate does not exceed the amount worked out under whichever of subsections (2) and (3) is applicable.
In applying paragraph (c), disregard any pensions or lump sums that section 200F applies to.
(2) This subsection applies if the relevant period for the person is less than 1 year. The amount worked out under this subsection is:
Start formula start fraction Estimated annual base salary times Number of days in relevant period over 365 end fraction end formula
where:
estimated annual base salary is a reasonable estimate of the base salary that the person would have received from the company and related bodies corporate during the relevant period if the relevant period had been 1 year.
Note: The relevant period for the person is defined in subsection (6).
(3) This subsection applies in every other case. The amount worked out under this subsection is:
(a) if the relevant period is 1 year—the base salary that the person received from the company and related bodies corporate during the relevant period; or
(b) if the relevant period is more than 1 year but less than 2 years—the average annual base salary that the person received from the company and related bodies corporate during the relevant period, worked out as if:
(i) the relevant period were 2 years; and
(ii) the person’s annual base salary for the second year were a reasonable estimate of what the person would have received as base salary after the first year of the relevant period had the relevant period been 2 years; or
(c) if the relevant period is 2 years—the average annual base salary that the person received from the company and related bodies corporate during the relevant period; or
(d) if the relevant period is more than 2 years but less than 3 years—the average annual base salary that the person received from the company and related bodies corporate during the relevant period, worked out as if:
(i) the relevant period were 3 years; and
(ii) the person’s annual base salary for the third year were a reasonable estimate of what the person would have received as base salary after the second year of the relevant period had the relevant period been 3 years; or
(e) if the relevant period is 3 years or more—the average annual base salary that the person received from the company and related bodies corporate during the last 3 years of the relevant period.
(4) In determining for the purposes of paragraph (1)(c) the value of a pension or lump sum payment, disregard any part of the pension or lump sum payment that is attributable to:
(a) a contribution made by the person; or
(b) a contribution made by a person other than:
(i) the company; or
(ii) a body corporate (a relevant body corporate) that is a related body corporate of the company, or that was, when the contribution was made, such a related body corporate; or
(iii) an associate of the company, or of a relevant body corporate, in respect of:
(A) the payment of the pension, or the making of the lump sum payment, as the case may be; or
(B) the making of the contribution.
(6) In this section:
payment means a payment by way of pension or lump sum and includes a superannuation, retiring allowance, superannuation gratuity or similar payment.
relevant period: if a person has held a managerial or executive office in the company or a related body corporate:
(a) throughout a period; or
(b) throughout a number of periods;
the relevant period for that person is that period or the period consisting of those periods.
200H Benefits required by law
Subsection 200B(1) does not apply to a benefit given by a person if failure to give the benefit would constitute a contravention of a law in force in Australia or elsewhere (otherwise than because of breach of contract or breach of trust).
200J Benefits to be held on trust and repaid
(1) If an entity (the giver) contravenes section 200B by giving a benefit to a person (the recipient), then the amount of the benefit, or the money value of the benefit if it is not a payment:
(a) is taken to be received by the recipient on trust for the giver; and
(b) must be immediately repaid by the recipient to the giver.
(1A) An amount repayable under subsection (1) to the giver:
(a) is a debt due to the giver; and
(b) may be recovered by the giver in a court of competent jurisdiction.
(2) Subsection (1) applies to the whole of the amount of a payment or of the money value of the benefit even though giving the benefit would not have contravened section 200B if that amount or value of the benefit had been less.
Part 2D.3—Appointment, remuneration and cessation of appointment of directors
Note: This Part does not apply to a CCIV: see section 1224E.
Division 1—Appointment of directors
Subdivision A—General rules
201A Minimum number of directors
Proprietary companies
(1) A proprietary company must have at least 1 director. That director must ordinarily reside in Australia.
(1A) However, a proprietary company must have at least 2 directors while the company has one or more CSF shareholders. Of those directors:
(a) if there are only 2 of them—at least one of them must ordinarily reside in Australia; or
(b) otherwise—a majority of them must ordinarily reside in Australia.
Note: The company must also have at least 2 directors when making the CSF offer (see paragraph 738H(1)(a)).
Public companies
(2) A public company must have at least 3 directors (not counting alternate directors). At least 2 directors must ordinarily reside in Australia.
201B Who can be a director
(1) Only an individual who is at least 18 may be appointed as a director of a company.
(2) A person who is disqualified from managing corporations under Part 2D.6 may only be appointed as director of a company if the appointment is made with permission granted by ASIC under section 206GAB or leave granted by the Court under section 206G.
201D Consent to act as director
(1) A company contravenes this subsection if a person does not give the company a signed consent to act as a director of the company before being appointed.
(2) The company must keep the consent.
(3) An offence based on subsection (1) or (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
201E Special rules for the appointment of public company directors
(1) A resolution passed at a general meeting of a public company appointing or confirming the appointment of 2 or more directors is void unless:
(a) the meeting has resolved that the appointments or confirmations may be voted on together; and
(b) no votes were cast against the resolution.
(2) This section does not affect:
(a) a resolution to appoint directors by an amendment to the company’s constitution (if any); or
(b) a ballot or poll to elect 2 or more directors if the ballot or poll does not require members voting for 1 candidate to vote for another candidate.
(3) For the purposes of paragraph (2)(b), a ballot or poll does not require a member to vote for a candidate merely because the member is required to express a preference among individual candidates in order to cast a valid vote.
201F Special rules for the appointment of directors for single director/single shareholder proprietary companies
(1) The director of a proprietary company who is its only director and only shareholder may appoint another director by recording the appointment and signing the record.
Appointment of new director on death, mental incapacity or bankruptcy
(2) If a person who is the only director and the only shareholder of a proprietary company:
(a) dies; or
(b) cannot manage the company because of the person’s mental incapacity;
and a personal representative or trustee is appointed to administer the person’s estate or property, the personal representative or trustee may appoint a person as the director of the company.
(3) If:
(a) the office of the director of a proprietary company is vacated under subsection 206B(3) or (4) because of the bankruptcy of the director; and
(b) the person is the only director and the only shareholder of the company; and
(c) a trustee in bankruptcy is appointed to the person’s property;
the trustee may appoint a person as the director of the company.
(4) A person who has a power of appointment under subsection (2) or (3) may appoint themselves as director.
(5) A person appointed as a director of a company under subsection (2), (3) or (4) holds office as if they had been appointed in the usual way.
201G Company may appoint a director (replaceable rule—see section 135)
A company may appoint a person as a director by resolution passed in general meeting.
201H Directors may appoint other directors (replaceable rule—see section 135)
Appointment by other directors
(1) The directors of a company may appoint a person as a director. A person can be appointed as a director in order to make up a quorum for a directors’ meeting even if the total number of directors of the company is not enough to make up that quorum.
Proprietary company—confirmation by meeting within 2 months
(2) If a person is appointed under this section as a director of a proprietary company, the company must confirm the appointment by resolution within 2 months after the appointment is made. If the appointment is not confirmed, the person ceases to be a director of the company at the end of those 2 months.
Public company—confirmation by next AGM
(3) If a person is appointed by the other directors as a director of a public company, the company must confirm the appointment by resolution at the company’s next AGM. If the appointment is not confirmed, the person ceases to be a director of the company at the end of the AGM.
201J Appointment of managing directors (replaceable rule—see section 135)
The directors of a company may appoint 1 or more of themselves to the office of managing director of the company for the period, and on the terms (including as to remuneration), as the directors see fit.
(1) With the other directors’ approval, a director may appoint an alternate to exercise some or all of the director’s powers for a specified period.
(2) If the appointing director requests the company to give the alternate notice of directors’ meetings, the company must do so.
(3) When an alternate exercises the director’s powers, the exercise of the powers is just as effective as if the powers were exercised by the director.
(4) The appointing director may terminate the alternate’s appointment at any time.
(5) An appointment or its termination must be in writing. A copy must be given to the company.
Note: ASIC must be given notice of the appointment and termination of appointment of an alternate (see subsections 205B(2) and (5)).
201L Signpost—ASIC to be notified of appointment
Under section 205B, a company must notify ASIC within 28 days if a person is appointed as a director or as an alternate director.
201M Effectiveness of acts by directors
(1) An act done by a director is effective even if their appointment, or the continuance of their appointment, is invalid because the company or director did not comply with the company’s constitution (if any) or any provision of this Act.
(2) Subsection (1) does not deal with the question whether an effective act by a director:
(a) binds the company in its dealings with other people; or
(b) makes the company liable to another person.
Note: The kinds of acts that this section validates are those that are only legally effective if the person doing them is a director (for example, calling a meeting of the company’s members or signing a document to be lodged with ASIC or minutes of a meeting). Sections 128‑130 contain rules about the assumptions people are entitled to make when dealing with a company and its officers.
Subdivision B—Limits on numbers of directors of public companies
201N Application of Subdivision
(1) This Subdivision applies in relation to a public company if its constitution allows its directors to set a limit (a board limit) whose effect is to restrict the number of directors of the company to a number less than the maximum number of directors specified in the constitution.
Note: This Subdivision applies however the constitution or board limit is expressed.
(2) If a company’s constitution provides that the maximum number of directors is either a specified number or another number determined by the directors:
(a) any number determined by the directors that is lower than the specified number is a board limit; and
(b) any lowering by the directors of that lower number is also a board limit.
(3) Subsection (2) does not limit, and is not limited by, subsection (1).
201P Directors must not set board limit unless proposed limit has been approved by general meeting
(1) The directors must not set a board limit unless:
(a) a resolution (a board limit resolution) approving the proposal to set the limit specified in the resolution has been passed by a general meeting of the company; and
(b) the notice of the meeting set out an intention to propose the board limit resolution and stated the resolution; and
(c) the notice was accompanied by a statement explaining the resolution and meeting the requirements in section 201Q.
Note 1: Subsection 249L(3) requires information in the notice of meeting to be presented clearly, concisely and effectively.
Note 2: Section 201U specifies the consequences of a contravention of subsection (1) of this section. Also, section 1324 provides for injunctions to enforce subsection (1) of this section.
(2) A board limit resolution has effect until immediately before the start of the first AGM of the company after the general meeting by which the resolution was passed.
(3) A board limit resolution does not prevent the appointment of a person as a director of the company by the other directors of the company between general meetings of the company.
(4) However, if a person is appointed by the other directors as a director of the company while a board limit resolution has effect, the company must confirm the appointment by resolution at the company’s next AGM. If the appointment is not confirmed, the person ceases to be a director of the company at the end of the AGM.
(5) Subsections (1), (2) and (4) have effect despite the company’s constitution.
Note: Although subsection (4) is like subsection 201H(3) in many ways, it is not a replaceable rule like subsection 201H(3).
201Q Requirements for explanatory statement to members
The statement accompanying the notice of a general meeting stating an intention to propose the board limit resolution must be in writing and set out clearly, concisely and effectively:
(a) the directors’ reasons for proposing the board limit resolution; and
(b) 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 board limit resolution; and
(ii) is known to the company or to any of its directors.
Note: Section 1309 creates offences where false and misleading material relating to a corporation’s affairs is made available or furnished to members.
201R Records of voting on board limit resolution if poll required
(1) This section applies if a poll is duly demanded, or is otherwise required under section 250JA, on the question that the board limit resolution be passed.
(2) For each member of the company who votes on the poll in person, the company must record in writing:
(a) the member’s name; and
(b) how many votes the member casts for the resolution and how many against.
Note: Failure to comply with this subsection is an offence: see subsection 1311(1).
(3) For each member of the company who votes on the poll by proxy, or by a representative authorised under section 250D, the company must record in writing:
(a) the member’s name; and
(b) in relation to each person who votes as proxy, or as such a representative, for the member:
(i) the person’s name; and
(ii) how many votes the person casts on the resolution as proxy, or as such a representative, for the member; and
(iii) how many of those votes the person casts for the resolution and how many against.
Note: Failure to comply with this subsection is an offence: see subsection 1311(1).
201S Notice of resolution to be lodged
The company must lodge a notice setting out the text of the board limit resolution within 14 days after the resolution is passed.
201T Declaration by court of substantial compliance
(1) The Court may declare that a requirement set by section 201Q, 201R or 201S has been satisfied if the Court finds that it has been substantially satisfied.
(2) A declaration may be made only on the application of an interested person.
201U Consequences of setting board limit in breach of section 201P
Application
(1) This section applies if the directors of the company set a board limit in contravention of subsection 201P(1).
Board limit etc. ineffective
(2) The board limit and anything done in reliance on it have no effect for the purposes of:
(a) the company’s constitution; or
(b) this Act, except this section.
Note: If a board limit resolution is not passed, the number of directors of a company that can be appointed (for example by a general meeting) depends on the maximum number of directors specified by the company’s constitution. This is so even if the directors purport to set a board limit despite the fact the board limit resolution was not passed.
(3) If:
(a) one or more directors are appointed by one or more resolutions passed at a particular general meeting of the company; and
(b) because of the board limit, the general meeting was not given the opportunity to pass one or more resolutions appointing a number of directors such that the number of directors of the company would (if those resolutions had been passed) have exceeded the board limit;
every appointment of director made by a resolution passed at the general meeting is invalid.
Note: This subsection does not apply if a shortage of persons consenting to be appointed director was the reason the general meeting was not given the opportunity to pass one or more resolutions appointing a number of directors such that the number of directors of the company would (if those resolutions had been passed) have exceeded the board limit.
(4) Subsections (2) and (3) have effect despite anything else in the company’s constitution or in this Act, except sections 128, 129 and 201M.
Note: Sections 128 and 129 deal with assumptions a person dealing with the company may make, including assumptions about the due appointment of directors. Section 201M deals with effectiveness of acts by a director in circumstances where the director’s appointment is invalid for certain reasons.
Company and candidates for directors may seek compensation
(5) Subsection (6) applies if either of the following (the suffering party) suffers loss or damage because of the setting of the board limit in contravention of subsection 201P(1):
(a) the company;
(b) a person for whom both the following conditions are met:
(i) the person had given the company a written indication that he or she would be a candidate to be appointed director at a general meeting;
(ii) because of the board limit, the general meeting was not given the opportunity to consider passing a resolution to appoint the person as director.
(6) The suffering party may institute a proceeding in the Court for the contravention.
Note: Section 1325 deals with the orders the Court may make to compensate the suffering party for the loss.
Contravention does not give rise to an offence
(7) A person is not guilty of an offence because of the contravention.
Division 2—Remuneration of directors
202A Remuneration of directors (replaceable rule—see section 135)
(1) The directors of a company are to be paid the remuneration that the company determines by resolution.
Note: Chapter 2E makes special provision for the payment of remuneration to the directors of public companies.
(2) The company may also pay the directors’ travelling and other expenses that they properly incur:
(a) in attending directors’ meetings or any meetings of committees of directors; and
(b) in attending any general meetings of the company; and
(c) in connection with the company’s business.
202B Members may obtain information about directors’ remuneration
(1) A company must disclose the remuneration paid to each director of the company or a subsidiary (if any) by the company or by an entity controlled by the company if the company is directed to disclose the information by:
(a) members with at least 5% of the votes that may be cast at a general meeting of the company; or
(b) at least 100 members who are entitled to vote at a general meeting of the company.
The company must disclose all remuneration paid to the director, regardless of whether it is paid to the director in relation to their capacity as director or another capacity.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The company must comply with the direction as soon as practicable by:
(a) preparing a statement of the remuneration of each director of the company or subsidiary for the last financial year before the direction was given; and
(b) having the statement audited; and
(c) sending a copy of the audited statement to each person entitled to receive notice of general meetings of the company.
202C Special rule for single director/single shareholder proprietary companies
A person who is the only director and the only shareholder of a proprietary company is to be paid any remuneration for being a director that the company determines by resolution. The company may also pay the director’s travelling and other expenses properly incurred by the director in connection with the company’s business.
Division 3—Resignation, retirement or removal of directors
203A Director may resign by giving written notice to company (replaceable rule—see section 135)
A director of a company may resign as a director of the company by giving a written notice of resignation to the company at its registered office.
203AA Resignation of directors—when resignation takes effect
When resignation takes effect
(1) A person’s resignation as a director of a company takes effect on:
(a) if, within 28 days after the day the person stopped being a director of the company, ASIC is notified of that fact under subsection 205A(1) or 205B(5)—the day the person stopped being a director of the company; or
(b) in any other case—the day written notice is lodged with ASIC stating that the person has stopped being a director of the company.
Note 1: A director includes a person appointed to the position of alternate director, see the definition of director in section 9.
Note 2: For the application of this section, see Part 10.37.
(2) However, if:
(a) because of paragraph (1)(b), the person’s resignation takes effect on a day that is not the day the person stopped being a director of the company; and
(b) the person or the company applies to ASIC or the Court for it to fix, as the day the person’s resignation takes effect, the day (the resignation day) that the person stopped being a director of the company; and
(c) the application is made in accordance with subsection (5); and
(d) the applicant satisfies ASIC or the Court that the person stopped being a director of the company on the resignation day;
ASIC or the Court may fix the resignation day as the day the person’s resignation takes effect.
(3) The Court must not fix the resignation day as the day the person’s resignation takes effect unless it is satisfied that it is just and equitable to do so.
(4) ASIC must not fix the resignation day as the day the person’s resignation takes effect unless it has had regard to:
(a) any conduct, act, omission or representation of the applicant in relation to notifying ASIC of the resignation; and
(b) the reasons for any delay in notifying ASIC of the resignation.
Application to ASIC or the Court
(5) For the purposes of paragraph (2)(c), the application:
(a) if made to ASIC—must:
(i) be made within 56 days after the day the person stopped being a director of the company; and
(ii) be lodged in the prescribed form; or
(b) if made to the Court—must be made within either:
(i) 12 months after the day the person stopped being a director of the company; or
(ii) such longer period as the Court allows.
Notification to ASIC
(6) If the Court fixes the resignation day as the day the person’s resignation takes effect, the applicant must, within 2 business days after the Court fixes the resignation day, lodge with ASIC a copy of the order made by the Court that fixes the day.
(7) An offence based on subsection (6) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Company must be left with at least 1 director
(8) This section has effect subject to section 203AB.
203AB Resignation of directors—resignation has no effect if company has no other directors
(1) The resignation of a director of a company does not take effect if, at the end of the day that the resignation is to take effect, the company does not have at least one director.
Note: For the application of this section, see Part 10.37.
(2) However, subsection (1) does not prevent the resignation of a director of a company taking effect if the resignation is to take effect on or after the day that the winding up of the company is taken, because of Division 1A of Part 5.6, to have begun.
203B Signpost to consequences of disqualification from managing corporations
A person ceases to be a director of a company if the person becomes disqualified from managing corporations under Part 2D.6 (see subsection 206A(2)) unless ASIC or the Court allows them to manage the company (see sections 206GAB and 206G).
203C Removal by members—proprietary companies (replaceable rule—see section 135)
A proprietary company:
(a) may by resolution remove a director from office; and
(b) may by resolution appoint another person as a director instead.
203CA Resolution to remove directors—resolution is void if proprietary company has no other directors
(1) A resolution by members of a proprietary company to remove a director of the company is void if, at the end of the day that the resolution is to take effect, the company does not have at least one director.
Note: For the application of this section, see Part 10.37.
(2) However, subsection (1) does not affect the validity of a resolution by members of a proprietary company to remove a director of the company if the resolution is to take effect on or after the day that the winding up of the company is taken, because of Division 1A of Part 5.6, to have begun.
203D Removal by members—public companies
Resolution for removal of director
(1) A public company may by resolution remove a director from office despite anything in:
(a) the company’s constitution (if any); or
(b) an agreement between the company and the director; or
(c) an agreement between any or all members of the company and the director.
If the director was appointed to represent the interests of particular shareholders or debenture holders, the resolution to remove the director does not take effect until a replacement to represent their interests has been appointed.
Note: See sections 249C to 249G for the rules on who may call meetings, sections 249H to 249M on how to call meetings and sections 249N to 249Q for rules on members’ resolutions.
Notice of intention to move resolution for removal of director
(2) Notice of intention to move the resolution must be given to the company at least 2 months before the meeting is to be held. However, if the company calls a meeting after the notice of intention is given under this subsection, the meeting may pass the resolution even though the meeting is held less than 2 months after the notice of intention is given.
Note: Short notice of the meeting cannot be given for this resolution (see subsection 249H(3)).
Director to be informed
(3) The company must give the director a copy of the notice as soon as practicable after it is received.
Director’s right to put case to members
(4) The director is entitled to put their case to members by:
(a) giving the company a written statement for circulation to members (see subsections (5) and (6)); and
(b) speaking to the motion at the meeting (whether or not the director is a member of the company).
(5) The written statement is to be circulated by the company to members by:
(a) sending a copy to everyone to whom notice of the meeting is sent if there is time to do so; or
(b) if there is not time to comply with paragraph (a)—having the statement distributed to members attending the meeting and read out at the meeting before the resolution is voted on.
(6) The director’s statement does not have to be circulated to members if it is more than 1,000 words long or defamatory.
Time of retirement
(7) If a person is appointed to replace a director removed under this section, the time at which:
(a) the replacement director; or
(b) any other director;
is to retire is to be worked out as if the replacement director had become director on the day on which the replaced director was last appointed a director.
Strict liability offences
(8) An offence based on subsection (3) or (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
203E Director cannot be removed by other directors—public companies
A resolution, request or notice of any or all of the directors of a public company is void to the extent that it purports to:
(a) remove a director from their office; or
(b) require a director to vacate their office.
203F Termination of appointment of managing director (replaceable rule—see section 135)
(1) A person ceases to be managing director if they cease to be a director.
(2) The directors may revoke or vary an appointment of a managing director.
Part 2D.4—Appointment of secretaries
Note: This Part does not apply to a CCIV: see section 1224E.
204A Minimum number of secretaries
Proprietary companies
(1) A proprietary company is not required to have a secretary but, if it does have 1 or more secretaries, at least 1 of them must ordinarily reside in Australia.
Public companies
(2) A public company must have at least 1 secretary. At least 1 of them must ordinarily reside in Australia.
Strict liability offences
(3) An offence based on subsection (1) or (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
204B Who can be a secretary
(1) Only an individual who is at least 18 may be appointed as a secretary of a company.
(2) A person who is disqualified from managing corporations under Part 2D.6 may only be appointed as a secretary of a company if the appointment is made with permission granted by ASIC under section 206GAB or leave granted by the Court under section 206G.
204C Consent to act as secretary
(1) A company contravenes this subsection if a person does not give the company a signed consent to act as secretary of the company before being appointed.
(2) The company must keep the consent.
(3) An offence based on subsection (1) or (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
204D How a secretary is appointed
A secretary is to be appointed by the directors.
Note 1: The company must notify ASIC of the appointment within 28 days (see subsection 205B(1)).
Note 2: Section 188 deals with the responsibilities of secretaries for contraventions by the company.
204E Effectiveness of acts by secretaries
(1) An act done by a secretary is effective even if their appointment, or the continuance of their appointment, is invalid because the company or secretary did not comply with the company’s constitution (if any) or any provision of this Act.
(2) Subsection (1) does not deal with the question whether an effective act by a secretary:
(a) binds the company in its dealings with other people; or
(b) makes the company liable to another person.
Note: The kinds of acts that this section validates are those that are only legally effective if the person doing them is a secretary (for example, signing and sending out a notice of a meeting of directors if the company’s constitution authorises the secretary to do so or signing a document to be lodged with ASIC). Sections 128‑130 contain rules about the assumptions people are entitled to make when dealing with a company and its officers.
204F Terms and conditions of office for secretaries (replaceable rule—see section 135)
A secretary holds office on the terms and conditions (including as to remuneration) that the directors determine.
204G Signpost to consequences of disqualification from managing corporations
A person ceases to be a secretary of a company if the person becomes disqualified from managing corporations under Part 2D.6 (see subsection 206A(2)) unless ASIC or the Court allows them to manage the company (see sections 206GAB and 206G).
Part 2D.5—Public information about directors and secretaries
Note: This Part does not apply to a CCIV: see section 1224E.
205A Director, secretary or alternate director may notify ASIC of resignation or retirement
(1) If a director, secretary or alternate director retires or resigns, they may give ASIC written notice of the retirement or resignation. The notice must be in the prescribed form.
(2) To be effective, a notice of resignation must be accompanied by a copy of the letter of resignation given to the company.
Note: If a director, secretary or alternative director of a company gives a written notice in accordance with this section, the company is not required to lodge a notice with ASIC under subsection 205B(5) (see subsection 205B(6)).
205B Notice of name and address of directors and secretaries to ASIC
New directors or secretaries
(1) A company must lodge with ASIC a notice of the personal details of a director or secretary within 28 days after they are appointed. The notice must be in the prescribed form.
Note 1: If a person becomes a director under subsection 120(1) there is no appointment and no notice is required under this subsection.
Note 2: If a person who was appointed as an alternate director becomes a director under the terms of their appointment as an alternate director, there is no appointment as a director and no notice is required under this subsection.
New alternate directors
(2) A company must lodge with ASIC a notice of:
(a) the personal details of a person who is appointed as an alternate director; and
(b) the terms of their appointment (including terms about when the alternate director is to act as a director);
within 28 days after their appointment as an alternate director. The notice must be in the prescribed form.
Personal details
(3) The personal details of a director, alternate director, or secretary are:
(a) their given and family names; and
(b) all of their former given and family names; and
(c) their date and place of birth; and
(d) their address.
Note: For address see section 205D.
Changes in details
(4) The company must lodge with ASIC notice of any change in the personal details of a director, alternate director or secretary within 28 days after the change. The notice must be in the prescribed form.
Notice required if person stops being a director or secretary
(5) If a person stops being a director, alternate director or secretary of the company, the company must lodge with ASIC notice of the fact within 28 days. The notice must be in the prescribed form.
(6) Subsection (5) does not apply if:
(a) the person was an alternate director who stopped being a director in accordance with the terms of their appointment as an alternate director; or
(b) the person gives ASIC a written notice of the person’s retirement or resignation as a director, alternate director or secretary of the company in accordance with section 205A.
Note: A defendant bears an evidential burden in relation to the matter in subsection (6), see subsection 13.3(3) of the Criminal Code.
(7) An offence based on subsection (1), (2), (4) or (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
205C Director and secretary must give information to company
(1) A director, alternate director or secretary must give the company any information the company needs to comply with subsection 205B(1) or (2) within 7 days after their initial appointment unless they have previously given the information to the company.
(2) A director, alternate director or secretary must give the company any information the company needs to comply with subsection 205B(4) within 7 days after any change in their personal details.
(3) An offence based on subsection (1) or (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
205D Address for officers
Address is normally residential address
(1) A person’s address for the purposes of a notice or application under subsection 5H(2), 117(2), 205B(1), (2) or (4) or 601BC(2) must be their usual residential address unless they are entitled to have an alternative address substituted for their usual residential address under subsection (2).
Entitlement to have alternative address
(2) The person is entitled to have an alternative address substituted for their usual residential address if:
(a) their name, but not their residential address, is on an electoral roll under the Commonwealth Electoral Act 1918 because of section 104 of that Act; or
(b) their name is not on an electoral roll under that Act and ASIC determines, in writing, that including their residential address in the notice or application would put at risk their personal safety or the personal safety of members of their family.
This alternative address must be in Australia and be one at which documents can be served on the person. At any particular time, a person is entitled to have only 1 alternative address under this section.
Note: See subsection 109X(2) on the status of the alternative address as an address for service.
(3) A person who takes advantage of subsection (2) must:
(a) before or at the same time as the alternative address is first included in a notice or application, lodge with ASIC notice of the person’s usual residential address; and
(b) lodge with ASIC notice of any change in the person’s usual residential address within 14 days after the change.
A notice under this subsection must be in the prescribed form.
(4) If a court gives a judgment for payment of a sum of money against a person who is taking advantage of subsection (2), ASIC may give details of the person’s usual residential address to an officer of the court for the purposes of enforcing the judgment debt.
205E ASIC’s power to ask for information about person’s position as director or secretary
(1) ASIC may ask a person, in writing, to inform ASIC:
(a) whether the person is a director or secretary of a particular company; and
(b) if the person is no longer a director or secretary of the company—the date on which the person stopped being a director or secretary.
(2) The person must give the information to ASIC in writing by the date specified in the request.
(3) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
205F Director must give information to company
(1) A director must give the company any information affecting or relating to the director that the company needs, or will need, to comply with Chapter 6. The director must give the information to the company as soon as practicable after becoming aware that the company needs, or will need, the information. The company must give the information to each of the other directors of the company within 7 days of receiving it.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
205G Listed company—director to notify market operator of shareholdings etc.
Notifiable interests
(1) A director of a listed public company must notify the relevant market operator in accordance with subsections (2), (3) and (4) of the following interests of the director:
(a) relevant interests in securities of the company or a related body corporate;
(b) contracts:
(i) to which the director is a party or under which the director is entitled to a benefit; and
(ii) that confer a right to call for or deliver shares in, debentures of, or interests in a managed investment scheme made available by, the company or a related body corporate.
Note: Under section 353, ASIC may determine conditions that must be complied with when lodging documents electronically under this subsection.
(2) A notice of a relevant interest in securities under paragraph (1)(a) must give details of:
(a) the number of securities; and
(b) the circumstances giving rise to the relevant interest.
Occasions for initial notification
(3) The director must notify the relevant market operator within 14 days after each of the following occasions:
(a) appointment as a director of the company;
(b) the listing of the company.
Paragraph (a) does not apply to a director who retires and is then reappointed at the same meeting.
Note: Under section 353, ASIC may determine conditions that must be complied with when lodging documents electronically under this subsection.
Updating notices
(4) The director must notify the relevant market operator within 14 days after any change in the director’s interests.
Note: Under section 353, ASIC may determine conditions that must be complied with when lodging documents electronically under this subsection.
(5) The director need not give the information to the relevant market operator under this section if the director has already given the information to the relevant market operator.
ASIC’s power to make class orders
(6) ASIC may make an order in writing relieving a director of the obligation to notify the relevant market operator of an interest in a security or contract. The order may be made in respect of a specified class of companies, directors, securities or contracts.
(7) The order may be expressed to be subject to conditions.
(8) Notice of the making, revocation or suspension of the order must be published in the Gazette.
Fault‑based offence
(9) A person commits an offence if the person contravenes subsection (1).
Strict liability offence
(10) A person commits an offence of strict liability if the person contravenes subsection (1).
Part 2D.6—Disqualification from managing corporations
Note: This Part does not apply to a CCIV: see section 1224E.
206A Disqualified person not to manage corporations
(1) A person who is disqualified from managing corporations under this Part commits an offence if:
(a) they make, or participate in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or
(b) they exercise the capacity to affect significantly the corporation’s financial standing; or
(c) they communicate instructions or wishes (other than advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the corporation) to the directors of the corporation:
(i) knowing that the directors are accustomed to act in accordance with the person’s instructions or wishes; or
(ii) intending that the directors will act in accordance with those instructions or wishes.
Note: Under section 1274AA, ASIC is required to keep a record of persons disqualified from managing corporations.
(1A) For an offence based on subsection (1), strict liability applies to the circumstance, that the person is disqualified from managing corporations under this Part.
Note: For strict liability, see section 6.1 of the Criminal Code.
(1B) It is a defence to a contravention of subsection (1) if the person had permission to manage the corporation under either section 206GAB or 206G and their conduct was within the terms of that permission.
Note: A defendant bears an evidential burden in relation to the matters in subsection (1B), see subsection 13.3(3) of the Criminal Code.
(2) A person ceases to be a director, alternate director or a secretary of a company if:
(a) the person becomes disqualified from managing corporations under this Part; and
(b) they are not given permission to manage the corporation under section 206GAB or 206G.
Note: If a person ceases to be a director, alternate director or a secretary under subsection (2) the company must notify ASIC (see subsection 205B(5)).
206B Automatic disqualification—convictions, bankruptcy and foreign court orders etc.
Convictions
(1) A person becomes disqualified from managing corporations if the person:
(a) is convicted on indictment of an offence that:
(i) concerns the making, or participation in making, of decisions that affect the whole or a substantial part of the business of the corporation; or
(ii) concerns an act that has the capacity to affect significantly the corporation’s financial standing; or
(b) is convicted of an offence that:
(i) is a contravention of this Act and is punishable by imprisonment for a period greater than 12 months; or
(ii) involves dishonesty and is punishable by imprisonment for at least 3 months; or
(c) is convicted of an offence against the law of a foreign country that is punishable by imprisonment for a period greater than 12 months.
The offences covered by paragraph (a) and subparagraph (b)(ii) include offences against the law of a foreign country.
(2) The period of disqualification under subsection (1) starts on the day the person is convicted and lasts for:
(a) if the person does not serve a term of imprisonment—5 years after the day on which they are convicted; or
(b) if the person serves a term of imprisonment—5 years after the day on which they are released from prison.
Bankruptcy or personal insolvency agreement
(3) A person is disqualified from managing corporations if the person is an undischarged bankrupt under the law of Australia, its external territories or another country.
(4) A person is disqualified from managing corporations if:
(a) the person has executed a personal insolvency agreement under:
(i) Part X of the Bankruptcy Act 1966; or
(ii) a similar law of an external Territory or a foreign country; and
(b) the terms of the agreement have not been fully complied with.
(5) A person is disqualified from managing corporations at a particular time if the person is, at that time, disqualified from managing Aboriginal and Torres Strait Islander corporations under Part 6‑5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
Foreign court orders
(6) A person is disqualified from managing corporations if the person is disqualified, under an order made by a court of a foreign jurisdiction that is in force, from:
(a) being a director of a foreign company; or
(b) being concerned in the management of a foreign company; or
(c) being a director of a passport fund, or of an operator of a passport fund; or
(d) being concerned in the management of a passport fund.
Definitions
(7) In this section:
foreign jurisdiction means a foreign country, or part of a foreign country, prescribed by the regulations as a foreign jurisdiction for the purposes of this section.
206BA Extension of period of automatic disqualification under section 206B
(1) This section applies if:
(a) under subsection 206B(1); or
(b) as a result of the operation of subsection 279‑5(1) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 and subsection 206B(5) of this Act;
a person is disqualified from managing corporations on being convicted of an offence.
(2) On application by ASIC, the Court may extend by up to an additional 15 years the period of disqualification.
(3) ASIC must apply:
(a) before the period of disqualification begins; or
(b) before the end of the first year of the disqualification.
(4) ASIC may apply only once in relation to the disqualification.
(5) In determining whether an extension is justified (and if so, for how long), the Court may have regard to any matters that the Court considers appropriate.
206C Court power of disqualification—contravention of civil penalty provision
(1) On application by ASIC, the Court may disqualify a person from managing corporations for a period that the Court considers appropriate if:
(a) a declaration is made under:
(i) section 1317E (civil penalty provision) that the person has contravened a corporation/scheme civil penalty provision or subsection 670A(4), 727(6), 728(4) or 1309(12); or
(ii) section 386‑1 (civil penalty provision) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 that the person has contravened a civil penalty provision (within the meaning of that Act); and
(b) the Court is satisfied that the disqualification is justified.
(2) In determining whether the disqualification is justified, the Court may have regard to:
(a) the person’s conduct in relation to the management, business or property of any corporation; and
(b) any other matters that the Court considers appropriate.
(3) To avoid doubt, the reference in paragraph (2)(a) to a corporation includes a reference to an Aboriginal and Torres Strait Islander corporation.
206D Court power of disqualification—insolvency and non‑payment of debts
(1) On application by ASIC, the Court may disqualify a person from managing corporations for up to 20 years if:
(a) within the last 7 years, the person has been an officer of 2 or more corporations when they have failed; and
(b) the Court is satisfied that:
(i) the manner in which the corporation was managed was wholly or partly responsible for the corporation failing; and
(ii) the disqualification is justified.
(1A) To avoid doubt, the references in paragraphs (1)(a) and (b) to a corporation include references to an Aboriginal and Torres Strait Islander corporation.
(2) For the purposes of subsection (1), a corporation fails if:
(a) a Court orders the corporation to be wound up under:
(i) section 459B of this Act; or
(ii) section 526‑1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006;
because the Court is satisfied that the corporation is insolvent; or
(b) the corporation enters into voluntary liquidation and creditors are not fully paid or are unlikely to be fully paid; or
(c) the corporation executes a deed of company arrangement and creditors are not fully paid or are unlikely to be fully paid; or
(ca) the corporation makes a restructuring plan and creditors are not fully paid or are unlikely to be fully paid; or
(d) the corporation ceases to carry on business and creditors are not fully paid or are unlikely to be fully paid; or
(e) a levy of execution against the corporation is not satisfied; or
(f) a receiver, receiver and manager, or provisional liquidator is appointed in relation to the corporation; or
(g) the corporation enters into a compromise or arrangement with its creditors under Part 5.1 (including that Part as applied by section 45‑1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006); or
(h) the corporation is wound up and a liquidator lodges a report under subsection 533(1) (including that subsection as applied by section 526‑35 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006) about the corporation’s inability to pay its debts.
Note: To satisfy paragraph (h), a corporation must begin to be wound up while the person is an officer or within 12 months after the person ceases to be an officer. However, the report under subsection 533(1) may be lodged by the liquidator at a time that is more than 12 months after the person ceases to be an officer. Sections 513A to 513D contain rules about when a company begins to be wound up.
(2A) The reference in paragraph (2)(c) to a deed of company arrangement includes a reference to a deed of corporation arrangement (within the meaning of the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
(2B) For the purposes of subsection (1), a person is an officer of an Aboriginal and Torres Strait Islander corporation if the person is an officer of that corporation within the meaning of the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
(3) In determining whether the disqualification is justified, the Court may have regard to:
(a) the person’s conduct in relation to the management, business or property of any corporation; and
(b) any other matters that the Court considers appropriate.
(4) To avoid doubt, the reference in paragraph (3)(a) to a corporation includes a reference to an Aboriginal and Torres Strait Islander corporation.
206E Court power of disqualification—repeated contraventions of Act
(1) On application by ASIC, the Court may disqualify a person from managing corporations for the period that the Court considers appropriate if:
(a) the person:
(i) has at least twice been an officer of a body corporate that has contravened this Act or the Corporations (Aboriginal and Torres Strait Islander) Act 2006 while they were an officer of the body corporate and each time the person has failed to take reasonable steps to prevent the contravention; or
(ii) has at least twice contravened this Act or the Corporations (Aboriginal and Torres Strait Islander) Act 2006 while they were an officer of a body corporate; or
(iii) has been an officer of a body corporate and has done something that would have contravened subsection 180(1) or section 181 if the body corporate had been a corporation; and
(b) the Court is satisfied that the disqualification is justified.
(1A) For the purposes of subsection (1), a person is an officer of an Aboriginal and Torres Strait Islander corporation if the person is an officer of that corporation within the meaning of the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
(2) In determining whether the disqualification is justified, the Court may have regard to:
(a) the person’s conduct in relation to the management, business or property of any corporation; and
(b) any other matters that the Court considers appropriate.
(3) To avoid doubt, the reference in paragraph (2)(a) to a corporation includes a reference to an Aboriginal and Torres Strait Islander corporation.
206EAA Court power of disqualification—disqualification under a law of a foreign jurisdiction
(1) On application by ASIC, the Court may disqualify a person from managing corporations for the period that the Court considers appropriate if:
(a) the person is disqualified under the law of a foreign jurisdiction from:
(i) being a director of, or being concerned in the management of, a foreign company; or
(ii) carrying on activities that the Court is satisfied are substantially similar to being a director of, or being concerned in the management of, a foreign company; or
(iii) being a director of a passport fund, or of the operator of a passport fund; or
(iv) being concerned in the management of a passport fund; or
(v) carrying on activities that the Court is satisfied are substantially similar to being a director of a passport fund, or of the operator of a passport fund, or being concerned in the management of a passport fund; and
(b) the Court is satisfied that the disqualification under this subsection is justified.
(2) In determining what is an appropriate period for which to disqualify the person, the Court may have regard to the period for which the person is disqualified under the law of the foreign jurisdiction.
(3) In determining whether the disqualification is justified, the Court may have regard to:
(a) the person’s conduct in relation to the management, business or property of a foreign company or a passport fund (as the case requires); and
(b) any other matters that the Court considers appropriate.
(4) In this section:
foreign jurisdiction has the same meaning as in section 206B.
206EAB Court power of disqualification—unrecovered payments under employee entitlements scheme
(1) On application by ASIC, the Court may disqualify a person from managing corporations for a period that the Court considers appropriate if:
(a) subsection (2) applies to the person in relation to 2 or more corporations; and
(b) the Court is satisfied that the disqualification is justified.
(2) This subsection applies to the person in relation to a corporation if:
(a) within the last 7 years:
(i) the person has been an officer of the corporation; and
(ii) while the person was an officer, or within 12 months after the person ceased to be an officer, the corporation began to be wound up; and
(iii) money was advanced for the purposes of paying the entitlements of employees of the corporation under the Fair Entitlements Guarantee Act 2012; and
(b) the Commonwealth has received a minimal return, or no return, on the advance (whether or not the corporation is still being wound up, or has been wound up); and
(c) the Court is satisfied that the Commonwealth is unlikely to receive more than a minimal return on the advance; and
(d) either of the following occurred during the 7‑year period mentioned in paragraph (a):
(i) the corporation contravened this Act or the Corporations (Aboriginal and Torres Strait Islander) Act 2006 while the person was an officer of the corporation, and the person failed to take reasonable steps to prevent the contravention;
(ii) the person contravened this Act or the Corporations (Aboriginal and Torres Strait Islander) Act 2006 while the person was an officer of the corporation.
(3) For the purposes of paragraphs (2)(b) and (c), the Commonwealth has received a minimal return on an advance under the Fair Entitlements Guarantee Act 2012 if the amount of the advance recovered by the Commonwealth is 10 cents in the dollar or less.
Note: For recovery of advances paid under the Fair Entitlements Guarantee Act 2012, see Part 5 of that Act.
(4) In determining whether the disqualification is justified, the Court may have regard to:
(a) the person’s conduct in relation to the management, business or property of any corporation; and
(b) any other matters that the Court considers appropriate.
(5) To avoid doubt, the references in paragraph (1)(a) and subsections (2) and (4) to a corporation include references to an Aboriginal and Torres Strait Islander corporation.
206EA Disqualification under the Competition and Consumer Act 2010 etc.
A person is disqualified from managing corporations if a court order disqualifying the person from managing corporations is in force under:
(a) section 86E of the Competition and Consumer Act 2010; or
(b) section 248 of Schedule 2 to that Act, as that section applies as a law of the Commonwealth, a State or a Territory.
206EB Disqualification under the ASIC Act
A person is disqualified from managing corporations if a court order disqualifying the person from managing corporations is in force under section 12GLD of the ASIC Act.
206F ASIC’s power of disqualification
Power to disqualify
(1) ASIC may disqualify a person from managing corporations for up to 5 years if:
(a) within 7 years immediately before ASIC gives a notice under paragraph (b)(i):
(i) the person has been an officer of 2 or more corporations; and
(ii) while the person was an officer, or within 12 months after the person ceased to be an officer of those corporations, each of the corporations was wound up and a liquidator lodged a report under subsection 533(1) (including that subsection as applied by section 526‑35 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006) about the corporation’s inability to pay its debts; and
(b) ASIC has given the person:
(i) a notice in the prescribed form requiring them to demonstrate why they should not be disqualified; and
(ii) an opportunity to be heard on the question; and
(c) ASIC is satisfied that the disqualification is justified.
(1A) To avoid doubt, the references in paragraph (1)(a) to corporations include references to Aboriginal and Torres Strait Islander corporations.
Grounds for disqualification
(2) In determining whether disqualification is justified, ASIC:
(a) must have regard to whether any of the corporations mentioned in subsection (1) were related to one another; and
(b) may have regard to:
(i) the person’s conduct in relation to the management, business or property of any corporation; and
(ii) whether the disqualification would be in the public interest; and
(iii) any other matters that ASIC considers appropriate.
(2A) To avoid doubt, the references in subsection (2) to a corporation includes a reference to an Aboriginal and Torres Strait Islander corporation.
Notice of disqualification
(3) If ASIC disqualifies a person from managing corporations under this section, ASIC must serve a notice on the person advising them of the disqualification. The notice must be in the prescribed form.
Start of disqualification
(4) The disqualification takes effect from the time when a notice referred to in subsection (3) is served on the person.
206GAA ASIC’s power of disqualification—unrecovered payments under employee entitlements scheme
(1) ASIC may disqualify a person from managing corporations for up to 5 years if:
(a) subsection (2) applies to the person in relation to 2 or more corporations; and
(b) ASIC has given the person:
(i) a notice in the prescribed form requiring them to demonstrate why they should not be disqualified; and
(ii) an opportunity to be heard on the question; and
(c) ASIC is satisfied that the disqualification is justified.
(2) This subsection applies to the person in relation to a corporation if:
(a) within 7 years immediately before ASIC gives the notice under subparagraph (1)(b)(i):
(i) the person has been an officer of the corporation; and
(ii) while the person was an officer, or within 12 months after the person ceased to be an officer, the corporation began to be wound up; and
(iii) money was advanced for the purposes of paying the entitlements of employees of the corporation under the Fair Entitlements Guarantee Act 2012; and
(b) the Commonwealth has received a minimal return, or no return, on the advance (whether or not the corporation is still being wound up, or has been wound up); and
(c) ASIC has reason to believe that the Commonwealth is unlikely to receive more than a minimal return on the advance; and
(d) ASIC has reason to believe that either of the following occurred during the 7‑year period mentioned in paragraph (a):
(i) the corporation contravened this Act or the Corporations (Aboriginal and Torres Strait Islander) Act 2006 while the person was an officer of the corporation, and the person failed to take reasonable steps to prevent the contravention;
(ii) the person contravened this Act or the Corporations (Aboriginal and Torres Strait Islander) Act 2006 while the person was an officer of the corporation.
(3) For the purposes of paragraphs (2)(b) and (c), the Commonwealth has received a minimal return on an advance under the Fair Entitlements Guarantee Act 2012 if the amount of the advance recovered by the Commonwealth is 10 cents in the dollar or less.
Note: For recovery of advances paid under the Fair Entitlements Guarantee Act 2012, see Part 5 of that Act.
(4) In determining whether the disqualification is justified, ASIC:
(a) must have regard to whether any of the corporations mentioned in paragraph (1)(a) were related to one another; and
(b) may have regard to:
(i) the person’s conduct in relation to the management, business or property of any corporation; and
(ii) whether the disqualification would be in the public interest; and
(iii) any other matters that ASIC considers appropriate.
(5) To avoid doubt, the references in paragraph (1)(a) and subsections (2) and (4) to a corporation include references to an Aboriginal and Torres Strait Islander corporation.
Notice of disqualification
(6) If ASIC disqualifies a person from managing corporations under this section, ASIC must serve a notice on the person advising them of the disqualification. The notice must be in the prescribed form.
Start of disqualification
(7) The disqualification takes effect from the time when a notice referred to in subsection (6) is served on the person.
206GAB ASIC power to grant leave
ASIC may give a person who it has disqualified from managing corporations under this Part written permission to manage a particular corporation or corporations. The permission may be expressed to be subject to conditions and exceptions determined by ASIC.
206G Court power to grant leave
(1) A person who is disqualified from managing corporations may apply to the Court for leave to manage:
(a) corporations; or
(b) a particular class of corporations; or
(c) a particular corporation;
if the person was not disqualified by ASIC.
(2) The person must lodge a notice with ASIC at least 21 days before commencing the proceedings. The notice must be in the prescribed form.
(3) The order granting leave may be expressed to be subject to exceptions and conditions determined by the Court.
Note: If the Court grants the person leave to manage the corporation, the person may be appointed as a director (see section 201B) or secretary (see section 204B) of a company.
(4) The person must lodge with ASIC a copy of any order granting leave within 14 days after the order is made.
(5) On application by ASIC, the Court may revoke the leave. The order revoking leave does not take effect until it is served on the person.
206GA Involvement of ACCC—leave orders under section 206G
Scope of section
(1) This section applies in relation to a person who is disqualified from managing corporations under section 206EA.
Notice lodged with ASIC before leave application
(2) If the person lodges a notice with ASIC under subsection 206G(2), ASIC must give the ACCC a copy of the notice.
Leave orders
(3) If the person lodges a copy of an order with ASIC under subsection 206G(4), ASIC must give the ACCC a copy of the order.
Revoking leave
(4) If ASIC decides to apply for an order under subsection 206G(5) in relation to the person, it must consult the ACCC before making the application.
Definition
(5) In this section:
ACCC means the Australian Competition and Consumer Commission.
206H Limited application of Part to foreign companies
This Part (except for subsection 206B(6) and section 206EAA) does not apply in respect of an act or omission by a person while they are managing a corporation that is a foreign company unless the act or omission occurred in connection with:
(a) the foreign company carrying on business in this jurisdiction; or
(b) an act that the foreign company does, or proposes to do, in this jurisdiction; or
(c) a decision by the foreign company whether or not to do, or refrain from doing, an act in this jurisdiction.
206HAA Limited application of Part to notified foreign passport funds and their operators
This Part (except for subsection 206B(6) and section 206EAA) does not apply in respect of an act or omission by a person while they are managing a corporation that is either the operator of a notified foreign passport fund, or a notified foreign passport fund, unless the act or omission occurred in connection with:
(a) the operator or the fund carrying on business in this jurisdiction; or
(b) an act that the operator or the fund does, or proposes to do, in this jurisdiction; or
(c) a decision by the operator or the fund whether or not to do, or refrain from doing, an act in this jurisdiction.
206HA Limited application of Part to registrable Australian bodies
This Part does not apply in respect of an act or omission by a person while they are managing a corporation that is a registrable Australian body unless the act or omission occurred in connection with:
(a) the body carrying on business outside its place of origin; or
(b) an act that the body does or proposes to do outside its place of origin; or
(c) a decision by the body whether or not to do, or refrain from doing, an act outside its place of origin.
206HB Part does not apply to Aboriginal and Torres Strait Islander corporations
This Part does not apply, of its own force, to disqualify a person from managing a corporation that is an Aboriginal and Torres Strait Islander corporation.
Note 1: Subsection 279‑5(5) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 provides that a person who is disqualified from managing corporations under this Part will be automatically disqualified under Part 6‑5 of that Act from managing Aboriginal and Torres Strait Islander corporations.
Note 2: Similarly, subsection 206B(5) of this Act provides that a person who is disqualified from managing Aboriginal and Torres Strait Islander corporations under Part 6‑5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 will be automatically disqualified under this Part from managing corporations.
Part 2D.7—Ban on hedging remuneration of key management personnel
Note: This Part does not apply to a CCIV: see section 1224E.
206J No hedging of remuneration of key management personnel
(1) A member of the key management personnel for a company that is a disclosing entity, or a closely related party of such a member, must not enter into an arrangement (with anyone) if the arrangement would have the effect of limiting the exposure of the member to risk relating to an element of the member’s remuneration that:
(a) has not vested in the member; or
(b) has vested in the member but remains subject to a holding lock.
(2) Without limiting paragraph (1)(a), remuneration that is not payable to a member until a particular day is, until that day, remuneration that has not vested in the member.
(3) In determining whether an arrangement has the effect described in subsection (1) in relation to an element of remuneration described in that subsection, regard is to be had to the regulations (if any) made for the purposes of this subsection.
(4) A member of the key management personnel for a company who contravenes subsection (1) commits an offence.
(5) An offence against subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) A person commits an offence if:
(a) the person is a member of the key management personnel for a company; and
(b) a closely related party of the member contravenes subsection (1) in relation to the member; and
(c) the person is reckless as to the contravention.
(7) A closely related party of a member of the key management personnel for a company commits an offence if the party intentionally contravenes subsection (1) in relation to the member.
(8) ASIC may by writing declare that subsection (1) does not apply to a specified arrangement, but may do so only if ASIC is satisfied that the operation of that subsection would be unreasonable in the circumstances. The declaration has effect accordingly. The declaration is not a legislative instrument.
Note: A defendant bears an evidential burden in relation to the matter in subsection (8): see subsection 13.3(3) of the Criminal Code.
Part 2D.8—Remuneration recommendations in relation to key management personnel for disclosing entities
Note: This Part does not apply to a CCIV: see section 1224E.
206K Board to approve remuneration consultants
(1) This section applies to a contract (a remuneration consultancy contract):
(a) that is for services that include making a remuneration recommendation in relation to one or more members of the key management personnel for a company that is a disclosing entity; and
(b) that is between the company and a person (the proposed consultant) who, by making the recommendation under the contract, will be a remuneration consultant.
(2) Before a company enters into a remuneration consultancy contract, the proposed consultant must be approved by:
(a) the directors of the company; or
(b) the members of a committee (the remuneration committee) that:
(i) is a committee of the board of directors of the company; and
(ii) has functions relating to the remuneration of key management personnel for the company.
(3) A contravention of subsection (2):
(a) is not an offence except as provided by subsection (4); and
(b) does not affect the validity of the contract.
(4) The company commits an offence if, at the time the company enters into the contract, the proposed consultant has not been approved in accordance with subsection (2).
(5) An offence against subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
206L Remuneration recommendation by remuneration consultants
(1) This section applies to a remuneration recommendation made by a remuneration consultant in relation to one or more members of the key management personnel for a company that is a disclosing entity.
(2) The remuneration consultant must provide the recommendation directly to either or both of the following:
(a) the directors of the company;
(b) the members of the remuneration committee (if any).
(3) However, the remuneration consultant must not provide the recommendation to a person who is an executive director of the company unless all the directors of the company are executive directors of the company.
(4) The remuneration consultant must not provide the recommendation to a person who is neither a director of the company nor a member of the remuneration committee.
(5) If the remuneration consultant contravenes subsection (2) the remuneration consultant is not guilty of an offence. This does not prevent the remuneration consultant from being guilty of an offence for contravening subsection (3) or (4).
Note: Subsection 1311(1) makes it an offence for the remuneration consultant to contravene subsection (3) or (4).
(6) This section does not prevent someone other than the remuneration consultant from providing the recommendation to a person who is neither a director of the company nor a member of the remuneration committee.
206M Declaration by remuneration consultant
(1) This section applies to a remuneration consultant who makes a remuneration recommendation in relation to one or more members of the key management personnel for a company that is a disclosing entity.
(2) The remuneration consultant must include with the recommendation a declaration about whether the consultant’s recommendation is made free from undue influence by the member or members of the key management personnel to whom the recommendation relates.
Note: Failure to comply with this subsection is an offence: see subsection 1311(1).
(3) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Chapter 2E—Related party transactions
Note: This Chapter applies to a CCIV with modifications: see Division 5 of Part 8B.3.
207 Purpose
The rules in this Chapter are designed to protect the interests of a public company’s members as a whole, by requiring member approval for giving financial benefits to related parties that could endanger those interests.
Part 2E.1—Member approval needed for related party benefit
Division 1—Need for member approval
208 Need for member approval for financial benefit
(1) For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company:
(a) the public company or entity must:
(i) obtain the approval of the public company’s members in the way set out in sections 217 to 227; and
(ii) give the benefit within 15 months after the approval; or
(b) the giving of the benefit must fall within an exception set out in sections 210 to 216.
Note 1: For the criminal liability of a person dishonestly involved in a contravention of this subsection, see subsection 209(3).
Note 2: This section applies to a CCIV in a modified form: see section 1227A.
(2) If:
(a) the giving of the benefit is required by a contract; and
(b) the making of the contract was approved in accordance with subparagraph (1)(a)(i) as a financial benefit given to the related party; and
(c) the contract was made:
(i) within 15 months after that approval; or
(ii) before that approval, if the contract was conditional on the approval being obtained;
member approval for the giving of the benefit is taken to have been given and the benefit need not be given within the 15 months.
209 Consequences of breach
(1) If the public company or entity contravenes section 208:
(a) the contravention does not affect the validity of any contract or transaction connected with the giving of the benefit; and
(b) the public company or entity is not guilty of an offence.
Note: A Court may order an injunction to stop the company or entity giving the benefit to the related party (see section 1324).
(2) A person contravenes this subsection if they are involved in a contravention of section 208 by a public company or entity.
Note 1: This subsection is a civil penalty provision.
Note 2: Section 79 defines involved.
Note 3: This section has an extended operation in relation to a retail CCIV: see section 1227A.
(3) A person commits an offence if they are involved in a contravention of section 208 by a public company or entity and the involvement is dishonest.
Division 2—Exceptions to the requirement for member approval
210 Arm’s length terms
Member approval is not needed to give a financial benefit on terms that:
(a) would be reasonable in the circumstances if the public company or entity and the related party were dealing at arm’s length; or
(b) are less favourable to the related party than the terms referred to in paragraph (a).
211 Remuneration and reimbursement for officer or employee
Benefits that are reasonable remuneration
(1) Member approval is not needed to give a financial benefit if:
(a) the benefit is remuneration to a related party as an officer or employee of the following:
(i) the public company;
(ii) an entity that the public company controls;
(iii) an entity that controls the public company;
(iv) an entity that is controlled by an entity that controls the public company; and
(b) to give the remuneration would be reasonable given:
(i) the circumstances of the public company or entity giving the remuneration; and
(ii) the related party’s circumstances (including the responsibilities involved in the office or employment).
Benefits that are payments of expenses incurred
(2) Member approval is not needed to give a financial benefit if:
(a) the benefit is payment of expenses incurred or to be incurred, or reimbursement for expenses incurred, by a related party in performing duties as an officer or employee of the following:
(i) the public company;
(ii) an entity that the public company controls;
(iii) an entity that controls the public company;
(iv) an entity that is controlled by an entity that controls the public company; and
(b) to give the benefit would be reasonable in the circumstances of the public company or entity giving the remuneration.
(3) For the purposes of this section:
(a) a contribution made by a body corporate to a fund or scheme for the purposes of making provision for, or obtaining, superannuation benefits (including defined benefits) for an officer of the body, or for dependants of an officer of the body, is remuneration provided by the body to the officer of the body; and
(b) a financial benefit given to a person because of the person ceasing to hold an office or employment as an officer or employee of a body corporate is remuneration paid or provided to the person in a capacity as an officer of the body.
212 Indemnities, exemptions, insurance premiums and payment for legal costs for officers
Indemnities, exemptions and insurance premiums
(1) Member approval is not needed to give a financial benefit if:
(a) the benefit is for a related party who is an officer of the public company or entity; and
(b) the benefit is:
(i) an indemnity, exemption or insurance premium in respect of a liability incurred as an officer of the public company or entity; or
(ii) an agreement to give an indemnity or exemption, or to pay an insurance premium, of that kind; and
(c) to give the benefit would be reasonable in the circumstances of the public company or entity giving the benefit.
Note: Sections 199A to 199C may prohibit giving an indemnity or exemption or paying an insurance premium for an officer.
Payments in respect of legal costs
(2) Member approval is not needed to give a financial benefit if:
(a) the benefit is for a related party who is an officer of the public company or entity; and
(b) the benefit is the making of, or an agreement to make, a payment (whether by way of advance, loan or otherwise) in respect of legal costs incurred by the officer in defending an action for a liability incurred as an officer of the public company or entity; and
(c) either:
(i) section 199A does not apply to the costs; or
(ii) if section 199A applies to the costs—the officer must repay the amount paid if the costs become costs for which the company must not give the officer an indemnity under that section; and
(d) to give the benefit would be reasonable in the circumstances of the public company or entity giving the benefit.
(3) In working out for the purposes of subsection (1) or (2) whether giving the benefit is reasonable in the circumstances:
(a) assess whether it would be reasonable on the basis of the circumstances existing:
(i) if the benefit is given under an agreement—at the time when the agreement is or was made; or
(ii) if the benefit is not given under an agreement—at the time when the benefit is or was given; and
(b) disregard any other financial benefit given or payable to the officer by the public company or entity.
213 Small amounts given to related entity
(1) Member approval is not needed to give a financial benefit to a related party in a financial year if the total of the following amounts or values is less than or equal to the amount prescribed by the regulations for the purposes of this section:
(a) the amount or value of the financial benefit;
(b) the total of all other amounts or values of financial benefits given to the related party, in the financial year, for which member approval was not needed because of this section.
(2) In working out the total of the amounts or values referred to in paragraphs (1)(a) and (b):
(a) add in all amounts or values of financial benefits given to the related party in the financial year by:
(i) the public company or entity; and
(ii) any entities controlled by the public company or entity; and
(b) disregard:
(i) amounts that have been repaid; and
(ii) amounts that fall under any other exception in this Part.
For the purposes of this subsection, the time at which the entity must be controlled by the public company is the time at which the financial benefit is given.
214 Benefit to or by closely‑held subsidiary
(1) Member approval is not needed to give a financial benefit if the benefit is given:
(a) by a body corporate to a closely‑held subsidiary of the body; or
(b) by a closely‑held subsidiary of a body corporate to the body or an entity it controls.
(2) For the purposes of this section, a body corporate is a closely‑held subsidiary of another body corporate if, and only if, no member of the first‑mentioned body is a person other than:
(a) the other body; or
(b) a nominee of the other body; or
(c) a body corporate that is a closely‑held subsidiary of the other body because of any other application or applications of this subsection; or
(d) a nominee of a body referred to in paragraph (c).
(3) For the purposes of subsection (2), disregard shares that are not voting shares.
215 Benefits to members that do not discriminate unfairly
Member approval is not needed to give a financial benefit if:
(a) the benefit is given to the related party in their capacity as a member of the public company; and
(b) giving the benefit does not discriminate unfairly against the other members of the public company.
216 Court order
Member approval is not needed to give a financial benefit under an order of a court.
Division 3—Procedure for obtaining member approval
217 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.
218 Company must lodge material that will be put to members with ASIC
(1) At least 14 days before the notice convening the relevant meeting is given, the public company must lodge:
(a) a proposed notice of meeting setting out the text of the proposed resolution; and
(b) a proposed explanatory statement satisfying section 219; and
(c) any other document that is proposed to accompany the notice convening the meeting and that relates to the proposed resolution; and
(d) any other document that any of the following proposes to give to members of the public company before or at the meeting:
(i) the company;
(ii) a related party of the company to whom the proposed resolution would permit a financial benefit to be given;
(iii) an associate of the company or of such a related party;
and can reasonably be expected to be material to a member in deciding how to vote on the proposed resolution.
(2) If, when the notice convening the meeting is given, ASIC:
(a) has approved in writing a period of less than 14 days for the purposes of subsection (1); and
(b) has not revoked the approval by written notice to the public company;
subsection (1) applies as if the reference to 14 days were a reference to the approved period.
(3) ASIC may give and revoke approvals for the purposes of subsection (2).
219 Requirements for explanatory statement to members
(1) The proposed explanatory statement lodged under section 218 must be in writing and set out:
(a) the related parties to whom the proposed resolution would permit financial benefits to be given; and
(b) the nature of the financial benefits; and
(c) in relation to each director of the company:
(i) if the director wanted to make a recommendation to members about the proposed resolution—the recommendation and his or her reasons for it; or
(ii) if not—why not; or
(iii) if the director was not available to consider the proposed resolution—why not; and
(d) in relation to each such director:
(i) whether the director had an interest in the outcome of the proposed resolution; and
(ii) if so—what it was; and
(e) all other information that:
(i) is reasonably required by members in order to decide whether or not it is in the company’s interests to pass the proposed resolution; and
(ii) is known to the company or to any of its directors.
(2) An example of the kind of information referred to in paragraph (1)(e) is information about what, from an economic and commercial point of view, are the true potential costs and detriments of, or resulting from, giving financial benefits as permitted by the proposed resolution, including (without limitation):
(a) opportunity costs; and
(b) taxation consequences (such as liability to fringe benefits tax); and
(c) benefits forgone by whoever would give the benefits.
Note: Sections 180 and 181 require an officer of a corporation to act honestly and to exercise care and diligence. These duties extend to preparing an explanatory statement under this section. Section 1309 creates offences where false and misleading material relating to a corporation’s affairs is made available or furnished to members.
220 ASIC may comment on proposed resolution
(1) Within 14 days after a public company lodges documents under section 218, ASIC may give to the company written comments on those documents (other than comments about whether the proposed resolution is in the company’s best interests).
(2) If the company is listed, ASIC may consult with the relevant market operator for the purposes of giving comments to the company.
(3) Subsection (2) does not limit the persons with whom ASIC may consult.
(4) ASIC must keep a copy of the written comments it gives to a company under subsection (1), and subsections 1274(2) and (5) apply to the copy as if it were a document lodged with ASIC.
(5) The fact that ASIC has given particular comments, or has declined to give comments, under subsection (1) does not in any way affect the performance or exercise of any of ASIC’s functions and powers.
221 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 218; and
(b) must be accompanied by an explanatory statement that is the same, in all material respects, as the proposed explanatory statement lodged under that section; and
(c) must be accompanied by a document that is, or documents that are, the same, in all material respects, as the document or documents (if any) lodged under paragraph 218(1)(c); and
(d) if ASIC has given to the public company, under section 220, comments on the documents lodged under section 218—must be accompanied by a copy of those comments; and
(e) must not be accompanied by any other documents.
222 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 218(1)(d).
223 Proposed resolution cannot be varied
The resolution must be the same as the proposed resolution set out in the proposed notice lodged under section 218.
224 Voting by or on behalf of related party interested in proposed resolution
(1) At a general meeting, a vote on a proposed resolution under this Division must not be cast (in any capacity) by or on behalf of:
(a) a related party of the public company to whom the resolution would permit a financial benefit to be given; or
(b) an associate of such a related party.
(2) Subsection (1) does not prevent the casting of a vote if:
(a) it is cast by a person as a proxy appointed by writing that specifies how the proxy is to vote on the proposed resolution; and
(b) it is not cast on behalf of a related party or associate of a kind referred to in subsection (1).
(3) The regulations may prescribe cases where subsection (1) does not apply.
(4) ASIC may by writing declare that:
(a) subsection (1) does not apply to a specified proposed resolution; or
(b) subsection (1) does not prevent the casting of a vote, on a specified proposed resolution, by a specified entity, or on behalf of a specified entity;
but may only do so if satisfied that the declaration will not cause unfair prejudice to the interests of any member of the public company.
(5) A declaration in force under subsection (4) has effect accordingly.
(6) If a vote is cast in contravention of subsection (1), the related party or associate, as the case may be, contravenes this subsection, whether or not the proposed resolution is passed.
(7) For the purposes of this section, a vote is cast on behalf of an entity if, and only if, it is cast:
(a) as proxy for the entity; or
(b) otherwise on behalf of the entity; or
(c) in respect of a share in respect of which the entity has:
(i) power to vote; or
(ii) power to exercise, or control the exercise of, a right to vote.
(8) Subject to subsection 225(1), a contravention of this section does not affect the validity of a resolution.
(9) Subject to Part 1.1A, this section has effect despite:
(a) anything else in:
(i) this Act; or
(ii) any other law (including the general law) of a State or Territory; or
(b) anything in a body corporate’s constitution.
225 Voting on the resolution
(1) If any votes on the resolution are cast in contravention of subsection 224(1), it must be the case that the resolution would still be passed even if those votes were disregarded.
(2) If a poll was duly demanded, or is otherwise required under section 250JA, on the question that the resolution be passed, subsections (3) and (4) apply in relation to voting on the poll.
(3) In relation to each member of the public company who voted on the resolution in person, the public company must record in writing:
(a) the member’s name; and
(b) how many votes the member cast for the resolution and how many against.
(4) In relation to each member of the public company who voted on the resolution by proxy, or by a representative authorised under section 250D, the public company must record in writing:
(a) the member’s name; and
(b) in relation to each person who voted as proxy, or as such a representative, for the member:
(i) the person’s name; and
(ii) how many votes the person cast on the resolution as proxy, or as such a representative, for the member; and
(iii) how many of those votes the person cast for the resolution and how many against.
(5) For 7 years after the day when a resolution under this Division is passed, the public company must retain the records it made under this section in relation to the resolution.
(6) An offence based on subsection (3), (4) or (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
226 Notice of resolution to be lodged
The public company must lodge a notice setting out the text of the resolution within 14 days after the resolution is passed.
227 Declaration by court of substantial compliance
(1) The Court may declare that the conditions prescribed by this Division have been satisfied if it finds that they have been substantially satisfied.
(2) A declaration may be made only on the application of an interested person.
Part 2E.2—Related parties and financial benefits
228 Related parties
Controlling entities
(1) An entity that controls a public company is a related party of the public company.
Directors and their spouses
(2) The following persons are related parties of a public company:
(a) directors of the public company;
(b) directors (if any) of an entity that controls the public company;
(c) if the public company is controlled by an entity that is not a body corporate—each of the persons making up the controlling entity;
(d) spouses of the persons referred to in paragraphs (a), (b) and (c).
Relatives of directors and spouses
(3) The following relatives of persons referred to in subsection (2) are related parties of the public company:
(a) parents;
(b) children.
Entities controlled by other related parties
(4) An entity controlled by a related party referred to in subsection (1), (2) or (3) is a related party of the public company unless the entity is also controlled by the public company.
Related party in previous 6 months
(5) An entity is a related party of a public company at a particular time if the entity was a related party of the public company of a kind referred to in subsection (1), (2), (3) or (4) at any time within the previous 6 months.
Entity has reasonable grounds to believe it will become related party in future
(6) An entity is a related party of a public company at a particular time if the entity believes or has reasonable grounds to believe that it is likely to become a related party of the public company of a kind referred to in subsection (1), (2), (3) or (4) at any time in the future.
Acting in concert with related party
(7) An entity is a related party of a public company if the entity acts in concert with a related party of the public company on the understanding that the related party will receive a financial benefit if the public company gives the entity a financial benefit.
229 Giving a financial benefit
(1) In determining whether a financial benefit is given for the purposes of this Act:
(a) give a broad interpretation to financial benefits being given, even if criminal or civil penalties may be involved; and
(b) the economic and commercial substance of conduct is to prevail over its legal form; and
(c) disregard any consideration that is or may be given for the benefit, even if the consideration is adequate.
(2) Giving a financial benefit includes the following:
(a) giving a financial benefit indirectly, for example, through 1 or more interposed entities;
(b) giving a financial benefit by making an informal agreement, oral agreement or an agreement that has no binding force;
(c) giving a financial benefit that does not involve paying money (for example by conferring a financial advantage).
(3) The following are examples of giving a financial benefit to a related party:
(a) giving or providing the related party finance or property;
(b) buying an asset from or selling an asset to the related party;
(c) leasing an asset from or to the related party;
(d) supplying services to or receiving services from the related party;
(e) issuing securities or granting an option to the related party;
(f) taking up or releasing an obligation of the related party.
Part 2E.3—Interaction with other rules
230 General duties still apply
A director is not relieved from any of their duties under this Act (including sections 180 and 184), or their fiduciary duties, in connection with a transaction merely because the transaction is authorised by a provision of this Chapter or is approved by a resolution of members under a provision of this Chapter.
Chapter 2F—Members’ rights and remedies
231 Membership of a company
A person is a member of a company if they:
(a) are a member of the company on its registration; or
(b) agree to become a member of the company after its registration and their name is entered on the register of members; or
(c) become a member of the company under section 167 (membership arising from conversion of a company from one limited by guarantee to one limited by shares).
Part 2F.1—Oppressive conduct of affairs
232 Grounds for Court order
The Court may make an order under section 233 if:
(a) the conduct of a company’s affairs; or
(b) an actual or proposed act or omission by or on behalf of a company; or
(c) a resolution, or a proposed resolution, of members or a class of members of a company;
is either:
(d) contrary to the interests of the members as a whole; or
(e) oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity.
For the purposes of this Part, a person to whom a share in the company has been transmitted by will or by operation of law is taken to be a member of the company.
Note 1: For affairs, see sections 53 and 53AAA.
Note 2: The effect of paragraph (d) is extended in relation to a sub‑fund of a CCIV: see section 1227F.
233 Orders the Court can make
(1) The Court can make any order under this section that it considers appropriate in relation to the company, including an order:
(a) that the company be wound up;
(b) that the company’s existing constitution be modified or repealed;
(c) regulating the conduct of the company’s affairs in the future;
(d) for the purchase of any shares by any member or person to whom a share in the company has been transmitted by will or by operation of law;
(e) for the purchase of shares with an appropriate reduction of the company’s share capital;
(f) for the company to institute, prosecute, defend or discontinue specified proceedings;
(g) authorising a member, or a person to whom a share in the company has been transmitted by will or by operation of law, to institute, prosecute, defend or discontinue specified proceedings in the name and on behalf of the company;
(h) appointing a receiver or a receiver and manager of any or all of the company’s property;
(i) restraining a person from engaging in specified conduct or from doing a specified act;
(j) requiring a person to do a specified act.
Note: If the company is a CCIV there are modifications for paragraphs (1)(a) and (h) (see section 1227G and Part 8B.6).
Order that the company be wound up
(2) If an order that a company be wound up is made under this section, the provisions of this Act relating to the winding up of companies apply:
(a) as if the order were made under section 461; and
(b) with such changes as are necessary.
Order altering constitution
(3) If an order made under this section repeals or modifies a company’s constitution, or requires the company to adopt a constitution, the company does not have the power under section 136 to change or repeal the constitution if that change or repeal would be inconsistent with the provisions of the order, unless:
(a) the order states that the company does have the power to make such a change or repeal; or
(b) the company first obtains the leave of the Court.
Note: If the company is a CCIV the reference to section 136 is modified (see subsection 1227G(2)).
234 Who can apply for order
An application for an order under section 233 in relation to a company may be made by:
(a) a member of the company, even if the application relates to an act or omission that is against:
(i) the member in a capacity other than as a member; or
(ii) another member in their capacity as a member; or
(b) a person who has been removed from the register of members because of a selective reduction; or
(c) a person who has ceased to be a member of the company if the application relates to the circumstances in which they ceased to be a member; or
(d) a person to whom a share in the company has been transmitted by will or by operation of law; or
(e) a person whom ASIC thinks appropriate having regard to investigations it is conducting or has conducted into:
(i) the company’s affairs; or
(ii) matters connected with the company’s affairs.
Note 1: If an application is made under this section, in certain cases the court may order that the company be wound up in insolvency (see section 459B).
Note 2: For selective reduction, see subsection 256B(2).
235 Requirement for person to lodge order
(1) If an order is made under section 233, the applicant must lodge a copy of the order with ASIC within 14 days after it is made.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Part 2F.1A—Proceedings on behalf of a company by members and others
236 Bringing, or intervening in, proceedings on behalf of a company
(1) A person may bring proceedings on behalf of a company, or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for those proceedings, or for a particular step in those proceedings (for example, compromising or settling them), if:
(a) the person is:
(i) a member, former member, or person entitled to be registered as a member, of the company or of a related body corporate; or
(ii) an officer or former officer of the company; and
(b) the person is acting with leave granted under section 237.
(2) Proceedings brought on behalf of a company must be brought in the company’s name.
(3) The right of a person at general law to bring, or intervene in, proceedings on behalf of a company is abolished.
Note 1: For the right to inspect company books, see subsections 247A(3) to (6).
Note 2: For the requirements to disclose proceedings and leave applications in the annual directors’ report, see subsections 300(14) and (15).
Note 3: This section does not prevent a person bringing, or intervening in, proceedings on their own behalf in respect of a personal right.
237 Applying for and granting leave
(1) A person referred to in paragraph 236(1)(a) may apply to the Court for leave to bring, or to intervene in, proceedings.
(2) The Court must grant the application if it is satisfied that:
(a) it is probable that the company will not itself bring the proceedings, or properly take responsibility for them, or for the steps in them; and
(b) the applicant is acting in good faith; and
(c) it is in the best interests of the company that the applicant be granted leave; and
(d) if the applicant is applying for leave to bring proceedings—there is a serious question to be tried; and
(e) either:
(i) at least 14 days before making the application, the applicant gave written notice to the company of the intention to apply for leave and of the reasons for applying; or
(ii) it is appropriate to grant leave even though subparagraph (i) is not satisfied.
(3) A rebuttable presumption that granting leave is not in the best interests of the company arises if it is established that:
(a) the proceedings are:
(i) by the company against a third party; or
(ii) by a third party against the company; and
(b) the company has decided:
(i) not to bring the proceedings; or
(ii) not to defend the proceedings; or
(iii) to discontinue, settle or compromise the proceedings; and
(c) all of the directors who participated in that decision:
(i) acted in good faith for a proper purpose; and
(ii) did not have a material personal interest in the decision; and
(iii) informed themselves about the subject matter of the decision to the extent they reasonably believed to be appropriate; and
(iv) rationally believed that the decision was in the best interests of the company.
The director’s belief that the decision was in the best interests of the company is a rational one unless the belief is one that no reasonable person in their position would hold.
(4) For the purposes of subsection (3):
(a) a person is a third party if:
(i) the company is a public company and the person is not a related party of the company; or
(ii) the company is not a public company and the person would not be a related party of the company if the company were a public company; and
(b) proceedings by or against the company include any appeal from a decision made in proceedings by or against the company.
Note 1: Related party is defined in section 228.
Note 2: For who is a third party of a CCIV, see section 1227H.
238 Substitution of another person for the person granted leave
(1) Any of the following persons may apply to the Court for an order that they be substituted for a person to whom leave has been granted under section 237:
(a) a member, former member, or a person entitled to be registered as a member, of the company or of a related body corporate;
(b) an officer, or former officer, of the company.
(2) The Court may make the order if it is satisfied that:
(a) the applicant is acting in good faith; and
(b) it is appropriate to make the order in all the circumstances.
(3) An order substituting one person for another has the effect that:
(a) the grant of leave is taken to have been made in favour of the substituted person; and
(b) if the other person has already brought the proceedings or intervened—the substituted person is taken to have brought those proceedings or to have made that intervention.
239 Effect of ratification by members
(1) If the members of a company ratify or approve conduct, the ratification or approval:
(a) does not prevent a person from bringing or intervening in proceedings with leave under section 237 or from applying for leave under that section; and
(b) does not have the effect that proceedings brought or intervened in with leave under section 237 must be determined in favour of the defendant, or that an application for leave under that section must be refused.
(2) If members of a company ratify or approve conduct, the Court may take the ratification or approval into account in deciding what order or judgment (including as to damages) to make in proceedings brought or intervened in with leave under section 237 or in relation to an application for leave under that section. In doing this, it must have regard to:
(a) how well‑informed about the conduct the members were when deciding whether to ratify or approve the conduct; and
(b) whether the members who ratified or approved the conduct were acting for proper purposes.
240 Leave to discontinue, compromise or settle proceedings brought, or intervened in, with leave
Proceedings brought or intervened in with leave must not be discontinued, compromised or settled without the leave of the Court.
241 General powers of the Court
(1) The Court may make any orders, and give any directions, that it considers appropriate in relation to proceedings brought or intervened in with leave, or an application for leave, including:
(a) interim orders; and
(b) directions about the conduct of the proceedings, including requiring mediation; and
(c) an order directing the company, or an officer of the company, to do, or not to do, any act; and
(d) an order appointing an independent person to investigate, and report to the Court on:
(i) the financial affairs of the company; or
(ii) the facts or circumstances which gave rise to the cause of action the subject of the proceedings; or
(iii) the costs incurred in the proceedings by the parties to the proceedings and the person granted leave.
(2) A person appointed by the Court under paragraph (1)(d) is entitled, on giving reasonable notice to the company, to inspect any books of the company for any purpose connected with their appointment.
(3) If the Court appoints a person under paragraph (1)(d):
(a) the Court must also make an order stating who is liable for the remuneration and expenses of the person appointed; and
(b) the Court may vary the order at any time; and
(c) the persons who may be made liable under the order, or the order as varied, are:
(i) all or any of the parties to the proceedings or application; and
(ii) the company; and
(d) if the order, or the order as varied, makes 2 or more persons liable, the order may also determine the nature and extent of the liability of each of those persons.
(4) Subsection (3) does not affect the powers of the Court as to costs.
242 Power of the Court to make costs orders
The Court may at any time make any orders it considers appropriate about the costs of the following persons in relation to proceedings brought or intervened in with leave under section 237 or an application for leave under that section:
(a) the person who applied for or was granted leave;
(b) the company;
(c) any other party to the proceedings or application.
An order under this section may require indemnification for costs.
Part 2F.2—Class rights
Note: This Part does not apply to the adoption or amendment of benefit fund rules or to consequential amendments to the rest of the company’s constitution made under the Life Insurance Act 1995, see Subdivision 2 of Division 4 of Part 2A of that Act.
246B Varying and cancelling class rights
If constitution sets out procedure
(1) If a company has a constitution that sets out the procedure for varying or cancelling:
(a) for a company with a share capital—rights attached to shares in a class of shares; or
(b) for a company without a share capital—rights of members in a class of members;
those rights may be varied or cancelled only in accordance with the procedure. The procedure may be changed only if the procedure itself is complied with.
Note: A CCIV must have a minimum of 1 class of shares per sub‑fund: see section 1230A.
If constitution does not set out procedure
(2) If a company does not have a constitution, or has a constitution that does not set out the procedure for varying or cancelling:
(a) for a company with a share capital—rights attached to shares in a class of shares; or
(b) for a company without a share capital—rights of members in a class of members;
those rights may be varied or cancelled only by special resolution of the company and:
(c) by special resolution passed at a meeting:
(i) for a company with a share capital of the class of members holding shares in the class; or
(ii) for a company without a share capital of the class of members whose rights are being varied or cancelled; or
(d) with the written consent of members with at least 75% of the votes in the class.
Note: This subsection applies to a CCIV in a modified form: see section 1227J.
(3) The company must give written notice of the variation or cancellation to the members of the class within 7 days after the variation or cancellation is made.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
246C Certain actions taken to vary rights etc.
Company with share capital
(1) If the shares in a class of shares in a company are divided into further classes, and after the division the rights attached to all of those shares are not the same:
(a) the division is taken to vary the rights attached to every share that was in the class existing before the division; and
(b) members who hold shares to which the same rights are attached after the division form a separate class.
(2) If the rights attached to some of the shares in a class of shares in a company are varied:
(a) the variation is taken to vary the rights attached to every other share that was in the class existing before the variation; and
(b) members who hold shares to which the same rights are attached after the variation form a separate class.
Company without share capital
(3) If the members in a class of members in a company without share capital are divided into further classes of members, and after the division the rights of all of those members are not the same:
(a) the division is taken to vary the rights of every member who was in the class existing before the division; and
(b) members who have the same rights after the division form a separate class.
(4) If the rights of some of the members in a class of members in a company without a share capital are varied:
(a) the variation is taken to vary the rights of every other member who was in the class existing before the variation; and
(b) members who have the same rights after the variation form a separate class.
Company with 1 class of shares issuing new class of shares
(5) If a company with 1 class of shares issues new shares, the issue is taken to vary the rights attached to shares already issued if:
(a) the rights attaching to the new shares are not the same as the rights attached to shares already issued; and
(b) those rights are not provided for in:
(i) the company’s constitution (if any); or
(ii) a notice, document or resolution that is lodged with ASIC.
(6) If a company issues new preference shares that rank equally with existing preference shares, the issue is taken to vary the rights attached to the existing preference shares unless the issue is authorised by:
(a) the terms of issue of the existing preference shares; or
(b) the company’s constitution (if any) as in force when the existing preference shares were issued.
246D Variation, cancellation or modification without unanimous support of class
(1) If members in a class do not all agree (whether by resolution or written consent) to:
(a) a variation or cancellation of their rights; or
(b) a modification of the company’s constitution (if any) to allow their rights to be varied or cancelled;
members with at least 10% of the votes in the class may apply to the Court to have the variation, cancellation or modification set aside.
(2) An application may only be made within 1 month after the variation, cancellation or modification is made.
(3) The variation, cancellation or modification takes effect:
(a) if no application is made to the Court to have it set aside—1 month after the variation, cancellation or modification is made; or
(b) if an application is made to the Court to have it set aside—when the application is withdrawn or finally determined.
(4) The members of the class who want to have the variation, cancellation or modification set aside may appoint 1 or more of themselves to make the application on their behalf. The appointment must be in writing.
(5) The Court may set aside the variation, cancellation or modification if it is satisfied that it would unfairly prejudice the applicants. However, the Court must confirm the variation, cancellation or modification if the Court is not satisfied of unfair prejudice.
(6) Within 14 days after the Court makes an order, the company must lodge a copy of it with ASIC.
(7) An offence based on subsection (6) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
246E Variation, cancellation or modification with unanimous support of class
If the members in a class all agree (whether by resolution or written consent) to the variation, cancellation or modification, it takes effect:
(a) if no later date is specified in the resolution or consent—on the date of the resolution or consent; or
(b) on a later date specified in the resolution or consent.
246F Company must lodge documents and resolutions with ASIC
(1) A company must lodge with ASIC a notice in the prescribed form setting out particulars of any of the following:
(a) a division of shares in the company into classes if the shares were not previously so divided;
(b) a conversion of shares in a class of shares in the company into shares in another class.
Note: A proprietary company may also have to notify certain particulars under Part 2C.2.
(2) The notice must be lodged within 14 days after the division or conversion.
(3) A public company must lodge with ASIC a copy of each document (including an agreement or consent) or resolution that:
(a) does any of the following:
(i) attaches rights to issued or unissued shares;
(ii) varies or cancels rights attaching to issued or unissued shares;
(iii) varies or cancels rights of members in a class of members of a company that does not have a share capital;
(iv) binds a class of members; and
(b) is not already lodged with ASIC.
This also applies to a proprietary company that has applied under Part 2B.7 to change to a public company, while its application has not yet been determined.
Note: This subsection also applies to a CCIV: see section 1227L.
(3A) An offence based on subsection (1) or (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) The document must be lodged within 14 days after it is made. The resolution must be lodged within 14 days after it is passed.
246G Member’s copies of documents and resolutions
(1) A member of a company may ask the company in writing for a copy of a document or resolution referred to in section 246F. The company must send the copy to the member.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) If the company requires the member to pay for the copy, the company must send it:
(a) within 7 days after the company receives the payment; or
(b) within any longer period approved by ASIC.
(3) The amount of any payment the company requires cannot exceed the prescribed amount.
(4) If the company does not require payment for the copy, the company must send it:
(a) within 7 days after the member asks for it; or
(b) within any longer period approved by ASIC.
246H Application of this Part to MCI mutual entities that are companies limited by guarantee
For the purposes of applying this Part to an MCI mutual entity that is a company limited by guarantee, treat the entity:
(a) in relation to a person who holds MCIs in the entity—as a company with a share capital; and
(b) in relation to a non‑shareholder mutual member—as a company without a share capital.
Part 2F.3—Inspection of books
247A Order for inspection of books of company or registered scheme
(1) On application by a member of a company or registered scheme, the Court may make an order:
(a) authorising the applicant to inspect books of the company or scheme; or
(b) authorising another person (whether a member or not) to inspect books of the company or scheme on the applicant’s behalf.
The Court may only make the order if it is satisfied that the applicant is acting in good faith and that the inspection is to be made for a proper purpose.
(2) A person authorised to inspect books may make copies of the books unless the Court orders otherwise.
(3) A person who:
(a) is granted leave under section 237; or
(b) applies for leave under that section; or
(c) is eligible to apply for leave under that section;
may apply to the Court for an order under this section.
(4) On application, the Court may make an order authorising:
(a) the applicant to inspect books of the company; or
(b) another person to inspect books of the company on the applicant’s behalf.
(5) The Court may make the order only if it is satisfied that:
(a) the applicant is acting in good faith; and
(b) the inspection is to be made for a purpose connected with:
(i) applying for leave under section 237; or
(ii) bringing or intervening in proceedings with leave under that section.
(6) A person authorised to inspect books may make copies of the books unless the Court orders otherwise.
247B Ancillary orders
If the Court makes an order under section 247A, the Court may make any other orders it considers appropriate, including either or both of the following:
(a) an order limiting the use that a person who inspects books may make of information obtained during the inspection;
(b) an order limiting the right of a person who inspects books to make copies in accordance with subsection 247A(2).
247C Disclosure of information acquired in inspection
(1) A person who inspects books on behalf of an applicant under section 247A must not disclose information obtained during the inspection.
(2) Subsection (1) does not apply to the extent that the disclosure is to:
(a) ASIC; or
(b) the applicant.
Note: A defendant bears an evidential burden in relation to the matter in subsection (2), see subsection 13.3(3) of the Criminal Code.
(3) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
247D Company or directors may allow member to inspect books (replaceable rule see section 135)
The directors of a company, or the company by a resolution passed at a general meeting, may authorise a member to inspect books of the company.
Part 2F.4—Proceedings against a company by members and others
247E Shareholding does not prevent compensation claim
A person is not prevented from obtaining damages or other compensation from a company only because the person:
(a) holds, or has held, shares in the company; or
(b) has subscribed for shares in the company; or
(c) has a right to be included in the register that the company maintains under section 169.
Chapter 2G—Meetings
Part 2G.1—Directors’ meetings
Note: Section 1228 applies instead of this Part in relation to a CCIV.
Division 1—Resolutions and declarations without meetings
248A Circulating resolutions of companies with more than 1 director (replaceable rule see section 135)
Resolutions
(1) The directors of a company may pass a resolution without a directors’ meeting being held if all the directors entitled to vote on the resolution sign a document containing a statement that they are in favour of the resolution set out in the document.
Copies
(2) Separate copies of a document may be used for signing by directors if the wording of the resolution and statement is identical in each copy.
When the resolution is passed
(3) The resolution is passed when the last director signs.
Note: Passage of a resolution under this section must be recorded in the company’s minute books (see section 251A).
248B Resolutions and declarations of 1 director proprietary companies
Resolutions
(1) The director of a proprietary company that has only 1 director may pass a resolution by recording it and signing the record.
Declarations
(2) The director of a proprietary company that has only 1 director may make a declaration by recording it and signing the record. Recording and signing the declaration satisfies any requirement in this Act that the declaration be made at a directors’ meeting.
Note 1: For directors’ declarations, see sections 295 and 494.
Note 2: Passage of a resolution or the making of a declaration under this section must be recorded in the company’s minute books (see section 251A).
Division 2—Directors’ meetings
248C Calling directors’ meetings (replaceable rule see section 135)
A directors’ meeting may be called by a director giving reasonable notice individually to every other director.
Note: A director who has appointed an alternate director may ask for the notice to be sent to the alternate director (see subsection 201K(2)).
248D Use of technology
(1) A directors’ meeting may be called or held using any technology.
(2) Without limiting subsection (1), a directors’ meeting may be held:
(a) at one or more physical venues; or
(b) at one or more physical venues and using virtual meeting technology; or
(c) using virtual meeting technology only.
(3) Despite subsections (1) and (2), if technology is used to call a director’s meeting, or to hold a directors’ meeting (whether or not the meeting is held at one or more physical venues), the technology must be reasonable.
248E Chairing directors’ meetings (replaceable rule see section 135)
(1) The directors may elect a director to chair their meetings. The directors may determine the period for which the director is to be the chair.
(2) The directors must elect a director present to chair a meeting, or part of it, if:
(a) a director has not already been elected to chair the meeting; or
(b) a previously elected chair is not available or declines to act, for the meeting or the part of the meeting.
248F Quorum at directors’ meetings (replaceable rule see section 135)
Unless the directors determine otherwise, the quorum for a directors’ meeting is 2 directors and the quorum must be present at all times during the meeting.
Note 1: For special quorum rules for public companies, see section 195.
Note 2: For resolutions of 1 director proprietary companies without meetings, see section 248B.
248G Passing of directors’ resolutions (replaceable rule see section 135)
(1) A resolution of the directors must be passed by a majority of the votes cast by directors entitled to vote on the resolution.
(2) The chair has a casting vote if necessary in addition to any vote they have in their capacity as a director.
Note: The chair may be precluded from voting, for example, by a conflict of interest.
Part 2G.2—Meetings of members of companies
Note: This Part does not apply to a CCIV or its members. Instead, section 1228A applies a modified version of Part 2G.4.
Division 1—Resolutions without meetings
249A Circulating resolutions of proprietary companies with more than 1 member
(1) This section applies to resolutions of the members of proprietary companies that this Act or, if a company has a constitution, the company’s constitution requires or permits to be passed at a general meeting. It does not apply to a resolution under section 329 to remove an auditor.
(2) A company may pass a resolution without a general meeting being held if all the members entitled to vote on the resolution sign a document containing a statement that they are in favour of the resolution set out in the document. Each member of a joint membership must sign.
(3) Separate copies of a document may be used for signing by members if the wording of the resolution and statement is identical in each copy.
(4) The resolution is passed when the last member signs.
(5) A company that passes a resolution under this section without holding a meeting satisfies any requirement in this Act:
(a) to give members information or a document relating to the resolution—by giving members that information or document with the document to be signed; and
(b) to lodge with ASIC a copy of a notice of meeting to consider the resolution—by lodging a copy of the document to be signed by members; and
(c) to lodge a copy of a document that accompanies a notice of meeting to consider the resolution—by lodging a copy of the information or documents referred to in paragraph (a).
(6) The passage of the resolution satisfies any requirement in this Act, or a company’s constitution (if any), that the resolution be passed at a general meeting.
(7) This section does not affect any rule of law relating to the assent of members not given at a general meeting.
Note 1: A body corporate representative may sign a circulating resolution (see section 250D).
Note 2: Passage of a resolution under this section must be recorded in the company’s minute books (see section 251A).
249B Resolutions of 1 member companies
(1) A company that has only 1 member may pass a resolution by the member recording it and signing the record.
(2) If this Act requires information or a document relating to the resolution to be lodged with ASIC, that requirement is satisfied by lodging the information or document with the resolution that is passed.
Note 1: A body corporate representative may sign such a resolution (see section 250D).
Note 2: Passage of a resolution under this section must be recorded in the company’s minute books (see section 251A).
Division 2—Who may call meetings of members
249C Calling of meetings of members by a director (replaceable rule—see section 135)
A director may call a meeting of the company’s members.
249CA Calling of meetings of members of a listed company by a director
(1) A director may call a meeting of the company’s members.
(2) This section only applies to a company that is listed.
(3) This section applies despite anything in the company’s constitution.
249D Calling of general meeting by directors when requested by members
(1) The directors of a company must call and arrange to hold a general meeting on the request of members with at least 5% of the votes that may be cast at the general meeting.
(2) The request must:
(a) be in writing; and
(b) state any resolution to be proposed at the meeting; and
(c) be signed by the members making the request; and
(d) be given to the company.
(3) Separate copies of a document setting out the request may be used for signing by members if the wording of the request is identical in each copy.
(4) The percentage of votes that members have is to be worked out as at the midnight before the request is given to the company.
(5) The directors must call the meeting within 21 days after the request is given to the company. The meeting is to be held not later than 2 months after the request is given to the company.
249E Failure of directors to call general meeting
(1) Members with more than 50% of the votes of all of the members who make a request under section 249D may call and arrange to hold a general meeting if the directors do not do so within 21 days after the request is given to the company.
(2) The meeting must be called in the same way—so far as is possible—in which general meetings of the company may be called. The meeting must be held not later than 3 months after the request is given to the company.
(3) To call the meeting the members requesting the meeting may ask the company under section 173 for a copy of the register of members. Despite paragraph 173(3)(b), the company must give the members the copy of the register without charge.
(4) The company must pay the reasonable expenses the members incurred because the directors failed to call and arrange to hold the meeting.
(4A) An offence based on subsection (3) or (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) The company may recover the amount of the expenses from the directors. However, a director is not liable for the amount if they prove that they took all reasonable steps to cause the directors to comply with section 249D. The directors who are liable are jointly and individually liable for the amount. If a director who is liable for the amount does not reimburse the company, the company must deduct the amount from any sum payable as fees to, or remuneration of, the director.
249F Calling of general meetings by members
(1) Members with at least 5% of the votes that may be cast at a general meeting of the company may call, and arrange to hold, a general meeting. The members calling the meeting must pay the expenses of calling and holding the meeting.
(2) The meeting must be called in the same way—so far as is possible—in which general meetings of the company may be called.
(3) The percentage of votes that members have is to be worked out as at the midnight before the meeting is called.
249G Calling of meetings of members by the Court
(1) The Court may order a meeting of the company’s members to be called if it is impracticable to call the meeting in any other way.
(2) The Court may make the order on application by:
(a) any director; or
(b) any member who would be entitled to vote at the meeting.
Note: For the directions the Court may give for calling, holding or conducting a meeting it has ordered be called, see section 1319.
Division 3—How to call meetings of members
249H Amount of notice of meetings
General rule
(1) Subject to subsection (2), at least 21 days notice must be given of a meeting of a company’s members. However, if a company has a constitution, it may specify a longer minimum period of notice.
Calling meetings on shorter notice
(2) A company may call on shorter notice:
(a) an AGM, if all the members entitled to attend and vote at the AGM agree beforehand; and
(b) any other general meeting, if members with at least 95% of the votes that may be cast at the meeting agree beforehand.
A company cannot call an AGM or other general meeting on shorter notice if it is a meeting of the kind referred to in subsection (3) or (4).
Shorter notice not allowed—removing or appointing director
(3) At least 21 days notice must be given of a meeting of the members of a public company at which a resolution will be moved to:
(a) remove a director under section 203D; or
(b) appoint a director in place of a director removed under that section.
Shorter notice not allowed—removing auditor
(4) At least 21 days notice must be given of a meeting of a company at which a resolution will be moved to remove an auditor under section 329.
249HA Amount of notice of meetings of listed company
(1) Despite section 249H, at least 28 days notice must be given of a meeting of a company’s members.
(2) This section only applies to a company that is listed.
(3) This section applies despite anything in the company’s constitution.
249J Notice of meetings of members to members and directors
Notice to members and directors individually
(1) Written notice of a meeting of a company’s members must be given individually to each member entitled to vote at the meeting and to each director. Notice need only be given to 1 member of a joint membership.
Notice to joint members (replaceable rule—see section 135)
(2) Notice to joint members must be given to the joint member named first in the register of members.
How notice is given
(3) A company may give the notice of meeting to a member:
(a) personally; or
(b) by sending it by post to the address for the member in the register of members or the alternative address (if any) nominated by the member; or
(c) in the manner mentioned in paragraph 110D(1)(b), (c) or (d); or
(d) by any other means that the company’s constitution (if any) permits.
Note: A defect in the notice given may not invalidate a meeting (see section 1322).
When notice is given (replaceable rule—see section 135)
(4) A notice of meeting is taken to be given:
(a) if it is sent by post—3 days after it is posted; or
(aa) if it is sent by sending the member information in accordance with paragraph 110D(1)(b) by post—3 days after the information is posted; or
(b) if it is sent by means of an electronic communication in accordance with paragraph 110D(1)(c)—on the business day after it is sent; or
(c) if it is sent by giving the member information in accordance with paragraph 110D(1)(d)—on the business day after the day on which the information is sent to the member.
249K Auditor entitled to notice and other communications
(1) A company must give its auditor:
(a) notice of a general meeting in the same way that a member of the company is entitled to receive notice; and
(b) any other communications relating to the general meeting that a member of the company is entitled to receive.
Note 1: For when a company must have an auditor, see Part 2M.3.
Note 2: An auditor may appoint a representative to attend a meeting (see subsection 249V(4)).
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
249L Contents of notice of meetings of members
(1) A notice of a meeting of a company’s members must:
(a) set out:
(i) if there is only one location at which the members who are entitled to physically attend the meeting may do so—the date, time and place for the meeting; and
(ii) if there are 2 or more locations at which the members who are entitled to physically attend the meeting may do so—the date and time for the meeting at each location, and the main location for the meeting; and
(iii) if virtual meeting technology is to be used in holding the meeting—sufficient information to allow the members to participate in the meeting by means of the technology; and
(b) state the general nature of the meeting’s business; and
(c) if a special resolution is to be proposed at the meeting—set out an intention to propose the special resolution and state the resolution; and
(d) if a member is entitled to appoint a proxy—contain a statement setting out the following information:
(i) that the member has a right to appoint a proxy;
(ii) whether or not the proxy needs to be a member of the company;
(iii) that a member who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise.
Note: There may be other requirements for disclosure to members.
(2) The notice of the AGM of a listed company must also:
(a) inform members that the resolution referred to in subsection 250R(2) (resolution on remuneration report) will be put at the AGM; and
(b) if at the previous AGM at least 25% of the votes cast on a resolution that the remuneration report be adopted were against adoption of the report (but the same was not the case at the AGM before that):
(i) explain the circumstances in which subsection 250V(1) would apply; and
(ii) inform members that the resolution described in subsection 250V(1) as the spill resolution will be put at the AGM if that subsection applies.
Note: Subsection 250R(2) requires a resolution to adopt a remuneration report for a listed company to be put to the vote at the company’s AGM.
(3) The information included in the notice of meeting must be worded and presented in a clear, concise and effective manner.
249LA Notice of meeting not required to contain certain information
(1) The regulations may provide that a notice of a meeting of a company’s members is not required by section 249L or otherwise to include information specified in the regulations if any conditions specified in the regulations are satisfied.
(2) Without limiting subsection (1), the regulations may specify different conditions for:
(a) different kinds of information; and
(b) a notice of meeting given by a company or a class of companies.
(3) If:
(a) regulations are made for the purposes of subsection (1); and
(b) a notice of meeting does not include particular information in accordance with those regulations;
the information is taken to be included in the notice of meeting.
249M Notice of adjourned meetings (replaceable rule—see section 135)
When a meeting is adjourned, new notice of the resumed meeting must be given if the meeting is adjourned for 1 month or more.
Division 4—Members’ rights to put resolutions etc. at general meetings
249N Members’ resolutions
(1) The following members may give a company notice of a resolution that they propose to move at a general meeting:
(a) members with at least 5% of the votes that may be cast on the resolution; or
(b) at least 100 members who are entitled to vote at a general meeting.
(1A) The regulations may prescribe a different number of members for the purposes of the application of paragraph (1)(b) to:
(a) a particular company; or
(b) a particular class of company.
Without limiting this, the regulations may specify the number as a percentage of the total number of members of the company.
(2) The notice must:
(a) be in writing; and:
(b) set out the wording of the proposed resolution; and
(c) be signed by the members proposing to move the resolution.
(3) Separate copies of a document setting out the notice may be used for signing by members if the wording of the notice is identical in each copy.
(4) The percentage of votes that members have is to be worked out as at the midnight before the members give the notice.
249O Company giving notice of members’ resolutions
(1) If a company has been given notice of a resolution under section 249N, the resolution is to be considered at the next general meeting that occurs more than 2 months after the notice is given.
(2) The company must give all its members notice of the resolution at the same time, or as soon as practicable afterwards, and in the same way, as it gives notice of a meeting.
(3) The company is responsible for the cost of giving members notice of the resolution if the company receives the notice in time to send it out to members with the notice of meeting.
(4) The members requesting the meeting are jointly and individually liable for the expenses reasonably incurred by the company in giving members notice of the resolution if the company does not receive the members’ notice in time to send it out with the notice of meeting. At a general meeting, the company may resolve to meet the expenses itself.
(5) The company need not give notice of the resolution:
(a) if it is more than 1,000 words long or defamatory; or
(b) if the members making the request are to bear the expenses of sending the notice out—unless the members give the company a sum reasonably sufficient to meet the expenses that it will reasonably incur in giving the notice.
249P Members’ statements to be distributed
(1) Members may request a company to give to all its members a statement provided by the members making the request about:
(a) a resolution that is proposed to be moved at a general meeting; or
(b) any other matter that may be properly considered at a general meeting.
(2) The request must be made by:
(a) members with at least 5% of the votes that may be cast on the resolution; or
(b) at least 100 members who are entitled to vote at the meeting.
(2A) The regulations may prescribe a different number of members for the purposes of the application of paragraph (2)(b) to:
(a) a particular company; or
(b) a particular class of company.
Without limiting this, the regulations may specify the number as a percentage of the total number of members of the company.
(3) The request must be:
(a) in writing; and
(b) signed by the members making the request; and
(c) given to the company.
(4) Separate copies of a document setting out the request may be used for signing by members if the wording of the request is identical in each copy.
(5) The percentage of votes that members have is to be worked out as at the midnight before the request is given to the company.
(6) After receiving the request, the company must distribute to all its members a copy of the statement at the same time, or as soon as practicable afterwards, and in the same way, as it gives notice of a general meeting.
(7) The company is responsible for the cost of making the distribution if the company receives the statement in time to send it out to members with the notice of meeting.
(8) The members making the request are jointly and individually liable for the expenses reasonably incurred by the company in making the distribution if the company does not receive the statement in time to send it out with the notice of meeting. At a general meeting, the company may resolve to meet the expenses itself.
(9) The company need not comply with the request:
(a) if the statement is more than 1,000 words long or defamatory; or
(b) if the members making the request are responsible for the expenses of the distribution—unless the members give the company a sum reasonably sufficient to meet the expenses that it will reasonably incur in making the distribution.
Division 5—Holding meetings of members
249Q Purpose
A meeting of a company’s members must be held for a proper purpose.
249R How meetings of members may be held
A company may hold a meeting of its members:
(a) at one or more physical venues; or
(b) at one or more physical venues and using virtual meeting technology; or
(c) using virtual meeting technology only, if this is required or permitted by the company’s constitution expressly.
249RA Place and time of meetings and presence at meetings
(1) The place at which a meeting of the members of a company is held is taken to be:
(a) if the meeting is held at only one physical venue (whether or not it is also held using virtual meeting technology)—that physical venue; or
(b) if the meeting is held at more than one physical venue (whether or not it is also held using virtual meeting technology)—the main physical venue of the meeting as set out in the notice of the meeting; or
(c) if the meeting is held using virtual meeting technology only—the registered office of the company.
(2) The time at which the meeting is held is taken to be the time at the place at which the meeting is taken to be held in accordance with subsection (1).
(3) A member who attends the meeting (whether at a physical venue or by using virtual meeting technology) is taken for all purposes to be present in person at the meeting while so attending.
249S Reasonable opportunity to participate
(1) A company that holds a meeting of its members must give the members entitled to attend the meeting, as a whole, a reasonable opportunity to participate in the meeting.
Note: Section 1322 provides for consequences of a breach of this subsection.
(2) Without limiting the scope of subsection (1), the effects of that subsection include those set out in subsections (3), (4), (5), (6) and (7).
(3) The meeting must be held at a time that is reasonable at:
(a) if the meeting is held at only one physical venue (whether or not it is also held using virtual meeting technology)—that physical venue; or
(b) if the meeting is held at more than one physical venue (whether or not it is also held using virtual meeting technology)—the main physical venue of the meeting as set out in the notice of the meeting; or
(c) if the meeting is held using virtual meeting technology only—a physical venue at which it would be reasonable to hold the meeting.
(4) If the meeting is held at only one physical venue (whether or not it is also held using virtual meeting technology), it must be reasonable to hold the meeting at that physical venue.
(5) If the meeting is held at more than one physical venue (whether or not it is also held using virtual meeting technology), it must be reasonable to hold the meeting at its main physical venue as set out in the notice of the meeting.
(6) If the meeting is held at more than one physical venue (whether or not it is also held using virtual meeting technology), the technology used to hold the meeting at more than one physical venue must be reasonable.
(7) If the meeting is held using virtual meeting technology (whether or not it is held at one or more physical venues), that virtual meeting technology must:
(a) be reasonable; and
(b) allow the members who are entitled to attend the meeting, and do attend the meeting using that virtual meeting technology, as a whole, to exercise orally and in writing any rights of those members to ask questions and make comments.
249T Quorum (replaceable rule—see section 135)
(1) The quorum for a meeting of a company’s members is 2 members and the quorum must be present at all times during the meeting.
Note: For single member companies, see section 249B.
(2) In determining whether a quorum is present, count individuals attending as proxies or body corporate representatives. However, if a member has appointed more than 1 proxy or representative, count only 1 of them. If an individual is attending both as a member and as a proxy or body corporate representative, count them only once.
Note 1: For rights to appoint proxies, see section 249X.
Note 2: For body corporate representatives, see section 250D.
(3) A meeting of the company’s members that does not have a quorum present within 30 minutes after the time for the meeting set out in the notice of meeting is adjourned to a meeting (the resumed meeting) at a later time.
(3A) The directors may specify:
(a) the date and time of the resumed meeting; and
(b) if any of the company’s members is entitled to physically attend the resumed meeting—the location or locations at which the members may do so; and
(c) if virtual meeting technology is to be used in holding the meeting—sufficient information to allow the members to participate in the resumed meeting by means of the technology.
(3B) If the directors do not specify one or more of the things mentioned in subsection (3A):
(a) if the date is not specified—the meeting is adjourned to the same day in the next week; and
(b) if the time is not specified—the meeting is adjourned to the same time; and
(c) if any of the company’s members was entitled to physically attend the meeting and the location is not specified—the meeting is adjourned to the same location or locations as were specified for the original meeting; and
(d) if virtual meeting technology was used in holding the meeting and sufficient information to allow members to participate in the resumed meeting by means of the technology is not specified—participation in the resumed meeting by means of the technology must be provided in the same manner as set out in the notice for the original meeting.
(4) If no quorum is present at the resumed meeting within 30 minutes after the time for the meeting, the meeting is dissolved.
249U Chairing meetings of members (replaceable rule—see section 135)
(1) The directors may elect an individual to chair meetings of the company’s members.
(2) The directors at a meeting of the company’s members must elect an individual present to chair the meeting (or part of it) if an individual has not already been elected by the directors to chair it or, having been elected, is not available to chair it, or declines to act, for the meeting (or part of the meeting).
(3) The members at a meeting of the company’s members must elect a member present to chair the meeting (or part of it) if:
(a) a chair has not previously been elected by the directors to chair the meeting; or
(b) a previously elected chair is not available, or declines to act, for the meeting (or part of the meeting).
(4) The chair must adjourn a meeting of the company’s members if the members present with a majority of votes at the meeting agree or direct that the chair must do so.
249V Auditor’s right to be heard at general meetings
(1) A company’s auditor is entitled to attend any general meeting of the company.
Note: Section 250RA imposes on the auditor of a listed public company an obligation to attend or be represented at the AGM.
(2) The auditor is entitled to be heard at the meeting on any part of the business of the meeting that concerns the auditor in their capacity as auditor.
(3) The auditor is entitled to be heard even if:
(a) the auditor retires at the meeting; or
(b) the meeting passes a resolution to remove the auditor from office.
(4) The auditor may authorise a person in writing as their representative for the purpose of attending and speaking at any general meeting.
Note 1: At an AGM, members may ask the auditor questions (see section 250T).
Note 2: For when a company must have an auditor, see Part 2M.3.
249W Adjourned meetings
When resolution passed
(1) A resolution passed at a meeting resumed after an adjournment is passed on the day it was passed.
Business at adjourned meetings (replaceable rule—see section 135)
(2) Only unfinished business is to be transacted at a meeting resumed after an adjournment
Division 6—Proxies and body corporate representatives
249X Who can appoint a proxy (replaceable rule for proprietary companies and mandatory rule for public companies—see section 135)
(1) A member of a company who is entitled to attend and cast a vote at a meeting of the company’s members may appoint a person as the member’s proxy to attend and vote for the member at the meeting.
(1A) The person appointed as the member’s proxy may be an individual or a body corporate.
Note: A body corporate may appoint a representative to exercise the powers that the body corporate may exercise as the member’s proxy, see section 250D.
(2) The appointment may specify the proportion or number of votes that the proxy may exercise.
(3) Each member may appoint a proxy. If the member is entitled to cast 2 or more votes at the meeting, they may appoint 2 proxies. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes each proxy may exercise, each proxy may exercise half of the votes.
(4) Disregard any fractions of votes resulting from the application of subsection (2) or (3).
249Y Rights of proxies
Rights of proxies
(1) A proxy appointed to attend and vote for a member has the same rights as the member:
(a) to speak at the meeting; and
(b) to vote (but only to the extent allowed by the appointment); and
(c) join in a demand for a poll.
Proxy’s right to vote
(2) If a company has a constitution, the constitution may provide that a proxy is not entitled to vote on a show of hands.
Note: Even if the proxy is not entitled to vote on a show of hands, they may make or join in the demand for a poll.
Effect of member’s presence on proxy’s authority
(3) A company’s constitution (if any) may provide for the effect that a member’s presence at a meeting has on the authority of a proxy appointed to attend and vote for the member. However, if the constitution does not deal with this, a proxy’s authority to speak and vote for a member at a meeting is suspended while the member is present at the meeting.
249Z Company sending appointment forms or lists of proxies must send to all members
(1) If a company sends a member a proxy appointment form for a meeting or a list of persons willing to act as proxies at a meeting:
(a) if the member requested the form or list—the company must send the form or list to all members who ask for it and who are entitled to appoint a proxy to attend and vote at the meeting; or
(b) otherwise—the company must send the form or list to all its members entitled to appoint a proxy to attend and vote at the meeting.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
250A Appointing a proxy
(1) An appointment of a proxy is valid if it is signed, or otherwise authenticated in a manner prescribed by the regulations, by the member of the company making the appointment and contains the following information:
(a) the member’s name and address;
(b) the company’s name;
(c) the proxy’s name or the name of the office held by the proxy;
(d) the meetings at which the appointment may be used.
An appointment may be a standing one.
(1A) The regulations made for the purposes of subsection (1) may prescribe different requirements for the authentication of an appointment given to the company by different means (electronic or otherwise).
(2) If a company has a constitution, the constitution may provide that an appointment is valid even if it contains only some of the information required by subsection (1).
(3) An undated appointment is taken to have been dated on the day it is given to the company.
(6) An appointment does not have to be witnessed.
(7) A later appointment revokes an earlier one if both appointments could not be validly exercised at the meeting.
250B Proxy documents
Documents to be received by company before meeting
(1) For an appointment of a proxy for a meeting of a company’s members to be effective, the following documents must be received by the company at least 48 hours before the meeting:
(a) the proxy’s appointment;
(b) if the appointment is signed, or otherwise authenticated in a manner prescribed by regulations made for the purposes of subsection 250A(1), by the appointor’s attorney—the authority under which the appointment was signed or authenticated or a certified copy of the authority.
Documents received following adjournment of meeting
(2) If a meeting of a company’s members has been adjourned, an appointment and any authority received by the company at least 48 hours before the resumption of the meeting are effective for the resumed part of the meeting.
Receipt of documents
(3) A company receives a document referred to in subsection (1):
(a) when the document is received at any of the following:
(i) the company’s registered office;
(ii) a fax number at the company’s registered office;
(iii) a place, fax number or electronic address specified for the purpose in the notice of meeting; and
(b) if the notice of meeting specifies other electronic means by which a member may give the document—when the document given by those means is received by the company as prescribed by the regulations.
Note: For when a document is received by electronic communication, see section 105A.
Constitution or notice of meeting may provide for different notification period
(5) The company’s constitution (if any) or the notice of meeting may reduce the period of 48 hours referred to in subsection (1) or (2).
250BA Proxy documents—listed companies
(1) In a notice of meeting for a meeting of the members of the company, the company must specify at least one of the following:
(a) a place for the purposes of receipt of proxy appointments and proxy appointment authorities;
(b) sufficient information to allow members to comply with section 250B by means of an electronic communication.
(2) This section only applies to a company that is listed.
(3) This section applies despite anything in the company’s constitution.
250BB Proxy vote if appointment specifies way to vote
(1) An appointment of a proxy may specify the way the proxy is to vote on a particular resolution. If it does:
(a) the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way; and
(b) if the proxy has 2 or more appointments that specify different ways to vote on the resolution—the proxy must not vote on a show of hands; and
(c) if the proxy is the chair of the meeting at which the resolution is voted on—the proxy must vote on a poll, and must vote that way; and
(d) if the proxy is not the chair—the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way.
If a proxy is also a member, this subsection does not affect the way that the person can cast any votes they hold as a member.
Note: A company’s constitution may provide that a proxy is not entitled to vote on a show of hands (see subsection 249Y(2)).
(2) If the chair contravenes subsection (1), the chair commits an offence if the appointment as a proxy resulted from:
(a) the company sending to members:
(i) a list of persons willing to act as proxies; or
(ii) a proxy appointment form holding the chair out as being willing to act as a proxy; or
(b) the operation of section 250BC.
(3) If a person other than the chair contravenes paragraph (1)(a) or (d), the person commits an offence if the person:
(a) agreed to the appointment; or
(b) held himself or herself out, or caused another person to hold him or her out, as being willing to act as a proxy in relation to the appointment.
(4) If a person other than the chair contravenes paragraph (1)(b), the person commits an offence if, in relation to at least 2 of the different ways of voting specified by the appointments, the person:
(a) agreed to at least one of the appointments specifying that way of voting; or
(b) held himself or herself out, or caused another person to hold him or her out, as being willing to act as a proxy in relation to at least one of the appointments specifying that way of voting.
(5) An offence against subsection (2), (3) or (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
250BC Transfer of non‑chair proxy to chair in certain circumstances
If:
(a) an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the company’s members; and
(b) the appointed proxy is not the chair of the meeting; and
(c) at the meeting, a poll is duly demanded, or is otherwise required under section 250JA, on the question that the resolution be passed; and
(d) either of the following apply:
(i) if a record of attendance is made for the meeting—the proxy is not recorded as attending;
(ii) the proxy does not vote on the resolution;
the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at that meeting.
250BD Proxy voting by key management personnel or closely related parties
(1) A person appointed as a proxy must not vote, on the basis of that appointment, on a resolution connected directly or indirectly with the remuneration of a member of the key management personnel for the company or, if the company is part of a consolidated entity, for the entity if:
(a) the person is either:
(i) a member of the key management personnel for the company or, if the company is part of a consolidated entity, for the entity; or
(ii) a closely related party of a member of the key management personnel for the company or, if the company is part of a consolidated entity, for the entity; and
(b) the appointment does not specify the way the proxy is to vote on the resolution.
Note 1: Examples of resolutions connected directly or indirectly with the remuneration of a member of the key management personnel for the company or entity include:
(a) resolutions that must be put to the vote under subsection 250R(2) (about a resolution that the remuneration report for a listed company be adopted); and
(b) resolutions that must be put to the vote under subsection 250V(1) (about fresh elections for directors at meetings arising from concerns about remuneration reports); and
(c) resolutions determining directors’ remuneration as mentioned in section 202A; and
(d) resolutions for the purposes of Chapter 2E (about public companies and entities they control giving financial benefits to related parties of public companies) affecting directors’ remuneration.
Note 2: Subsections 250R(4) and 250V(2) also prevent the person from voting on the resolution if it is a resolution that must be put to the vote under subsection 250R(2) or 250V(1).
Note 3: Section 224 may also prohibit the person from voting on the resolution if it is a resolution for the purposes of Chapter 2E.
Note 4: Failure to comply with this subsection is an offence: see subsection 1311(1).
(2) Subsection (1) does not apply if:
(a) the person is the chair of the meeting at which the resolution is voted on; and
(b) the appointment expressly authorises the chair to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the key management personnel for the company or, if the company is part of a consolidated entity, for the entity.
Note: A defendant bears an evidential burden in relation to the matter in subsection (2): see subsection 13.3(3) of the Criminal Code.
(3) ASIC may by writing declare that:
(a) subsection (1) does not apply to a specified resolution; or
(b) subsection (1) does not prevent the casting of a vote, on a specified resolution, by or on behalf of a specified entity;
but may do so only if satisfied that the declaration will not cause unfair prejudice to the interests of any member of the company. The declaration has effect accordingly. The declaration is not a legislative instrument.
Note: A defendant bears an evidential burden in relation to the matter in subsection (3): see subsection 13.3(3) of the Criminal Code.
(4) A vote cast in contravention of subsection (1) is taken not to have been cast. This subsection has effect for the purposes of this Act except subsection (1) and subsections 250R(4) and (7), and section 1311 and Schedule 3 so far as they relate to any of those subsections.
Note: This means the vote is not counted in working out a percentage of votes cast or whether the resolution is passed, and does not affect the validity of the resolution.
250C Validity of proxy vote
Proxy vote valid even if proxy cannot vote as member
(1) A proxy who is not entitled to vote on a resolution as a member may vote as a proxy for another member who can vote if their appointment specifies the way they are to vote on the resolution and they vote that way.
Proxy vote valid even if member dies, revokes appointment etc. (replaceable rule—see section 135)
(2) Unless the company has received written notice of the matter before the start or resumption of the meeting at which a proxy votes, a vote cast by the proxy will be valid even if, before the proxy votes:
(a) the appointing member dies; or
(b) the member is mentally incapacitated; or
(c) the member revokes the proxy’s appointment; or
(d) the member revokes the authority under which the proxy was appointed by a third party; or
(e) the member transfers the share in respect of which the proxy was given.
Note: A proxy’s authority to vote is suspended while the member is present at the meeting (see subsection 249Y(3)).
250D Body corporate representative
(1) A body corporate may appoint an individual as a representative to exercise all or any of the powers the body corporate may exercise:
(a) at meetings of a company’s members; or
(b) at meetings of creditors or debenture holders; or
(c) relating to resolutions to be passed without meetings; or
(d) in the capacity of a member’s proxy appointed under subsection 249X(1).
The appointment may be a standing one.
(2) The appointment may set out restrictions on the representative’s powers. If the appointment is to be by reference to a position held, the appointment must identify the position.
(3) A body corporate may appoint more than 1 representative but only 1 representative may exercise the body’s powers at any one time.
(4) Unless otherwise specified in the appointment, the representative may exercise, on the body corporate’s behalf, all of the powers that the body could exercise at a meeting or in voting on a resolution.
Note: For resolutions of members without meetings, see sections 249A and 249B.
Division 7—Voting at meetings of members
250E How many votes a member has (replaceable rule—see section 135)
Company with share capital
(1) Subject to any rights or restrictions attached to any class of shares, at a meeting of members of a company with a share capital:
(a) on a show of hands, each member has 1 vote; and
(b) on a poll, each member has 1 vote for each share they hold.
Note: Unless otherwise specified in the appointment, a body corporate representative has all the powers that a body corporate has as a member (including the power to vote on a show of hands).
Company without share capital
(2) Each member of a company that does not have a share capital has 1 vote, both on a show of hands and a poll.
Chair’s casting vote
(3) The chair has a casting vote, and also, if they are a member, any vote they have in their capacity as a member.
Note 1: The chair may be precluded from voting, for example, by a conflict of interest.
Note 2: For rights to appoint proxies, see section 249X.
250F Jointly held shares (replaceable rule—see section 135)
If a share is held jointly and more than 1 member votes in respect of that share, only the vote of the member whose name appears first in the register of members counts.
250G Objections to right to vote (replaceable rule—see section 135)
A challenge to a right to vote at a meeting of a company’s members:
(a) may only be made at the meeting; and
(b) must be determined by the chair, whose decision is final.
250H Votes need not all be cast in the same way
On a poll a person voting who is entitled to 2 or more votes:
(a) need not cast all their votes; and
(b) may cast their votes in different ways.
Note: For proxy appointments that specify the way the proxy is to vote on a particular resolution, see subsection 250BB(1).
250J How voting is carried out (replaceable rule—see section 135)
(1) A resolution put to the vote at a meeting of a company’s members may be decided on a show of hands unless a poll is demanded.
Note: For listed companies, certain resolutions must be decided on a poll despite this subsection (see section 250JA).
(1A) Before a vote is taken the chair must inform the meeting whether any proxy votes have been received and how the proxy votes are to be cast.
(2) On a show of hands, a declaration by the chair is conclusive evidence of the result, provided that the declaration reflects the show of hands and the votes of the proxies received. Neither the chair nor the minutes need to state the number or proportion of the votes recorded in favour or against.
Note: Even though the chair’s declaration is conclusive of the voting results, the members present may demand a poll (see paragraph 250L(3)(c)).
250JA Certain resolutions must be decided on a poll—listed companies
(1) A resolution put to the vote at a meeting of members of a listed company must be decided on a poll (and not a show of hands) if:
(a) the notice of the meeting set out an intention to propose the resolution and stated the resolution; or
(b) the company has given notice of the resolution in accordance with section 249O (members’ resolutions); or
(c) a poll is demanded.
(2) This section applies despite subsection 250J(1) and anything in the company’s constitution.
250K Matters on which a poll may be demanded
(1) A poll may be demanded on any resolution.
(2) If a company has a constitution, the constitution may provide that a poll cannot be demanded on any resolution concerning:
(a) the election of the chair of a meeting; or
(b) the adjournment of a meeting.
(3) A demand for a poll may be withdrawn.
250L When a poll is effectively demanded
(1) At a meeting of a company’s members, a poll may be demanded by:
(a) at least 5 members entitled to vote on the resolution; or
(b) members with at least 5% of the votes that may be cast on the resolution on a poll; or
(c) the chair.
Note: A proxy may join in the demand for a poll (see paragraph 249Y(1)(c)).
(2) If a company has a constitution, the constitution may provide that fewer members or members with a lesser percentage of votes may demand a poll.
(3) The poll may be demanded:
(a) before a vote is taken; or
(b) before the voting results on a show of hands are declared; or
(c) immediately after the voting results on a show of hands are declared.
(4) The percentage of votes that members have is to be worked out as at the midnight before the poll is demanded.
250M When and how polls must be taken (replaceable rule—see section 135)
(1) A poll, other than a poll demanded on the election of a chair or the question of an adjournment, must be taken when and in the manner the chair directs.
(2) A poll demanded on the election of a chair or on the question of an adjournment must be taken immediately.
250MA Requirements for a special resolution
For a resolution of a company to have effect as a special resolution:
(a) notice given under section 249J of the meeting at which the resolution is proposed must include the information required by paragraph 249L(1)(c) in relation to the resolution; and
(b) the resolution must be passed by at least 75% of the votes cast by members who are entitled to vote on the resolution; and
(c) the resolution must be otherwise valid.
Division 8—AGMs of public companies
250N Public company must hold AGM
(1) A public company must hold an annual general meeting (AGM) within 18 months after its registration.
(2) A public company must hold an AGM at least once in each calendar year and within 5 months after the end of its financial year.
Note: An AGM held to satisfy this subsection may also satisfy subsection (1).
(2A) An offence based on subsection (1) or (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) An AGM is to be held in addition to any other meetings held by a public company in the year.
Note 1: The company’s annual financial report, sustainability report, directors’ report and auditor’s reports must be laid before the AGM (see section 317).
Note 2: The rules in sections 249C‑250M apply to an AGM.
(4) A public company that has only 1 member is not required to hold an AGM under this section.
(5) A company need not comply with subsection (1) if it is covered under section 738ZI at the end of the most recent financial year ending earlier than 18 months after its registration.
(6) A company need not comply with subsection (2) if it is covered under section 738ZI at the end of the financial year mentioned in subsection (2).
250P Extension of time for holding AGM
(1) A public company may lodge an application with ASIC to extend the period within which section 250N requires the company to hold an AGM.
(2) If the company applies before the end of the period within which the company would otherwise be required to hold an AGM, ASIC may extend the period in writing. ASIC must specify the period of the extension.
(3) A company granted an extension under subsection (2) must hold its AGM within the extended period.
(4) ASIC may impose conditions on the extension and the company must comply with those conditions.
(5) An offence based on subsection (3) or (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
250PAA Exemptions by ASIC—class orders relating to externally‑administered companies
(1) ASIC may, by legislative instrument, make an order exempting any of the following from section 250N:
(a) a specified class of companies that are being wound up;
(b) a specified class of companies under administration;
(c) a specified class of companies subject to deeds of company arrangement;
(d) a specified class of companies under restructuring;
(e) a specified class of companies subject to restructuring plans.
(2) The order may be:
(a) unconditional; or
(b) subject to one or more specified conditions.
(3) ASIC must cause a copy of the order to be published in the Gazette.
250PAB Exemptions by ASIC—individual externally‑administered companies
(1) The liquidator of a company that is being wound up may lodge an application with ASIC to exempt the company from section 250N.
(2) The administrator of a company under administration may lodge an application with ASIC to exempt the company from section 250N.
(3) The administrator of a deed of company arrangement may lodge an application with ASIC to exempt the company from section 250N.
(3A) The restructuring practitioner for a company under restructuring may lodge an application with ASIC to exempt the company from section 250N.
(3B) The restructuring practitioner for a restructuring plan for a company may lodge an application with ASIC to exempt the company from section 250N.
(4) If an application is lodged under subsection (1), (2) or (3), ASIC may, by writing, exempt the company from section 250N.
(5) The exemption may be:
(a) unconditional; or
(b) subject to one or more specified conditions.
(6) ASIC must cause a copy of the exemption to be published in the Gazette.
250PA Written questions to auditor submitted by members of listed company before AGM
Member may submit question
(1) A member of a listed company who is entitled to cast a vote at the AGM may submit a written question to the auditor under this section if the question is relevant to:
(a) the content of any auditor’s report to be considered at the AGM; or
(b) the conduct of the audit of the annual financial report or annual sustainability report to be considered at the AGM.
The member submits the question to the auditor under this subsection by giving the question to the listed company no later than the fifth business day before the day on which the AGM is held.
(2) Despite the question being one that is addressed to the auditor, the listed company may:
(a) examine the contents of the question; and
(b) make a copy of the question.
Company to pass question on to auditor
(3) The listed company must, as soon as practicable after the question is received by the company, pass the question on to the auditor. The company must pass the question on to the auditor even if the company believes the question is not relevant to the matters specified in paragraph (1)(a) and (b).
Contravention by individual auditor
(4) If the auditor is an individual auditor, the auditor contravenes this subsection if the auditor does not prepare, and give to the listed company, a document (the question list) that sets out the questions that:
(a) the listed company has passed on to the auditor; and
(b) the auditor considers to be relevant to the matters specified in paragraphs (1)(a) and (b);
as soon as practicable after the end of the time for submitting questions under subsection (1) and a reasonable time before the AGM.
(5) An offence based on subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Contravention by lead auditor
(6) A person contravenes this subsection if:
(a) the auditor is an audit firm or audit company; and
(b) the person is the lead auditor for the audit; and
(c) the person does not prepare, and give to the listed company, a document (the question list) that sets out the questions that:
(i) the listed company has passed on to the auditor; and
(ii) the person considers to be relevant to the matters specified in paragraphs (1)(a) or (b);
as soon as practicable after the end of the time for submitting questions under subsection (1) and a reasonable time before the AGM.
(7) An offence based on subsection (6) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Certain questions do not need to be included in question list
(8) A question need not be included in the question list under subsection (4) or (6) if:
(a) the question list includes a question that is the same in substance as that question (even if it is differently expressed); or
(b) it is not practicable to include the question in the question list, or to decide whether to include the question in the question list, because of the time when the question is passed on to the auditor.
Listed company to make question list available at AGM
(9) The listed company must, at or before the start of the AGM, make copies of the question list reasonably available to the members attending the AGM.
250R Business of AGM
(1) The business of an AGM may include any of the following, even if not referred to in the notice of meeting:
(a) the consideration of the annual financial report, sustainability report, directors’ report and auditor’s reports;
(b) the election of directors;
(c) the appointment of the auditor;
(d) the fixing of the auditor’s remuneration.
Advisory resolution for adoption of remuneration report
(2) At a listed company’s AGM, a resolution that the remuneration report be adopted must be put to the vote.
Note: Under paragraph 249L(2)(a), the notice of the AGM must inform members that this resolution will be put at the AGM.
(3) The vote on the resolution is advisory only and does not bind the directors or the company.
Voting on advisory resolution by key management personnel or closely related parties
(4) A vote on the resolution must not be cast (in any capacity) by or on behalf of either of the following persons:
(a) a member of the key management personnel details of whose remuneration are included in the remuneration report;
(b) a closely related party of such a member.
(5) However, a person (the voter) described in subsection (4) may cast a vote on the resolution as a proxy if the vote is not cast on behalf of a person described in subsection (4) and either:
(a) the voter is appointed as a proxy by writing that specifies the way the proxy is to vote on the resolution; or
(b) the voter is the chair of the meeting and the appointment of the chair as proxy:
(i) does not specify the way the proxy is to vote on the resolution; and
(ii) expressly authorises the chair to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the key management personnel for the company or, if the company is part of a consolidated entity, for the entity.
(6) ASIC may by writing declare that:
(a) subsection (4) does not apply to a specified resolution; or
(b) subsection (4) does not prevent the casting of a vote, on a specified resolution, by or on behalf of a specified entity;
but may do so only if satisfied that the declaration will not cause unfair prejudice to the interests of any member of the listed company. The declaration has effect accordingly. The declaration is not a legislative instrument.
(7) A person described in subsection (4) contravenes this subsection if a vote on the resolution is cast by or on behalf of the person in contravention of that subsection (whether or not the resolution is passed).
Note: A contravention of this subsection is an offence: see subsection 1311(1).
(8) A vote cast in contravention of subsection (4) is taken not to have been cast. This subsection has effect for the purposes of this Act except subsections (4) and (7) and subsection 250BD(1), and section 1311 and Schedule 3 so far as they relate to any of those subsections.
Note: This means the vote is not counted in working out a percentage of votes cast or whether the resolution is passed, and does not affect the validity of the resolution.
(9) For the purposes of this section, a vote is cast on behalf of a person if, and only if, it is cast:
(a) as proxy for the person; or
(b) otherwise on behalf of the person; or
(c) in respect of a share in respect of which the person has:
(i) power to vote; or
(ii) power to exercise, or control the exercise of, a right to vote.
(10) Subject to Part 1.1A, subsections (4), (5), (6), (7), (8) and (9) have effect despite:
(a) anything else in:
(i) this Act; or
(ii) any other law (including the general law) of a State or Territory; and
(b) anything in the company’s constitution.
250RA Auditor required to attend listed company’s AGM
Contravention by individual auditor
(1) If a listed company’s auditor for a financial year is an individual auditor, the auditor contravenes this subsection if:
(a) the auditor does not attend the company’s AGM at which an auditor’s report for that financial year is considered; and
(b) the auditor does not arrange to be represented, at that AGM, by a person who:
(i) is a suitably qualified member of the audit team that conducted the audit; and
(ii) is in a position to answer questions about the audit.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Contravention by lead auditor
(3) A person contravenes this subsection if:
(a) a listed company’s auditor for a financial year is an audit firm or an audit company; and
(b) the person is the lead auditor for the audit; and
(c) the person is not represented, at the AGM at which an auditor’s report for that financial year is considered, by a person who:
(i) is a suitably qualified member of the audit team that conducted the audit; and
(ii) is in a position to answer questions about the audit.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
250S Questions and comments by members on company management at AGM
(1) The chair of an AGM must allow a reasonable opportunity for the members as a whole at the meeting to ask questions about or make comments on the management of the company.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
250SA Listed company—remuneration report
(1) At a listed company’s AGM, the chair must allow a reasonable opportunity for the members as a whole to ask questions about, or make comments on, the remuneration report. This section does not limit section 250S.
(2) An offence based on subsection (1) is an offence of strict liability.
250T Questions by members of auditors at AGM
(1) If the company’s auditor or their representative is at the meeting, the chair of an AGM must:
(a) allow a reasonable opportunity for the members as a whole at the meeting to ask the auditor or the auditor’s representative questions relevant to:
(i) the conduct of audits; and
(ii) the preparation and content of the auditor’s reports; and
(iii) the accounting policies adopted by the company in relation to the preparation of the financial statements; and
(iiia) the policies adopted by the company in relation to the preparation of any sustainability reports the company is required to prepare; and
(iv) the independence of the auditor in relation to the conduct of audits; and
(b) allow a reasonable opportunity for the auditor or their representative to answer written questions submitted to the auditor under section 250PA.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) If :
(a) the company’s auditor or their representative is at the meeting; and
(b) the auditor has prepared a written answer to a written question submitted to the auditor under section 250PA;
the Chair of the AGM may permit the auditor or their representative to table the written answer to the written question.
(4) The listed company must make the written answer tabled under subsection (3) reasonably available to members as soon as practicable after the AGM.
Division 9—Meetings arising from concerns about remuneration reports
250U Application
This Division applies in relation to a listed company if:
(a) at an AGM (the later AGM) of the company, at least 25% of the votes cast on a resolution that the remuneration report be adopted were against adoption of the report; and
(b) at the immediately preceding AGM (the earlier AGM) of the company, at least 25% of the votes cast on a resolution that the remuneration report be adopted were against adoption of the report; and
(c) a resolution was not put to the vote at the earlier AGM under an earlier application of section 250V.
Note: Subsection 250R(2) requires a resolution to adopt a remuneration report for a listed company to be put to the vote at the company’s AGM.
250V Resolution to hold fresh elections for directors at special meeting to be put to vote at AGM
(1) At the later AGM, there must be put to the vote a resolution (the spill resolution) that:
(a) another meeting (the spill meeting) of the company’s members be held within 90 days; and
(b) all the company’s directors who:
(i) were directors of the company when the resolution to make the directors’ report considered at the later AGM was passed; and
(ii) are not a managing director of the company who may, in accordance with the listing rules for a declared financial market in whose official list the company is included, continue to hold office indefinitely without being re‑elected to the office;
cease to hold office immediately before the end of the spill meeting; and
(c) resolutions to appoint persons to offices that will be vacated immediately before the end of the spill meeting be put to the vote at the spill meeting.
(2) Subsections 250R(4), (5), (6), (7), (8), (9) and (10), and other provisions of this Act so far as they relate to any of those subsections, apply in relation to the spill resolution in the same way as they apply in relation to a resolution that a remuneration report be adopted.
(3) To avoid doubt, section 203D does not apply in relation to the spill resolution.
250W Consequences of spill resolution being passed
(1) This section applies if the spill resolution is passed.
Deadline for holding spill meeting
(2) The company must hold the spill meeting within 90 days after the spill resolution was passed.
(3) Nothing in subsection (2) authorises any person to disregard:
(a) section 249HA (Amount of notice of meetings of listed company); or
(b) if a person intends to move a resolution relating to the appointment of a director of the company—any provision of the company’s constitution that requires a minimum period of notice for such a resolution.
Note: Division 3 (which includes section 249HA) deals with giving notice of the spill meeting. Division 5 contains rules relevant to holding the spill meeting.
If relevant directors cease to hold office before deadline
(4) The company need not hold the spill meeting within 90 days after the spill resolution was passed if, before the end of that period, none of the company’s directors described in paragraph 250V(1)(b) remain as directors of the company.
Consequences of failure to hold spill meeting in time
(5) If the company does not hold the spill meeting within 90 days after the spill resolution was passed, each person who is a director of the company at the end of those 90 days commits an offence.
Note: A person who is a director at the end of those 90 days may commit an offence even if he or she was not a director when the spill resolution was passed.
(6) An offence against subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(7) Subsection (5) does not apply if the company need not hold the spill meeting because of subsection (4).
Note: A defendant bears an evidential burden in relation to the matter in subsection (7): see subsection 13.3(3) of the Criminal Code.
(8) Subsection (5) does not apply to a person who was not a director of the company at any time during the period:
(a) starting when the spill resolution was passed; and
(b) ending at the last time notice of the spill meeting could have been given to hold the spill meeting within 90 days after the spill resolution was passed and comply with section 249HA (Amount of notice of meetings of listed company).
Note: A defendant bears an evidential burden in relation to the matter in subsection (8): see subsection 13.3(3) of the Criminal Code.
Cessation of relevant directors and commencement of newly‑appointed directors
(9) All the company’s directors described in paragraph 250V(1)(b) cease to hold office immediately before the end of the spill meeting and the directors appointed by the meeting commence to hold office at the end of that meeting. This subsection has effect despite anything else in this Act and the company’s constitution.
250X Ensuring there are at least 3 directors after spill meeting
(1) This section applies if there would be fewer than 3 directors of the company immediately after the spill meeting apart from this section.
Note: Subsection 201A(2) requires the company to have at least 3 directors.
(2) Enough directors to ensure that the company has 3 directors immediately after the spill meeting are taken to have been appointed, by resolution passed at the spill meeting, from the persons who:
(a) gave the company signed consents to act as directors of the company in anticipation of being appointed by such a resolution; and
(b) were not appointed as directors by such a resolution apart from this section.
Note: The number of directors taken under subsection (2) to have been appointed is the difference between 3 and the number of directors holding office immediately after the spill meeting apart from this section.
(3) The persons taken to have been appointed are those with the highest percentages of votes favouring their appointment cast at the spill meeting on the resolution for their appointment (even if less than half the votes cast on the resolution were in favour of their appointment).
Note: Example: Suppose that, under subsection (2), 2 directors are taken to have been appointed, and the percentages of votes favouring appointment were 50% for Jean, 40% for Karl and 30% for Lionel. Jean and Karl would both be taken to have been appointed directors, but Lionel would not.
(4) For the purposes of this section, if 2 or more persons have the same percentage of votes favouring their appointment, the one of those persons chosen by the director or directors who hold office apart from this subsection is taken to have a higher percentage than the rest of those persons.
Note: A director who holds office apart from subsection (4) could make a series of choices if 3 or more persons all have the same percentage of votes favouring their appointment and it is necessary to work out which 2 of those persons are taken to be appointed as directors.
(5) If a person is taken to have been appointed because of a choice under subsection (4), the company must confirm the appointment by resolution at the company’s next AGM. If the appointment is not confirmed, the person ceases to be a director of the company at the end of the AGM.
(6) This section has effect despite anything else in this Act and the company’s constitution.
250Y Term of office of director reappointed at spill meeting
If a director who ceased to hold office immediately before the end of the spill meeting is appointed as director by resolution passed at the spill meeting, his or her term of office runs as if the cessation and appointment had not happened.
Note: This section is subject to subsection 250X(5).
Part 2G.3—Minutes and members’ access to minutes
Note: This Part does not apply to a CCIV or its members. Instead, section 1228A applies a modified version of Part 2G.4.
251A Minutes
(1) A company must keep minute books in which it records within 1 month:
(a) proceedings and resolutions of meetings of the company’s members; and
(b) proceedings and resolutions of directors’ meetings (including meetings of a committee of directors); and
(c) resolutions passed by members without a meeting; and
(d) resolutions passed by directors without a meeting; and
(e) if the company is a proprietary company with only 1 director—the making of declarations by the director.
Note: For resolutions and declarations without meetings, see sections 248A, 248B, 249A and 249B.
(2) The company must ensure that minutes of a meeting are signed within a reasonable time after the meeting by 1 of the following:
(a) the chair of the meeting;
(b) the chair of the next meeting.
(3) The company must ensure that minutes of the passing of a resolution without a meeting are signed by a director within a reasonable time after the resolution is passed.
(4) The director of a proprietary company with only 1 director must sign the minutes of the making of a declaration by the director within a reasonable time after the declaration is made.
(5) A company must keep its minute books at:
(a) its registered office; or
(b) its principal place of business in this jurisdiction; or
(c) another place in this jurisdiction approved by ASIC.
(5A) An offence based on subsection (1), (2), (3), (4) or (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) A minute that is so recorded and signed is evidence of the proceeding, resolution or declaration to which it relates, unless the contrary is proved.
251AA Disclosure of proxy votes—listed companies
(1) A company must record in the minutes of a meeting, in respect of each resolution in the notice of meeting, the total number of proxy votes exercisable by all proxies validly appointed and:
(a) if the resolution is decided by a show of hands—the total number of proxy votes in respect of which the appointments specified that:
(i) the proxy is to vote for the resolution; and
(ii) the proxy is to vote against the resolution; and
(iii) the proxy is to abstain on the resolution; and
(iv) the proxy may vote at the proxy’s discretion; and
(b) if the resolution is decided on a poll—the information specified in paragraph (a) and the total number of votes cast on the poll:
(i) in favour of the resolution; and
(ii) against the resolution; and
(iii) abstaining on the resolution.
(2) A company that must notify the operator of each market on which financial products of the company are listed of a resolution passed by members at a meeting of the company must, at the same time, give the relevant market operator the information specified in subsection (1).
(3) This section only applies to a company that is listed.
(4) This section applies despite anything in the company’s constitution.
251B Members’ access to minutes
(1) A company must ensure that the minute books for the meetings of its members and for resolutions of members passed without meetings are open for inspection by members free of charge.
(2) A member of a company may ask the company in writing for a copy of:
(a) any minutes of a meeting of the company’s members or an extract of the minutes; or
(b) any minutes of a resolution passed by members without a meeting.
(3) If the company does not require the member to pay for the copy, the company must send it:
(a) within 14 days after the member asks for it; or
(b) within any longer period that ASIC approves.
(4) If the company requires payment for the copy, the company must send it:
(a) within 14 days after the company receives the payment; or
(b) within any longer period that ASIC approves.
The amount of any payment the company requires cannot exceed the prescribed amount.
(5) An offence based on subsection (1), (3) or (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Part 2G.4—Meetings of members of registered schemes
Note: Section 1228A applies a modified version of this Part in relation to a CCIV. Section 1228B applies a modified version of this Part in relation to a sub‑fund of a CCIV.
Division 1—Who may call meetings of members
252A Calling of meetings of members by responsible entity
The responsible entity of a registered scheme may call a meeting of the scheme’s members.
252B Calling of meetings of members by responsible entity when requested by members
(1) The responsible entity of a registered scheme must call and arrange to hold a meeting of the scheme’s members to consider and vote on a proposed special or extraordinary resolution on the request of:
(a) members with at least 5% of the votes that may be cast on the resolution; or
(b) at least 100 members who are entitled to vote on the resolution.
(1A) The regulations may prescribe a different number of members for the purposes of the application of paragraph (1)(b) to:
(a) a particular scheme; or
(b) a particular class of scheme.
Without limiting this, the regulations may specify the number as a percentage of the total number of members of the scheme.
(2) The request must:
(a) be in writing; and
(b) state any resolution to be proposed at the meeting; and
(c) be signed by the members proposing to move the resolution.
(3) The request may be accompanied by a statement about the proposed resolution provided by the members making the request.
(4) Separate copies of a document setting out the request and statement (if any) may be used for signing by members if the wording of the request and statement (if any) is identical in each copy.
(5) The percentage of the votes that members have is to be worked out as at the midnight before the request is given to the responsible entity.
(6) The responsible entity must call the meeting within 21 days after the request is given to it. The meeting is to be held not later than 2 months after the request is given to the responsible entity.
(7) The responsible entity must give to each of the members a copy of the proposed resolution and statement (if any) at the same time, or as soon as practicable afterwards, as it gives notice of the meeting. The responsible entity must distribute the copies in the same way in which it gives notice of the meeting.
(8) The responsible entity does not have to distribute a copy of the resolution or statement if either is more than 1,000 words long or defamatory.
(9) The responsible entity is responsible for the expenses of calling and holding the meeting and making the distribution. The responsible entity may meet those expenses from the scheme’s assets.
252C Failure of responsible entity to call meeting of the scheme’s members
(1) Members with more than 50% of the votes carried by interests held by the members who make a request under section 252B may call and arrange to hold a meeting of the scheme’s members and distribute the statement (if any) if the responsible entity does not do so within 21 days after the request is given to the responsible entity.
(2) The meeting must be called and the statement is to be distributed in the same way—so far as is possible—in which meetings of the scheme’s members may be called by the responsible entity and information is distributed to members by the responsible entity. The meeting must be held not later than 3 months after the request is given to the responsible entity.
(3) To call the meeting the members requesting the meeting may ask the responsible entity under section 173 for a copy of the register of members. Despite paragraph 173(3)(b), the responsible entity must give the members requesting the meeting the copy of the register without charge.
(4) The responsible entity must pay the reasonable expenses the members incurred because the responsible entity failed to call and arrange to hold the meeting and to make the distribution (if any). The responsible entity must not pay those expenses from the scheme’s assets.
(5) An offence based on subsection (3) or (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
252D Calling of meetings of members by members
(1) Members of a registered scheme who hold interests carrying at least 5% of the votes that may be cast at a meeting of the scheme’s members may call and arrange to hold a meeting of the scheme’s members to consider and vote on a proposed special resolution or a proposed extraordinary resolution. The members calling the meeting must pay the expenses of calling and holding the meeting.
(2) The meeting must be called in the same way—so far as is possible—in which meetings of the scheme’s members may be called by the responsible entity.
(3) The percentage of the votes carried by interests that members hold is to be worked out as at the midnight before the meeting is called.
252E Calling of meetings of members by the Court
(1) The Court may order a meeting of a registered scheme’s members to be called to consider and vote on a proposed special or extraordinary resolution if it is impracticable to call the meeting in any other way.
(2) The Court may make the order on application by:
(a) the responsible entity; or
(b) any member of the scheme who would be entitled to vote at the meeting.
Note: For the directions the Court may give for calling, holding or conducting a meeting it has ordered be called, see section 1319.
Division 2—How to call meetings of members
252F Amount of notice of meetings
At least 21 days notice must be given of a meeting of the members of a registered scheme. However, the scheme’s constitution may specify a longer minimum period of notice.
252G Notice of meetings of members to members, directors and auditors
Notice to members, directors and auditors individually
(1) Written notice of a meeting of a registered scheme’s members must be given to:
(a) each member of the scheme entitled to vote at the meeting; and
(b) each director of the responsible entity; and
(c) the auditor of the scheme; and
(d) the auditor of the scheme compliance plan.
If an interest is held jointly, notice need only be given to 1 of the members.
Notice to joint members
(2) Unless the scheme’s constitution provides otherwise, notice to joint members must be given to the joint member named first in the register of members.
How notice is given
(3) Unless the scheme’s constitution provides otherwise, the responsible entity may give notice of the meeting to a member:
(a) personally; or
(b) by sending it by post to the address for the member in the register of members or an alternative address (if any) nominated by the member; or
(c) in the manner mentioned in paragraph 110D(1)(b), (c) or (d).
Note: A defect in the notice given may not invalidate a meeting (see section 1322).
When notice is given
(4) Unless the scheme’s constitution provides otherwise, a notice of meeting is taken to be given:
(a) if it is sent by post—3 days after it is posted; or
(aa) if it is sent by sending the member information in accordance with paragraph 110D(1)(b) by post—3 days after the information is posted; or
(b) if it is sent by means of an electronic communication in accordance with paragraph 110D(1)(c)—on the business day after it is sent; or
(c) if it is sent by giving the member information in accordance with paragraph 110D(1)(d)—on the business day after the day on which the information is sent to the member.
252H Auditors entitled to other communications
(1) The responsible entity of a registered scheme must give the auditor of the scheme and the auditor of the scheme compliance plan any other communications relating to the meeting that a member of the scheme is entitled to receive.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
252J Contents of notice of meetings of members
A notice of a meeting of a registered scheme’s members must:
(a) set out:
(i) if there is only one location at which the members who are entitled to physically attend the meeting may do so—the date, time and place for the meeting; and
(ii) if there are 2 or more locations at which the members who are entitled to physically attend the meeting may do so—the date and time for the meeting at each location, and the main location for the meeting; and
(iii) if virtual meeting technology is to be used in holding the meeting—sufficient information to allow the members to participate in the meeting by means of the technology; and
(b) state the general nature of the meeting’s business; and
(c) if a special or extraordinary resolution is to be proposed at the meeting—set out an intention to propose the special or extraordinary resolution and state the resolution; and
(d) contain a statement setting out the following information:
(i) that the member has a right to appoint a proxy;
(ii) that the proxy does not need to be a member of the registered scheme;
(iii) that if the member appoints 2 proxies the member may specify the proportion or number of votes the proxy is appointed to exercise; and
(e) specify at least one of the following:
(i) a place for the purposes of receipt of proxy appointments and proxy appointment authorities;
(ii) sufficient information to allow members to comply with section 252Z by means of an electronic communication.
Note: There may be other requirements for disclosure to members.
252K Notice of adjourned meetings
When a meeting is adjourned, new notice of the adjourned meeting must be given if the meeting is adjourned for 1 month or more.
Division 3—Members’ rights to put resolutions etc. at meetings of members
252L Members’ resolutions
(1) The following members of a registered scheme may give the responsible entity notice of a resolution that they propose to move at a meeting of the scheme’s members:
(a) members with at least 5% of the votes that may be cast on the resolution; or
(b) at least 100 members who are entitled to vote at a meeting of the scheme’s members.
(1A) The regulations may prescribe a different number of members for the purposes of the application of paragraph (1)(b) to:
(a) a particular scheme; or
(b) a particular class of scheme.
Without limiting this, the regulations may specify the number as a percentage of the total number of members of the scheme.
(1B) The resolution must be:
(a) a special resolution; or
(b) an extraordinary resolution; or
(c) a resolution to remove the responsible entity of a scheme that is listed and choose a new responsible entity.
(2) The notice must:
(a) be in writing; and
(b) set out the wording of the proposed resolution; and
(c) be signed by the members giving the notice.
(3) Separate copies of a document setting out the notice may be used for signing by members if the wording of the notice is identical in each copy.
(4) The percentage of the votes that members have is to be worked out as at the midnight before the members give the notice.
252M Responsible entity giving notice of members’ resolutions
(1) If a responsible entity has been given notice of a resolution under section 252L, the resolution is to be considered at the next meeting of the scheme’s members that occurs more than 2 months after the notice is given.
(2) The responsible entity must give all the members of the scheme notice of the resolution at the same time, or as soon as practicable afterwards, and in the same way, as it gives notice of a meeting.
(3) The responsible entity is responsible for the cost of giving members notice of the resolution if the responsible entity receives the notice in time to send it out to members with the notice of meeting.
(4) The members requesting the meeting are jointly and individually liable for the expenses reasonably incurred by the responsible entity in giving members notice of the resolution if the responsible entity does not receive the members’ notice in time to send it out with the notice of meeting. A resolution may be passed at a meeting of the scheme’s members that the responsible entity is to meet the expenses out of the scheme’s assets.
(5) The responsible entity need not give notice of the resolution:
(a) if it is more than 1,000 words long or defamatory; or
(b) if the members making the request are to bear the expenses of sending the notice out—unless the members give the responsible entity a sum reasonably sufficient to meet the expenses that it will reasonably incur in giving the notice.
252N Members’ statements to be distributed
(1) Members may request a responsible entity to give to all its members a statement provided by the members making the request about:
(a) a resolution that is proposed to be moved at a meeting of the scheme’s members; or
(b) any other matter that may be properly considered at a meeting of the scheme’s members.
(2) The request must be made by:
(a) members with at least 5% of the votes that may be cast on the resolution; or
(b) at least 100 members who are entitled to vote at the meeting.
(2A) The regulations may prescribe a different number of members for the purposes of the application of paragraph (2)(b) to:
(a) a particular scheme; or
(b) a particular class of scheme.
Without limiting this, the regulations may specify the number as a percentage of the total number of members of the scheme.
(3) The request must be:
(a) in writing; and
(b) signed by the members making the request; and
(c) given to the responsible entity.
(4) Separate copies of a document setting out the request may be used for signing by members if the wording of the request is identical in each copy.
(5) The percentage of the votes that members have is to be worked out as at the midnight before the request is given to the responsible entity.
(6) After receiving the request, the responsible entity must distribute to all the members of the scheme a copy of the statement at the same time, or as soon as practicable afterwards, and in the same way, as it gives notice of a meeting.
(7) The responsible entity is responsible for the cost of making the distribution if the responsible entity receives the statement in time to send it out to members with the notice of meeting.
(8) The members making the request are jointly and individually liable for the expenses reasonably incurred by the responsible entity in making the distribution if the responsible entity does not receive the statement in time to send it out with the notice of meeting. A resolution may be passed at a meeting of the scheme’s members that the responsible entity is to meet the expenses out of the scheme’s assets.
(9) The responsible entity need not comply with the request:
(a) if the statement is more than 1,000 words long or defamatory; or
(b) if the members making the request are responsible for the expenses of the distribution—unless the members give the company a sum reasonably sufficient to meet the expenses that it will reasonably incur in making the distribution.
Division 4—Holding meetings of members
252P How meetings of members may be held
A registered scheme may hold a meeting of its members:
(a) at one or more physical venues; or
(b) at one or more physical venues and using virtual meeting technology; or
(c) using virtual meeting technology only, if this is required or permitted by the scheme’s constitution expressly and the provisions of the scheme’s constitution that require or permit such use were included in the scheme’s constitution:
(i) at the time the scheme was established; or
(ii) by special resolution of the members of the scheme.
252PA Place and time of meetings and presence at meetings
(1) The place at which a meeting of the members of a registered scheme is held is taken to be:
(a) if the meeting is held at only one physical venue (whether or not it is also held using virtual meeting technology)—that physical venue; or
(b) if the meeting is held at more than one physical venue (whether or not it is also held using virtual meeting technology)—the main physical venue of the meeting as set out in the notice of the meeting; or
(c) if the meeting is held using virtual meeting technology only—the registered office of the responsible entity of the scheme.
(2) The time at which the meeting is held is taken to be the time at the place at which the meeting is taken to be held in accordance with subsection (1).
(3) A member who attends the meeting (whether at a physical venue or by using virtual meeting technology) is taken for all purposes to be present in person at the meeting while so attending.
252Q Reasonable opportunity to participate
(1) A registered scheme that holds a meeting of its members must give the members entitled to attend the meeting, as a whole, a reasonable opportunity to participate in the meeting.
Note: Section 1322 provides for consequences of a breach of this subsection.
(2) Without limiting the scope of subsection (1), the effects of that subsection include those set out in subsections (3), (4), (5), (6) and (7).
(3) The meeting must be held at a time that is reasonable at:
(a) if the meeting is held at only one physical venue (whether or not it is also held using virtual meeting technology)—that physical venue; or
(b) if the meeting is held at more than one physical venue (whether or not it is also held using virtual meeting technology)—the main physical venue of the meeting as set out in the notice of the meeting; or
(c) if the meeting is held using virtual meeting technology only—a physical venue at which it would be reasonable to hold the meeting.
(4) If the meeting is held at only one physical venue (whether or not it is also held using virtual meeting technology), it must be reasonable to hold the meeting at that physical venue.
(5) If the meeting is held at more than one physical venue (whether or not it is also held using virtual meeting technology), it must be reasonable to hold the meeting at its main physical venue as set out in the notice of the meeting.
(6) If the meeting is held at more than one physical venue (whether or not it is also held using virtual meeting technology), the technology used to hold the meeting at more than one physical venue must be reasonable.
(7) If the meeting is held using virtual meeting technology (whether or not it is held at one or more physical venues), that virtual meeting technology must:
(a) be reasonable; and
(b) allow the members who are entitled to attend the meeting, and do attend the meeting using that virtual meeting technology, as a whole, to exercise orally and in writing any rights of those members to ask questions and make comments.
252R Quorum
(1) This section applies to a registered scheme subject to the provisions of the scheme’s constitution.
(2) The quorum for a meeting of a registered scheme’s members is 2 members and the quorum must be present at all times during the meeting.
(3) In determining whether a quorum is present, count individuals attending as proxies or body corporate representatives. However, if a member has appointed more than 1 proxy or representative, count only 1 of them. If an individual is attending both as a member and as a proxy or body corporate representative, count them only once.
Note 1: For rights to appoint proxies, see section 252V.
Note 2: For body corporate representatives, see section 253B.
(4) A meeting of the scheme’s members that does not have a quorum present within 30 minutes after the time for the meeting set out in the notice of meeting is adjourned to a meeting (the resumed meeting) at a later time.
(4A) The responsible entity may specify:
(a) the date and time of the resumed meeting; and
(b) if any of the scheme’s members is entitled to physically attend the resumed meeting—the location or locations at which the members may do so; and
(c) if virtual meeting technology is to be used in holding the meeting—sufficient information to allow members to participate in the resumed meeting by means of the technology.
(4B) If the responsible entity does not specify one or more of the things mentioned in subsection (4A):
(a) if the date is not specified—the meeting is adjourned to the same day in the next week; and
(b) if the time is not specified—the meeting is adjourned to the same time; and
(c) if any of the scheme’s members was entitled to physically attend the meeting and the location is not specified—the meeting is adjourned to the same location or locations as were specified for the original meeting; and
(d) if virtual meeting technology was used in holding the meeting and sufficient information to allow the scheme’s members to participate in the meeting by means of the technology is not specified—participation in the resumed meeting by means of the technology must be provided in the same manner as set out in the notice for the original meeting.
(5) If no quorum is present at the resumed meeting within 30 minutes after the time for the start of the meeting, the meeting is dissolved.
252S Chairing meetings of members
(1) The responsible entity may, in writing, appoint an individual to chair a meeting called under section 252A or 252B.
(2) The members present at a meeting called under section 252A or 252B must elect a member present to chair the meeting (or part of it) if:
(a) a chair has not previously been appointed to chair the meeting; or
(b) a previously appointed chair is not available, or declines to act, for the meeting (or part of the meeting).
(3) The members present at a meeting called under section 252C, 252D or 252E must elect a member present to chair the meeting. This is not so if the meeting is called under section 252E and the Court has directed otherwise under section 1319.
252T Auditors’ right to be heard at meetings of members
(1) The auditor of a registered scheme and the auditor of the scheme compliance plan are entitled to attend any meeting of the scheme’s members.
(2) An auditor is entitled to be heard at the meeting on any part of the business of the meeting that concerns the auditor in their capacity as auditor.
(3) An auditor may authorise a person in writing as their representative for the purpose of attending and speaking at any meeting of the scheme’s members.
252U Adjourned meetings
(1) A resolution passed at a meeting resumed after an adjournment is passed on the day it was passed.
(2) Only unfinished business is to be transacted at a meeting resumed after an adjournment.
Division 5—Proxies and body corporate representatives
252V Who can appoint a proxy
(1) A member of a registered scheme who is entitled to attend and cast a vote at a meeting of the scheme’s members may appoint a person as the member’s proxy to attend and vote for the member at the meeting.
(2) The appointment may specify the proportion or number of votes that the proxy may exercise.
(3) A member may appoint 1 or 2 proxies. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes each proxy may exercise, each proxy may exercise half of the votes.
(4) Disregard any fractions of votes resulting from the application of subsection (2) or (3).
252W Rights of proxies
Rights of proxies
(1) A proxy appointed to attend and vote for a member has the same rights as the member:
(a) to speak at the meeting; and
(b) to vote (but only to the extent allowed by the appointment).
Proxy’s right to vote
(2) A registered scheme’s constitution (if any) may provide that a proxy is not entitled to vote on a show of hands.
Note: Even if the proxy is not entitled to vote on a show of hands, they may make or join in the demand for a poll (see section 253L).
Effect of member’s presence on proxy’s authority
(3) A registered scheme’s constitution (if any) may provide for the effect that a member’s presence at a meeting has on the authority of a proxy appointed to attend and vote for the member. However, if the constitution does not make such provision, a proxy’s authority to speak and vote for a member at a meeting is suspended while the member is present at the meeting.
252X Responsible entity sending appointment forms or lists of proxies must send to all members
(1) If the responsible entity of a registered scheme sends a member a proxy appointment form for a meeting or a list of persons willing to act as proxies at a meeting:
(a) if the member requested the form or list—the responsible entity must send the form or list to all members who ask for it and who are entitled to appoint a proxy to attend and vote at the meeting; or
(b) otherwise—the responsible entity must send the form or list to all its members entitled to appoint a proxy to attend and vote at the meeting.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
252Y Appointing a proxy
(1) An appointment of a proxy is valid if it is signed by the member of the registered scheme making the appointment and contains the following information:
(a) the member’s name and address;
(b) the scheme’s name;
(c) the proxy’s name or the name of the office held by the proxy;
(d) the meetings at which the appointment may be used.
An appointment may be a standing one
(2) A registered scheme’s constitution may provide that an appointment is valid even if it contains only some of the information required by subsection (1).
(3) An undated appointment is taken to have been dated on the day it is given to the responsible entity.
(4) An appointment may specify the way the proxy is to vote on a particular resolution. If it does:
(a) the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way; and
(b) if the proxy has 2 or more appointments that specify different ways to vote on the resolution—the proxy must not vote on a show of hands; and
(c) if the proxy is the chair—the proxy must vote on a poll, and must vote that way; and
(d) if the proxy is not the chair—the proxy need not vote on a poll, but if the proxy does so, the proxy must vote that way.
If a proxy is also a member, this subsection does not affect the way that the person can cast any votes they hold as a member.
Note: The scheme’s constitution may provide that a proxy is not entitled to vote on a show of hands (see subsection 252W(2)).
(5) A person who contravenes subsection (4) is guilty of an offence, but only if their appointment as a proxy resulted from the responsible entity sending to members:
(a) a list of persons willing to act as proxies; or
(b) a proxy appointment form holding the person out as being willing to act as a proxy.
(5A) An offence based on subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) An appointment does not have to be witnessed.
(7) A later appointment revokes an earlier one if both appointments could not be validly exercised at the meeting.
252Z Proxy documents
Section applies subject to scheme’s constitution
(1) Subsections (2), (3) and (4) apply to a registered scheme subject to the provisions of the scheme’s constitution.
Documents to be received by responsible entity before meeting
(2) For an appointment of a proxy for a meeting of the scheme’s members to be effective, the following documents must be received by the responsible entity at least 48 hours before the meeting:
(a) the proxy’s appointment
(b) if the appointment is signed by the appointor’s attorney—the authority under which the appointment was signed or a certified copy of the authority.
Documents received following adjournment of meeting
(3) If a meeting of the scheme’s members has been adjourned, an appointment and any authority received by the responsible entity at least 48 hours before the resumption of the meeting are effective for the resumed part of the meeting.
Receipt of documents
(3A) For the purposes of this section, a responsible entity receives an appointment or authority when it is received at any of the following:
(a) the responsible entity’s registered office;
(b) a fax number at the responsible entity’s registered office;
(c) a place, fax number or electronic address specified for the purpose in the notice of meeting.
Note: For when a document is received by electronic communication, see section 105A.
Ineffective appointments of fax or electronic notification
(4) An appointment of a proxy is ineffective if:
(a) the responsible entity receives either or both the appointment or authority at a fax number or electronic address; and
(b) a requirement (if any) in the notice of meeting that:
(i) the transmission be verified in a way specified in the notice; or
(ii) the proxy produce the appointment and authority (if any) at the meeting;
is not complied with.
Constitution or notice of meeting may provide for different notification period
(5) The scheme’s constitution or the notice of meeting may reduce the period of 48 hours referred to in subsection (2) or (3).
253A Validity of proxy vote
Proxy vote valid even if member dies, revokes appointment etc.
(1) Unless the responsible entity has received written notice of the matter before the start or resumption of the meeting at which a proxy votes, a vote cast by the proxy will be valid even if, before the proxy votes:
(a) the appointing member dies; or
(b) the member is mentally incapacitated; or
(c) the member revokes the proxy’s appointment; or
(d) the member revokes the authority under which the proxy was appointed by a third party; or
(e) the member transfers the interest in respect of which the proxy was given.
This subsection applies to a registered scheme subject to the provisions of the scheme’s constitution.
Note: A proxy’s authority to vote is suspended while the member is present at the meeting (see subsection 252W(3)).
Proxy vote valid even if proxy cannot vote as member
(2) A proxy who is not entitled to vote on a resolution as a member may vote as a proxy for another member who can vote if their appointment specifies the way they are to vote on the resolution and they vote that way.
253B Body corporate representative
(1) A body corporate may appoint an individual as a representative to exercise all or any of its powers at a meeting of a registered scheme’s members. The appointment may be a standing one.
(2) The appointment must set out what the representative is appointed to do and may set out restrictions on the representative’s powers. If the appointment is to be by reference to a position held, the appointment must identify the position.
(3) A body corporate may appoint more than 1 representative but only 1 representative may exercise the body’s powers at any one time.
(4) Unless otherwise specified in the appointment, the representative may exercise, on the body corporate’s behalf, all of the powers that the body could exercise at a meeting or in voting on a resolution.
Division 6—Voting at meetings of members
253C How many votes a member has
(1) On a show of hands, each member of a registered scheme has 1 vote.
(2) On a poll, each member of the scheme has 1 vote for each dollar of the value of the total interests they have in the scheme.
Note 1: For rights to appoint proxies, see section 252V.
Note 2: Unless otherwise specified in the appointment, a body corporate representative has all the powers that a body corporate has as a member (including the power to vote on a show of hands).
253D Jointly held interests
If an interest in a registered scheme is held jointly and more than 1 member votes in respect of that interest, only the vote of the member whose name appears first in the register of members counts.
253E Responsible entity and associates cannot vote if interested in resolution
The responsible entity of a registered scheme and its associates are not entitled to vote their interest on a resolution at a meeting of the scheme’s members if they have an interest in the resolution or matter other than as a member. However, if the scheme is listed, the responsible entity and its associates are entitled to vote their interest on resolutions to remove the responsible entity and choose a new responsible entity.
Note: The responsible entity and its associates may vote as proxies if their appointments specify the way they are to vote and they vote that way (see subsection 253A(2)).
253F How to work out the value of an interest
The value of an interest in a registered scheme is:
(a) if it is quoted on a declared financial market—the last sale price on that market on the trading day immediately before the day on which the poll is taken; or
(b) if it is not quoted on a declared financial market and the scheme is liquid and has a withdrawal provision in its constitution—the amount that would be paid for the interest under that provision on the business day immediately before the day on which the poll is taken; or
(c) in any other case—the amount that the responsible entity determines in writing to be the price that a willing but not anxious buyer would pay for the interest if it was sold on the business day immediately before the day on which the poll is taken.
253G Objections to a right to vote
A challenge to a right to vote at a meeting of members of a registered scheme:
(a) may only be made at the meeting; and
(b) must be determined by the chair, whose decision is final.
253H Votes need not all be cast in the same way
On a poll a person voting who is entitled to 2 or more votes:
(a) need not cast all their votes; and
(b) may cast their votes in different ways.
Note: For proxy appointments that specify the proxy is to vote on a particular resolution, see subsection 252Y(4).
253J How voting is carried out
(1) A special or extraordinary resolution put to the vote at a meeting of a registered scheme’s members must be decided on a poll.
(1A) A resolution put to the vote at a meeting of the members of a registered scheme that is listed must be decided on a poll if:
(a) the notice of the meeting set out an intention to propose the resolution and stated the resolution; or
(b) the responsible entity of the scheme has given notice of the resolution in accordance with section 252M (member’s resolutions).
(2) Any other resolution put to the vote at a meeting of a registered scheme’s members may be decided on a show of hands unless a poll is demanded.
(2A) A resolution mentioned in subsection (1A) or (2) is passed on a poll if it has been passed by more than 50% of the votes cast by members entitled to vote on the resolution.
(3) On a show of hands, a declaration by the chair is conclusive evidence of the result. Neither the chair nor the minutes need to state the number or proportion of the votes recorded in favour or against.
Note: Even though the chair’s declaration is conclusive of the voting results, the members present may demand a poll (see paragraph 253L(3)(c)).
253K Matters on which a poll may be demanded
(1) A poll may be demanded on any resolution.
(2) A registered scheme’s constitution may provide that a poll cannot be demanded on any resolution concerning:
(a) the election of the chair of a meeting; or
(b) the adjournment of a meeting.
(3) A demand for a poll may be withdrawn.
253L When a poll is effectively demanded
(1) At a meeting of a registered scheme’s members, a poll may be demanded by:
(a) at least 5 members present entitled to vote on the resolution; or
(b) members present with at least 5% of the votes that may be cast on the resolution on a poll; or
(c) the chair.
(2) A registered scheme’s constitution may provide that fewer members or members with a lesser percentage of votes may demand a poll.
(3) The poll may be demanded:
(a) before a vote is taken; or
(b) before the voting results on a show of hands are declared; or
(c) immediately after the voting results on a show of hands are declared.
(4) The percentage of votes that members have is to be worked out as at close of business on the day before the poll is demanded.
253LA Requirements for a special resolution or an extraordinary resolution
(1) For a resolution of the members of a registered scheme to have effect as a special resolution:
(a) notice given under section 252G of the meeting at which the resolution is proposed must include the information required by paragraph 252J(c) in relation to the resolution; and
(b) the resolution must be passed by at least 75% of the votes cast by members of the scheme who are entitled to vote on the resolution; and
(c) the resolution must be otherwise valid.
(2) For a resolution of the members of a registered scheme to have effect as an extraordinary resolution:
(a) notice given under section 252G of the meeting at which the resolution is proposed must include the information required by paragraph 252J(c) in relation to the resolution; and
(b) the resolution must be passed by at least 50% of the votes that may be cast by members of the scheme who are entitled to vote on the resolution (including members who are not present in person or by proxy).
(c) the resolution must be otherwise valid.
Division 7—Minutes and members’ access to minutes
253M Minutes
(1) A responsible entity of a registered scheme must keep minute books in which it records within 1 month:
(a) proceedings of meetings of the scheme’s members; and
(b) resolutions of meetings of the scheme’s members.
(2) The responsible entity must ensure that minutes of a meeting are signed within a reasonable time after the meeting by the chair of the meeting or the chair of the next meeting.
(3) The responsible entity must keep the minute books at:
(a) its registered office; or
(b) its principal place of business in this jurisdiction; or
(c) another place in this jurisdiction approved by ASIC.
(3A) An offence based on subsection (1), (2) or (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) A minute that is so recorded and signed is evidence of the proceeding or resolution to which it relates, unless the contrary is proved.
253N Members’ access to minutes
(1) The responsible entity of a registered scheme must ensure that the minute books for the meetings of the scheme’s members are open for inspection by members free of charge.
(2) A member of a registered scheme may ask the responsible entity in writing for a copy of any minutes of a meeting of the scheme’s members or an extract of the minutes.
(3) If the responsible entity does not require the member to pay for the copy, the responsible entity must send it:
(a) within 14 days after the member asks for it; or
(b) within any longer period that ASIC approves.
(4) If the responsible entity requires payment for the copy, the responsible entity must send it:
(a) within 14 days after the responsible entity receives the payment; or
(b) within any longer period that ASIC approves.
The amount of any payment the responsible entity requires cannot exceed the prescribed amount.
(5) An offence based on subsection (1), (3) or (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Part 2G.5—Electronic recording and keeping of minute books
Division 4—Recording and keeping of minute books
253S Electronic recording and keeping of minute books
(1) If information is required to be recorded in a minute book, the information may be recorded in electronic form if, at the time of the recording of the information, it was reasonable to expect that the information would be readily accessible so as to be useable for subsequent reference.
(2) If a minute book is required to be kept at a place, the requirement is taken to be satisfied if:
(a) an electronic form of the minute book is open for inspection at the place in accordance with this Act; and
(b) having regard to all the relevant circumstances at the time of the generation of the electronic form of the minute book, the method of generating the electronic form of the minute book provided a reliable means of assuring the maintenance of the integrity of the information contained in the minute book; and
(c) at the time of the generation of the electronic form of the minute book, it was reasonable to expect that the information contained in the electronic form of the minute book would be readily accessible so as to be useable for subsequent reference.
(3) For the purposes of subsection (2), the integrity of information contained in a minute book is maintained if, and only if, the information has remained complete and unaltered, apart from:
(a) the addition of any endorsement; or
(b) any immaterial change;
which arises in the normal course of communication, storage or display.
Part 2G.6—Exceptional circumstances
253T Exceptional circumstances—AGM
(1) A public company is taken to comply with subsections 250N(1) and (2) in relation to an AGM if:
(a) the company is in a class of companies specified in a determination under subsection (2); and
(b) the company holds the AGM within the period of extension specified in the determination.
(2) ASIC may, by legislative instrument, make a determination specifying a class of public companies, if ASIC considers that it may be unreasonable to expect the companies in the specified class to hold AGMs within the time required under section 250N because of a situation that is beyond the control of those companies.
(3) The determination must specify a period of extension of that time.
(4) The determination may be subject to specified conditions applying to public companies in the specified class. A company to which a condition specified in the determination applies must comply with the condition. The Court may order the company to comply with the condition in a specified way.
(5) Unless revoked earlier, the determination is repealed at the end of 12 months after the day on which it commences.
253TA Exceptional circumstances—virtual meetings
(1) An entity may hold a meeting of its members, using virtual meeting technology only (even if this is not required or permitted by the entity’s constitution expressly), if:
(a) the entity is specified in a determination under subsection (2); or
(b) the entity is in a class of entities specified in a determination under subsection (2).
(2) ASIC may make a determination specifying an entity, or a class of entities, if ASIC considers that it may be unreasonable to expect the specified entity, or entities in the specified class, to hold meetings wholly or partially at one or more physical venues because of a situation that is beyond the control of the entity, or the entities in the class.
(3) The determination is:
(a) a notifiable instrument, if it specifies an entity; or
(b) a legislative instrument, if it specifies a class of entities.
(4) The determination may be subject to specified conditions applying to the specified entity, or to entities in the specified class. An entity to which a condition specified in the determination applies must comply with the condition. The Court may order the entity to comply with the condition in a specified way.
(5) Unless revoked earlier, the determination is repealed at the end of 12 months after the day on which it commences.
(6) A reference in this section to an entity is a reference to any of the following:
(a) a company;
(b) a registered scheme.
Part 2G.7—Independent reports on polls
253U Application of Part
This Part applies:
(a) in relation to a company, if the company is listed; and
(b) in relation to a registered scheme, if the scheme is listed.
253UA Independent persons
A reference in a provision of this Part to an independent person is a reference to a person who is independent of the company or registered scheme to which the provision applies.
253UB Company members’ rights to request observer and report on conduct of poll
(1) Members of a company with at least 5% of the votes that may be cast at a meeting of the company’s members may request the company to appoint an independent person to:
(a) observe the conduct of a poll at the meeting; and
(b) prepare a report on the conduct of the poll.
(2) The request must:
(a) be in writing; and
(b) identify the poll to which it relates; and
(c) be made no later than 5 business days before the day the meeting is held.
(3) A company commits an offence if:
(a) the company receives a request under subsection (1); and
(b) the company fails to take reasonable steps to:
(i) ensure that an independent person observes the conduct of the poll to which the request relates; and
(ii) ensure that the independent person prepares a report on the conduct of the poll; and
(iii) ensure that a copy of the report is made readily available to the members of the company within a reasonable time after the request is received.
(4) An offence based on subsection (3) is an offence of strict liability.
(5) A company that appoints an independent person for the purposes of this section is liable to pay the independent person’s fees.
(6) To avoid doubt, an independent person appointed for the purposes of this section may be an auditor or a registry service provider (including an auditor or a registry service provider of the company concerned), unless the relevant poll concerns an issue or a matter relating to the person.
253UC Company members’ rights to request scrutiny and report on outcome of poll
(1) Members of a company with at least 5% of the votes that may be cast at a meeting of the company’s members may request the company to appoint an independent person to:
(a) scrutinise the outcome of a poll at the meeting; and
(b) prepare a report on the outcome of the poll.
(2) The request must:
(a) be in writing; and
(b) identify the poll to which it relates; and
(c) be made no later than 5 business days after the day the meeting is held.
(3) To avoid doubt, the request may be made before the meeting is held.
(4) A company commits an offence if:
(a) the company receives a request under subsection (1); and
(b) the company fails to take reasonable steps to:
(i) ensure that an independent person scrutinises the outcome of the poll to which the request relates; and
(ii) ensure that the independent person prepares a report on the outcome of the poll; and
(iii) ensure that a copy of the report is made readily available to the members of the company within a reasonable time after the request is received.
(5) An offence based on subsection (4) is an offence of strict liability.
(6) A company that appoints an independent person for the purposes of this section is liable to pay the independent person’s fees.
(7) To avoid doubt, an independent person appointed for the purposes of this section may be an auditor or a registry service provider (including an auditor or a registry service provider of the company concerned), unless the relevant poll concerns an issue or a matter relating to the person.
(8) To avoid doubt, if the same independent person is appointed under section 253UB and this section in relation to a poll, the reports on the conduct and outcome of the poll may be included in a single report.
253UD Registered scheme members’ rights to request observer and report on conduct of poll
(1) Members of a registered scheme with at least 5% of the votes that may be cast at a meeting of the scheme’s members may request the responsible entity of the scheme to appoint an independent person to:
(a) observe the conduct of a poll at the meeting; and
(b) prepare a report on the conduct of the poll.
(2) The request must:
(a) be in writing; and
(b) identify the poll to which it relates; and
(c) be made no later than 5 business days before the day the meeting is held.
(3) A responsible entity of a registered scheme commits an offence if:
(a) the responsible entity receives a request under subsection (1); and
(b) the responsible entity fails to take reasonable steps to:
(i) ensure that an independent person observes the conduct of the poll to which the request relates; and
(ii) ensure that the independent person prepares a report on the conduct of the poll; and
(iii) ensure that a copy of the report is made readily available to the members of the scheme within a reasonable time after the request is received.
(4) An offence based on subsection (3) is an offence of strict liability.
(5) A responsible entity of a registered scheme that appoints an independent person for the purposes of this section is liable to pay the independent person’s fees.
(6) To avoid doubt, an independent person appointed for the purposes of this section may be an auditor or a registry service provider (including an auditor or a registry service provider of the registered scheme concerned), unless the relevant poll concerns an issue or a matter relating to the person.
253UE Registered scheme members’ rights to request scrutiny and report on outcome of poll
(1) Members of a registered scheme with at least 5% of the votes that may be cast at a meeting of the scheme’s members may request the responsible entity of the scheme to appoint an independent person to:
(a) scrutinise the outcome of a poll at the meeting; and
(b) prepare a report on the outcome of the poll.
(2) The request must:
(a) be in writing; and
(b) identify the poll to which it relates; and
(c) be made no later than 5 business days after the day the meeting is held.
(3) To avoid doubt, the request may be made before the meeting is held.
(4) A responsible entity of a registered scheme commits an offence if:
(a) the responsible entity receives a request under subsection (1); and
(b) the responsible entity fails to take reasonable steps to:
(i) ensure that an independent person scrutinises the outcome of the poll to which the request relates; and
(ii) ensure that the independent person prepares a report on the outcome of the poll; and
(iii) ensure that a copy of the report is made readily available to the members of the scheme within a reasonable time after the request is received.
(5) An offence based on subsection (4) is an offence of strict liability.
(6) A responsible entity of a registered scheme that appoints an independent person for the purposes of this section is liable to pay the independent person’s fees.
(7) To avoid doubt, an independent person appointed for the purposes of this section may be an auditor or a registry service provider (including an auditor or a registry service provider of the registered scheme concerned), unless the relevant poll concerns an issue or a matter relating to the person.
(8) To avoid doubt, if the same independent person is appointed under section 253UD and this section in relation to a poll, the reports on the conduct and outcome of the poll may be included in a single report.
253UF Right of independent person to information
Right to information
(1) An independent person appointed for the purposes of section 253UB, 253UC, 253UD or 253UE in relation to a poll may make a request for any information that the person reasonably considers is necessary for the purposes of:
(a) if the person is appointed under section 253UB or 253UD—observing and preparing a report on the conduct of the poll; or
(b) if the person is appointed under section 253UC or 253UE—scrutinising and preparing a report on the outcome of the poll.
(2) A company commits an offence if:
(a) the company receives a request for information under subsection (1); and
(b) the company fails to take reasonable steps to provide the information to the independent person within a reasonable time after receiving the request.
(3) A responsible entity of a registered scheme commits an offence if:
(a) the responsible entity receives a request for information under subsection (1); and
(b) the responsible entity fails to take reasonable steps to provide the information to the independent person within a reasonable time after receiving the request.
(4) An offence based on subsection (2) or (3) is an offence of strict liability.
253UG Record‑keeping for reports on polls
(1) A company commits an offence if:
(a) the company receives a report on the conduct or outcome of a poll from an independent person appointed for the purposes of section 253UB or 253UC (as the case requires) in relation to the poll; and
(b) the company fails to keep a copy of the report.
(2) A responsible entity of a registered scheme commits an offence if:
(a) the responsible entity receives a report on the conduct or outcome of a poll from an independent person appointed for the purposes of section 253UD or 253UE (as the case requires) in relation to the poll; and
(b) the responsible entity fails to keep a copy of the report.
(3) An offence based on subsection (1) or (2) is an offence of strict liability.
Chapter 2H—Shares
Part 2H.1—Issuing and converting shares
254A Power to issue bonus, partly‑paid, preference and redeemable preference shares
(1) A company’s power under section 124 to issue shares includes the power to issue:
(a) bonus shares (shares for whose issue no consideration is payable to the issuing company); and
(b) preference shares (including redeemable preference shares); and
(c) partly‑paid shares (whether or not on the same terms for the amount of calls to be paid or the time for paying calls).
Note 1: Subsections 246C(5) and (6) provide that in certain circumstances the issue of preference shares is taken to be a variation of class rights.
Note 2: Partly‑paid shares are dealt with in sections 254M‑254N.
Note 3: On the issue of a bonus share there need not be any increase in the company’s share capital.
(2) A company can issue preference shares only if the rights attached to the preference shares with respect to the following matters are set out in the company’s constitution (if any) or have been otherwise approved by special resolution of the company:
(a) repayment of capital;
(b) participation in surplus assets and profits;
(c) cumulative and non‑cumulative dividends;
(d) voting;
(e) priority of payment of capital and dividends in relation to other shares or classes of preference shares.
(3) Redeemable preference shares are preference shares that are issued on the terms that they are liable to be redeemed. They may be redeemable:
(a) at a fixed time or on the happening of a particular event; or
(b) at the company’s option; or
(c) at the shareholder’s option.
Note: Redeemable preference shares are dealt with in sections 254J‑254L.
254B Terms of issue
(1) A company may determine:
(a) the terms on which its shares are issued; and
(b) the rights and restrictions attaching to the shares.
Note 1: Details of any division of shares into classes or conversion of classes of shares must be given to ASIC by a notice in the prescribed form (see subsection 246F(1)).
Note 2: For public companies, any document or resolution that attaches rights to shares or varies or cancels rights attaching to shares must be lodged with ASIC (see subsection 246F(3)).
Note 3: Sections 246B‑246G provide safeguards in cases where class rights are cancelled or varied.
Note 4: The company cannot issue par value shares (see section 254C) or bearer shares (see section 254F).
Note 5: A CCIV may issue a share only if the share is referable to a sub‑fund of the CCIV (see section 1230).
No liability companies—special terms of issue
(2) A share in a no liability company is issued on the following terms:
(a) if a no liability company is wound up and a surplus remains, it must be distributed among the parties entitled to it in proportion to the number of shares held by them, irrespective of the amounts paid up on the shares; and
(b) a member who is in arrears in payment of a call on a share, but whose share has not been forfeited, is not entitled to participate in the distribution on the basis of holding that share until the amount owing in respect of the call has been fully paid and satisfied.
Companies incorporated as no liability companies—special terms of issue
(3) If a company:
(a) either:
(i) is a no liability company; or
(ii) was initially registered as a no liability company and has changed its status under section 162 to another type of company; and
(b) ceases to carry on business within 12 months after its registration and is wound up;
shares issued for cash rank (to the extent of the capital contributed by subscribing shareholders) in the winding up in priority to shares issued to vendors or promoters, or both, for consideration other than cash.
(4) The holders of shares issued to vendors or promoters are not entitled to preference on the winding up of a company that:
(a) is a no liability company; or
(b) was initially registered as a no liability company and has changed its status under section 162 to another type of company.
This is so despite anything in the company’s constitution or the terms on which the shares are on issue.
254C No par value shares
Shares of a company have no par value.
Note: The Part 10.1 transitional provisions contain provisions that deal with the introduction of no par value shares. See also subsection 169(4).
254D Pre‑emption for existing shareholders on issue of shares in proprietary company (replaceable rule—see section 135)
(1) Before issuing shares of a particular class, the directors of a proprietary company must offer them to the existing holders of shares of that class. As far as practicable, the number of shares offered to each shareholder must be in proportion to the number of shares of that class that they already hold.
(2) To make the offer, the directors must give the shareholders a statement setting out the terms of the offer, including:
(a) the number of shares offered; and
(b) the period for which it will remain open.
(3) The directors may issue any shares not taken up under the offer under subsection (1) as they see fit.
(4) The company may by resolution passed at a general meeting authorise the directors to make a particular issue of shares without complying with subsection (1).
254E Court validation of issue
(1) On application by a company, a shareholder, a creditor or any other person whose interests have been or may be affected, the Court may make an order validating, or confirming the terms of, a purported issue of shares if:
(a) the issue is or may be invalid for any reason; or
(b) the terms of the issue are inconsistent with or not authorised by:
(i) this Act; or
(ii) another law of a State or Territory; or
(iii) the company’s constitution (if any).
(2) On lodgment of a copy of the order with ASIC, the order has effect from the time of the purported issue.
254F Bearer shares and stock must not be issued
A company does not have the power to:
(a) issue bearer shares; or
(b) issue stock or convert shares into stock.
Note: The Part 10.1 transitionals contain provisions for the conversion of existing stock into shares.
254G Conversion of shares
(1) A company may:
(a) convert an ordinary share into a preference share; and
(b) convert a preference share into an ordinary share.
Note 1: The variation of class rights provisions (sections 246B‑246G) will apply to the conversion.
Note 2: Section 1230C applies to a CCIV instead of this section.
(2) A company can convert ordinary shares into preference shares only if the holders’ rights with respect to the following matters are set out in the company’s constitution (if any) or have been otherwise approved by special resolution of the company:
(a) repayment of capital;
(b) participation in surplus assets and profits;
(c) cumulative and non‑cumulative dividends;
(d) voting;
(e) priority of payment of capital and dividends in relation to other shares or classes of preference shares.
(3) A share that is not a redeemable preference share when issued cannot afterwards be converted into a redeemable preference share.
254H Resolution to convert shares into larger or smaller number
(1) A company may convert all or any of its shares into a larger or smaller number of shares by resolution passed at a general meeting.
Note 1: The variation of class rights provisions (sections 246B‑246G) may apply to the conversion.
Note 2: Section 1230C applies to a CCIV instead of this section.
(2) The conversion takes effect on:
(a) the day the resolution is passed; or
(b) a later date specified in the resolution.
(3) Any amount unpaid on shares being converted is to be divided equally among the replacement shares.
(4) The company must lodge a copy of the resolution with ASIC within 1 month after it is passed.
(5) An offence based on subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Part 2H.2—Redemption of redeemable preference shares
Note: This Part does not apply to a CCIV: see section 1230D.
254J Redemption must be in accordance with terms of issue
(1) A company may redeem redeemable preference shares only on the terms on which they are on issue. On redemption, the shares are cancelled.
Note 1: For the power to issue redeemable preference shares see paragraph 254A(1)(b) and subsections 254A(2) and (3).
Note 2: For the criminal liability of a person dishonestly involved in a contravention of this section, see subsection 254L(3). Section 79 defines involved.
(2) This section does not affect the terms on which redeemable preference shares may be cancelled under a reduction of capital or a share buy‑back under Part 2J.1.
254K Other requirements about redemption
A company may only redeem redeemable preference shares:
(a) if the shares are fully paid‑up; and
(b) out of profits or the proceeds of a new issue of shares made for the purpose of the redemption.
Note 1: For a director’s duty to prevent insolvent trading on redeeming redeemable preference shares, see section 588G.
Note 2: For the criminal liability of a person dishonestly involved in a contravention of this section, see subsection 254L(3). Section 79 defines involved.
254L Consequences of contravening section 254J or 254K
(1) If a company redeems shares in contravention of section 254J or 254K:
(a) the contravention does not affect the validity of the redemption or of any contract or transaction connected with it; and
(b) the company is not guilty of an offence.
(2) Any person who is involved in a company’s contravention of section 254J or 254K contravenes this subsection.
Note 1: Subsection (2) is a civil penalty provision (see section 1317E).
Note 2: Section 79 defines involved.
(3) A person commits an offence if they are involved in a company’s contravention of section 254J or 254K and the involvement is dishonest.
Part 2H.3—Partly‑paid shares
254M Liability on partly‑paid shares
General rule about shareholder’s liability for calls
(1) If shares in a company are partly‑paid, the shareholder is liable to pay calls on the shares in accordance with the terms on which the shares are on issue. This subsection does not apply to a no liability company.
Note: The shareholder may also be liable as a contributory under sections 514‑529 if the company is wound up.
No liability companies
(2) The acceptance by a person of a share in a no liability company, whether by issue or transfer, does not constitute a contract by the person to pay:
(a) calls in respect of the share; or
(b) any contribution to the debts and liabilities of the company.
254N Calls may be limited to when company is externally‑administered
(1) A limited company may provide by special resolution that the whole or a part of its unpaid share capital may be called up only if the company becomes a Chapter 5 body corporate.
Note: This section does not apply to a CCIV: see section 1230L.
(2) The company must lodge with ASIC a copy of the special resolution within 14 days after it is passed.
(3) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
254P No liability companies—calls on shares
Making calls
(1) A call on a share in a no liability company is not effective unless it is made payable at least 14 days after the call is made.
Notice of call
(2) At least 7 days before a call on shares in a no liability company becomes payable, the company must give the holders of the shares notice of:
(a) the amount of the call; and
(b) the day when it is payable; and
(c) details for making the payment.
If the notice is not given, the call is not payable.
(3) A call does not have any effect on a forfeited share that is held by or in trust for the company under subsection 254Q(6). However, when the share is re‑issued or sold by the company, the share may be credited as paid up to the amount determined by the company in accordance with its constitution or by resolution.
254Q No liability companies—forfeiture and sale of shares for failure to meet call
Forfeiture and sale of shares
(1) A share in a no liability company is immediately forfeited if:
(a) a call is made on the share; and
(b) the call is unpaid at the end of 14 days after it became payable.
Note: The holder of the share may redeem it under section 254R.
(2) The forfeited share must then be offered for sale by public auction within 6 weeks after the call became payable.
Advertisement of sale
(3) At least 14 days, and not more than 21 days, before the day of the sale, a notice of the sale must be published in accordance with subsection (5A). The specific number of shares to be offered need not be specified in the notice and it is sufficient for the notice to be to the effect that all shares on which a call remains unpaid will be sold.
Postponement of sale
(4) An intended sale of forfeited shares of which a notice has been published in accordance with subsection (3) may be postponed for not more than 21 days from the date of sale specified in the notice. A notice of the date to which the sale is postponed must be published in accordance with subsection (5A).
(5) There may be more than 1 postponement but the sale cannot be postponed to a date more than 90 days from the first date fixed for the intended sale.
Publishing notices
(5A) A notice under subsection (3) or (4) is published in accordance with this subsection if the notice is published:
(a) unless paragraph (b) of this subsection applies—in a manner that results in the notice being accessible to the public and reasonably prominent; or
(b) if a determination in force under subsection (5B) specifies one or more manners in which such a notice may be published—in a manner so specified.
(5B) For the purposes of paragraph (5A)(b), ASIC may, by legislative instrument, make a determination specifying one or more manners in which a notice under subsection (3) or (4) may be published.
(5C) A manner of publication may be specified in the determination only if ASIC considers that the manner of publication would result in such a notice being accessible to the public and reasonably prominent.
Shares may be offered as credited to a particular amount
(6) The share may be sold credited as paid up to the sum of:
(a) the amount paid upon the share at the time of forfeiture; and
(b) the amount of the call; and
(c) the amount of any other calls becoming payable on or before the day of the sale;
if the company in accordance with its constitution or by ordinary resolution so determines.
Reserve price
(7) The directors may fix a reserve price for the share that does not exceed the sum of:
(a) the amount of the call due and unpaid on the share at the time of forfeiture; and
(b) the amount of any other calls that become payable on or before the date of the sale.
Withdrawal from sale
(8) The share may be withdrawn from sale if no bid at least equal to the reserve price is made at the sale.
Disposal of shares withdrawn from sale
(9) If:
(a) no bid for the share is received at the sale; or
(b) the share is withdrawn from sale;
the share must be held by the directors in trust for the company. It must be then disposed of in the manner determined by the company in accordance with its constitution or by resolution. Unless otherwise specifically provided by resolution, the share must first be offered to shareholders for a period of 14 days before being disposed of in any other manner.
Suspension of voting rights attached to share held in trust
(10) At any meeting of the company, no person is entitled to any vote in respect of the shares held by the directors in trust under subsection (9).
Application of proceeds of sale
(11) The proceeds of the sale under subsection (2) or the disposal under subsection (9) must be applied to pay:
(a) first, the expenses of the sale; and
(b) then, any expenses necessarily incurred in respect of the forfeiture; and
(c) then, the calls on the share that are due and unpaid.
The balance (if any) must be paid to the member whose share has been sold. If there is a share certificate that relates to the share, the balance does not have to be paid until the member delivers the certificate to the company.
Validity of sale
(12) If a sale is not held in time because of error or inadvertence, a late sale is not invalid if it is held as soon as practicable after the discovery of the error or inadvertence.
Failure to comply an offence
(13) If there is failure to comply with subsection (2) or (3), the company is guilty of an offence.
Strict liability offences
(14) An offence by the company based on subsection (13) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
254R No liability companies—redemption of forfeited shares
(1) Despite section 254Q, if a person’s share has been forfeited, the person may redeem the share, at any time up to or on the last business day before the proposed sale, by paying the company:
(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.
On payment, the person is entitled to the share as if the forfeiture had not occurred.
(2) On the last business day before the proposed sale, the registered office of the company must be open during the hours for which it is by this Act required to be open and accessible to the public.
Part 2H.4—Capitalisation of profits
254S Capitalisation of profits
A company may capitalise profits. The capitalisation need not be accompanied by the issue of shares.
Part 2H.5—Dividends
254SA Companies limited by guarantee not to pay dividends
A company limited by guarantee must not pay a dividend to its members.
254T Circumstances in which a dividend may be paid
(1) A company must not pay a dividend unless:
(a) the company’s assets exceed its liabilities immediately before the dividend is declared and the excess is sufficient for the payment of the dividend; and
(b) the payment of the dividend is fair and reasonable to the company’s shareholders as a whole; and
(c) the payment of the dividend does not materially prejudice the company’s ability to pay its creditors.
Note 1: As an example, the payment of a dividend would materially prejudice the company’s ability to pay its creditors if the company would become insolvent as a result of the payment.
Note 2: For a director’s duty to prevent insolvent trading on payment of dividends, see section 588G.
Note 3: Section 1230M applies to a CCIV instead of this section.
(2) Assets and liabilities are to be calculated for the purposes of this section in accordance with accounting standards in force at the relevant time (even if the standard does not otherwise apply to the financial year of some or all of the companies concerned).
254U Other provisions about paying dividends (replaceable rule—see section 135)
(1) The directors may determine that a dividend is payable and fix:
(a) the amount; and
(b) the time for payment; and
(c) the method of payment.
The methods of payment may include the payment of cash, the issue of shares, the grant of options and the transfer of assets.
(2) Interest is not payable on a dividend.
254V When does the company incur a debt?
(1) A company does not incur a debt merely by fixing the amount or time for payment of a dividend. The debt arises only when the time fixed for payment arrives and the decision to pay the dividend may be revoked at any time before then.
(2) However, if the company has a constitution and it provides for the declaration of dividends, the company incurs a debt when the dividend is declared.
254W Dividend rights
Shares in public companies
(1) Each share in a class of shares in a public company has the same dividend rights unless:
(a) the company has a constitution and it provides for the shares to have different dividend rights; or
(b) different dividend rights are provided for by special resolution of the company.
Note: Section 1230N is about dividend rights in a CCIV.
Shares in proprietary companies (replaceable rule—see section 135)
(2) Subject to the terms on which shares in a proprietary company are on issue, the directors may pay dividends as they see fit.
No liability companies
(3) A person is not entitled to a dividend on a share in a no liability company if a call:
(a) has been made on the share; and
(b) is due and unpaid.
(4) Dividends are payable to the shareholders in a no liability company in proportion to the number of shares held by them, irrespective of the amount paid up, or credited as paid up, on the shares. This subsection has effect subject to any provisions in the company’s constitution relating to shares that are not ordinary shares.
254WA Application of this Part to MCI mutual entities
(1) Section 254SA does not prevent an MCI mutual entity that is a company limited by guarantee paying a dividend in respect of an MCI.
(2) Without limiting section 254T, an MCI mutual entity must not pay a dividend unless the payment of the dividend is fair and reasonable to the entity’s members as a whole.
Part 2H.6—Notice requirements
Note: This Part does not apply to a CCIV: see section 1230P.
254X Notice to ASIC of share issue
(1) Within 28 days after issuing shares, a company must lodge with ASIC a notice in the prescribed form that sets out:
(a) the number of shares that were issued; and
(b) if the company has different classes of shares—the class to which each of those shares belongs; and
(c) the amount (if any) paid, or agreed to be considered as paid, on each of those shares; and
(d) the amount unpaid (if any) on each of those shares; and
(e) if the company is a public company and the shares were issued for non‑cash consideration—the prescribed particulars about the issue of the shares, unless the shares were issued under a written contract and a copy of the contract is lodged with the notice; and
(f) if the company is a proprietary company and the shares are issued pursuant to a CSF offer—that the company has one or more CSF shareholders as a result of the issuing of the shares.
Note 1: The company must lodge information when rights attached to the shares change, or when the shares are divided or converted into new classes (see section 246F).
Note 2: A proprietary company may also have to notify certain particulars under Part 2C.2.
(2) If the shares were issued for non‑cash consideration under a contract, the company must also lodge with ASIC a certificate stating that all stamp duty payable on the contract under any applicable law relating to stamp duty has been paid. This certificate must be lodged with the subsection (1) notice or at a later time permitted by the regulations or by ASIC.
(2A) An offence based on subsection (1) or (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) The company does not have to lodge a subsection (1) notice about the issue of shares to a person on the registration of the company or on the company changing its type from a company limited by guarantee to a company limited by shares.
Note: Information about shares issued in these situations will come to ASIC under subsections 5H(2), 117(2), 163(3) and 601BC(2).
254Y Notice to ASIC of share cancellation
(1) Within 1 month after shares are cancelled, the company must lodge with ASIC a notice in the prescribed form that sets out:
(a) the number of shares cancelled; and
(b) any amount paid by the company (in cash or otherwise) on the cancellation of the shares; and
(c) if the shares are cancelled following a share buy‑back—the amount paid by the company (in cash or otherwise) on the buy‑back; and
(d) if the company has different classes of shares—the class to which each cancelled share belonged; and
(e) if the company is a proprietary company that has made one or more CSF offers—whether the cancellation has resulted in the company ceasing to have any CSF shareholders.
Note: Provisions under which shares are cancelled include section 254J (redeemable preference shares), section 256B (capital reductions), subsection 257H(3) (shares a company has bought back), section 258D (forfeited shares), and subsections 258E(2) and (3) (shares returned to a company).
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Chapter 2J—Transactions affecting share capital
Note: This Chapter is modified for CCIVs: see Division 2 of Part 8B.4.
Part 2J.1—Share capital reductions and share buy‑backs
256A Purpose
This Part states the rules to be followed by a company for reductions in share capital and for share buy‑backs. The rules are designed to protect the interests of shareholders and creditors by:
(a) addressing the risk of these transactions 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.
Division 1—Reductions in share capital not otherwise authorised by law
Note: This Division does not apply to a CCIV: see subsection 1231A(5).
256B Company may make reduction not otherwise authorised
(1) A company may reduce its share capital in a way that is not otherwise authorised by law if the reduction:
(a) is fair and reasonable to the company’s shareholders as a whole; and
(b) does not materially prejudice the company’s ability to pay its creditors; and
(c) is approved by shareholders under section 256C.
A cancellation of a share for no consideration is a reduction of share capital, but paragraph (b) does not apply to this kind of reduction.
Note 1: One of the ways in which a company might reduce its share capital is cancelling uncalled capital.
Note 2: Sections 258A‑258F deal with some of the other situations in which reductions of share capital are authorised. Subsection 254K(2) authorises capital reductions involved in the redemption of redeemable preference shares and subsection 257A(2) authorises reductions involved in share buy‑backs.
Note 3: For a director’s duty to prevent insolvent trading on reductions of share capital, see section 588G.
Note 4: For the criminal liability of a person dishonestly involved in a contravention of subsection 256D(1) based on this subsection, see subsection 256D(4). Section 79 defines involved.
Note 5: A company may reduce its share capital for the purposes of the conversion and write‑off provisions determined by APRA despite this Division (see Subdivision B of Division 1A of Part II of the Banking Act 1959, Division 2 of Part IIIA of the Insurance Act 1973 and Division 1A of Part 10A of the Life Insurance Act 1995).
(1A) To avoid doubt, a cancellation of a partly‑paid share is taken to be for consideration.
(2) The reduction is either an equal reduction or a selective reduction. The reduction is an equal reduction if:
(a) it relates only to ordinary shares; and
(b) it applies to each holder of ordinary shares in proportion to the number of ordinary shares they hold; and
(c) the terms of the reduction are the same for each holder of ordinary shares.
Otherwise, the reduction is a selective reduction.
(3) In applying subsection (2), ignore differences in the terms of the reduction that are:
(a) attributable to the fact that shares have different accrued dividend entitlements; or
(b) attributable to the fact that shares have different amounts unpaid on them; or
(c) introduced solely to ensure that each shareholder is left with a whole number of shares.
256C Shareholder approval
Ordinary resolution required for equal reduction
(1) If the reduction is an equal reduction, it must be approved by a resolution passed at a general meeting of the company.
Special shareholder approval for selective reduction
(2) If the reduction is a selective reduction, it must be approved 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 who is to receive consideration as part of the reduction or whose liability to pay amounts unpaid on shares is to be reduced, or by their associates; or
(b) a resolution agreed to, at a general meeting, by all ordinary shareholders.
If the reduction involves the cancellation of shares, the reduction must also be approved by a special resolution passed at a meeting of the shareholders whose shares are to be cancelled.
(3) The company must lodge with ASIC a copy of any resolution under subsection (2) within 14 days after it is passed. The company must not make the reduction until 14 days after lodgment.
Note: A proprietary company may also have to notify certain particulars under Part 2C.2.
Information to accompany the notice of meeting
(4) 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 on how to vote on 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 ASIC
(5) Before the notice of the meeting is sent to shareholders, the company must lodge with ASIC a copy of:
(a) the notice of the meeting; and
(b) any document relating to the reduction that will accompany the notice of the meeting sent to shareholders.
256D Consequences of failing to comply with section 256B
(1) The company must not make the reduction unless it complies with subsection 256B(1).
(2) If the company contravenes subsection (1):
(a) the contravention does not affect the validity of the reduction or of any contract or transaction connected with it; and
(b) the company is not guilty of an offence.
(3) Any person who is involved in a company’s contravention of subsection (1) contravenes this subsection.
Note 1: Subsection (3) is a civil penalty provision (see section 1317E).
Note 2: Section 79 defines involved.
(4) A person commits an offence if they are involved in a company’s contravention of subsection (1) and the involvement is dishonest.
256E Signposts to other relevant provisions
The following table lists other provisions of this Act that are relevant to reductions in share capital.
<table cellspacing="0" cellpadding="0" style="border-collapse:collapse"><thead><tr><td colspan="3" style="width:290.6pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Other provisions relevant to reductions in share capital</span></p></td><td style="width:4.3pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span></span></p></td><td style="width:27.1pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span></span></p></td></tr></thead><tbody><tr><td style="width:10.5pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:64.9pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>588G</span></p><p class="Tabletext"><span>section</span><span> </span><span>1317H</span></p></td><td colspan="3" style="width:246.6pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">liability of directors on insolvency</span></p><p class="Tabletext"><span>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 reduces its share capital.</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:64.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>1324</span></p></td><td colspan="3" style="width:246.6pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">injunctions to restrain contravention</span></p><p class="Tabletext"><span>Under this section the Court may grant an injunction against conduct that constitutes or would constitute a contravention of this Act.</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:64.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Chapter</span><span> </span><span>6CA</span></p></td><td colspan="3" style="width:246.6pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">continuous disclosure provisions</span></p><p class="Tabletext"><span>Under this Chapter a disclosing entity is required to disclose information about its securities that is material and not generally available.</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>5</span></p></td><td style="width:64.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Chapter</span><span> </span><span>2E</span></p></td><td colspan="3" style="width:246.6pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">benefits to related parties to be disclosed</span></p><p class="Tabletext"><span>Under this Chapter a financial benefit to a director or other related party that could adversely affect the interests of a public company’s members as a whole must be approved at a general meeting before it can be given.</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>6</span></p></td><td style="width:64.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>125</span></p></td><td colspan="3" style="width:246.6pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">provisions in constitution</span></p><p class="Tabletext"><span>This section deals with the way in which a company’s constitution may restrict the exercise of the company’s powers and the consequences of a failure to observe these restrictions.</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>7</span></p></td><td style="width:64.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>sections</span><span> </span><span>246B</span><span>‑</span><span>246G</span></p></td><td colspan="3" style="width:246.6pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">variation of class rights</span></p><p class="Tabletext"><span>These sections deal with the variation of rights attached to a class of shares. This variation may be governed by the provisions of the company’s constitution.</span></p></td></tr><tr style="height:0pt"><td style="width:21.3pt"></td><td style="width:75.7pt"></td><td style="width:204.4pt"></td><td style="width:15.1pt"></td><td style="width:37.9pt"></td></tr></tbody></table>
Division 2—Share buy‑backs
Note: This Division does not apply to a CCIV: see subsection 1231C(6).
257A The company’s power to buy back its own shares
A company may buy back its own shares if:
(a) the buy‑back does not materially prejudice the company’s ability to pay its creditors; and
(b) the company follows the procedures laid down in this Division.
Note 1: If a company has a constitution, it may include provisions in the constitution 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: A company may buy‑back redeemable preference shares and may do so on terms other than the terms on which they could be redeemed. For the redemption of redeemable preference shares, see sections 254J‑254L.
257B 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.
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). Subsections (6) and (7) of this section explain what an on‑market buy‑back is. See section 9 for definitions of minimum holding buy‑back, employee share buy‑back and selective buy‑back.
Equal access scheme
(2) An equal access scheme is a scheme that satisfies all the following conditions:
(a) the offers under the scheme relate only to ordinary shares;
(b) the 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), ignore:
(a) differences in consideration attributable to the fact that the offers relate to shares having different accrued dividend entitlements;
(b) differences in consideration attributable to the fact that the offers relate to shares on which different amounts remain unpaid;
(c) differences in the offers introduced solely to ensure that each shareholder is left with a whole number of shares.
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.
On‑market buy‑backs
(6) A buy‑back is an on‑market buy‑back if it results from an offer made by a listed corporation on a declared financial market in the ordinary course of trading on that market.
(7) A buy‑back by a company (whether listed or not) is also an on‑market buy‑back if it results from an offer made in the ordinary course of trading in a financial market outside Australia which ASIC declares in writing to be an approved overseas financial market for the purposes of this subsection. A buy‑back by a listed company is an on‑market buy‑back under this subsection only if an offer to buy‑back those shares is also made on a declared financial market at the same time.
(8) A declaration under subsection (7) may be subject to conditions. Notice of the making of the declaration must be published in the Gazette.
257C Buy‑back procedure—shareholder approval if the 10/12 limit exceeded
Ordinary resolution required
(1) If section 257B 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 how to vote on 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 ASIC
(3) Before the notice of the meeting is sent to shareholders, the company must lodge with ASIC 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.
257D Buy‑back procedure—special shareholder approval for selective buy‑back
Selective buy‑back requires special or unanimous resolution
(1) If section 257B 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 by their associates; or
(b) a resolution agreed to, at a general meeting, by all ordinary shareholders;
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 how to vote on 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 ASIC
(3) Before the notice of the meeting is sent to shareholders, the company must lodge with ASIC 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) ASIC 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.
257E Buy‑back procedure—lodgment of offer documents with ASIC
If section 257B applies this section to a buy‑back, the company must lodge with ASIC, 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.
257F Notice of intended buy‑back
(1) If section 257B 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 257C(1) or 257D(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 ASIC:
(a) documents under subsection 257C(3) or 257D(3) or section 257E; 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 257C, 257D or 257E needs to lodge a notice under paragraph (2)(b) of this section only if it wants for some reason to enter into the agreement or pass the resolution less than 14 days after lodging the section 257C, 257D or 257E documents.
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:
Note: under a particular scheme; or
Note: as part of particular on‑market buy‑back activity.
257G Buy‑back procedure—disclosure of relevant information when offer made
If section 257B 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 the decision whether to accept the offer.
257H 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 dispose of 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.
Note: ASIC must be notified of the cancellation under section 254Y.
257J Signposts to other relevant provisions
The following table sets out other provisions of this Act that are relevant to buy‑backs.
<table cellspacing="0" cellpadding="0" style="border-collapse:collapse"><thead><tr><td colspan="3" style="width:306.6pt; border-top:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Other provisions relevant to buy</span><span style="font-weight:bold">‑</span><span style="font-weight:bold">backs</span></p></td><td style="width:4pt; border-top:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span></span></p></td><td style="width:11.4pt; border-top:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span></span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span></span></p></td><td style="width:88.4pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">provision</span></p></td><td colspan="3" style="width:223.1pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">comment</span></p></td></tr></thead><tbody><tr><td style="width:10.5pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:88.4pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>588G section</span><span> </span><span>1317H</span></p></td><td colspan="3" style="width:223.1pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">liability of directors on insolvency</span></p><p class="Tabletext"><span>The directors may have to compensate the company if the company is, or becomes, insolvent when the company enters into the buy</span><span>‑</span><span>back agreement.</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:88.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>1324</span></p></td><td colspan="3" style="width:223.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">injunctions to restrain contravention</span></p><p class="Tabletext"><span>The Court may grant an injunction against conduct that constitutes, or would constitute, a contravention of this Act.</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:88.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>subsection</span><span> </span><span>609(4) section</span><span> </span><span>611 (item</span><span> </span><span>19 of the table)</span></p></td><td colspan="3" style="width:223.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">application of takeover provisions</span></p><p class="Tabletext"><span>These sections deal with the application of Chapter</span><span> </span><span>6 to buy</span><span>‑</span><span>backs.</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>5</span></p></td><td style="width:88.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>259A</span></p></td><td colspan="3" style="width:223.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">consequences of failure to follow procedures—the company and the officers</span></p><p class="Tabletext"><span>If a company fails to follow the procedure in this Division, the company contravenes this section and the officers who are involved in the contravention are liable to a civil penalty under Part</span><span> </span><span>9.4B and may commit an offence.</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>6</span></p></td><td style="width:88.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>256D</span></p></td><td colspan="3" style="width:223.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">consequences of failure to follow procedures if reduction in share capital involved—the company and the officers</span></p><p class="Tabletext"><span>If the buy</span><span>‑</span><span>back involves a reduction in share capital and the company fails to follow the procedures in this Division, the company contravenes this section and the officers who are involved in the contravention are liable to a civil penalty under Part</span><span> </span><span>9.4B and may commit an offence.</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>7</span></p></td><td style="width:88.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>256D</span></p></td><td colspan="3" style="width:223.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">consequences of failure to follow procedures if reduction in share capital involved—the transaction</span></p><p class="Tabletext"><span>This section provides that a failure to follow the procedures for share capital reductions does not affect the validity of the buy</span><span>‑</span><span>back transaction itself.</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>8</span></p></td><td style="width:88.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Chapter</span><span> </span><span>6CA</span></p></td><td colspan="3" style="width:223.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">continuous disclosure provisions</span></p><p class="Tabletext"><span>Under this Chapter a disclosing entity is required to disclose information about its securities that is material and not generally available.</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>9</span></p></td><td style="width:88.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span>Chapter</span><span> </span><span>2E</span></p></td><td colspan="3" style="width:223.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span style="font-weight:bold">benefits to related parties to be disclosed</span></p><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span>Under this Chapter, a financial benefit to a director or other related party may need to be approved at a general meeting before it is given.</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>10</span></p></td><td style="width:88.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>125</span></p></td><td colspan="3" style="width:223.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">provisions in constitution</span></p><p class="Tabletext"><span>This section deals with the way in which a company’s constitution may restrict the exercise of the company’s powers and the consequences of a failure to observe these restrictions.</span></p></td></tr><tr><td style="width:10.5pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>11</span></p></td><td style="width:88.4pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>sections</span><span> </span><span>246B</span><span>‑</span><span>246G</span></p></td><td colspan="3" style="width:223.1pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-weight:bold">variation of class rights</span></p><p class="Tabletext"><span>These sections deal with the variation of rights attached to a class of shares. This variation may be governed by the provisions of a company’s constitution.</span></p></td></tr><tr style="height:0pt"><td style="width:21.3pt"></td><td style="width:99.2pt"></td><td style="width:196.9pt"></td><td style="width:14.8pt"></td><td style="width:22.2pt"></td></tr></tbody></table>
Division 3—Other share capital reductions
Note: This Division applies to a CCIV with modifications: see section 1231H.
258A Unlimited companies
An unlimited company may reduce its share capital in any way.
258B Right to occupy or use real property
(1) If a company has a constitution, under it the company may grant to a shareholder, as a shareholder, a right to occupy or use real property that the company owns or holds under lease, whether the right is a lease or licence or a contractual right.
Note: Before the introduction of strata or unit titles systems, rights to occupy real property were sometimes based on a holding of shares in a company.
(2) A company may transfer to a person an interest in land in exchange for, or in satisfaction of, a right to occupy or use the land of the kind referred to in subsection (1).
Note: Example: A person has a right to occupy an apartment in a block of units because they hold shares in a company. As part of converting the block of units to strata title, the person surrenders the shares in return for a transfer of strata title over the apartment. The capital reduction involved in the transfer is authorised under this subsection.
258C Brokerage or commission
A company may pay brokerage or commission to a person in respect of that person or another person agreeing to take up shares in the company.
258D Cancellation of forfeited shares
A company may, by resolution passed at a general meeting, cancel shares that have been forfeited under the terms on which the shares are on issue.
258E Other share cancellations
(1) Any reduction in share capital involved in:
(a) the redemption of redeemable preference shares out of the proceeds of a new issue of shares made for the purpose of the redemption (see section 254K); or
(b) a company’s buying‑back of its own shares under sections 257A to 257J if the shares are paid for out of share capital.
is authorised by this section.
(2) A company may cancel shares returned to it under section 651C, 724(2), 737 or 738 and any reduction in the company’s share capital that is involved is authorised by this subsection.
(3) Any reduction in a company’s share capital because of an order under section 1325A is authorised by this subsection.
258F Reductions because of lost capital
(1) A company may reduce its share capital by cancelling any paid‑up share capital that is lost or is not represented by available assets.
(2) This power does not apply if:
(a) the company also cancels shares; or
(b) the cancellation of paid‑up share capital is inconsistent with the requirements of any accounting standard.
Division 4—Application of this Part to MCI mutual entities
258G Application of this Part to MCI mutual entities
(1) For the purposes of applying this Part to an MCI mutual entity, a reference (other than in section 258B) to a shareholder of the entity is taken to include a non‑shareholder mutual member of the entity.
(2) For the purposes of applying Division 1 to an MCI mutual entity:
(a) any reduction of the entity’s share capital that relates to MCIs is taken to be a selective reduction; and
(b) the reference to all ordinary shareholders in paragraph 256C(2)(b) is taken to be a reference to all members of the entity.
(3) For the purposes of applying Division 2 to an MCI mutual entity:
(a) any scheme to buy back MCIs is taken not to be an equal access scheme; and
(b) subsections 257B(4) and (5) (the 10/12 limit) have effect in relation to MCIs issued by a mutual entity as if each MCI were a voting share with one vote attached to it; and
(c) the reference to all ordinary shareholders in paragraph 257D(1)(b) is taken to be a reference to all members of the entity.
(4) To avoid doubt, this section does not have the effect of treating a non‑shareholder mutual member’s membership of an MCI mutual entity as a share.
Part 2J.2—Self‑acquisition and control of shares
Note: This Part applies to a CCIV with modifications: see sections 1231J and 1231K.
259A Directly acquiring own shares
A company must not acquire shares (or units of shares) in itself except:
(a) in buying back shares under section 257A; or
(b) in acquiring an interest (other than a legal interest) in fully‑paid shares in the company if no consideration is given for the acquisition by the company or an entity it controls; or
(c) under a court order; or
(d) in circumstances covered by subsection 259B(2) or (3).
Note: For the criminal liability of a person dishonestly involved in a contravention of this section, see subsection 259F(3). Section 79 defines involved.
259B Taking security over own shares or shares in holding company
(1) A company must not take security over shares (or units of shares) in itself or in a company that controls it, except as permitted by subsection (2) or (3).
Note 1: For the criminal liability of a person dishonestly involved in a contravention of this subsection, see subsection 259F(3). Section 79 defines involved.
Note 2: Subsection (3) does not apply to a CCIV: see section 1231K.
(2) A company may take security over shares in itself under an employee share scheme that has been approved by:
(a) a resolution passed at a general meeting of the company; and
(b) if the company is a subsidiary of a listed domestic corporation—a resolution passed at a general meeting of the listed domestic corporation; and
(c) if paragraph (b) does not apply but the company has a holding company that is a domestic corporation and that is not itself a subsidiary of a domestic corporation—a resolution passed at a general meeting of that holding company.
Special exemptions for financial institutions
(3) A company’s taking security over shares (or units of shares) in itself or in a company that controls it is exempted from subsection (1) if:
(a) the company’s ordinary business includes providing finance; and
(b) the security is taken in the ordinary course of that business and on ordinary commercial terms.
(4) If a company acquires shares (or units of shares) in itself because it exercises rights under a security permitted by subsection (2) or (3), then, within the following 12 months, the company must cease to hold those shares (or units of shares). ASIC may extend this period of 12 months if the company applies for the extension before the end of the period.
(5) Any voting rights attached to the shares (or units of shares) cannot be exercised while the company continues to hold them.
(6) If, at the end of the 12 months (or extended period), the company still holds any of the shares (or units of shares), the company commits an offence for each day while that situation continues.
(7) An offence based on subsection (6) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
259C Issuing or transferring shares to controlled entity
(1) The issue or transfer of shares (or units of shares) of a company to an entity it controls is void unless:
(a) the issue or transfer is to the entity as a personal representative; or
(b) the issue or transfer is to the entity as trustee and neither the company nor any entity it controls has a beneficial interest in the trust, other than a beneficial interest that satisfies these conditions:
(i) the interest arises from a security given for the purposes of a transaction entered into in the ordinary course of business in connection with providing finance; and
(ii) that transaction was not entered into with an associate of the company or an entity it controls; or
(c) the issue to the entity is made as a result of an offer to all the members of the company who hold shares of the class being issued and is made on a basis that does not discriminate unfairly, either directly or indirectly, in favour of the entity; or
(d) the transfer to the entity is by a wholly‑owned subsidiary of a body corporate and the entity is also a wholly‑owned subsidiary of that body corporate.
(2) ASIC may exempt a company from the operation of this section. The exemption:
(a) must be in writing; and
(b) may be granted subject to conditions.
(3) If paragraph (1)(c) or (d) applies to an issue or transfer of shares (or units of shares), section 259D applies.
259D Company controlling entity that holds shares in it
(1) If any of the following occur:
(a) a company obtains control of an entity that holds shares (or units of shares) in the company;
(b) a company’s control over an entity that holds shares (or units of shares) in the company increases;
(c) a company issues shares (or units of shares) to an entity it controls in the situation covered by paragraph 259C(1)(c);
(d) shares (or units of shares) in the company are transferred to an entity it controls in the situation covered by paragraph 259C(1)(d);
then, within 12 months after it occurs either:
(e) the entity must cease to hold the shares (or units); or
(f) the company must cease to control the entity.
ASIC may extend this period of 12 months if the company applies for the extension before the end of the period.
(2) If this section applies to shares (or units of shares), it also applies to bonus shares issued in respect of those shares (or units of shares). Within the same period that applies to the shares themselves under subsection (1), either:
(a) the entity must cease to hold the bonus shares; or
(b) the company must cease to control the entity.
(3) Any voting rights attached to the shares (or units of shares) cannot be exercised while the company continues to control the entity.
(4) If, at the end of the 12 months (or extended period), the company still controls the entity and the entity still holds the shares (or units of shares), the company commits an offence for each day while that situation continues.
(4A) An offence based on subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) This section does not apply to shares (or units of shares) if:
(a) they are held by the entity as a personal representative; or
(b) they are held by the entity as trustee and neither the company nor any entity it controls has a beneficial interest in the trust, other than a beneficial interest that satisfies these conditions:
(i) the interest arises from a security given for the purposes of a transaction entered into in the ordinary course of business in connection with providing finance; and
(ii) that transaction was not entered into with an associate of the company or an entity it controls.
(6) A contravention of this section does not affect the validity of any transaction.
259E When a company controls an entity
(1) For the purposes of this Part, a company controls an entity if the company has the capacity to determine the outcome of decisions about the entity’s financial and operating policies.
(2) In determining whether a company has this capacity:
(a) the practical influence the company can exert (rather than the rights it can enforce) is the issue to be addressed; and
(b) any practice or pattern of behaviour affecting the entity’s financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).
(3) Merely because the company and an unrelated entity jointly have the capacity to determine the outcome of decisions about another entity’s financial and operating policies, the company does not control the other entity.
(4) A company is not taken to control an entity merely because of a capacity that it is under a legal obligation to exercise for the benefit of someone other than its shareholders.
Note: This situation could arise, for example, if the company holds shares as a trustee or is performing duties as a liquidator.
259F Consequences of failing to comply with section 259A or 259B
(1) If a company contravenes section 259A or subsection 259B(1):
(a) the contravention does not affect the validity of the acquisition or security or of any contract or transaction connected with it; and
(b) the company is not guilty of an offence.
(2) Any person who is involved in a company’s contravention of section 259A or subsection 259B(1) contravenes this subsection.
Note 1: Subsection (2) is a civil penalty provision (see section 1317E).
Note 2: Section 79 defines involved.
(3) A person commits an offence if they are involved in a company’s contravention of section 259A or subsection 259B(1) and the involvement is dishonest.
Part 2J.3—Financial assistance
Note: This Part does not apply to a CCIV: see section 1231L.
260A Financial assistance by a company for acquiring shares in the company or a holding company
(1) A company may financially assist a person to acquire shares (or units of shares) in the company or a holding company of the company only if:
(a) giving the assistance does not materially prejudice:
(i) the interests of the company or its shareholders; or
(ii) the company’s ability to pay its creditors; or
(b) the assistance is approved by shareholders under section 260B (that section also requires advance notice to ASIC); or
(c) the assistance is exempted under section 260C.
Note: For the criminal liability of a person dishonestly involved in a contravention of this section, see subsection 260D(3). Section 79 defines involved.
(2) Without limiting subsection (1), financial assistance may:
(a) be given before or after the acquisition of shares (or units of shares); and
(b) take the form of paying a dividend.
(3) Subsection (1) extends to the acquisition of shares (or units of shares) by:
(a) issue; or
(b) transfer; or
(c) any other means.
260B Shareholder approval
Approval by company’s own shareholders
(1) Shareholder approval for financial assistance by a company must be given by:
(a) a special resolution passed at a general meeting of the company, with no votes being cast in favour of the resolution by the person acquiring the shares (or units of shares) or by their associates; or
(b) a resolution agreed to, at a general meeting, by all ordinary shareholders.
Approval by shareholders of listed holding corporation
(2) If the company will be a subsidiary of a listed domestic corporation immediately after the acquisition referred to in section 260A occurs, the financial assistance must also be approved by a special resolution passed at a general meeting of that corporation.
Approval by shareholders in ultimate Australian holding company
(3) If, immediately after the acquisition, the company will have a holding company that:
(a) is a domestic corporation but not listed; and
(b) is not itself a subsidiary of a domestic corporation;
the financial assistance must also be approved by a special resolution passed at a general meeting of the body corporate that will be the holding company.
Information to accompany the notice of meeting
(4) A company or other body that calls a meeting for the purpose of subsection (1), (2) or (3) must include with the notice of the meeting a statement setting out all the information known to the company or body that is material to the decision on how to vote on the resolution. However, the company or body does not have to disclose information if it would be unreasonable to require the company or body to do so because the company or body had previously disclosed the information to its members.
Documents to be lodged with the ASIC before notice of meeting is sent out
(5) Before the notice of a meeting for the purpose of subsection (1), (2) or (3) is sent to members of a company or other body, the company or body must lodge with ASIC a copy of:
(a) the notice of the meeting; and
(b) any document relating to the financial assistance that will accompany the notice of the meeting sent to the members.
(6) The company must lodge with ASIC, at least 14 days before giving the financial assistance, a notice in the prescribed form stating that the assistance has been approved under this section.
Lodgment of special resolutions
(7) A special resolution passed for the purpose of subsection (1), (2) or (3) must be lodged with ASIC by the company, listed domestic corporation or holding company within 14 days after it is passed.
260C Exempted financial assistance
General exemptions based on ordinary course of commercial dealing
(1) Financial assistance is exempted from section 260A if it is given in the ordinary course of commercial dealing and consists of:
(a) acquiring or creating a lien on partly‑paid shares in the company for amounts payable to the company on the shares; or
(b) entering into an agreement with a person under which the person may make payments to the company on shares by instalments.
Special exemptions for financial institutions
(2) Financial assistance is exempted from section 260A if:
(a) the company’s ordinary business includes providing finance; and
(b) the financial assistance is given in the ordinary course of that business and on ordinary commercial terms.
Special exemptions for subsidiaries of debenture issuers
(3) Financial assistance is exempted from section 260A if:
(a) the company is a subsidiary of a borrower in relation to debentures; and
(b) the financial assistance is a guarantee or other security given by the company for the repayment by the borrower of money that it is or will be liable to repay; and
(c) the borrower is a borrower in relation to the debentures because it is or will be liable to repay the money; and
(d) the guarantee or security is given by the company in the ordinary course of commercial dealing.
Special exemption for approved employee share schemes
(4) Financial assistance is exempted from section 260A if it is given under an employee share scheme that has been approved by:
(a) a resolution passed at a general meeting of the company; and
(b) if the company is a subsidiary of a listed domestic corporation—a resolution passed at a general meeting of the listed domestic corporation; and
(c) if paragraph (b) does not apply but the company has a holding company that is a domestic corporation and that is not itself a subsidiary of a domestic corporation—a resolution passed at a general meeting of that holding company.
Other exemptions
(5) The following types of financial assistance are exempted from section 260A:
(a) a reduction of share capital in accordance with Division 1 of Part 2J.1;
(b) a share buy‑back in accordance with Division 2 of Part 2J.1;
(c) assistance given under a court order;
(d) a discharge on ordinary commercial terms of a liability that the company incurred as a result of a transaction entered into on ordinary commercial terms.
260D Consequences of failing to comply with section 260A
(1) If a company provides financial assistance in contravention of section 260A:
(a) the contravention does not affect the validity of the financial assistance or of any contract or transaction connected with it; and
(b) the company is not guilty of an offence.
(2) Any person who is involved in a company’s contravention of section 260A contravenes this subsection.
Note 1: Subsection (2) is a civil penalty provision (see section 1317E).
Note 2: Section 79 defines involved.
(3) A person commits an offence if they are involved in a company’s contravention of section 260A and the involvement is dishonest.
260DA Application of this Part to MCI mutual entities
(1) For the purposes of applying this Part to an MCI mutual entity:
(a) a reference to a shareholder of the entity is taken to include a non‑shareholder mutual member of the entity; and
(b) the reference to all ordinary shareholders in paragraph 260B(1)(b) is taken to be a reference to all members of the entity.
(2) To avoid doubt, this section does not have the effect of treating a non‑shareholder mutual member’s membership of an MCI mutual entity as a share.
Part 2J.4—Interaction with general directors’ duties
260E General duties still apply
A director is not relieved from any of their duties under this Act (including sections 180, 181, 182, 183 and 184), or their fiduciary duties, in connection with a transaction merely because the transaction is authorised by a provision of this Chapter or is approved by a resolution of members under a provision of this Chapter.