Corporations (New South Wales) Act 1990

The legislation directly affects four broad classes.

First, companies, their directors, officers and members. Because the Corporations Law of New South Wales governs incorporation, internal management, share capital, takeovers, financial reporting and external administration (see the applied Chapters 1–7), every company registered in NSW or carrying on business here is subject to it. The Crown in right of NSW is bound by Chapter 5 (except Part 5.8) and by Chapters 6–6D only to the extent that Commonwealth legislative power permits (s 15(1A)).

Second, participants in securities and futures markets. The applied ASIC Law and the market misconduct and licensing provisions of the Corporations Law bind brokers, advisers, exchanges and their members. Fidelity fund contributions and levies are imposed as State taxes by ss 23 and 25.

Third, regulators and Commonwealth officers. The Australian Securities and Investments Commission (defined in s 3 as the Commission established by the ASIC Act) is given the functions and powers conferred by the national scheme laws (s 66). Commonwealth officers exercising investigation, prosecution or administrative review functions under the applied Commonwealth laws are deemed to be exercising those functions in relation to NSW law (ss 31, 37). The Commonwealth Director of Public Prosecutions and Australian Federal Police receive equivalent enforcement powers in respect of the residual co-operative scheme laws (s 91).

Fourth, courts and legal practitioners. The Federal Court, Supreme Courts, State Family Courts and lower courts are vested with jurisdiction and are required to apply uniform rules of evidence and procedure (s 45). Legal practitioners admitted in any Australian superior court gain rights of appearance in transferred proceedings (s 48). The Supreme Court of NSW may make rules under the Supreme Court Act 1970 that apply when any court in the national scheme exercises jurisdiction under the Act (s 51).

Indirectly, the Act affects investors, creditors, liquidators, administrators and any person dealing with a company that has NSW connections. Transitional provisions (Part 13) continue to affect parties to pre-1990 windings up through the Companies Liquidation Account (s 57).

The Act itself creates few standalone duties; its importance lies in the duties and rights it imports by application.

Key imported duties include the directors' duties in the applied Corporations Law, the continuous disclosure obligations, the takeover and fundraising rules in Chapters 6–6D, and the licensing and conduct obligations under the ASIC Law. Section 15(1) expressly binds the Crown in all capacities to Chapter 5 (external administration), while s 15(2) confirms that Chapter 7 (financial services) does not bind the Crown.

Rights created or preserved by the Act itself include:

• The right to have civil matters determined by the most appropriate court under the transfer provisions (ss 44, 44A, 44AA, 44B).
• The right of a private person not to be disadvantaged by retrospective regulations (s 8(3)).
• The right to have Commonwealth administrative laws (including freedom of information, privacy and ombudsman review) apply to decisions made under the applicable provisions (Part 8 Division 3).
• Immunity of the Crown from prosecution (s 17).
• The right of legal practitioners to appear in cross-vested proceedings (s 48).

Section 5 entrenches the national scheme against later State legislation unless that legislation expressly states that it is to prevail. Section 6 preserves the operation of pre-commencement State Acts except where the national scheme provides otherwise.

Penalties are not created by the Act but by the applied Corporations Law and ASIC Law. The Act's contribution is procedural and jurisdictional. Division 2 of Part 8 (ss 28–33) provides that an offence against an applicable provision of NSW is to be treated as an offence against a Commonwealth law for all purposes, including investigation, arrest, bail, trial, sentencing, appeals, proceeds of crime and spent convictions. Commonwealth laws apply as laws of NSW (s 29). Conversely, offences against the applicable provisions of other jurisdictions are treated as Commonwealth offences when dealt with in NSW (s 30).

Administrative enforcement follows the same pattern: Commonwealth administrative laws apply to acts, matters or things arising under the applicable provisions (ss 35–38). The Commission, the Panel and the Disciplinary Board are given the functions and powers conferred by the national scheme laws (ss 66, 70, 71).

Fines, penalties and other money (other than fees and taxes) must be paid to the Commonwealth (s 79). Specific fees, fidelity fund contributions and National Guarantee Fund levies are imposed as State taxes by Part 7 (ss 22–25) to ensure they are not struck down as duties of excise.

Section 17 confirms that nothing in the Act renders the Crown in any right liable to prosecution. Section 18 overrides any prerogative right or privilege that would otherwise prevent a provision of another jurisdiction's Corporations Law from binding the NSW Crown.

The Act is the linchpin of the former national scheme. It interacts with the Corporations Act 1989 (Cth) and the ASIC Act 1989 (Cth) by applying them as State law. It expressly subordinates the old co-operative scheme laws (the 1981 Codes listed in s 84) to the national scheme (s 85). Where a co-operative scheme law is inconsistent with a national scheme law, the latter prevails (s 85(2)), adopting the s 109 Constitution test.

Commonwealth administrative laws listed in s 3 (Administrative Review Tribunal Act 2024 (excluding Part 7), Freedom of Information Act 1982, Ombudsman Act 1976, Privacy Act 1988) apply as laws of NSW to acts done under the applicable provisions (s 35). The Acts Interpretation Act 1901 (Cth) applies to the interpretation of the Corporations Law and ASIC Law of NSW (ss 10, 62), while the NSW Interpretation Act 1987 is excluded.

The Jurisdiction of Courts (Cross-vesting) Act 1987 is excluded in favour of the specific rules in Part 9 (s 40(1)). The Act also interfaces with the Strata Schemes legislation: s 97 provides that certain transfers of strata lots in satisfaction of reduction-of-capital rights do not constitute a reduction of share capital.

Later Commonwealth legislation (Corporations Act 2001, Corporations (Ancillary Provisions) Act 2001) is accommodated by transitional provisions (ss 96B–96C) that relieve Commonwealth officers of any duty to perform functions expressed to be conferred by the "old corporations legislation".

The text reflects amendments up to 2025 No 38, Sch 1.5. The most recent change substitutes updated references to the Administrative Review Tribunal Act 2024 (formerly the Administrative Appeals Tribunal Act 1975) in the definition of Commonwealth administrative laws (s 3) and in s 36A. These updates ensure that merits review of ASIC and Commission decisions continues to operate under the current Commonwealth tribunal framework.

The 2001 amendments (Corporations (Ancillary Provisions) Act 2001) inserted the new transitional Division 8 (ss 96B–96C) to deal with the shift from the 1989/1990 scheme to the Corporations Act 2001. They also updated the definition of "Corporations Law" to reflect the repeal of the old Commonwealth Act.

The 2000 amendments (Federal Courts (Consequential Provisions) Act 2000) inserted s 42AA to give the Supreme Court of NSW jurisdiction to review certain prosecutorial decisions and related criminal justice process decisions made by Commonwealth officers. This was a direct response to the High Court's decision in Re Wakim; Ex parte McNally (1999) 198 CLR 511, which had invalidated aspects of the original cross-vesting scheme. The amendments also adjusted transfer rules and rules of court to accommodate the new constitutional reality.

These changes were necessary to maintain the national scheme after the constitutional difficulties exposed in 1999 and to keep administrative review machinery current.

Although the Act itself has not generated a large body of case law, its cross-vesting and jurisdictional provisions have been tested. The validity of the original national scheme was upheld by the High Court in New South Wales v The Commonwealth (1990) 169 CLR 482 (the Incorporation Case), which confirmed that the Commonwealth could not itself incorporate trading corporations but that States could apply Commonwealth law as their own.

The 1999 Wakim litigation invalidated the automatic cross-vesting of State jurisdiction to the Federal Court. The 2000 amendments to this Act (particularly ss 42AA, 44 and 44B) were a legislative response. Subsequent cases have explored the limits of the "interests of justice" test in transfer applications (see, for example, the principles applied in decisions considering s 44B factors such as the company's principal place of business and the location of events).

Controversy has also surrounded the extent to which the ASIC Law binds the Crown. Section 15(1A) was inserted to make clear that Chapters 6–6D do not bind the State Crown, reflecting a policy choice to preserve governmental flexibility in takeover and fundraising contexts.

The interaction between the old co-operative scheme laws and the national scheme has produced litigation on transitional issues, particularly the survival of pre-1990 windings up and the status of the Companies Liquidation Account (s 57). Courts have consistently held that the national scheme laws prevail (s 85) but that the saving provisions in Part 13 protect accrued rights.

No court has struck down the core application technique used in ss 7, 8, 58 and 59, which remains the constitutional foundation of the current Corporations Act 2001 reference scheme.

Most practitioners assume that once the Corporations Act 2001 (Cth) came into force the 1990 Act became a dead letter. It has not. The 2001 ancillary provisions legislation preserved the application mechanism for the new Act, and many of the jurisdictional and transitional rules in this statute continue to govern pre-2001 matters and certain cross-jurisdictional disputes.

Section 8(3) contains a hidden retrospectivity shield: a regulation that purports to operate from a date earlier than its notification cannot disadvantage a private person or impose liability for past conduct. Many compliance officers overlook this when advising on historical breaches.

The definition of "applicable provision" in s 3 is deceptively complex. It includes not only the Corporations Law and ASIC Law of NSW but also Commonwealth laws that apply because of other applications of the definition. This recursive structure can catch unwary litigants in choice-of-law arguments.

Section 5 is a "notwithstanding" clause that prevents later State Acts from amending the national scheme unless they expressly say so. However, subsection (2) allows a later Act to override if it states that it is to have effect "despite" this Act. Several later NSW statutes contain such clauses; practitioners must check each one.

The Crown-binding provisions in s 15 are asymmetrical. Chapter 5 binds the Crown in all capacities (subject to legislative power), but Chapters 6–6D bind only the Commonwealth Crown. This creates traps for government-owned corporations and sovereign investors.

Finally, the Companies Liquidation Account (s 57) still receives money from pre-Chapter 5 windings up. Unclaimed money in that account is not subject to the usual NSW unclaimed money regime; it continues under the old Companies (New South Wales) Code rules. Liquidators of old schemes can be caught out by this.

Compliance begins with recognising that the substantive rules are in the applied Corporations Law and ASIC Law, not in this Act. Nevertheless, NSW-specific steps are required.

1. Identify the correct citation. Use "Corporations Law" or "Corporations Regulations" only when the simplified citation in s 11 is appropriate. For jurisdiction-specific references, cite "Corporations Law of New South Wales" (s 9).

2. Check Crown application. Before advising a government entity, confirm whether the relevant Chapter binds the Crown in the relevant capacity (s 15). Chapter 7 does not bind any Crown.

3. Manage cross-jurisdictional litigation. When proceedings involve multiple jurisdictions, apply the transfer rules in ss 44–44D and the "interests of justice" factors in s 44B. File in the court whose jurisdiction is most closely connected to the company's principal place of business and the events in dispute.

4. Preserve transitional rights. For any matter arising before 1 January 1991, check whether the co-operative scheme laws (s 84) continue to apply (s 85(1)). The national scheme does not disturb accrued rights in those matters.

5. Apply the correct interpretation rules. The Acts Interpretation Act 1901 (Cth) (as at the relevant commencement date) governs the Corporations Law and ASIC Law of NSW (ss 10, 62). Do not default to the Interpretation Act 1987 (NSW).

6. Handle fees and taxes. Ensure that any fidelity fund contributions or National Guarantee Fund levies are paid as State taxes under Part 7; failure to do so can invalidate membership of an exchange or organisation.

7. Update administrative review pathways. Decisions by ASIC or the Commission are now reviewed under the Administrative Review Tribunal Act 2024 as applied by ss 35–36A. Ensure any internal review or AAT/ART application refers to the correct applied Commonwealth law.

8. Document Commonwealth officer involvement. When Commonwealth officers exercise functions in NSW, record that they are acting under the authority of this Act (ss 31, 37) and must follow the "as nearly as practicable" rule.

Legal teams should maintain a copy of the Act annotated with the date of each amendment, particularly the 2000, 2001 and 2025 changes, because the applicable version of the administrative laws depends on the date the relevant act or thing occurred. Regular reconciliation of the Companies Liquidation Account for legacy matters remains a compliance obligation for the few remaining pre-1990 liquidators.

By treating the Act as the constitutional bridge rather than the rule book, and by paying close attention to its jurisdictional, transitional and Crown-binding provisions, compliance professionals can avoid the hidden traps that have ensnared others.