Corporations Act 2001
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) ).
[ CCH Note: S 254B(1) will be amended by No 69 of 2020, s 3, Sch 1 and [ 564], by substituting " the Registrar by a notice that meets the requirements of the data standards (see subsections 246F(1) and (2)) " for " ASIC by a notice in the prescribed form (see subsection 246F(1)) " in note 1 and " the Registrar " for " ASIC " in note 2, (effective 22 June 2022 or a day or days to be fixed by Proclamation).]
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 254B(3)
If a company:
(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.254B(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.