THE CORPORATIONS LAW

CHAPTER 1 - INTRODUCTORY

PART 1.1 - PRELIMINARY

SECTION 1   CITATION  

1    This Law may be referred to as the Corporations Law.

SECTION 2   COMMISSION HAS GENERAL ADMINISTRATION OF THIS LAW  

2    Subject to the ASIC Law of this jurisdiction, the Commission has the general administration of the Corporations Law of this jurisdiction.

SECTION 3   APPLICATION TO THE CROWN  (Repealed by No 110 of 1990, Sch 1 (effective 18 December 1990).)

SECTION 4   EXTENSION TO EXTERNAL TERRITORIES  (Repealed by No 110 of 1990, Sch 1 (effective 18 December 1990).)

SECTION 5   COMMISSION HAS GENERAL ADMINISTRATION OF ACT  (Repealed by No 110 of 1990, Sch 1 (effective 18 December 1990).)

PART 1.2 - INTERPRETATION

Division 1 - General

SECTION 6   EFFECT OF THIS PART  

6(1)  (Effect unless contrary intention)  

The provisions of this Part have effect for the purposes of this Law, except so far as the contrary intention appears in this Law.

6(2)  (Reference to person or body corporate)  

This Part applies for the purposes of:

(a)  Part 5.7;

(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.

6(3)  (Body corporate)  

This Part applies for the purposes of Chapter 6 as if a reference in this Part to a body corporate included a reference to a Chapter 6 body.

6(4)  (Continued application of unamended Part)  

Where, because of Part 11.2, provisions of this Law, 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.

SECTION 7   LOCATION OF OTHER INTERPRETATION PROVISIONS  

7(1)  (Location of interpretation provisions)  

Most of the interpretation provisions for this Law are in this Part.

7(2)  (Chapters 6, 7 and 8)  

However, interpretation provisions relevant only to Chapters 6, 7 and 8, respectively, are to be found at the beginning of those Chapters.

7(3)  [Interpretation of Parts, Divisions or Subdivisions]  

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

7(4)  [Interpretation of individual sections]  

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

SECTION 8   HOW TO READ REFERENCES TO PROVISIONS OF THIS LAW  

8(1)  [Single national Corporations Law]  

The object of this section is to help ensure that the Corporations Law of this jurisdiction operates, so far as possible, as if that Law, together with the Corporations Law of each jurisdiction other than this jurisdiction, constituted a single national Corporations Law applying of its own force throughout Australia.

8(2)  [Reference to this Law]  

A reference to this Law is a reference to this Law or the Corporations Law of another jurisdiction.

8(3)  [Corresponding provisions included]  

A reference to a provision of this Law is a reference to that provision or the corresponding provision of the Corporations Law of another jurisdiction.

8(4)  [Exceptions]  

Subsections (2) and (3) have effect:

(a)  except so far as the contrary intention appears or the context otherwise requires; and

(b)  except as prescribed.

8(5)  [Where subsec (2) and (3) not to apply]  

Without limiting subsection (4):

(a)  subsection (2) does not apply in relation to a reference to this Law that is expressed as a reference to the Corporations Law of this jurisdiction; and

(b)  subsection (3) does not apply in relation to a reference to a provision of this Law that is expressed as a reference to that provision of the Corporations Law of this jurisdiction; and

(c)  neither subsection (2) nor (3) applies to a reference in:

(i) this section; or

(ii) section 8A, 58, 58A or 58B; or

(iii) Division 9, 10 or 11 of this Part; or

(iv) Part 1.3; or

(v) Chapter 2A (except subsection 113(3)); or

(vi) Chapter 2E (except subsection 213(2)); or

(vii) Chapter 2K (except section 273); or

(viii) Part 5B.1 or Part 5B.2 (except section 601CX); or

(ix) Part 5.7; or

(ixa) Chapter 5C; or

(x) Division 2 of Part 7.3; or

(xi) section 703; or

(xii) Division 3 or 4 of Part 7.11; or

(xiii) (Repealed by No 62 of 1998, Sch 2, Pt 1 (effective 1 July 1998)

(xiv) Division 2 of Part 8.3; or

(xv) Part 9.10 or 11.1.

SECTION 8A   CORPORATIONS REGULATIONS, AND APPLICATION ORDERS, OF A JURISDICTION TREATED AS PART OF THAT JURISDICTION'S CORPORATIONS LAW  

8A(1)  [Reference is inclusive]  

Except in subsection 8(3) or Part 1.3, a reference to this Law includes a reference to the regulations and the application orders.

8A(2)  [Reference in Pt 1.3]  

A reference in Part 1.3 to this Law includes a reference to the regulations.

8A(3)  [Corporations Law of a jurisdiction]  

Subject to this section, a reference to the Corporations Law of a jurisdiction includes a reference to:

(a)  the Corporations Regulations of that jurisdiction; and

(b)  the application orders under section 111A of that Law.

8A(4)  [Application orders in force under this Law]  

A reference to a provision of this Law includes a reference to the application orders (if any) in force for the purposes of that provision.

8A(5)  [Application orders in force under a jurisdiction's Corporations's Law]  

A reference to a provision of the Corporations Law of a jurisdiction includes a reference to the application orders (if any) under section 111A of that Law that are in force for the purposes of the first-mentioned provision.

8A(6)  [References in this section]  

No earlier subsection of this section applies in relation to a reference in this section.

SECTION 9   DICTIONARY  

9    Unless the contrary intention appears:

A

``AASB'' means the Australian Accounting Standards Board.

[``abbreviation''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``Account'' means the Companies Unclaimed Money Account established by section 71 of the Corporations Act 1989;

[``accounting period''] (Definition repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

[``accounting records''] (Definition repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

``accounting standard'' means:

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

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

[``accounts''] (Definition repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

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

``acquire'' :

(a)  in relation to a futures contract - has the meaning given by sections 23, 26, 27 and 28;

(b)  in relation to shares - has, in Chapter 7, the meaning given by subsection 51(1);

(c)  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

``act'' includes thing;

``Act'' means:

(a)  except in relation to a jurisdiction - an Act of the Commonwealth; and

(b)  in relation to a jurisdiction:

(i) in the case of a State - an Act passed by the Parliament of that State; or

(ii) in the case of the Northern Territory - an Act of the Northern Territory; or

(iii) in the case of the Capital Territory - an Act or Ordinance of the Capital Territory;

``adjustment agreement'' means a standardised agreement the effect of which is that:

(a)  a particular person will either be under a Chapter 8 obligation to pay, or will have a Chapter 8 right to receive, an amount of money;

(b)  whether the person will be under such an obligation to pay, or will have such a right to receive, the amount of money will depend on a particular state of affairs existing at a particular future time, including, without limiting the generality of the foregoing, a state of affairs that relates to fluctuations in the value or price of a commodity or other property, or in an index or other factor; and

(c)  the amount of money will be calculated in a particular manner by reference to that state of affairs;

whether or not the agreement has any other effect or is capable of being varied or discharged before that future time;

``administration'' , in relation to a body corporate, has, in the case of a company or recognised company, the meaning given by:

(a)  section 435C or a corresponding law; and

(b)  section 1381 or a corresponding law;

``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 appointed under Part 5.3A; and

(ii) has a meaning affected by section 1381; and

(iii) if 2 or more persons are appointed under that Part as administrators of the body - 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'' : securities are `` admitted to quotation '' on a stock market of a securities exchange if the exchange has given unconditional permission for quotation of the securities on the stock market;

``Advisory Committee'' means the Companies and Securities Advisory Committee established by section 145 of the Australian Securities and Investments Commission Act 1989;

``affairs'' , in relation to a body corporate, has, in the provisions referred to in section 53, a meaning affected by that section;

``affidavit'' includes affirmation;

[``AFIC Codes''] (Definition repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

``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'' means:

(a)  in Chapter 6 or 7 - a relevant agreement; or

(b)  in Chapter 8 - a Chapter 8 agreement;

``amount'' includes a nil amount and zero;

``ancillary offence'' , in relation to another offence, means an offence against:

(a)  section 5, 6, 7 or 7A of the Crimes Act 1914; or

(b)  subsection 86(1) of that Act by virtue of paragraph 86(1)(a) of that Act; or

(c)  such a provision of the Crimes Act 1914 as it applies as a law of this jurisdiction;

being an offence that is related to that other offence;

[``annual general meeting''] (Definition repealed by No 61 of 1998, Sch 2, Pt 2 (effective 1 July 1998).)

``annual return'' :

(a)  of a company - means the return that subsection 345(1) requires the company to lodge with ASIC; and

(b)  of a registered managed investment scheme - means the return that subsection 345(2) requires the responsible entity of the scheme to lodge with ASIC.

``another jurisdiction'' means a jurisdiction other than this jurisdiction;

[``applicable accounting standard''] (Definition repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

``application order'' means an order under section 111A of the Corporations Law of this jurisdiction;

[``application period''] (Definition repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

``appoint'' includes re-appoint;

``appropriate dealer'' for a market bid means a member of the relevant securities exchange;

``approved foreign bank'' , in relation to a member of a futures organisation, means a bank, established by or under the law of a foreign country, in relation to which there is in force an approval given by the futures organisation in accordance with its business rules (within the meaning of Chapter 8);

``approved securities organisation'' means a body corporate in relation to which an approval under section 770 of the Corporations Law of this jurisdiction is in force;

[``approving holding company''] (Definition repealed by No 61 of 1998, Sch 2, Pt 3 (effective 1 July 1998).)

``APRA'' means the Australian Prudential Regulation Authority;

``arbitrage transaction'' means a purchase or sale of securities effected in the ordinary course of trading on a stock market together with an offsetting sale or purchase of those securities effected at the same time, or at as nearly the same time as practicable, in the ordinary course of trading on another stock market for the purpose of obtaining a profit from the difference between the prices of those securities in the 2 stock markets;

``ARBN'' (short for ``Australian Registered Body Number'') is the number given by ASIC to a registrable body on registration under Part 5B.2;

``arrangement'' , in Part 5.1, includes a reorganisation of the share capital of a body corporate by the consolidation of shares of different classes, by the division of shares into shares of different classes, or by both of those methods;

``ARSN'' (short for ``Australian Registered Scheme Number'') is the number given by ASIC to a registered scheme on registration (see section 601EB).

[``articles''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

[``ASC''] (Definition repealed by No 54 of 1998, Sch 4, Pt 1 (effective 1 July 1998).)

[``ASC database''] (Definition repealed by No 54 of 1998, Sch 5, Pt 3 (effective 1 July 1998).)

``ASIC'' means the Australian Securities and Investments Commission;

``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 Law; or

(b)  information set out in a document lodged under this Law;

but does not include ASIC's document imaging system.

``assets'' means:

(a)  in relation to the holder of a futures brokers licence - all the assets of the holder, whether or not used in connection with a business of dealing in futures contracts; and

(b)  in relation to the holder of a dealers licence - all the assets of the holder, whether or not used in connection with a securities business;

``associate'' : The following are the associates of a bidder making a takeover offer, a substantial holder or a 90% holder:

(a)  if the bidder or holder is a body corporate:

(i) a body corporate it controls; or

(ii) a body corporate that controls it; or

(iii) a body corporate that is controlled by an entity that controls it

(b)  a person with whom the bidder or holder has, or proposes to enter into, a relevant agreement for the purpose of controlling or influencing the composition of the body's board or the conduct of the body's affairs

(c)  a person with whom the bidder or holder is acting, or proposes to act, in concert in relation to the body's affairs.

Otherwise a person's associates are determined under sections 10 to 17;

``ASX'' means Australian Stock Exchange Limited.

[``audited or reviewed in accordance with this Law''] (Definition repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

``Australia'' includes the coastal sea of each jurisdiction but does not include an external Territory;

``Australian ADI'' means:

(a)  an ADI (authorised deposit-taking institution) within the meaning of the Banking Act 1959; and

(b)  a person who carries on State banking within the meaning of paragraph 51 (xiii) of the Constitution;

``Australian bank'' means:

(a)  a bank as defined in section 5 of the Banking Act 1959; or

(b)  a bank constituted by or under a law of a State or Territory;

``Australian company law'' means:

(a)  this Act; or

(b)  the company law of a State or Territory;

``Australian court'' means a federal court or a court of a State or Territory;

``Australian law'' means a law of the Commonwealth or of a State or Territory;

``Australian register'' of a foreign company means a branch register of members kept under section 601CM;

``authorised trustee corporation'' means a body corporate that is declared by the regulations to be an authorised trustee corporation for the purposes of the provision in which the expression appears;

[``available''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

B

``bank'' 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.

``banker's books'' means:

(a)  books of an Australian ADI, including documents used in the ordinary business of an Australian ADI;

(b)  cheques, orders for the payment of money, bills of exchange and promissory notes in an Australian ADI's possession;

(c)  scrip in an Australian ADI's possession, whether by way of pledge or otherwise; or

(d)  documents that create or evidence futures contracts and are in an Australian ADI's possession;

``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:

(a)  in section 835 or 836 - an order by the Commission in force under Division 5 of Part 7.3; and

(b)  in any other provision of Chapter 7 - an order by the Commission in force under Division 5 of Part 7.3 of the Corporations Law of this jurisdiction; and

(c)  in section 1199 or 1199A - an order by the Commission in force under Division 5 of Part 8.3; and

(d)  in any other provision of Chapter 8 - an order by the Commission in force under Division 5 of Part 8.3 of the Corporations Law of this jurisdiction;

``begin'' , in relation to a winding up, has the meaning given by Division 1A of Part 5.6;

``benefit'' :

(a)  means any benefit, whether by way of payment of cash or otherwise; and

(b)  when used in Division 2 of Part 2D.2 (sections 200B to 1813) - means:

(i) a payment or other valuable consideration; or

(ii) an interest in property of any kind; and

(iii) any other benefit;

``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:

The dealer who announces a market bid is not the bidder; the bidder is the person or people on whose behalf the announcement is made.

``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 securities exchange and ends at the end of the offer period;

``Board'' means:

(a)  (Paragraph repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

(b)  in Part 7.10 - the board of SEGC; or

(c)  in Part 9.2 - the Companies Auditors and Liquidators Disciplinary Board established by section 202 of the Australian Securities and Investments Commission Act 1989;

``board'' , in relation to a body, means the committee of management, board of directors, council or other governing authority of the body;

``board or managerial office'' (when used in Division 2 of Part 2D.2 (sections 200B to 1813) in relation to a body corporate) means:

(a)  an office of director of the body corporate; and

(b)  any other office in connection with the management of the body corporate's affairs that is held by:

(i) a person who also holds an office of director of the body corporate or a related body corporate; or

(ii) a person who has held an office of director of the body corporate or a related body corporate at any time within the 12 months immediately before the loss of, or retirement from, that office;

``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;

``books'' includes:

(a)  a register;

(b)  any other record of information;

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

(d)  a document;

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

[``borrowing corporation''] (Definition repealed by No 156 of 1999, Sch 3, Pt 2 (effective 13 March 2000). )

``bought position'' means:

(a)  in relation to a commodity agreement, or in relation to a futures contract, being a commodity agreement - the position of a person who, by virtue of the agreement, is under a Chapter 8 obligation to accept delivery in accordance with the agreement; or

(b)  in relation to a futures contract, being an adjustment agreement - the position of a person who, by virtue of the agreement:

(i) will, if the value or worth of the agreement (as determined in accordance with the agreement) as at a particular future time is less by a particular amount than the value or worth of the agreement (as so determined) as at a particular earlier time, be under a Chapter 8 obligation to pay that amount; and

(ii) will, if the value or worth of the agreement (as so determined) as at a particular future time exceeds by a particular amount the value or worth of the agreement (as so determined) as at a particular earlier time, have a Chapter 8 right to receive that amount;

[``branch register''] (Definition repealed by No 115 of 1995, Sch 6 (effective 9 December 1995).)

[``building society''] (Definition repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

[``building society special services provider''] (Definition repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

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

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

[``buy-back''] (Definition of ``buy-back repealed by No 62 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``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);

[``buy-back arrangements''] (Definition repealed by No 62 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

[``buy-back covenant''] (Definition repealed by No 62 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

C

``calendar month'' means a period commencing at the beginning of a day of one of the 12 months of the year and ending immediately before the beginning of the corresponding day of the next month or, if there is no such corresponding day, ending at the expiration of the next month;

``calendar year'' means a period of 12 months commencing on 1 January;

``Capital Territory'' means the Australian Capital Territory and the Jervis Bay Territory;

``carry on'' has a meaning affected by Division 3;

``cash management trust interest'' means an interest that:

(a)  is an interest in a registered scheme; and

(b)  relates to an undertaking of the kind commonly known as a cash management trust.

``cause'' includes procure;

``certified'' means:

(a)  in relation to a copy of, or extract from, a document - certified by a statement in writing to be a true copy of, or extract from, the document; or

(b)  in relation to a translation of a document - certified by a statement in writing to be a correct translation of the document into English;

[``Chapter 6 body''] (Definition repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

[``Chapter 6 company''] (Definition repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

``Chapter 8 agreement'' means:

(a)  a relevant agreement;

(b)  a proposed relevant agreement;

(c)  a relevant agreement as varied, or as proposed to be varied;

(d)  where a relevant agreement has been varied - the relevant agreement as in force at any time before the variation; or

(e)  where a relevant agreement has been discharged - the relevant agreement as in force at any time before its discharge;

``Chapter 8 obligation'' has the meaning given by section 55;

``Chapter 8 right'' has the meaning given by section 55;

``charge'' means a charge created in any way and includes a mortgage and an agreement to give or execute a charge or mortgage, whether on demand or otherwise;

``chargeable matter'' means any of the following:

(a)  the lodgment of a document under the Corporations Law of this jurisdiction;

(b)  the registration of a document under that Law;

(c)  the inspection or search of a register kept by, or a document in the custody of, the Commission under that Law;

(d)  the making available by the Commission, under that Law, of information (whether in the form of a document or otherwise);

(e)  the production by the Commission, under a subpoena, of such a register or document;

(f)  the issuing of a document or a copy of a document, the granting of a licence, consent or approval, or the doing of any other act, under that Law, by the Minister or the Commission;

(g)  the making of an inquiry of, or an application to, the Minister, or the Commission, in relation to a matter arising under that Law;

(h)  the submission to the Commission of a document for examination by the Commission;

(i)  the making of an application under that Law to the Panel;

(j)  the doing of any act by the Panel in dealing with an application under that Law to the Panel;

``chargee'' means the holder of a charge and includes a person in whose favour a charge is to be given or executed, whether on demand or otherwise, under an agreement;

[``chief entity''] (Definition repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

[``child entity''] (Definition repealed by No 156 of 1999, Sch 3, Pt 4 (effective 13 March 2000). )

``civil penalty disqualification'' has the meaning given by subsection 91(4A);

``civil penalty order'' means any of the following:

(a)  a declaration of contravention under section 1317F

(b)  a pecuniary penalty order under section 1317G

(c)  a compensation order under section 1317H

(d)  an order under section 206C disqualifying a person from managing corporations;

``civil penalty provision'' has the meaning given in subsection 1317E(1);

``class'' has:

(a)  in relation to futures contracts - a meaning affected by subsection 72(3); and

(b)  in relation to shares or interests in a managed investment scheme - a meaning affected by section 57; and

(c)  when used in relation to securities for the purposes of Chapter 6, 6A or 6C - a meaning affected by subsection 605(2);

``clearing house'' means:

(a)  in relation to a body corporate:

(i) in any case - a person who provides, or proposes to provide, clearing house facilities for a futures market conducted by that body; or

(ii) in the case of a futures exchange - a body corporate in relation to which an approval as a clearing house for that futures exchange is in force under subsection 1131(2) or is taken because of subsection 1131(4) to be in force; and

(b)  in relation to a futures market:

(i) in any case - a person who provides, or proposes to provide, clearing house facilities for that futures market; or

(ii) in the case of a futures market of a futures exchange - a body corporate in relation to which an approval as a clearing house for that futures exchange is in force under subsection 1131(2) or is taken because of subsection 1131(4) to be in force;

``clearing house facilities'' , in relation to a futures market, means facilities for the registration of futures contracts acquired or disposed of on that futures market;

``client'' , in relation to a futures broker, means, except in Division 2 of Part 8.3, a person on whose behalf the broker deals, or from whom the broker accepts instructions to deal, in futures contracts;

``clients' segregated account'' , in relation to a person who is a member of a futures organisation, means an account that:

(a)  the person maintains, whether in Australia or elsewhere, with:

(i) an Australian ADI; or

(ii) an approved foreign bank in relation to the person; and

(b)  is maintained for the sole purpose of containing money deposited by the person into the account under section 1209 or a corresponding previous law;

[``close corporation''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

``close out'' , in relation to a futures contract, means:

(a)  discharge the Chapter 8 obligations of the person in the bought position, or sold position, under the futures contract as a result of the matching up of the futures contract with a futures contract of the same kind under which the person has assumed an offsetting sold position, or offsetting bought position, as the case may be; or

(b)  otherwise discharge the Chapter 8 obligations of a party to the futures contract;

``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 jurisdiction - means so much of the coastal sea of Australia as is within the area described in Schedule 2 to the Petroleum (Submerged Lands) Act 1967 under the heading that refers to that jurisdiction;

``commence'' , in relation to a winding up, has the meaning given by Division 1A of Part 5.6;

``commencement'' means:

(a)  in relation to this Law or a provision of this Law - the time at which the Law or provision came into operation; or

(b)  in relation to an accounting standard:

(i) in the case of an accounting standard as originally in effect - the time when the accounting standard took effect; or

(ii) in the case of an accounting standard as varied by a particular provision of an instrument made under section 32 of the Corporations Act 1989, as the instrument has effect for the purposes of Chapter 2M of the Corporations Law of this jurisdiction - the time when that provision took effect;

``Commission'' means the Australian Securities and Investments Commission;

``Commission Act'' means the Australian Securities and Investments Commission Act 1989;

``Commission delegate'' has the same meaning as in the ASIC Law of this jurisdiction;

``committee of creditors'' , in relation to a company under administration, means a committee of creditors of the company appointed at a meeting convened under section 436E;

``commodity'' means:

(a)  any thing that is capable of delivery pursuant to an agreement for its delivery; or

(b)  without limiting the generality of paragraph (a), an instrument creating or evidencing a thing in action;

``commodity agreement'' means a standardised agreement the effect of which is that:

(a)  a person is under a Chapter 8 obligation to make delivery; or

(b)  a person is under a Chapter 8 obligation to accept delivery;

at a particular future time of a particular quantity of a particular commodity for a particular price or for a price to be calculated in a particular manner, whether or not:

(c)  the subject matter of the agreement is in existence;

(d)  the agreement has any other effect; or

(e)  the agreement is capable of being varied or discharged before that future time;

``company'' means a company registered, or taken to be registered, under the Corporations Law of this jurisdiction and:

(a)  in sections 70A, 500 and 600F, includes a recognised company; and

(b)  in Chapter 2K (other than section 273), includes a registrable body (other than a registrable local body) that is registered under Division 1 or 2 of Part 5B.2 of the Corporations Law of this jurisdiction; and

(ba)  in section 273, includes:

(i) a recognised company; and

(ii) a registered body (other than a registrable local body); and

(c)  in Parts 5.7B and 5.8 (except sections 595 and 596), includes a Part 5.7 body

(ca)  in Part 5B.1 includes an unincorporated registrable body.

(d)  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

[``company having a share capital''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``company law'' , in relation to a State or Territory, means the law, or a previous law, of the State or Territory relating to companies;

``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;

``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;

``conduct'' :

(a)  in relation to a futures market, a stock market, or any other market, exchange, place or facility - includes maintain or provide; and

(b)  inChapter 7 - has a meaning affected by section 762;

``connected entity'' , in relation to a corporation, means:

(a)  a body corporate that is, or has been, related to the corporation; or

(b)  an entity that is, or has been, connected (as defined by section 64B) with the corporation;

[``consolidated accounts''] (Definition repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

``consolidated entity'' means a company, registered managed investment scheme or disclosing entity together with all the entities it is required by the accounting standards to include in consolidated financial statements.

``Consolidated Revenue Fund'' means the Consolidated Revenue Fund of the Commonwealth;

``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 Law) constituting, or defining the constitution of, the body or governing the activities of the body or its members.

Note:

The Life Insurance Act 1995 has rules about how benefit fund rules become part of a company's constitution. They override this Law. See Subdivision 2 of Division 4 of Part 2A of that Act.

``Constitution'' means the Constitution of the Commonwealth;

``continuous disclosure notice'' means:

(a)  a document used to notify a securities exchange of information relating to a body under provisions of the securities exchange's listing rules referred to in subsection 1001A(1); or

(b)  a document under section 1001B 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 12 months before the date of the prospectus; and

(b)  are securities of an entity that was not covered by any of the following at any time in that 12 months:

(i) an exemption under section 111AS or 111AT, or a modification under section 111AV

(ii) an exemption under paragraph 741(1)(a), or a 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

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.

``contravene'' includes fail to comply with;

``contributing member'' , in relation to a futures organisation, means:

(a)  in the case of a futures exchange - a member or member organisation of the futures exchange; or

(b)  in the case of a futures association:

(i) a member of that futures association that is a member of no futures exchange; or

(ii) a member organisation of that futures association that is a member organisation of no futures exchange;

``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;

(c)  in relation to a no liability company - subject to section 385, a member of the company;

``control'' has the meaning given by section 50AA;

``control day'' , in relation to a controller of property of a corporation, means:

(a)  unless paragraph (b) applies:

(i) in the case of a receiver, or receiver and manager, of that property - the day when the receiver, or receiver and manager, was appointed; or

(ii) in the case of any other person who is in possession, or has control, of that property for the purpose of enforcing a charge - the day when the person entered into possession, or took control, of property of the corporation for the purpose of enforcing that charge; or

(b)  if the controller became a controller of property of the corporation:

(i) to act with an existing controller of such property; or

(ii) in place of a controller of such property who has died or ceased to be a controller of such property;

the day that is, because of any other application or applications of this definition, the control day in relation to the controller referred to in subparagraph (i) or (ii);

``controller'' , in relation to property of a corporation, means:

(a)  a receiver, or receiver and manager, of that property; or

(b)  anyone else who (whether or not as agent for the corporation) is in possession, or has control, of that property for the purpose of enforcing a charge;

``convertible note'' has the same meaning as in Division 3A of Part III of the Income Tax Assessment Act 1936;

``convertible securities'' : Securities are convertible into another class of securities if the holder may have the other class of securities issued to them by the exercise of rights attached to those securities. An option may be a convertible security even if it is non-renounceable;

``corporation'' has the meaning given by section 57A;

``Corporations Law'' , in relation to a jurisdiction, has the additional meaning given by section 8A;

``corresponding'' , in relation to a law, has the meaning given by section 58;

``corresponding previous law'' has the meaning given by section 58;

``court'' has the meaning given by section 58AA;

``Court'' has the meaning given by section 58AA;

``court of summary jurisdiction'' means any justice or justices of the peace or other magistrate sitting as a court for the making of summary orders or the summary punishment of offences:

(a)  under a law of the Commonwealth or of this or any other jurisdiction; or

(b)  by virtue of his or her commission or their commissions;

[``credit union''] (Definition repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

[``credit union special services provider''] (Definition repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

``creditors' voluntary winding up'' means a winding up under Part 5.5, other than a members' voluntary winding up;

``current market bid price'' for securities covered by a market bid is the price specified in the announcement of the bid as increased or decreased during the offer period;

D

``daily newspaper'' means a newspaper that is ordinarily published on each day that is a business day in the place where the newspaper is published, whether or not the newspaper is ordinarily published on other days;

``date'' of a takeover bid is:

(a)  for an off-market bid - the date on which offers are first made under the bid; or

(b)  for a market bid - the date on which the bid is announced to the relevant securities exchange;

[``deadline''] (Definition repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

``deal'' :

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

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

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

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

``dealer'' means:

(a)  a person who carries on a securities business; or

(b)  2 or more persons who together carry on a securities business;

``dealers licence'' means:

(a)  in this Chapter or section 780, 806 or 807 - a dealers licence granted under Part 7.3; or

(b)  in any other provision of Chapter 7 - a dealers licence granted under Part 7.3 of the Corporations Law of this jurisdiction;

``debenture'' of a body means a chose in action that includes an undertaking by the body to repay as a debt money deposited with or lent to the body. The chose in action may (but need not) include a charge over property of the body to secure repayment of the money. However, a debenture does not include:

(a)  an undertaking to repay money deposited with or lent to the body by a person if:

(i) the person deposits or lends the money in the ordinary course of a business carried on by the person; and

(ii) the body receives the money in the ordinary course of carrying on a business that neither comprises nor forms part of a business of borrowing money and providing finance

(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

(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

(d)  an undertaking to pay money under a promissory note that has a face value of at least $50,000

(e)  an undertaking by a body corporate to pay money to a related body corporate

(f)  an undertaking to repay money that is prescribed by the regulations.

For the purposes of this definition, if a chose in action that includes an undertaking by a body to pay money as a debt is offered as consideration for the acquisition of securities under an off-market takeover bid, or is issued under a compromise or arrangement under Part 5.1, the undertaking is taken to be an undertaking to repay as a debt money deposited with or lent to the body;

``decision period'' , in relation to a chargee in relation to a charge on property of a company under administration, means the period beginning on the day when:

(a)  if notice of the appointment of the administrator must be given to the chargee under subsection 450A(3) - such notice is so given; or

(b)  otherwise - the administration begins;

and ending at the end of the tenth business day after that day;

``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 time to time;

``de facto spouse'' , in relation to a person, means an individual of the opposite sex to that person who is living with that person as his or her spouse on a genuine domestic basis although not legally married to that person;

``defalcation'' , in Part 7.9, includes a contravention of subsection 870(3);

``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;

``Department'' , in a case where a provision uses the expression ``the Department'' without specifying which Department is referred to, means:

(a)  if the Minister or Ministers for the time being administering the Corporations Act 1989 administers or administer only one Department of State of the Commonwealth - that Department; or

(b)  otherwise - the Department of State of the Commonwealth prescribed for the purposes of this definition as it applies for the purposes of that provision;

``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.

``director'' of a company or other body means:

(a)  a person who:

(i) is appointed to the position of a director; or

(ii) is appointed to the position of an alternate director and is acting in that capacity;

regardless of the name that is given to their position; and

(b)  unless the contrary intention appears, a person who is not validly appointed as a director if:

(i) they act in the position of a director; or

(ii) the directors of the company or body are accustomed to act in accordance with the person's instructions or wishes.

Subparagraph (b)(ii) does not apply merely because the directors act on advice given by the person in the proper performance of functions attaching to the person's professional capacity, or the person's business relationship with the directors or the company or body;

Note:

Paragraph (b) - Contrary intention - Examples of provisions for which a person referred to in paragraph (b) would not be included in the term ``director'' are:

• section 249C (power to call meetings of a company's members)

• subsection 251A(3) (signing minutes of meetings)

• section 205B (notice to ASIC of change of address).

``disclosing entity'' has the meaning given by section 111AC;

``disclosure document'' for an offer of securities means:

(a)  a prospectus for the offer; or

(b)  a profile statement for the offer; or

(c)  an offer information statement for the offer;

``discretionary account'' has the meaning given by section 61;

``dispose'' of a futures contract has the meaning given by sections 24, 26, 27 and 28. 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;

[``Division 1 company''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

[``Division 2 company''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

[``Division 2 or 3 company''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

[``Division 3 company''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

[``Division 4 company''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``document'' includes:

(a)  any paper or other material on which there is writing or printing or on which there are marks, figures, symbols or perforations having a meaning for persons qualified to interpret them;

(b)  a disc, tape or other article from which sounds, images or messages are capable of being reproduced; and

(c)  a disc, tape or other article, or any material, from which sounds, images, writings or messages are capable of being reproduced with or without the aid of any other article or device;

and without limiting the generality of the foregoing, includes any summons, order and other legal process and any notice;

Note:

In Division 3 of Part 7.13, ``document'' has a meaning affected by the definition of ``document'' in subsection 1097(1).

``document of title'' , in relation to securities, includes an instrument of transfer relating to the securities;

``domestic corporation'' means a corporation that is incorporated or formed in Australia or an external Territory;

[``dormant''] (Definition repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

E

(``economic entity'') (Definition repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

``ED securities'' has the meaning given by section 111AD;

``eligible applicant'' , in relation to a corporation, means:

(a)  the Commission; or

(b)  a liquidator or provisional liquidator of the corporation; or

(c)  an administrator of the corporation; or

(d)  an administrator of a deed of company arrangement executed by the corporation; or

(e)  a person authorised in writing by the Commission 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 circumstances''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

``eligible commodity agreement'' means a commodity agreement (in this definition called the ``relevant agreement''), where, at the time when the relevant agreement:

(a)  unless paragraph (b) applies - is entered into; or

(b)  if the relevant agreement is not a commodity agreement at the time when it is entered into - becomes a commodity agreement;

it appears likely, having regard to all relevant circumstances (other than the respective intentions of the person in the sold position, and the person in the bought position, under the relevant agreement), including, without limiting the generality of the foregoing:

(c)  the provisions of any agreement;

(d)  the rules and practices of any market; and

(e)  the manner in which the respective Chapter 8 obligations of persons in sold positions, and persons in bought positions, under agreements of the same kind as the first-mentioned agreement are generally discharged;

that:

(f)  the Chapter 8 obligation of the person in the sold position under the relevant agreement to make delivery in accordance with the relevant agreement will be discharged otherwise than by the person so making delivery;

(g)  the Chapter 8 obligation of the person in the bought position under the relevant agreement to accept delivery in accordance with the relevant agreement will be discharged otherwise than by the person so accepting delivery; or

(h)  the person in the sold position, or bought position, under the relevant agreement will assume an offsetting bought position, or offsetting sold position, as the case may be, under an agreement of the same kind as the relevant agreement;

[``eligible communications service''] (Definition repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

[``eligible corporation''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

``eligible exchange-traded option'' means a contract that is entered into on a futures market of a futures exchange and under which a party acquires from another party an option or right, exercisable at or before a specified time:

(a)  to purchase from, or to sell to, that other party a specified quantity of a specified commodity at a price specified in, or to be determined in accordance with, the contract; or

(b)  to be paid by that other party an amount of money to be determined by reference to the amount by which a specified number is greater or less than the number of a specified index, being the Australian Stock Exchanges All Ordinaries Price Index or a prescribed index, as at the time when the option or right is exercised;

[``eligible futures advice business''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

[``eligible futures adviser''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

[``eligible futures broker''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

[``eligible futures broking business''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

[``eligible futures conduct''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

[``eligible futures contract''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

[``eligible futures market''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

[``eligible investment advice business''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

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

[``eligible negotiable instrument''] (Amended to ``negotiable instrument'' by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

[``eligible securities''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

[``eligible securities business''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

``eligible securities conduct'' means conduct in the course of, for the purposes of, or otherwise in connection with:

(a)  dealing in securities; or

(b)  advising a person about securities; or

(c)  giving to a person a securities report;

``emoluments'' means the amount or value of any money, consideration or benefit given, directly or indirectly, to a director of a body corporate in connection with the management of affairs of the body or of any holding company or subsidiary of the body, whether as a director or otherwise, but does not include amounts in payment or reimbursement of out-of-pocket expenses incurred for the benefit of the body;

``employee share scheme'' for a company means a scheme under which shares (or units in shares) in the company or a holding company may be acquired:

(a)  by, or for the benefit of:

(i) employees of the company, or of a related body corporate; or

(ii) directors of the company, or of a related body corporate, who hold a salaried employment or office in the company or in a related body corporate; or

(b)  by a corporation all of whose members are:

(i) employees of the company, or of a related body corporate; or

(ii) directors of the company, or of a related body corporate, who hold a salaried employment or office in the company or in a related body corporate.

``employee share scheme buy-back'' means a buy-back under a scheme that:

(a)  has as its purpose the acquisition of shares in a company by, or on behalf of:

(i) employees of the company, or of a related body corporate; or

(ii) directors of the company, or a related body corporate, who hold a salaried employment or office in the company or in a related body corporate; and

(b)  has been approved by the company in general meeting.

``enforce'' , in relation to a charge on property of a company under administration, includes:

(a)  appoint a receiver of property of the company under a power contained in an instrument relating to the charge; or

(b)  obtain an order for the appointment of a receiver of such property for the purpose of enforcing the charge; or

(c)  enter into possession, or assume control, of such property for that purpose; or

(d)  appoint a person so to enter into possession or assume control (whether as agent for the chargee or for the company); or

(e)  exercise, as chargee or as a receiver or person so appointed, a right, power or remedy existing because of the charge, whether arising under an instrument relating to the charge, under a written or unwritten law, or otherwise;

``enforcement process'' , in relation to property, means:

(a)  execution against that property; or

(b)  any other enforcement process in relation to that property that involves a court or a sheriff;

``enter into'' : A person who:

(a)  enters into, or becomes a party to, a relevant agreement in relation to voting shares or other securities; or

(b)  exercises an option to have voting shares or other securities issued or granted;

is taken to enter into a transaction in relation to the shares or securities. `` Enter into '', in relation to a futures contract, has a meaning affected by subsection 72(2);

``entitlements'' of an employee of a company has the meaning given by subsections 596AA(2) and (3).

``entity'' :

(a)  in Chapter 2E - has the meaning given by section 243C; and

(b)  (Repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

(c)  otherwise - has the meaning given by section 64A;

``entity'' : for the purposes of Chapter 2E an `` entity '' is any of the following:

(a)  a body corporate

(b)  a partnership

(c)  an unincorporated body

(d)  an individual

(e)  for a trust that has only 1 trustee - the trustee

(f)  for a trust that has more than 1 trustee - the trustees together;

``equal access scheme'' has the meaning given by subsections 257B(2) and (3);

``estate'' includes any estate or interest, charge, right, title, claim, demand, lien or encumbrance, at law or in equity;

``event'' includes any happening, circumstance or state of affairs;

``examinable affairs'' , in relation to a corporation means:

(a)  the promotion, formation, management, administration or winding up of the corporation; or

(b)  any other affairs of the corporation (including anything that is included in the corporation's affairs because of section 53); or

(c)  the business affairs of a connected entity of the corporation, in so far as they are, or appear to be, relevant to the corporation or to anything that is included in the corporation's examinable affairs because of paragraph (a) or (b);

``examinable assets and liabilities'' , in relation to an entity, means all of the following:

(a)  the entity's property and assets:

(i) whether present or future; and

(ii) whether held alone or jointly with any other person or persons; and

(iii) whether or not held as agent, bailee or trustee;

(b)  the entity's liabilities:

(i) whether present or future; and

(ii) whether actual or contingent; and

(iii) whether owed alone or jointly with any other person or persons; and

(iv) whether or not owed as trustee;

``examinable officer'' , in relation to a corporation, means:

(a)  a director, secretary or executive officer of the corporation; or

(b)  a receiver, or receiver and manager, of property of the corporation (whether appointed under a provision contained in an instrument, or by a court); or

(c)  an administrator of the corporation; or

(d)  an administrator of a deed of company arrangement executed by the corporation; or

(e)  a liquidator or provisional liquidator of the corporation (whether or not appointed by a court); or

(f)  a trustee or other person administering a compromise or arrangement made between the corporation and any other person or persons;

``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;

``Exchange'' means Australian Stock Exchange Limited;

``exchange member'' , in relation to a futures exchange, means:

(a)  a corporation that is a member of the futures exchange;

(b)  a partnership that is a member of the futures exchange; or

(c)  a member of such a partnership;

``Exchange subsidiary'' means:

(a)  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

(b)  in section 779 or subsection 920(1) - a securities exchange that is a subsidiary of the Exchange; and

(c)  in any other provision of Chapter 7 - a local securities exchange that is a subsidiary of the Exchange;

``exchange traded option'' means an option declared by a securities exchange to be an exchange traded option;

EXCLUDED

(``excluded corporation'') (Definition repealed by No 156 of 1999, Sch 3, Pt 2 (effective 13 March 2000). )

[``excluded invitation''] (Definition repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

[``excluded issue''] (Definition repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

[``excluded offer''] (Definition repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

[``excluded prospectus''] (Definition repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

``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;

``excluded Territory'' means an external Territory to which this Act does not extend;

``Executive Council'' means the Federal Executive Council;

``executive officer'' of a body corporate means a person who is concerned in, or takes part in, the management of the body (regardless of the person's designation and whether or not the person is a director of the body).

EXEMPT

``exempt body'' has the meaning given by section 66A;

``exempt broker'' means a person who is an exempt broker by virtue of section 67;

``exempt dealer'' has the meaning given by section 68;

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

``exempt futures market'' means a futures market in relation to which a declaration under section 1127 is in force;

``exempt investment adviser'' has the meaning given by section 68;

``exempt managed investment scheme interest'' has the meaning given by section 68A.

[``exempt prescribed interest''] (Definition repealed by No 62 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

[``exempt proprietary company''] (Definition omitted by No 115 of 1995, Sch 4 (effective 9 December 1995).)

``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 securities''] (Definition repealed by No 156 of 1999, Sch 3, Pt 2 (effective 25 November 2000).)

``exempt stock market'' means a stock market in relation to which, or a stock market in a class of stock markets in relation to which, a declaration is in force under section 771;

``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 Territory'' means a Territory, not being an internal Territory, provision for the government of which as a territory is made by any Act;

``externally-administered body corporate'' means a body corporate:

(a)  that is being wound up;

(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;

(c)  that is under administration;

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

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

``extraordinary resolution'' means a resolution:

(a)  of which notice as set out in paragraph 252J(c) has been given; and

(b)  that has been passed by at least 50% of the total votes that may be cast by members entitled to vote on the resolution (including members who are not present in person or by proxy).

F

``Federal Court'' means the Federal Court of Australia;

``fee'' , in Part 9.10, includes a fee that is a tax;

``fidelity fund'' means:

(a)  in relation to a futures organisation - the fidelity fund (if any) that section 1228 requires the futures organisation to keep; or

(b)  in relation to a securities exchange within the meaning of Chapter 7 - the fidelity fund (if any) that section 895 requires or required the securities exchange to keep;

``financial benefit'' (when used in Chapter 2E) has a meaning that is affected by section 229;

``financial corporation'' means a financial corporation within the meaning of paragraph 51(20) of the Constitution;

[``financial institution''] (Definition repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

[``Financial Institutions Codes''] (Definition repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

``financial records'' includes:

(a)  invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers; and

(b)  documents of prime entry; and

(c)  working papers and other documents needed to explain:

(i) the methods by which financial statements are made up; and

(ii) adjustments to be made in preparing financial statements.

``financial report'' means an annual financial report or a half-year financial report prepared under Chapter 2M;

Note:

Section 295 deals with the contents of annual financial reports and section 302 deals with the contents of half-year financial reports.

``financial statements'' means annual financial statements under section 295 or half-year financial statements under section 303;

``financial year'' has the meaning given by section 323D;

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

``floating charge'' includes a charge that conferred a floating security at the time of its creation but has since become a fixed or specific charge;

``for'' , in relation to a fee or tax, includes in respect of;

``foreign companies law'' , in relation to a State, Territory or excluded Territory, means the law, or a previous law, of that State, Territory or excluded Territory relating to foreign companies within the meaning of that law or previous law;

``foreign company'' means:

(a)  a body corporate incorporated in an external Territory or outside Australia and the external Territories, not being:

(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 corporation''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

``foreign country'' means any country (whether or not an independent sovereign state) outside Australia and the external Territories;

``foreign holder'' of securities means a holder of the securities whose address, as shown in the register in which details of their holding is recorded, is a place outside Australia and the external Territories;

``franchise'' means an arrangement under which a person earns profits or income by exploiting a right, conferred by the owner of the right, to use a trade mark or design or other intellectual property or the goodwill attached to it in connection with the supply of goods or services. An arrangement is not a franchise if the person engages the owner of the right, or an associate of the owner, to exploit the right on the person's behalf.

``fully paid share'' means a share on which no amount remains unpaid.

``function'' includes a duty;

``Fund'' means the National Guarantee Fund established under section 69 of the Corporations Act 1989;

FUTURES

``futures advice business'' has the meaning given by section 71;

``futures adviser'' means a person who carries on, or 2 or more persons who together carry on, a futures advice business;

``futures advisers licence'' means:

(a)  in this Chapter or section 1173 - a futures advisers licence granted under Part 8.3; and

(b)  in any other provision of Chapter 8 - a futures advisers licence granted under Part 8.3 of the Corporations Law of this jurisdiction;

``futures association'' means:

(a)  in this Chapter or section 1220, 1222, 1223 or 1269 - a body corporate in relation to which an approval under section 1132 is in force or is taken because of subsection 1132(3) to be in force; or

(b)  in any other provision of Chapter 8 - a local futures association;

``futures broker'' means:

(a)  except in section 1209 and Part 8.5:

(i) a person who carries on, or 2 or more persons who together carry on, a futures broking business, whether or not the person, or any of the persons, also deals in futures contracts on the person's own account; or

(ii) the holder of a futures brokers licence; and

(b)  in section 1209 or Part 8.5 (except a provision of that section or Part referred to in paragraph (c) of this definition) - the holder of a futures brokers licence granted under Part 8.3 of the Corporations Law of this jurisdiction; and

(c)  in subsection 1209(14), (15) or (16) or section 1221 or 1222 - the holder of a futures brokers licence;

``futures brokers licence'' means:

(a)  in this Chapter or section 1142, 1172, 1173 or 1269 - a futures brokers licence granted under Part 8.3; and

(b)  in any other provision of Chapter 8 - a futures brokers licence granted under Part 8.3 of the Corporations Law of this jurisdiction;

``futures broking business'' , in relation to a person, means, subject to subsection 25(4), a business of dealing in futures contracts on behalf of other persons;

``futures contract'' has the meaning given by section 72;

``futures exchange'' means:

(a)  in this Chapter or section 1220, 1222, 1223 or 1269 - a body corporate in relation to which an approval under section 1126 is in force or is taken because of subsection 1126(3) to be in force; or

(b)  in any other provision of Chapter 8 - a local futures exchange;

``futures law'' means a provision of Chapter 8;

``futures licence'' means a futures brokers licence or a futures advisers licence;

``futures licensee'' means a person who holds a futures licence;

``futures market'' means a market, exchange or other place at which, or a facility by means of which, futures contracts are regularly acquired or disposed of;

``futures option'' means an option or Chapter 8 right to assume, at a specified price or value and within a specified period, a bought position, or a sold position, in relation to an eligible commodity agreement or in relation to an adjustment agreement;

``futures organisation'' means:

(a)  in this Chapter, section 1141A or subsection 1242(3) or 1249(3) - a futures exchange or a futures association; and

(b)  in Part 8.6:

(i) a local futures exchange; or

(ii) a local futures association, other than a futures association each of whose members is also a member of a futures exchange; and

(c)  in any other provision of Chapter 8 - a local futures exchange or a local futures association;

``futures report'' means an analysis or report about futures contracts;

``futures representative'' has the meaning given by section 73;

G

``Gazette'' means the Commonwealth of Australia Gazette;

``Gazette notice'' means a notice published in the Gazette;

``general law'' means the principles andrules of the common law and equity;

``Government Printer'' includes any person printing for the Government of the Commonwealth;

[``group''] (Definition omitted by No 110 of 1991, Sch 3 (effective 1 August 1991).)

[``group accounts''] (Definition omitted by No 110 of 1991, Sch 3 (effective 1 August 1991).)

[``group holding company''] (Definition omitted by No 110 of 1991, Sch 3 (effective 1 August 1991).)

``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;

[``guarantor body''] (Definition repealed by No 156 of 1999, Sch 3, Pt 2 (effective 13 March 2000). )

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

H

``half-year'' has the meaning given by subsection 323D(5);

``have'' , in relation to information, includes be in possession of the information;

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

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

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

I

``included'' , in relation to an official list, has the meaning given by section 75;

[``incorporate''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``incorporated in Australia'' in relation to a body corporate, includes incorporated by or under a law of the Commonwealth, a State or the Capital Territory.

``incorporation'' :

(a)  of a company or of a recognised company - means the company's first registration under the Corporations Law of any jurisdiction; and

(b)  of any other incorporated body - means the body's incorporation by or under a law (other than this law or a corresponding previous law).

``individual'' means a natural person;

``industrial instrument'' means:

(a)  a contract of employment; or

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

``information'' includes complaint;

``information service'' means:

(a)  a broadcasting service;

(b)  an interactive or broadcast videotext or teletext service or a similar service;

(c)  an online database service or a similar service; or

(d)  any other prescribed service;

``injury compensation'' means compensation payable under any law relating to workers compensation;

``inside information'' , in relation to a futures contract, means information that is not generally available but, if it were generally available, would be likely to affect materially the price for dealing in:

(a)  that futures contract; or

(b)  a futures contract of the same kind as that futures contract;

``insolvent'' has the meaning given by subsection 95A(2) and, in Part 7.10, has a meaning affected by section 922;

``insolvent transaction'' has the meaning given by section 588FC;

``insolvent under administration'' means a person who:

(a)  under the Bankruptcy Act 1966 or the law of an external Territory, is a bankrupt in respect of a bankruptcy from which the person has not been discharged; or

(b)  under the law of a country other than Australia or the law of an external Territory, has the status of an undischarged bankrupt;

and includes:

(c)  a person who has executed a deed of arrangement under Part X of the Bankruptcy Act 1966 or the corresponding provisions of the law of an external Territory or of the law of a country other than Australia, where the terms of the deed have not been fully complied with; and

(d)  a person whose creditors have accepted a composition under Part X of the Bankruptcy Act 1966 or the corresponding provisions of the law of an external Territory or of the law of a country other than Australia where a final payment has not been made under that composition;

[``insurance corporation''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

``interest'' in a managed investment scheme means a right to benefits produced by the scheme (whether the right is actual, prospective or contingent and whether it is enforceable or not).

``internal Territory'' means the Capital Territory or the Northern Territory;

[``interstate''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

``invalid futures authority'' has the meaning given by subsection 87(2);

``invalid securities authority'' has the meaning given by subsection 88(2);

``investment advice business'' has the meaning given by section 77;

``investment adviser'' means a person who carries on, or 2 or more persons who together carry on, an investment advice business;

``investment advisers licence'' means:

(a)  in this Chapter or section 807 - an investment advisers licence granted under Part 7.3; or

(b)  in any other provision of Chapter 7 - an investment advisers licence granted under Part 7.3 of the Corporations Law of this jurisdiction;

``investment contract'' means any contract, scheme or arrangement that, in substance and irrespective of its form, involves the investment of money in or under such circumstances that the investor acquires or may acquire an interest in, or right in respect of, property, whether in this jurisdiction or elsewhere, that, under, or in accordance with, the terms of investment will, or may at the option of the investor, be used or employed in common with any other interest in, or right in respect of, property, whether in this jurisdiction or elsewhere, acquired in or under like circumstances;

``involved'' , in relation to a contravention, has the meaning given by section 79;

``issue'' includes:

(a)  in relation to interests in a managed investment scheme - make available; and

(b)  otherwise - circulate, distribute and disseminate;

J

``Jervis Bay Territory'' means the Territory referred to in the Jervis Bay Territory Acceptance Act 1915;

``Judge'' means a judge of the Court;

``jurisdiction'' means a State or the Capital Territory and, in the case of a State, includes the coastal sea of the State;

``justice of the peace'' includes a justice of the peace for a State or part of a State or for a Territory;

L

``land'' includes messuages, tenements and hereditaments, corporeal and incorporeal, of any tenure or description, and whatever may be the estate or interest therein;

``large proprietary company'' has the meaning given by subsection 45A(3);

``law'' , in relation to a jurisdiction, means, subject to section 58, a law of, or a law in force in, that jurisdiction and, in the case of the Capital Territory, includes, without limitation:

(a)  the Corporations Act 1989 and regulations under it; and

(b)  the Corporations Law, Corporations Regulations, ASIC Law, and ASIC Regulations, of the Capital Territory; and

(c)  a relevant Act within the meaning of the Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980; and

(d)  regulations under such an Act;

``Law'' , in the case of a reference to this Law or to the Corporations Law of a jurisdiction, has the additional meaning given by sections 8 and 8A;

``lawyer'' means a duly qualified legal practitioner and, in relation to a person, means such a practitioner acting for the person;

``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;

``licence'' means:

(a)  in section 808 - a securities licence; and

(b)  in any other provision of Chapter 7 - a dealers licence, or an investment advisers licence, granted under Part 7.3 of the Corporations Law of this jurisdiction; and

(c)  in section 1174 or subsection 1220(2) or 1221(3) - a futures licence; and

(d)  in any other provision of Chapter 8 - a futures brokers licence, or a futures advisers licence, granted under Part 8.3 of the Corporations Law of this jurisdiction;

``licensee'' means:

(a)  in section 781 or subsection 879(1) - a securities licensee; and

(b)  in any other provision of Chapter 7 - a person who holds a dealers licence, or an investment advisers licence, granted under Part 7.3 of the Corporations Law of this jurisdiction; and

(c)  in section 1143 - a futures licensee; and

(d)  in any other provision of Chapter 8 - a person who holds a futures brokers licence, or a futures advisers licence, granted under Part 8.3 of the Corporations Law of this jurisdiction; and

(e)  in relation to a licence - the person who holds the licence;

``limited company'' means a company limited by shares or a company limited by guarantee but does not include a no liability company;

``linked'' the incurring of a debt and a contravention of section 596AB are linked if they are linked under subsection 596AB(4).

``liquidating trade'' means a transaction whereby, for the purpose of closing out a futures contract, the person in the bought position, or sold position, under the futures contract assumes an offsetting sold position, or offsetting bought position, as the case may be, under another futures contract;

``liquidator'' , in Chapters 7 and 8, includes a provisional liquidator;

``listed'' : A company, managed investment scheme or other body is listed if it is included in the official list of a securities exchange;

``listed corporation'' means a body corporate that is included in an official list of a securities exchange (as defined, for the purposes of this definition, by the regulations) in Australia or an external Territory;

``listed disclosing entity'' has the meaning given by subsection 111AL(1);

``listing rules'' , when used in Chapter 7, has the meaning given by section 761;

``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);

``local corporation'' means:

(a)  a company; or

(b)  any other corporation that is incorporated in this jurisdiction;

``local futures association'' means a body corporate in relation to which an approval under section 1132 of the Corporations Law of this jurisdiction is in force;

``local futures exchange'' means a body corporate in relation to which an approval under section 1126 of the Corporations Law of this jurisdiction is in force;

``local securities exchange'' means a local stock exchange or an approved securities organisation;

``local stock exchange'' means:

(a)  the Exchange; or

(b)  a body corporate referred to in any of subparagraphs (c)(ii) to (x), inclusive, of the definition of ``stock exchange'' that conducts in this jurisdiction, or proposes so to conduct, a stock market; or

(c)  a body corporate in relation to which an approval under section 769 of the Corporations Law of this jurisdiction is in force;

``lodge'' means lodge with the Commission in this or any other jurisdiction;

M

``machine-copy'' , in relation to a document, means a copy made of the document by any machine in which, or process by which, an image of the contents of the document is reproduced;

``magistrate'' means a magistrate who is remunerated by salary or otherwise;

[``make''] (Definition repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

[``manage''] (Definition repealed by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000). )

``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 covered by an application order made for the purposes of section 115

(d)  a body corporate (other than a body corporate that operates as a time sharing scheme)

(e)  a scheme in which all the members are bodies corporate that are related to each other and to the body corporate that promotes the scheme

(f)  a franchise

(g)  a statutory fund maintained under the Life Insurance Act 1995

(h)  a regulated superannuation fund, an approved deposit fund, a pooled superannuation trust, or a public sector superannuation scheme, within the meaning of the Superannuation Industry (Supervision) Act 1993

(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

(n)  a scheme of a kind declared by the regulations not to be a managed investment scheme.

Note:

Paragraph (c) - A partnership with less than 20 members will usually not require registration because of paragraph 601ED(1)(a) and under section 115 a partnership with more than 20 members can only operate if covered by an application order.

[``management company''] (Definition repealed by No 62 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``manager'' has a meaning affected by section 90;

``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;

``market bid'' means a takeover bid made under Chapter 6 as a market bid (see section 616);

[``marketable parcel''] (Definition repealed by No 61 of 1998, Sch 2, Pt 3 (effective 1 July 1998).)

``marketable security'' 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;

``member'' :

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

(a)  when used in Chapter 6 or Chapter 7 (except Part 7.1A and the provisions mentioned in paragraph (aa) of this definition) in relation to a securities exchange or stock exchange, means:

(i) a person who is a member organisation of that exchange; or

(ii) a person who is a partner in a partnership that is a member organisation of that exchange; or

(aa)  when used in section 769, 769A or 772A, subsection 776(2), section 779, subsection 786(8) or 910(3) or section 913 or 1115, in relation to a securities exchange or stock exchange, means:

(i) a person who is a member organisation of that exchange; or

(ii) a person who is a partner in a partnership that is a member organisation of that exchange; or

(iii) a person who is recognised under the business rules of the exchange as a suitably qualified affiliate of the exchange and who is involved in the carrying on of a business of dealing in securities (whether as an employee, director or in any other capacity); or

(b)  in relation to a body corporate that is, or proposes to become, a futures organisation - has a meaning affected by section 56; or

(c)  in relation to a company registered under the Corporations Law of any jurisdiction - a person who is a member under section 246A;

``member firm'' , in relation to a securities exchange, means a partnership that is a member organisation of the securities exchange;

``member organisation'' means:

(a)  in relation to a securities exchange or stock exchange:

(i) a person who is recognised under the business rules of the exchange as a suitably qualified participant of the exchange and who carries on a business of dealing in securities otherwise than in partnership; or

(ii) a partnership that is recognised under the business rules of the exchange as a suitably qualified participant of the exchange and that carries on a business of dealing in securities; and

(b)  in relation to a futures organisation:

(i) a member of the futures organisation that carries on a business of dealing in futures contracts otherwise than in partnership; or

(ii) a partnership that the futures organisation recognises as a member organisation, that carries on a business of dealing in futures contracts and each partner in which is a member of some futures organisation;

``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''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``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 securities exchange;

[``minimum subscription''] (Definition repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

[``mining company''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``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;

``Minister'' has the meaning given by section 80A;

``Ministerial Council'' means the Ministerial Council for Companies and Securities established by the Agreement made on 22 December 1978 between the Commonwealth and the States a copy of which is set out in the Schedule to the National Companies and Securities Commission Act 1979, being that agreement as amended or affected by any other agreement;

``misconduct'' includes fraud, negligence, default, breach of trust and breach of duty;

``modifications'' includes additions, omissions and substitutions;

``money'' includes a payment order;

``month'' means calendar month;

N

``national business names register'' means the record or records of information identified by the Minister in a notice under section 70 of the Corporations Act 1989;

``national newspaper'' means a daily newspaper that circulates generally in each State, the Capital Territory and the Northern Territory;

``NCSC'' means the National Companies and Securities Commission;

``necessary transfer documents'' for the transfer of securities to a person means the documents that are sufficient to enable the person to become the holder of the securities;

``negotiable instrument'' , in relation to a body corporate, means:

(a)  a bill of exchange, promissory note, cheque or other negotiable instrument;

(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;

``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;

[``new company''] (Definition omitted by No 110 of 1991, Sch 5 (effective 27 June 1991).)

``no liability company'' means a company that is registered as, or converts to, a no liability company under this Law.

Note 1:

A no liability company can be registered under section 118, 601BD or 1362B. 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)).

``nominee corporation'' means a body corporate whose principal business is the business of holding marketable securities as a trustee or nominee;

``non-broker'' means a person who is neither a futures broker nor one of 2 or more persons who together constitute a futures broker;

[``non-company''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``non-dealer'' means a person who is neither a dealer nor one of 2 or more persons who together constitute a dealer;

``non-voting share'' , in relation to a body corporate, means an issued share in the body that is not a voting share in the body;

``Northern Territory'' means the Northern Territory of Australia;

``notice'' includes a circular and an advertisement;

``NSEGC'' means the National Securities Exchanges Guarantee Corporation referred to in a previous law corresponding to Part 7.10;

O

``oath'' includes affirmation;

(``odd lot buy-back'') (Definition repealed by No 61 of 1998, Sch 2, Pt 3 (effective 1 July 1998).)

``of'' in relation to securities, 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;

[``offer''] (Definition repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

``offer information statement'' means an offer information statement that is lodged with ASIC;

``offer period'' for a takeover bid is the period for which offers under the bid remain open;

``office'' , in relation to the Commission, means an office of the Commission in this jurisdiction or elsewhere;

``officer'' of a corporation means:

(a)  a director or secretary of the corporation; or

(b)  a person:

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

(ii) who has the capacity to affect significantly the corporation's financial standing; or

(iii) in accordance with whose instructions or wishes the directors of the corporation are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person's professional capacity or their business relationship with the directors or the corporation); or

(c)  a receiver, or receiver and manager, of the property of the corporation; or

(d)  an administrator of the corporation; or

(e)  an administrator of a deed of company arrangement executed by the corporation; or

(f)  a liquidator of the corporation; or

(g)  a trustee or other person administering a compromise or arrangement made between the corporation and someone else;

Note:

Section 201B contains rules about who is a director of a corporation.

``official liquidator'' means a person registered as an official liquidator under section 1283 or deemed to be registered as an official liquidator under this Law;

``official manager'' means a person appointed as an official manager under Part 5.3;

``off-market bid'' means a takeover bid made under Chapter 6 as an off-market bid (see section 616);

``on'' , in relation to a stock market or futures market, includes at or by means of;

``on behalf of'' includes on the instructions of;

``on-market'' : a transaction of any kind is an `` on-market '' transaction if it is effected on a stock market of a securities exchange and is:

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

(b)  if those rules do not define on-market transactions - effected in the ordinary course of trading on the stock market;

``on-market buy-back'' has the meaning given by subsections 257B(6) to (8).

[``open''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``option contract'' , in Chapter 7, means:

(a)  a contract under which a party acquires from another party an option or right, exercisable at or before a specified time, to buy from, or to sell to, that other party a number of specified securities, or of a specified class of securities, being securities of a kind referred to in paragraph 92(1)(a), (b), (c) or (d), at a price specified in, or to be determined in accordance with, the contract; or

(b)  a contract entered into on a stock market of a securities exchange or on an exempt stock market, being a contract under which a party to the contract acquires from another party to the contract an option or right, exercisable at or before a specified time:

(i) to buy from, or to sell to, that other party an amount of a specified foreign currency, or a quantity of a specified commodity, at a price specified in, or to be determined in accordance with, the contract; or

(ii) to be paid by that other party an amount of money to be determined by reference to the amount by which a specified number is greater or less than the number of a specified index, being the Australian Stock Exchanges All Ordinaries Price Index or a prescribed index, as at the time when the option or right is exercised;

``originating provision'' , in relation to a provision of this Law, means the provision enacted by the Parliament as a direct or indirect result of which the provision of this Law was included in this Law;

``other jurisdictions'' means 2 or more jurisdictions other than this jurisdiction;

``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;

``own account'' has:

(a)  in relation to a person dealing in a futures contract - a meaning affected by section 29; or

(b)  in relation to a person dealing in, or entering into a transaction in relation to, securities - a meaning affected by section 84;

P

(``paid up'') (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

(``parent entity'') (Definition repealed by No 156 of 1999, Sch 3, Pt 4 (effective 13 March 2000). )

``Parliament'' means the Parliament of the Commonwealth;

``Part 5.1 body'' means:

(a)  a company; or

(b)  a registrable body (other than a registrable local body) that is registered under Division 1 or 2 of Part 5B.2 of the Corporations Law of this jurisdiction;

``Part 5.7 body'' means:

(a)  a registrable body (other than a registrable local body) that:

(i) is registered under Division 1 or 2 of Part 5B.2 of the Corporations Law of this jurisdiction; or

(ii) carries on business in this jurisdiction; or

(b)  a partnership, association or other body (whether a body corporate or not) that consists of more than 5 members;

[``participating employee''] (Definition repealed by No 61 of 1998, Sch 2, Pt 3 (effective 1 July 1998).)

[``participation interest''] (Definition repealed by No 62 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``party'' :

(a)  in relation to a transaction - includes, if the transaction has been completed or given effect to, or has been terminated, a person who was a party to the transaction; and

(b)  in relation to a Chapter 8 agreement - means, in the case of a proposed or discharged relevant agreement, a person who would be a party to the relevant agreement if it were in effect;

``payment'' (when used in Division 2 of Part 2D.2 (sections 200B to 1813)) 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;

``penalty unit'' means $100;

``person'' :

(a)  has a meaning affected by section 85A; and

(b)  when used in Division 2 of Part 2D.2 (sections 200B to 1813) - includes a superannuation fund;

``place of origin'' , in relation to a body corporate, means:

(a)  in the case of a body incorporated in a State or Territory - that State or Territory; or

(b)  otherwise - the place of the body's incorporation;

``possession'' has a meaning affected by section 86;

``power'' includes an authority;

``premises'' includes:

(a)  a structure, building, aircraft, vehicle or vessel;

(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'' means prescribed by the Corporations Law of this jurisdiction, by the regulations or by the rules;

[``prescribed interest''] (Definition repealed by No 62 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``previous Fund'' means the National Guarantee Fund that was established under subsection 122CA(1) of the Securities Industry Act 1980;

``price'' , in relation to a commodity agreement or a futures contract, or in Chapter 8, includes any amount payable for the delivery of a commodity under an agreement;

[``primary prospectus''] (Definition omitted by No 31 of 1994, Sch 2, Pt 1 (effective 4 September 1994).)

[``principal Australian register''] (Definition omitted by No 115 of 1995, Sch 6 (effective 9 December 1995).)

[``principal executive officer''] (Definition omitted by No 115 of 1995, Sch 6 (effective 9 December 1995).)

[``principal register''] (Definition omitted by No 115 of 1995, Sch 6 (effective 9 December 1995).)

``printed'' includes type-written, lithographed or reproduced by any mechanical means;

``Proclamation'' means a Proclamation by the Governor-General published in the Gazette;

``procure'' includes cause;

``profile statement'' means a profile statement that is lodged with ASIC;

[``profit and loss account''] (Definition repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

[``profit or loss''] (Definition repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

[``promoter''] (Definition repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

``proper authority'' has:

(a)  in relation to a futures licensee - the meaning given by subsection 87(1); and

(b)  in relation to a securities licensee - the meaning given by subsection 88(1);

``proper SCH transfer'' means:

(a)  an SCH-regulated transfer of a quoted security or quoted right effected in accordance with the SCH business rules; or

(b)  a transfer that is taken by section 1097D to be a proper SCH transfer;

``property'' means any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and includes a thing in action;

``proportional takeover approval provisions'' , in relation to a company, means provisions of the kind referred to in subsection 648D(1) that are contained in, or that it is proposed to insert in, the constitution of the company;

``proportional takeover bid'' means an off-market bid for a specified proportion of the securities in the bid class (see paragraph 618(1)(b));

``proprietary company'' has the meaning given by subsection 45A(1);

[``proprietary company provisions''] (Definition omitted by No 115 of 1995, Sch 4 (effective 9 December 1995).)

``prospectus'' means a prospectus that is lodged with ASIC;

``prove'' includes establish in any way (for example, but without limitation, through the operation of a presumption for which this Law or any other law of this jurisdiction provides);

``providing finance'' means

(a)  lending money; or

(b)  giving guarantees or security for loans made by someone else; or

(c)  drawing, accepting, indorsing, negotiating or discounting a bill of exchange, cheque, payment order or promissory note so that someone can obtain funds.

``public authority of the Commonwealth or a State'' means:

(a)  a Minister or State Minister; or

(b)  the holder of an office established by a Commonwealth or State law; or

(c)  a body corporate incorporated for a public purpose by a Commonwealth or State law to the extent to which it is exercising a power conferred by a Commonwealth or State law;

``public company'' means a company other than a proprietary company and:

(a)  in subsection 849(1), includes a body corporate that is a public company for the purposes of the Corporations Law of another jurisdiction; and

(b)  in section 195, Chapter 2E and section 1376, includes a body corporate (other than a prescribed body corporate) that:

(i) is incorporated, or taken to be incorporated, in this jurisdiction, but not under the Corporations Law of this jurisdiction; and

(ii) is included in the official list of a securities exchange; and

(c)  in Chapter 2E and section 1376 does not include a company that does not have ``Limited'' in its name because of section 150 or 151;

[``public corporation''] (Definition repealed by No 62 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``public document'' , in relation to a body corporate, has the meaning given by section 88A;

``publish'' :

(a)  in relation to a notice - means, in Chapter 7, publish by any means, including in a newspaper or periodical, by broadcasting or televising or in a cinematograph film; and

(b)  in any case - includes issue;

Q

``qualified accountant'' means a member of a professional body that is approved by ASIC in writing for the purposes of this definition;

``qualified privilege'' has the meaning given by section 89;

``quarter day'' means 31 March, 30 June, 30 September or 31 December;

``quotation'' , in relation to securities, in relation to a stock market of a securities exchange, or of a stock exchange, within the meaning of the provision where the expression occurs, includes the displaying or providing, on a stock market of the securities exchange or stock exchange, of information concerning:

(a)  if offers to sell, purchase or exchange the securities at particular prices, or for particular consideration, are made or accepted on that stock market - those prices or that consideration;

(b)  if offers or invitations are made on that stock market, being offers or invitations that are intended, or may reasonably be expected, to result in the making or acceptance of offers to sell, purchase or exchange the securities 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 sell, purchase or exchange the securities;

``quoted ED securities'' has the meaning given by section 111AM;

``quoted right'' has the meaning given by section 1097A;

Note:

The meaning of ``quoted right'' may be extended by the SCH business rules (under section 1097B) or by a Commission declaration (under section 1097C).

``quoted security'' has the meaning given by section 1097A;

Note:

The meaning of ``quoted security'' may be extended by the SCH business rules (under section 1097B) or by a Commission declaration (under section 1097C).

R

``receiver and manager'' has a meaning affected by section 90;

``recognised company'' means a body corporate that, because of the definition of ``company'' in section 9 of the Corporations Law of another jurisdiction, is a company for the purposes of that section of that Law;

``recognised futures exchange'' means a body corporate that:

(a)  conducts a futures market outside Australia; and

(b)  is prescribed for the purposes of this definition;

``record'' includes information stored or recorded by means of a computer;

``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;

``register'' means register under this Law.

REGISTERED

``registered Australian body'' means:

(a)  in this Chapter - a registrable Australian body that is registered under Division 1 of Part 5B.2; or

(b)  otherwise - a registrable Australian body that is registered under Division 1 of Part 5B.2 of the Corporations Law of this jurisdiction;

``registered body'' means:

(a)  in this Chapter or section 601CX or 601CY - a registered Australian body or a registered foreign company; or

(b)  otherwise - a registrable body that is registered under Division 1 or 2 of Part 5B.2 of the Corporations Law of this jurisdiction;

``registered company auditor'' means:

(a)  in sections 1287 and 1288 - a person registered as an auditor, or taken to be registered as an auditor, under Part 9.2 of the Corporations Law of this jurisdiction; and

(b)  otherwise - a person registered as an auditor, or taken to be registered as an auditor, under Part 9.2;

and, 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)  in this Chapter or section 601CX - a foreign company that is registered under Division 2 of Part 5B.2; or

(b)  otherwise - a foreign company that is registered under Division 2 of Part 5B.2 of the Corporations Law of this jurisdiction;

``registered liquidator'' means:

(a)  in sections 1287 and 1288 - a person registered as a liquidator under subsection 1282(2), or taken to be registered as a liquidator under Part 9.2, of the Corporations Law of this jurisdiction; and

(b)  otherwise - a person registered as a liquidator under subsection 1282(2) or taken to be registered as a liquidator under Part 9.2;

``registered office'' , in relation to a body corporate, means the body's registered office under section 142 or 601CT, as the case requires;

``registered scheme'' means a managed investment scheme that is registered under section 601EB.

``registrable Australian body'' means:

(a)  a body corporate, not being:

(i) a company; or

(ii) a recognised company; or

(iii) an exempt public authority; or

(iv) a corporation sole; or

(b)  an unincorporated body that, 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;

but does not include a foreign company;

``registrable body'' means a registrable Australian body or a foreign company;

``registrable local body'' means a registrable Australian body that:

(a)  is incorporated in this jurisdiction; or

(b)  is unincorporated but is formed, or has its head office or principal place of business, in this jurisdiction;

[``registration application''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

[``registration day''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

[``registration number''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``regulations'' means the Corporations Regulations of this jurisdiction;

``related body corporate'' , in relation to a body corporate, means a body corporate that is related to the first-mentioned body by virtue of section 50;

``related entity'' , in relation to a body corporate, means any of the following:

(a)  a promoter of the body;

(b)  a relative, or de facto spouse, of such a promoter;

(c)  a relative of a spouse, or of a de facto spouse, of such a promoter;

(d)  a director or member of the body or of a related body corporate;

(e)  a relative, or de facto spouse, of such a director or member;

(f)  a relative of a spouse, or of a de facto 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, or de facto spouse, of such a beneficiary;

(j)  a relative of a spouse, or of a de facto spouse, of such a beneficiary;

(k)  a body corporate one of whose directors is also a director of the first-mentioned body;

(l)  a trustee of a trust under which a person is a beneficiary, where the person is a related entity of the first-mentioned body because of any other application or applications of this definition;

``related party'' (when used in Chapter 2E) has the meaning given by section 228;

``relation-back day'' , in relation to a winding up of a company or Part 5.7 body, means:

(a)  if, because of Division 1A of Part 5.6, the winding up is taken to have begun on the day when an order that the company or body be wound up was made - the day on which the application for the order was filed; or

(b)  otherwise - the day on which the winding up is taken because of Division 1A of Part 5.6 to have begun;

``relative'' , in relation to a person, means the spouse, parent or remoter lineal ancestor, son, daughter or remoter issue, or brother or sister of the person;

``relevant agreement'' means an agreement, arrangement or understanding:

(a)  whether formal or informal or partly formal and partly informal;

(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 body''] (Definition repealed by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000). )

``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 interest'' , in relation to securities, has a meaning given by sections 608 and 609;

``relevant previous law'' , in relation to a jurisdiction, means:

(a)  in the case of the Capital Territory - a relevant Act within the meaning of the Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980; and

(b)  in the case of any other jurisdiction - a relevant Code within the meaning of a law of that other jurisdiction;

``relevant securities exchange'' for a listed company, or listed registered managed investment scheme, means:

(a)  the securities exchange on whose stock market the company or scheme is listed; or

(b)  if the company or scheme is listed on 2 or more exchanges - each of those exchanges;

``remedial order'' means an order that:

(a)  restrains a person from exercising any voting or other rights attached to securities

(b)  directs a body corporate not to make or to defer payment of an amount due from the body corporate in respect of securities

(c)  restrains a person from acquiring securities or an interest in securities

(d)  directs a person to dispose of, or not to dispose of, securities or interests in securities

(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)

(g)  vests securities, or an interest in securities, in ASIC

(h)  directs a body corporate not to register the transfer or transmission of securities

(i)  cancels securities issued as consideration for offers under a takeover bid

(j)  declares that an exercise of the voting or other rights attached to securities be disregarded

(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

(m)  directs a body corporate not to issue securities to a person

(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

(o)  directs a body corporate to repeal or modify its existing constitution or adopt a particular constitution

(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 related parties. For the purposes of this definition, the following are not officers of a corporation:

(a)  a receiver, or receiver and manager, of the property of the corporation

(b)  an administrator of the corporation

(c)  an administrator of a deed of company arrangement executed by the corporation

(d)  a liquidator of the corporation

(e)  a trustee or other person administering a compromise or arrangement made between the corporation and someone else;

``renounceable option'' means an assignable option to have an allotment of shares in a body corporate made to the holder of the option;

[``replacement prospectus''] (Definition repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

[``reporting entity''] (Definition repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

``representative'' means:

(a)  in Chapter 7 - a securities representative; or

(b)  in Chapter 8 - a futures representative;

``reproduction'' , in relation to a document, means a machine-copy of the document or a print made from a negative of the document;

[``reserve''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``resolution'' , in relation to creditors or contributories, means a resolution passed at a meeting of the creditors or contributories;

``resolution for voluntary winding up'' means the special resolution referred to in section 491;

``responsible entity'' of a registered scheme means the company named in ASIC's record of the scheme's registration as the responsible entity or temporary responsible entity of the scheme;

``responsible officer'' means:

(a)  in relation to a body corporate that is, or proposes to be, a member of another body corporate:

(i) a director or executive officer of the first-mentioned body; or

(ii) a person who has control or substantial control of the first-mentioned body; and

(b)  in relation to a body corporate that applies for a licence - an officer of the body who would perform duties in connection with the holding of the licence;

``result'' includes:

(a)  when used as a verb - result indirectly; and

(b)  when used as a noun - an indirect result;

``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;

``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;

``rules'' means:

(a)  rules of the Federal Court; or

(b)  rules of the Supreme Court of this or another jurisdiction;

as the case requires;

S

``same kind'' , in relation to a Chapter 8 agreement, has the meaning given by section 54;

``SCH'' is short for securities clearing house;

``SCH business rules'' means the business rules (within the meaning of Chapter 7) of the securities clearing house;

``SCH certificate cancellation provisions'' means the provisions of the SCH business rules that deal with:

(a)  brokers cancelling certificates or other documents of title to quoted securities or quoted rights; and

(b)  matters incidental to brokers cancelling such certificates or documents;

``SCH participant'' means a person who, or a partnership that, under the SCH business rules, is entitled to participate in the facilities provided by the securities clearing house;

``SCH-regulated transfer'' means a transfer (within the meaning of Division 3 of Part 7.13) of a quoted security or a quoted right that, according to the SCH business rules, is an SCH-regulated transfer;

``SCH subregister'' means a subregister of quoted securities or quoted rights maintained by the SCH under the SCH business rules;

``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 Law or the ASIC Law; 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 Law and subsection 93A(5) of the ASIC Law.

``scrip'' means documents that are, or are documents of title to, securities;

[``secondary prospectus''] (Definition omitted by No 31 of 1994, Sch 2, Pt 1 (effective 4 September 1994).)

[``section 229 prohibition''] (Definition repealed by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000). )

[``section 230 order''] (Definition repealed by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000). )

``section 513C day'' , in relation to the administration of a company, has the meaning given by section 513C;

[``section 599 order''] (Definition repealed by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000). )

[``section 600 notice''] (Definition repealed by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000). )

``section 770A stock market'' means a stock market in relation to which an approval under section 770A is in force;

SECURlTlES

``securities'' has the meaning given by section 92;

``securities adviser'' means a dealer, an investment adviser or a securities representative of a dealer or of an investment adviser;

``securities business'' has the meaning given by section 93;

Note:

The activities of the securities clearing house will not generally constitute a securities business - see subsection 779J(1).

``securities clearing house'' means the body corporate in relation to which an approval under section 779B is in force;

``securities exchange'' means:

(a)  in a provision (other than a provision of this Chapter or Chapter 6 or 7) for the purposes of which a regulation is in force defining that expression - a securities exchange as defined by that regulation; or

(b)  in Chapter 6:

(i) the Exchange;

(ii) Australian Stock Exchange (Adelaide) Limited;

(iii) Australian Stock Exchange (Brisbane) Limited;

(iv) Australian Stock Exchange (Hobart) Limited;

(v) Australian Stock Exchange (Melbourne) Limited;

(vi) Australian Stock Exchange (Perth) Limited;

(vii) Australian Stock Exchange (Sydney) Limited; or

(viii) a body corporate that is declared by the regulations to be a securities exchange for the purposes of that Chapter; or

(c)  in this Chapter, section 773, 778, 779, 874 or 879, subsection 920(1) or Chapter 6D:

(i) a stock exchange; or

(ii) a body corporate in relation to which an approval under section 770 is in force; or

(d)  in any other provision of Chapter 7:

(i) a local stock exchange; or

(ii) an approved securities organisation;

``securities law'' means a provision of Chapter 5C, 6, 6A, 6B, 6C, 6D or 7 or a corresponding previous law;

``securities licence'' means a dealers licence or an investment advisers licence;

``securities licensee'' means a person who holds a securities licence;

``securities recommendation'' means a recommendation with respect to securities or a class of securities, whether made expressly or by implication;

``securities report'' means an analysis or report about securities;

``securities representative'' has the meaning given by section 94;

``SEGC'' means a body corporate in relation to which a nomination as the Securities Exchanges Guarantee Corporation is in force under subsection 67(1) of the Corporations Act 1989 or is taken because of subsection 67(5) of that Act to be so in force;

``selective buy-back'' means a buy-back that is none of the following:

(a)  a buy-back under an equal access scheme within the meaning of subsections 257B(2) and (3)

(b)  a minimum holding buy-back

(c)  an on-market buy-back

(d)  an employee share scheme buy-back;

[``seller''] (Definition omitted by No 31 of 1994, Sch 2, Pt 1 (effective 4 September 1994).)

``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;

[``share''] (Definition repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

``sheriff'' includes a person charged with the execution of a writ or other process;

[``sibling entity''] (Definition repealed by No 156 of 1999, Sch 3, Pt 4 (effective 13 March 2000). )

[``sign''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``small proprietary company'' has the meaning given by subsection 45A(2);

``sold position'' means:

(a)  in relation to a commodity agreement, or in relation to a futures contract, being a commodity agreement - the position of a person who, by virtue of the agreement, is under a Chapter 8 obligation to make delivery in accordance with the agreement; or

(b)  in relation to a futures contract, being an adjustment agreement - the position of a person who, by virtue of the agreement:

(i) will, if the value or worth of the agreement (as determined in accordance with the agreement) as at a particular future time exceeds by a particular amount the value or worth of the agreement (as so determined) as at a particular earlier time, be under a Chapter 8 obligation to pay that amount; and

(ii) will, if the value or worth of the agreement (as so determined) as at a particular future time is less by a particular amount than the value or worth of the agreement (as so determined) as at a particular earlier time, have a Chapter 8 right to receive that amount;

``sole trader'' means a person who is a member organisation of a securities exchange;

``solvent'' has the meaning given by subsection 95A(1);

``special resolution'' means:

(a)  in relation to a company, a resolution:

(i) of which notice as set out in paragraph 249L(c) has been given; and

(ii) that has been passed by at least 75% of the votes cast by members entitled to vote on the resolution; or

(b)  in relation to a registered scheme, a resolution:

(i) of which notice as set out in paragraph 252J(c) has been given; and

(ii) that has been passed by at least 75% of the votes cast by members entitled to vote on the resolution.

[``special services provider''] (Definition repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

``staff member'' , in relation to the Commission, means a person who is a staff member for the purposes of the Commission Act;

``standard opening hours'' means 10 am to 12 noon and 2 pm to 4 pm each business day;

``standardised agreement'' means a Chapter 8 agreement that is one of 2 or more Chapter 8 agreements each of which is a Chapter 8 agreement of the same kind as the other, or as each of the others, as the case may be;

``State'' means a State of the Commonwealth and includes the Northern Territory;

``State Fair Trading Act'' means the following Acts for each jurisdiction:

--------------------------------------------------------
   State Fair Trading Acts
--------------------------------------------------------
   Jurisdiction               Act
--------------------------------------------------------
 1 New South Wales            Fair Trading Act 1987 (NSW)
--------------------------------------------------------
 2 Victoria                   Fair Trading Act 1985
--------------------------------------------------------
 3 Queensland                 Fair Trading Act 1987
--------------------------------------------------------
 4 South Australia            Fair Trading Act 1987
--------------------------------------------------------
 5 Western Australia          Fair Trading Act 1987
--------------------------------------------------------
 6 Tasmania                   Fair Trading Act 1990
--------------------------------------------------------
 7 Northern Territory         Fair Trading Act 1990
--------------------------------------------------------
 8 Australian Capital         Fair Trading Act 1992
   Territory
--------------------------------------------------------


      

``statement'' , in Chapter 7, includes matter that is not written but conveys a message;

``statutory declaration'' means a declaration made by virtue of any Act of the Commonwealth, of a State or of a Territory authorising a declaration to be made otherwise than in the course of a judicial proceeding;

``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 meeting''] (Definition repealed by No 61 of 1998, Sch 2, Pt 2 (effective 1 July 1998).)

``statutory minimum'' means:

(a)  if an amount greater than $2,000 is prescribed - the prescribed amount; or

(b)  otherwise - $2,000;

[``statutory report''] (Definition repealed by No 61 of 1998, Sch 2, Pt 2 (effective 1 July 1998).)

``stock exchange'' means:

(a)  in a provision (other than a provision of this Chapter or Chapter 6 or 7) for the purposes of which a regulation is in force defining that expression - a stock exchange as defined by that regulation; or

(b)  in Chapter 6:

(i) the Exchange;

(ii) Australian Stock Exchange (Adelaide) Limited;

(iii) Australian Stock Exchange (Brisbane) Limited;

(iv) Australian Stock Exchange (Hobart) Limited;

(v) Australian Stock Exchange (Melbourne) Limited;

(vi) Australian Stock Exchange (Perth) Limited;

(vii) Australian Stock Exchange (Sydney) Limited; or

(viii) a body corporate that is declared by the regulations to be a stock exchange for the purposes of that Chapter; or

(c)  in this Chapter or section 869 or 1115 - any of the following:

(i) the Exchange;

(ii) Australian Stock Exchange (Adelaide) Limited;

(iii) Australian Stock Exchange (Brisbane) Limited;

(iv) Australian Stock Exchange (Hobart) Limited;

(v) Australian Stock Exchange (Melbourne) Limited;

(vi) Australian Stock Exchange (Perth) Limited;

(vii) Australian Stock Exchange (Sydney) Limited;

(viii) the Stock Exchange of Bendigo Limited;

(ix) the Stock Exchange of Ballarat Limited;

(x) the Stock Exchange of Newcastle Limited;

(xi) a body corporate in relation to which an approval under section 769 is in force; or

(d)  in any other provision of Chapter 7 - a local stock exchange;

``stock market'' means, subject to section 97, a market, exchange or other place at which, or a facility by means of which:

(a)  offers to sell, purchase or exchange securities are regularly made or accepted;

(b)  offers or invitations are regularly made, being offers or invitations that are intended, or may reasonably be expected, to result, whether directly or indirectly, in the making or acceptance of offers to sell, purchase or exchange securities; or

(c)  information is regularly provided about the prices at which, or the consideration for which, particular persons, or particular classes of persons, propose, or may reasonably be expected, to sell, purchase or exchange securities;

``subscriber'' for securities that are interests in a managed investment scheme means any person:

(a)  accepting an offer, or making an offer pursuant to an invitation, in respect of the interests; or

(b)  subscribing for or buying the interests.

``subsidiary'' , in relation to a body corporate, means a body corporate that is a subsidiary of the first-mentioned body by virtue of Division 6;

``substantial holding'' : A person has a substantial holding in a body corporate, or listed registered managed investment scheme, if:

(a)  the total votes attached to voting shares in the body, or voting interests in the scheme, in which they or their associates:

(i) have relevant interests; and

(ii) would have a relevant interest but for subsection 609(6) (exchange traded options) or 609(7) (conditional agreements);

is 5% or more of the total number of votes attached to voting shares in the body, or interests in the scheme; or

(b)  the person has made a takeover bid for voting shares in the body, or voting interests in the scheme, and the takeover period has started and not yet ended;

Note:

For `` relevant interest '', see section 608.

``substantial part'' , in relation to activities, includes the whole of those activities;

[``supplementary prospectus''] (Definition repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

``suspend'' , in relation to a licence, includes, except in sections 827 and 1192, make under section 827 or 1192, as the case requires, an order prohibiting the licensee as mentioned in paragraph 827(1)(d) or 1192(1)(d);

``swear'' , in relation to an affadavit, means, in the case of an affirmation, affirm;

T

(``Table A'') (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

(``Table A proprietary company'') (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

[``Table B''] (Definition repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

``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;

[``takeover scheme''] (Definition repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

``target'' for a takeover bid means the company, listed body or managed investment scheme whose securities are to be acquired under the bid;

``target's statement'' means a target's statement under sections 638 to 640 as supplemented;

``Territory'' means a Territory referred to in section 122 of the Constitution, other than the Northern Territory;

``Territory'' means the Capital Territory or an external Territory;

[``this Act''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

``this jurisdiction'' includes the coastal sea of this jurisdiction;

``this Law'' has the additional meaning given by sections 8 and 8A;

``time-sharing scheme'' means a scheme, undertaking or enterprise, whether in Australia or elsewhere:

(a)  participants in which are, or may become, entitled to use, occupy or possess, for 2 or more periods during the period for which the scheme, undertaking or enterprise is to operate, property to which the scheme, undertaking or enterprise relates; and

(b)  that is to operate for a period of not less than 3 years;

``trade'' , in relation to securities, in relation to a stock market, includes:

(a)  make or accept on that stock market an offer to sell, buy or exchange the securities; and

(b)  make on that stock market an offer or invitation that is intended, or may reasonably be expected, to result in the making or acceptance of an offer to sell, buy or exchange the securities;

[``trading activities''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

[``trading corporation''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

``trading day'' of a securities exchange or stock exchange means a day on which a stock market of the exchange or stock exchange is open for trading in securities;

``trading floor'' , in relation to a futures market conducted by a body corporate, means a place or facility that the body maintains or provides for the acquisition or disposal of futures contracts by members of the body, or by such members and other persons;

``transaction'' , in Part 5.7B, in relation to a body corporate or Part 5.7 body, means a transaction to which the body is a party, for example (but without limitation):

(a)  a conveyance, transfer or other disposition by the body of property of the body; and

(b)  a charge created by the body on property of the body; and

(c)  a guarantee given by the body; and

(d)  a payment made by the body; and

(e)  an obligation incurred by the body; and

(f)  a release or waiver by the body; and

(g)  a loan to the body;

and includes such a transaction that has been completed or given effect to, or that has terminated;

[``transfer day''] (Definition omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

``transmission'' means a transmission, by means of electric or electromagnetic energy, of:

(a)  sounds, including speech and music;

(b)  visual images;

(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;

(b)  a copy of an original photograph made by the use of photo-sensitive material (being photo-sensitive material on a transparent base) placed in surface contact with the original photograph; or

(c)  any one of a series of copies of an original photograph, the first of the series being made by the use of photo-sensitive material (being photo-sensitive material on a transparent base) placed in surface contact with a copy referred to in paragraph (b), and each succeeding copy in the series being made, in the same manner, from any preceding copy in the series;

``Tribunal'' means the Administrative Appeals Tribunal;

[``Type A body''] (Definition omitted by No 110 of 1990, Sch 1 (effective date 18 December 1990).)

[``Type B body''] (Definition omitted by No 110 of 1990, Sch 1 (effective date 18 December 1990).)

U

``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)  isitself a subsidiary of no body corporate;

``unauthorised futures market'' means a futures market that is neither a futures market of a futures exchange nor an exempt futures market;

``unauthorised stock market'' means a stock market that is not:

(a)  a stock market of a securities exchange; or

(b)  a section 770A stock market; or

(c)  an exempt stock market;

``unclaimed money account'' means an account that:

(a)  the Commission maintains under section 63J of the Audit Act 1901; and

(b)  is maintained for the sole purpose of containing money that is unclaimed property;

Note:

An unclaimed money account is an example of an account for which section 141 of the Australian Securities and Investments Commission Act 1989 provides. That section relates to money the Commission receives or holds on trust.

``unclaimed property'' means:

(a)  property paid or transferred to the Commission under a provision of this Law that provides for property to be transferred, or for the Court to direct that property be transferred, to the Commission to be dealt with under Part 9.7; or

(b)  any other property that a provision of this Law provides for the Commission to deal with under Part 9.7; or

(c)  property that vests in the Commission under section 1404; or

(d)  an accretion to, or substitution for, property that is unclaimed property because of any other application or applications of this definition; or

(e)  without limiting paragraph (d), money paid, or required to be paid, under paragraph 1339(2)(b) into an unclaimed money account;

but does not include income that the Minister has applied under subsection 1339(3);

``uncommercial transaction'' has the meaning given by section 588FB;

[``underlying''] (Definition repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

``underlying securities'' means:

(a)  in relation to an option over securities - those securities; and

(b)  in relation to scrip that is constituted by documents that are, or are documents of title to, securities - those securities;

``undertaking'' , in relation to a managed investment scheme, means the undertaking, scheme, enterprise, contract or arrangement to which the scheme relates.

``underwrite'' includes sub-underwrite;

``unfair loan'' has the meaning given by section 588FD;

``unfair preference'' has the meaning given by section 588FA;

``unit'' , in relation to a share, debenture or other interest, means a right or interest, whether legal or equitable, in the share, debenture or other interest, by whatever term called, and includes an option to acquire such a right or interest in the share, debenture or other interest;

``unlimited company'' means a company whose members have no limit placed on their liability;

``unlisted disclosing entity'' has the meaning given by subsection 111AL(2);

``unsecured'' , in relation to a debt, has in Part 5.7B a meaning affected by section 588D;

V

``value'' , in relation to an asset, includes amount;

``voting interest'' , in relation to a managed investment scheme, means an issued interest in the scheme that confers a right to vote, not being a right to vote that is exercisable only in one or more of the following circumstances:

(a)  on a proposal that affects rights attached to the interests

(b)  on a proposal to wind up the scheme

(c)  on a proposal for the disposal of the whole of the scheme property, business and undertaking

(d)  during the winding up of the scheme;

``voting power'' in a company 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;

W

``wages'' , in relation to a company, means amounts payable to or in respect of an employee of the company (whether the employee is remunerated by salary, wages, commission or otherwise) under an industrial instrument, including amounts payable by way of allowance or reimbursement but excluding amounts payable in respect of leave of absence;

``wholly-owned subsidiary'' , in relation to a body corporate, means a body corporate none of whose members is a person other than:

(a)  the first-mentioned body;

(b)  a nominee of the first-mentioned body;

(c)  a subsidiary of the first-mentioned body, being a subsidiary none of whose members is a person other than:

(i) the first-mentioned body; or

(ii) a nominee of the first-mentioned body; or

(d)  a nominee of such a subsidiary.

``winding up by the Court'' includes winding up in insolvency;

[``withdrawable share''] (Definition repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

``wound up by the Court'' includes wound up in insolvency;

``writing'' includes any mode of representing or reproducing words, figures, drawings or symbols in a visible form.

Division 2 - Associates

SECTION 10   EFFECT OF DIVISION  

10(1)  (Interpretative purpose)  

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.

10(2)  (Exclusive effect of Division)  

A person is not an associate of the primary person except as provided in this Division.

10(3)  (Generality not limited)  

Nothing in this Division limits the generality of anything else in it.

SECTION 11   ASSOCIATES OF BODIES CORPORATE  

11    If the primary person is a body corporate, the associate reference includes a reference to:

(a)  a director or secretary of the body;

(b)  a related body corporate; and

(c)  a director or secretary of a related body corporate.

SECTION 12   MATTERS RELATING TO VOTING SHARES  

12(1)  (Relevant agreement)  

If the associate reference relates to:

(a)  the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a body corporate;

(b)  the primary person's voting power in a body corporate; or

(c)  a takeover bid for securities in a body corporate;

it includes a reference to a person with whom the primary person has, or proposes to enter into, a relevant agreement:

(d)  because of which one of those persons has or will have power (even if it is in any way qualified):

(i) to exercise;

(ii) to control, directly or indirectly, the exercise of; or

(iii) to influence substantially the exercise of;

any voting power attached to shares in the body;

(e)  for the purpose of controlling or influencing:

(i) the composition of the body's board; or

(ii) the conduct of affairs of the body;

(f)  under which one of those persons:

(i) will or may acquire; or

(ii) may be required by the other to acquire;

shares in the body in which the other has a relevant interest; or

(g)  under which one of those persons may be required to dispose of shares in the body in accordance with the other's directions;

whatever other effect the relevant agreement may have.

12(2)  (Two-way association)  

In relation to a matter relating to shares in a body corporate, a person may be an associate of the body and the body may be an associate of a person.

SECTION 13   REFERENCES IN CHAPTER 7  

13    If the associate reference occurs in Chapter 7 and relates to a matter that is not of a kind referred to in paragraph 12(1)(a), (b) or (c), it includes a reference to:

(a)  a person in partnership with whom the primary person carries on a securities business;

(b)  subject to subsection 16(2), a person who is a partner of the primary person otherwise than because of carrying on a securities business in partnership with the primary person;

(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;

(d)  a director of a body corporate of which the primary person is also a director and that carries on a securities 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 securities business.

SECTION 14   REFERENCES IN CHAPTER 8  

14    If it occurs in section 29 or 1323 or Chapter 8, the associate reference includes a reference to:

(a)  a person in partnership with whom the primary person carries on a business of dealing in futures contracts;

(b)  subject to subsection 16(2), a person who is a partner of the primary person otherwise than because of carrying on in partnership with the primary person a business of dealing in futures contracts;

(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;

(d)  a director of a body corporate of which the primary person is also a director and that carries on a business of dealing in futures contracts; 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 business of dealing in futures contracts.

SECTION 15   GENERAL  

15(1)  [Persons to whom associate reference applies]  

The associate reference includes a reference to:

(a)  a person in concert with whom the primary person is acting, or proposes to act;

(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.

15(2)  [Entering into association]  

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.

SECTION 16   EXCLUSIONS  

16(1)  [Specified exclusions]  

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 securities, to acquire shares 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.

16(2)  [Necessity for knowledge]  

For the purposes of proceedings under this Law in which it is alleged that a person was an associate of another person by virtue of paragraph 13(b) or (e) or 14(b) or (e), the first-mentioned person shall not be 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.

SECTION 17   ASSOCIATES OF COMPOSITE PERSONS  

17    A reference to an associate, in relation to a dealer, investment adviser, futures broker or futures adviser, is, if 2 or more persons constitute the dealer, investment adviser, futures broker or futures adviser, a reference to an associate of any of those persons.

Division 3 - Carrying on business

SECTION 18   CARRYING ON BUSINESS: OTHERWISE THAN FOR PROFIT  

18    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.

SECTION 19   BUSINESSES OF A PARTICULAR KIND  

19    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.

SECTION 20   CARRYING ON A BUSINESS: ALONE OR TOGETHER WITH OTHERS  

20    A reference in this Law 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.

SECTION 21   CARRYING ON BUSINESS IN AUSTRALIA OR A STATE OR TERRITORY  

21(1)  [Place of business]  

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.

21(2)  [Shares and property]  

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.

21(3)  [Exceptions]  

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;

(b)  holds meetings of its directors or shareholders or carries on other activities concerning its internal affairs;

(c)  maintains a bank account;

(d)  effects a sale through an independent contractor;

(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;

(f)  creates evidence of a debt, or creates a charge on property;

(g)  secures or collects any of its debts or enforces its rights in regard to any securities relating to such debts;

(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.

SECTION 22   CARRYING ON BUSINESS INTERSTATE  (Repealed by No 110 of 1990, Sch 1 (effective 18 December 1990).)

Division 4 - Dealing in futures contracts

SECTION 23   ACQUIRING A FUTURES CONTRACT  

23(1)  (Acquisition of futures contract)  

A person acquires a futures contract (other than a futures option or an eligible exchange-traded option) if, and only if, the person enters into, or takes an assignment of, the futures contract, whether or not on another's behalf.

23(2)  [Futures option or eligible exchange-traded option]  

A person acquires a futures option or an eligible exchange-traded option if, and only if, the person takes the option, or takes an assignment of the option, whether or not on another's behalf.

23(3)  [Sections 26 and 27]  

This section has effect subject to sections 26 and 27.

SECTION 24   DISPOSING OF A FUTURES CONTRACT  

24(1)  [Disposal of futures contract]  

A person disposes of a futures contract (other than a futures option or an eligible exchange-traded option) if, and only if, the person takes, or causes to be taken, such action as closes out the futures contract, whether or not the action is taken on another's behalf.

24(2)  [Futures option or eligible exchange-traded option]  

A person disposes of a futures option or an eligible exchange-traded option if, and only if, the person:

(a)  grants, assigns or exercises the option;

(b)  takes, or causes to be taken, such action as releases the option; or

(c)  allows the option to lapse;

whether or not on another's behalf.

24(3)  [Sections 26 and 27]  

This section has effect subject to sections 26 and 27.

SECTION 25   DEALING IN FUTURES CONTRACTS: GENERAL  

25(1)  [Acquisition or disposal]  

Subject to sections 26 and 27, a person deals in a futures contract if, and only if, the person:

(a)  acquires, or disposes of, the futures contract;

(b)  offers to acquire, or to dispose of, the futures contract; or

(c)  induces, or attempts to induce, another person to acquire, or to dispose of, the futures contract.

25(2)  [On another person's behalf]  

Subject to sections 26 and 27, a person deals in a futures contract on another person's behalf if, and only if, the first-mentioned person acquires, or disposes of, the futures contract on the other person's behalf, or offers so to acquire, or so to dispose of, the futures contract.

25(3)  [Non-residents]  

In determining whether or not a person who is not a resident of Australia or of an external Territory deals in a futures contract on another person's behalf, an act that the holder of a futures brokers licence or an exempt broker does on the first-mentioned person's behalf shall be disregarded.

25(4)  [Effect of subsection (5)]  

Subsection (5) has effect for the purposes of determining:

(a)  whether or not a person deals in a futures contract on another person's behalf; and

(b)  (Omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

(c)  what constitutes such a business carried on by a person.

25(5)  [Employees of brokers]  

An act that the person does:

(a)  while employed by, or acting for or by arrangement with, a futures broker;

(b)  as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the broker; and

(c)  in connection with a business of dealing in futures contracts that the broker carries on;

shall be disregarded.

25(6)  [Non-applicability to other sections]  

Subsections (3), (4) and (5) do not have effect for the purposes of sections 26, 27, 28, 1126 and 1132.

SECTION 26   DEALING IN FUTURES CONTRACTS THROUGH INTERMEDIARIES: FIRST STEP  

26    Where a person acquires, disposes of, or otherwise deals in, a futures contract on another person's behalf, the other person shall also be deemed to acquire, dispose of, or deal in, as the case may be, the futures contract.

SECTION 27   DEALING IN FUTURES CONTRACTS THROUGH INTERMEDIARIES: SECOND AND LATER STEPS  

27(1)  [Effect of section]  

Where:

(a)  because of instructions given, or any other act done, by a person (in this section called the ``intermediary''), the intermediary is, by virtue of:

(i) an application of section 26; or

(ii) an application of section 26 and an application, or 2 or more applications, of this section;

to be deemed to acquire, dispose of, or deal in, a futures contract; and

(b)  the intermediary gave the instructions, or did that other act, on behalf of another person (in this section called the ``principal'');

this section has effect, except for the purposes of section 26.

27(2)  [Principal]  

The principal shall also be deemed to acquire, dispose of, or deal in, as the case may be, the futures contract.

27(3)  [Deemed acquisition, disposal, etc]  

The intermediary and:

(a)  if subparagraph (1)(a)(i) applies - the person who acquires, disposes of, or otherwise deals in, as the case may be; or

(b)  if subparagraph (1)(a)(ii) applies - the persons who, by virtue of the applications referred to in that subparagraph, are each deemed to acquire, dispose of, or deal in, as the case may be;

the futures contract on the intermediary's behalf shall each be deemed to acquire, dispose of, or deal in, as the case may be, the futures contract on the principal's behalf.

SECTION 28   DEALING IN FUTURES CONTRACTS, THROUGH INTERMEDIARIES, ON FUTURES MARKETS  

28(1)  [Effect of section]  

This section has effect where a person acquires, disposes of, or otherwise deals in, a futures contract on a futures market and by virtue of:

(a)  an application of section 26; or

(b)  an application of section 26 and an application or applications of section 27;

another person:

(c)  is also deemed to acquire, dispose of, or deal in, the futures contract; or

(d)  is deemed to acquire, dispose of, or deal in, the futures contract on a third person's behalf.

28(2)  [Deemed acquisition, disposal, etc]  

The other person shall be deemed to acquire, dispose of, or deal in, the futures contract on that futures market, or on the third person's behalf on that futures market, as the case may be.

SECTION 29   OWN ACCOUNT DEALINGS AND TRANSACTIONS: FUTURES CONTRACTS  

29(1)  [Extended meaning of own account dealings]  

A reference to a person dealing in a futures contract, or entering into a transaction in relation to a futures contract, on the person's own account includes a reference to a person so dealing, or entering into such a transaction, as the case may be, as principal or on behalf of:

(a)  in any case - an associate of the person;

(b)  in any case - a body corporate in which the person has a controlling interest; or

(c)  if the person carries on a futures broking business in partnership - a body corporate in which the person's interests and the interests of the other partners together constitute a controlling interest.

29(2)  [Other members of exchange]  

A futures broker who is a member of a futures exchange or of a recognised futures exchange does not deal in a futures contract, or enter into a transaction in relation to a futures contract, on the broker's own account merely because the dealing is with, or the transaction is entered into with, another futures broker who is a member of a futures exchange or of a recognised futures exchange.

29(3)  [Limited meaning of ``associate'']  

Despite Division 2, a person is not an associate of another person for the purposes of subsection (1) merely because the first-mentioned person is either or both of the following:

(a)  a partner of the other person otherwise than because of carrying on in partnership with the other person a business of dealing in futures contracts;

(b)  a director of a body corporate of which the other person is also a director, whether or not the body carries on a business of dealing in futures contracts.

Division 5 - (Repealed)

SECTION 30   TERMINOLOGY USED IN THIS DIVISION  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 31   BASIC RULES  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 32   CONTROL OF BODY CORPORATE HAVING POWER IN RELATION TO A SHARE  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 33   CONTROL OF PRESCRIBED PERCENTAGE OF VOTING POWER IN BODY CORPORATE HAVING POWER IN RELATION TO A SHARE  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 34   DEEMED RELEVANT INTEREST IN ADVANCE OF PERFORMANCE OF AGREEMENT WHOSE PERFORMANCE WILL GIVE RISE TO A RELEVANT INTEREST  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 35   CONTROL OF BODY CORPORATE HAVING A RELEVANT INTEREST BY VIRTUE OF SECTION 34  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 36   MATTERS NOT AFFECTING APPLICATION OF DIVISION  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 37   BODY CORPORATE MAY HAVE A RELEVANT INTEREST IN ITS OWN SHARES  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 38   EXCLUSIONS: MONEY-LENDERS  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 39   EXCLUSIONS: CERTAIN TRUSTEES  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 40   EXCLUSIONS: INSTRUCTIONS TO SECURITIES DEALER TO DISPOSE OF SHARE  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 41   EXCLUSIONS: HONORARY PROXIES  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 42   EXCLUSIONS: HOLDERS OF PRESCRIBED OFFICES  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 42A   SHARES COVERED BY BUY-BACK AGREEMENTS  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 43   PRESCRIBED EXCLUSIONS  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 44   RELEVANT INTERESTS IN SECURITIES  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 45   EFFECT OF DIVISION  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000).

Division 5A - Types of company

SECTION 45A   PROPRIETARY COMPANIES  

45A(1)  Proprietary company.  

A proprietary company is a company that is registered as, or converts to, a proprietary company under this Law.

Note 1:

A proprietary company can be registered under section 118, 601BD or 1362B. A company can convert to a proprietary company under Part 2B.7.

Note 2:

A proprietary company must:

•  be limited by shares or be an unlimited company with a share capital

•  have no more than 50 non-employee shareholders

•  not do anything that would require disclosure to investors under Chapter 6D (except in limited circumstances).

(see section 113).

45A(2)  Small proprietary company.  

A proprietary company is a small proprietary company for a financial year if it satisfies at least 2 ofthe following paragraphs:

(a)  the consolidated gross operating revenue for the financial year of the company and the entities it controls (if any) is less than $10 million

(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 $5 million

(c)  the company and the entities it controls (if any) have fewer than 50 employees at the end of the financial year.

Note:

A small proprietary company generally has reduced financial reporting requirements (see subsection 292(2)).

45A(3)  Large proprietary company.  

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 gross operating revenue for the financial year of the company and the entities it controls (if any) is $10 million 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 $5 million or more

(c)  the company and the entities it controls (if any) have 50 or more employees at the end of the financial year.

45A(4)  When a company controls an entity.  

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)(d) (even if the standards do not otherwise apply to the company).

45A(5)  Counting employees.  

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.

45A(6)  Accounting standards.  

Consolidated gross operating 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).

Division 6 - Subsidiaries and related bodies corporate

SECTION 46   WHAT IS A SUBSIDIARY  

46    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;

(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.

SECTION 47   CONTROL OF A BODY CORPORATE'S BOARD  

47    Without limiting by implication the circumstances in which the composition of a body corporate's board is to be taken to be controlled by another body corporate, the composition of the board shall be 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 shall be deemed 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.

SECTION 48   MATTERS TO BE DISREGARDED  

48(1)  [Subsidiary]  

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.

48(2)  [Fiduciary capacity]  

Any shares held, or power exercisable, by the other body in a fiduciary capacity shall be treated as not held or exercisable by it.

48(3)  [Nominee]  

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);

shall be treated as held or exercisable by the other body.

48(4)  [Debentures]  

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, shall be disregarded.

48(5)  [Money lending]  

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 shall 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.

SECTION 49   REFERENCES IN THIS DIVISION TO A SUBSIDIARY  

49    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.

SECTION 50   RELATED BODIES CORPORATE  

50    Where a body corporate is:

(a)  a holding company of another body corporate;

(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.

SECTION 50AA   CONTROL  

50AA(1)  [Definition of control]  

For the purposes of this Law, 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.

50AA(2)  [Definition of capacity]  

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).

50AA(3)  [Joint capacity]  

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.

50AA(4)  [Legal obligation to control]  

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 - Interpretation of other expressions

SECTION 50A   ACCOUNTING PERIODS AND HALF-YEARS  (Repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

SECTION 51   ACQUISITION AND DISPOSAL OF SHARES  

51(1)  (``deal'')  

For the purposes of the definition of `` deal'' in section 9 and of Chapter 7, a person acquires shares in a body corporate if, and only if:

(a)  the person acquires a relevant interest in those shares as a result of a transaction entered into by or on behalf of the person in relation to those shares, in relation to any other securities of that body corporate or in relation to securities of any other body corporate; or

(b)  the person acquires any legal or equitable interest in securities of that body corporate or in securities of any other body corporate and, as a result of the acquisition, another person acquires a relevant interest in those shares.

51(2)  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000).)

SECTION 52   DOING ACTS  

52    A reference to doing an act or thing includes a reference to causing or authorising the act or thing to be done.

SECTION 52A   SIGNING  

52A    Without affecting the law on agency, if this Law requires that something be signed, it can be signed by an individual using a power of attorney from the person required to sign.

SECTION 53   AFFAIRS OF A BODY CORPORATE  

53    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 Law, the affairs of a body corporate include:

(a)  the promotion, formation, membership, control, business, trading, transactions and dealings (whether alone or jointly with any other person or persons and including transactions and dealings as agent, bailee or trustee), property (whether held alone or jointly with any other person or persons and including property held as agent, bailee or trustee), liabilities (including liabilities owed jointly with any other person or persons and liabilities as trustee), profits and other income, receipts, losses, outgoings and expenditure of the body:

(b)  in the case of a body corporate (not being an authorised trustee corporation) that is a trustee (but without limiting the generality of paragraph (a)) - matters concerned with the ascertainment of the identity of the persons who are beneficiaries under the trust, their rights under the trust and any payments that they have received, or are entitled to receive, under the terms of the trust;

(c)  the internal management and proceedings of the body;

(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;

(ii) the body is under administration;

(iia) a deed of company arrangement executed by the body has not yet terminated;

(iii) a compromise or arrangement made between the body and any other person or persons is being administered; or

(iv) the body is being wound up;

and, without limiting the generality of the foregoing, any conduct of such a receiver or such a receiver and manager, of an administrator of the body, of an administrator of such a deed of company arrangement, of a person administering such a compromise or arrangement or of a liquidator or provisional liquidator of the body;

(e)  the ownership of shares in, debentures of, and interests in a managed investment scheme made available by, the body;

(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;

(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;

(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;

(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.

SECTION 53AAA   AUDITED OR REVIEWED IN ACCORDANCE WITH THIS LAW  (Repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

SECTION 53AA   BUSINESS AFFAIRS OF A BODY CORPORATE  

53AA    A body corporate's business affairs include (without limitation):

(a)  any of the body's affairs (including anything that is included in the body's affairs because of section 53); and

(b)  matters concerned with ascertaining the corporations with which the body is or has been connected.

SECTION 53AB   BUSINESS AFFAIRS OF A NATURAL PERSON  

53AB    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 deed of assignment, deed of arrangement, or composition, 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 deed of assignment or arrangement, a person acting under such an authority or a person administering such a composition; and

(d)  matters concerned with ascertaining the corporations with which the person is or has been connected.

SECTION 53AC   BUSINESS AFFAIRS OF A PARTNERSHIP  

53AC    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.

SECTION 53AD   BUSINESS AFFAIRS OF A TRUST  

53AD    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.

SECTION 53A   CHAPTER 6 BODY AND CHAPTER 6 COMPANY  (Repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000). )

SECTION 54   CHAPTER 8 AGREEMENTS OF THE SAME KIND  

54    A Chapter 8 agreement is of the same kind as another Chapter 8 agreement if, and only if, the provisions of the first-mentioned Chapter 8 agreement are the same as, or not materially different from, the provisions of the other Chapter 8 agreement, disregarding:

(a)  the fact that the parties to the respective Chapter 8 agreements are different; and

(b)  any difference in the amounts payable under corresponding provisions of the respective Chapter 8 agreements.

SECTION 55   CHAPTER 8 OBLIGATIONS AND RIGHTS  

55(1)  [Unenforceability not relevant]  

A Chapter 8 obligation, or a Chapter 8 right, is an obligation or right, as the case may be, whether or not enforceable at law or in equity.

55(2)  [Alternative obligations]  

A reference to a Chapter 8 obligation of a particular kind includes a reference to alternative Chapter 8 obligations one of which is a Chapter 8 obligation of that kind.

SECTION 56   CLASSES OF FUTURES ORGANISATION MEMBERSHIP  

56    A reference to a member, in relation to a body corporate that is, or proposes to become, a futures organisation, is, if the body may operate otherwise than as a futures organisation and any of the rules, regulations or by-laws made by the body or contained in its constituent documents provide for:

(a)  a separate class of membership for persons to whom the operation of the body otherwise than as a futures organisation relates (whether or not such persons may be members within another class of membership); or

(b)  2 or more such separate classes of membership;

a reference to a person in the person's capacity as a member of the body in a class of membership other than that separate class or those separate classes, as the case may be.

SECTION 57   CLASSES OF SHARES OR INTERESTS IN MANAGED INVESTMENT SCHEMES  

57(1)  [Shares]  

The shares in a body corporate, if not divided into 2 or more classes, constitute a class.

57(2)  [Interests in a managed investment scheme]  

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.

SECTION 57A   MEANING OF ``CORPORATION''  

57A(1)  [``corporation'']  

Subject to this section, in this Law, ``corporation'' includes:

(a)  any body corporate, whether incorporated in this jurisdiction or elsewhere; and

(b)  a company; and

(c)  a recognised company; and

(d)  an unincorporated body that:

(i) is formed outside this jurisdiction; 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 this jurisdiction.

57A(2)  [Exceptions]  

Neither of the following is a corporation :

(a)  an exempt public authority;

(b)  a corporation sole.

57A(3)  (Repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

57A(4)  [Exempt bodies are not corporations]  

An exempt body in relation to this jurisdiction (as defined in section 66A) is not a corporation .

SECTION 58   CORRESPONDING LAWS AND CORRESPONDING PREVIOUS LAWS  

58(1)  [Reference in relation to this Law]  

A reference, in relation to this Law, to a corresponding law is a reference to the Corporations Law of another jurisdiction.

58(2)  [Reference in relation to a provision of this Law]  

A reference, in relation to a provision of this Law, to a corresponding law, or a reference to a law corresponding to a provision of this Law, is a reference to the provision of the Corporations Law of another jurisdiction that corresponds to that provision of this Law.

58(3)  [Reference to a corresponding previous law]  

A reference to a corresponding previous law is a reference:

(a)  to a previous law of this jurisdiction that corresponds, in whole or in part, to this Law, to the extent that it so corresponds; and

(b)  except where the contrary intention appears - to a previous law of another jurisdiction that corresponds to a law referred to in paragraph (a).

58(4)  [Reference in relation to a provision of this Law, to corresponding previous law]  

A reference, in relation to a provision of this Law, to a corresponding previous law, or a reference to a previous law corresponding to a provision of this Law, is a reference:

(a)  to a provision of a previous law of this jurisdiction that:

(i) corresponds to that provision of this Law; or

(ii) is declared by the regulations to be a provision that so corresponds; and

(b)  except where the contrary intention appears - to a provision of a previous law of another jurisdiction that corresponds to the provision referred to in paragraph (a).

58(5)  [Reference to lodgment etc, of a prospectus]  

A reference to the lodgment or registration of a prospectus under a corresponding previous law is a reference to the lodgment of a copy of a prospectus with, or the registration of a copy of a prospectus by, as the case may be, the NCSC under:

(a)  a corresponding previous law of this jurisdiction; or

(b)  a law of another jurisdiction that corresponds to that corresponding previous law.

SECTION 58A   RECOGNITION OF ACTS ETC. DONE UNDER CORRESPONDING LAWS  

58A(1)  [The Commission]  

A reference to an act done by or in relation to the Commission is a reference to such an act done under or for the purposes of the Corporations Law of this or any other jurisdiction.

58A(2)  [A court]  

A reference to an act done by or in relation to a court is a reference to such an act done under or for the purposes of the Corporations Law of this or any other jurisdiction.

SECTION 58AA   MEANING OF ``court'' AND ``Court''  

58AA(1)  [Definitions]  

Subject to subsection (3), in this Law:

``court'' means any court when exercising the jurisdiction of this jurisdiction;

``Court'' means any of the following courts when exercising the jurisdiction of this jurisdiction:

(a)  the Federal Court;

(b)  the Supreme Court of this or any other jurisdiction;

(c)  the Family Court of Australia;

(d)  a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.

58AA(2)  [Jurisdiction of courts]  

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 Law may, subject to the Acts mentioned in subsection (3), be brought in any court.

58AA(3)  [Statutory provisions governing jurisdiction]  

The jurisdiction that courts have in relation to matters under this Law is dealt with in Part 9 of each of the following:

(a)  the Corporations Act 1989;

(b)  the Corporations (New South Wales) Act 1990 of New South Wales;

(c)  the Corporations (Victoria) Act 1990 of Victoria;

(d)  the Corporations (Queensland) Act 1990 of Queensland;

(e)  the Corporations (Western Australia) Act 1990 of Western Australia;

(f)  the Corporations (South Australia) Act, 1990 of South Australia;

(g)  the Corporations (Tasmania) Act 1990 of Tasmania;

(h)  the Corporations (Northern Territory) Act 1990 of the Northern Territory.

58AA(4)  [Limits on jurisdictional competence]  

The matters dealt with in those Parts of those Acts include the applicability of limits on the jurisdictional competence of courts.

SECTION 58B   DISCHARGE OF OBLIGATIONS UNDER THIS LAW  

58B(1)  [Discharge of obligation]  

Except as expressly provided in this Law, any act done, whether within Australia or elsewhere, which, if it had been done under or for the purposes of this Law, would have discharged an obligation under this Law, discharges that obligation.

58B(2)  [Act may be done anywhere in Australia]  

Subject to subsection (3), an act required to be done under this Law may, for the purposes of this Law, be done anywhere in Australia, whether within or outside this jurisdiction.

58B(3)  [Express requirements or permission]  

Nothing in subsection (2) affects the operation of any provision of this Law that:

(a)  expressly requires a particular act to be done within this jurisdiction; or

(b)  expressly or by implication permits a particular act to be done outside Australia.

SECTION 58C   DEADLINE AFTER AN ACCOUNTING PERIOD  (Repealed by No of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

SECTION 59   DEBENTURES AS CONSIDERATION FOR ACQUISITION OF SHARES  

59    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.

SECTION 60   DIRECTORS  (Repealed by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000). )

SECTION 61   DISCRETIONARY ACCOUNTS  

61    A reference to operation by a futures broker on a discretionary account is a reference to dealings by the broker in futures contracts on instructions of another person that authorise the broker to deal in futures contracts without the prior approval of that other person, whether:

(a)  the instructions are given by, and the money used for operating on the account is provided by, one person only; or

(b)  the instructions are given by, and the money used for operating on the account is contributedas a common fund by, each of a number of persons;

not being dealings on instructions that authorise dealings in futures contracts without the prior approval of that other person only as to the time when or the price at which the dealings are to be effected, or both.

SECTION 62   DORMANT ENTITIES  (Repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

SECTION 63   ELIGIBLE CIRCUMSTANCES  (Repealed by No 110 of 1990, Sch 1 (effective 18 December 1990).)

SECTION 64   ENTERING INTO A TRANSACTION IN RELATION TO SHARES OR SECURITIES  

64    A reference in section 51 or Chapter 6 to entering into a transaction in relation to shares or securities includes a reference to:

(a)  entering into, or becoming a party to, a relevant agreement in relation to the shares or securities; and

(b)  exercising an option to have the shares or securities allotted.

SECTION 64A   ENTITIES  

64A    Except in Chapter 2E, a reference to an entity:

(a)  is a reference to a natural person, a body corporate (other than an exempt public authority), a partnership or a trust; and

(b)  includes, in the case of a trust, a reference to the trustee of the trust.

SECTION 64B   ENTITIES CONNECTED WITH A CORPORATION  

64B(1)  [Body corporate]  

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.

64B(2)  [Natural person]  

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.

64B(3)  [Partnership]  

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.

64B(4)  [Trust]  

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.

SECTION 65   ELIGIBLE MONEY MARKET DEALER  

65    ASIC may declare a body corporate to be an authorised dealer in the short term money market by notice published in the Gazette.

SECTION 66   EXCLUDED ISSUES, OFFERS AND INVITATIONS  (Repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

SECTION 66A   EXEMPT BODIES  

66A(1)  [New South Wales]  

Each of the following is an exempt body in relation to New South Wales:

(a)  a society, association or union registered under the Co-operation Act 1923 of New South Wales;

(b)  a co-operative within the meaning of the Co-operatives Act 1992 of New South Wales or a foreign co-operative within the meaning of that Act registered under Division 3 of Part 2 of that Act;

(c)  (Repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

(d)  a registrable body or recognised company in respect of which an exemption from compliance with subsection 61(1) of the Co-operation Act 1923 of New South Wales is in force;

(e)  an association, society, club, institution or body incorporated under the Associations Incorporation Act 1984 of New South Wales.

66A(2A)  [Victoria]  

Each of the following is an exempt body in relation to Victoria:

(a)  an incorporated association within the meaning of the Associations Incorporation Act 1981 of Victoria;

(b)  (Omitted by No 104 of 1994, Sch 3 (effective 1 January 1995).)

(c)  a society within the meaning of the Co-operation Act 1981 of Victoria and a foreign society registered under Part XI of that Act;

(d)  a co-operative housing society within the meaning of the Co-operative Housing Societies Act 1958 of Victoria;

(e)  (Repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

66A(2)  [Queensland]  

Each of the following is an exempt body in relation to Queensland:

(a)  a society within the meaning of the Co-operative and Other Societies Act 1967-1986 of Queensland;

(b)  (Repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

(c)  a society within the meaning of the Co-operative Housing Societies Act 1958-1974 of Queensland;

(d)  an association within the meaning of the Primary Producers' Co-operative Associations Act 1923 of Queensland;

(e)  an association, society, institution or body incorporated under the Associations Incorporation Act 1981-1989 of Queensland;

(f)  (Omitted by No 104 of 1994, Sch 3 (effective 1 January 1995).)

(g)  (Repealed by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).)

66A(3)  [South Australia]  

A body corporate is an exempt body in relation to South Australia if, and only if:

(a)  it is not a company for the purposes of section 9 of the Corporations Law of South Australia; and

(b)  it is incorporated by or under a law of South Australia other than that Law or a corresponding previous law.

66A(4)  [Western Australia]  

Each of the following is an exempt body in relation to Western Australia:

(a)  a society within the meaning of section 5 of the Building Societies Act 1976 of Western Australia;

(b)  The WA Teachers Financial Society Limited;

(c)  a co-operative company registered under:

(i) Part VI of the Companies (Co-operative) Act 1943 of Western Australia; or

(ii) a previous law of Western Australia that corresponds to that Part;

(d)  a society registered under the Co-operative and Provident Societies Act 1903 of Western Australia;

(e)  an association, society, institution or body incorporated under the Associations Incorporation Act 1987 of Western Australia.

66A(5)  [Tasmania]  

Each of the following is an exempt body in relation to Tasmania:

(a)  a trustee bank registered under the Trustee Banks Act 1984 of Tasmania;

(b)  a society, other than a financial institution, registered under the Co-operative Industrial Societies Act 1928, or the Co-operative Housing Societies Act 1963, of Tasmania;

(c)  an association, society, institution or body incorporated under the Associations Incorporation Act 1964 of Tasmania;

(d)  a body corporate created by section 75Q of the Conveyancing and Law of Property Act 1884 of Tasmania.

66A(6)  [Northern Territory]  

Each of the following is an exempt body in relation to the Northern Territory:

(a)  the Cullen Bay Marina Management Corporation;

(b)  (Omitted by No 104 of 1994, Sch 3 (effective 1 January 1995).)

(c)  a society registered under the Co-operative Societies Act of the Northern Territory;

(d)  an association, society, institution or body incorporated under the Associations Incorporation Act of the Northern Territory;

(e)  a corporation constituted under the Unit Titles Act of the Northern Territory.

66A(7)  [Capital Territory]  

Each of the following is an exempt body in relation to the Capital Territory:

(a)  a society registered under the Co-operative Societies Act 1939 of the Capital Territory;

(b)  an association, society, institution or body incorporated under the Associations Incorporation Act 1953 of the Capital Territory;

(c)  a corporation constituted under the Unit Titles Act 1970 of the Capital Territory.

SECTION 67   EXEMPT BROKERS AND EXEMPT FUTURES ADVISERS  

67(1)  [Body corporate]  

A body corporate is both an exempt broker and an exempt futures adviser if it is:

(a)  a prescribed body corporate; or

(b)  an exempt public authority in relation to which a declaration is in force under subsection (2).

67(2)  [Declaration by Minister]  

The Minister may by writing declare that paragraph (1)(b) applies in relation to specified bodies corporate.

67(3)  [Publication of declaration]  

The Commission shall cause a copy of an instrument executed under subsection (2) to be published in the Gazette.

67(4)  [Carrying on business in other capacity]  

Subject to this section, a person is an exempt broker or an exempt futures adviser if the person is a futures broker or futures adviser, as the case may be, but does not carry on a futures broking business or a futures advice business, as the case may be, except:

(a)  as an official receiver or trustee within the meaning of the Bankruptcy Act 1966; or

(b)  as a receiver, receiver and manager, or liquidator, appointed by a court; or

(c)  as a person appointed by a court to carry on the business concerned; or

(d)  as a receiver, receiver and manager, or liquidator, appointed otherwise than by a court; or

(e)  as an administrator of a body corporate; or

(ea)  as an administrator of a deed of company arrangement executed by a body corporate;

(f)  as a trustee or other person administering a compromise or arrangement between a body corporate and any other person or persons; or

(g)  as a personal representative of a dead futures broker or futures adviser, as the case may be; or

(h)  in such other capacity, or in such other circumstances, as are prescribed.

67(5)  [Approval necessary in certain circumstances]  

A person who carries on a futures broking business or futures advice business in a capacity referred to in any of paragraphs (4)(d) to (g), inclusive, shall be deemed for the purposes of subsection (4) to carry on the business otherwise than in that capacity unless there is in force under subsection (6) an approval of the person carrying on the business in that capacity.

67(6)  [Commission may grant approval]  

The Commission may, on application by a person and after having regard to:

(a)  the prescribed matters (if any); and

(b)  such matters as it thinks appropriate;

by writing approve of the person carrying on a specified futures broking business or futures advice business in a specified capacity, being a capacity referred to in any of paragraphs (4)(d) to (g), inclusive.

67(7)  [Exclusive effect of section]  

A person is not an exempt broker or an exempt futures adviser except as provided by this section.

SECTION 68   EXEMPT DEALERS AND EXEMPT INVESTMENT ADVISERS  

68(1)  [Double exemptions]  

A person is both an exempt dealer and an exempt investment adviser if the person is:

(a)  an eligible money market dealer; or

(b)  an exempt public authority.

68(2)  [Carrying on business in other capacity]  

Subject to this section, a person is an exempt dealer or an exempt investment adviser if the person is a dealer or investment adviser, as the case may be, but does not carry on a securities business or an investment advice business, as the case may be, except:

(a)  as an official receiver or trustee within the meaning of the Bankruptcy Act 1966;

(b)  as a receiver, receiver and manager, or liquidator, appointed by a court;

(c)  as a person appointed by a court to carry on the business concerned;

(d)  by virtue of the person's powers, as Public Trustee, under a prescribed law of a State or Territory;

(e)  as a receiver, receiver and manager, or liquidator, appointed otherwise than by a court;

(f)  as an administrator of a body corporate; or

(fa)  as an administrator of a deed of company arrangement executed by a body corporate; or

(g)  as a trustee or other person administering a compromise or arrangement between a body corporate and any other person or persons;

(h)  as a personal representative of a dead dealer or investment adviser, as the case may be; or

(j)  in such other capacity, or in such other circumstances, as are prescribed.

68(3)  [Body corporate dealing in own debentures]  

A body corporate that carries on, or holds itself out as carrying on, a business of dealing in debentures of that body is an exempt dealer if it neither carries on, nor holds itself out as carrying on, a business of dealing in any other securities.

68(4)  [Approval necessary in certain circumstances]  

A person who carries on a securities business or investment advice business in a capacity referred to in any of paragraphs (2)(e) to (h), inclusive, shall be deemed for the purposes of subsection (2) to carry on the business otherwise than in that capacity unless there is in force under subsection (5) an approval of the person carrying on the business in that capacity.

68(5)  [Commission may grant approval]  

The Commission may, on application by a person and after having regard to:

(a)  the prescribed matters (if any); and

(b)  such matters as it thinks appropriate;

by writing approve of the person carrying on a specified securities business or investment advice business in a specified capacity, being a capacity referred to in any of paragraphs (2)(e) to (h), inclusive.

68(6)  [Time limit on representation for dead person]  

A person who carries on a securities business or investment advice business as a personal representative of a dead dealer or investment adviser, as the case may be, shall be deemed for the purposes of subsection (2) to stop carrying on that business as such a personal representative:

(a)  at the end of 6 months after the death of the dealer or investment adviser;

(b)  on being discharged or removed as a personal representative of the dealer or investment adviser; or

(c)  on the final distribution of the estate of the dealer or investment adviser;

whichever happens first.

68(7)  [Exclusive effect of section]  

A person is not an exempt dealer or an exempt investment adviser except as provided by this section.

SECTION 68A   EXEMPT INTERESTS IN MANAGED INVESTMENT SCHEMES IN RELATION TO A JURISDICTION  

68A(1)  [Western Australia]  

Each of the following is an exempt interest in a managed investment scheme in relation to Western Australia:

(a)  an interest in a registered scheme that a registered co-operative company has issued, or proposes to issue, to a member of the company

(b)  an interest in a registered scheme in so far as a registered co-operative company

(i) offers the interest to a member of the company for subscription or purchase; or

(ii) invites such a member to subscribe for or buy the interest

(c)  an interest in a registered scheme in so far as:

(i) a registered co-operative company:

(A) offers the interest to a person other than a member of the company; or

(B) invites a person other than a member to subscribe for or buy the interest; and

(ii) the terms or circumstances of the offer or invitation are such that, if the offer, or an offer that the person makes because of the invitation, is accepted, the acceptance will result in the person becoming a member of the company.

68A(2)  [Definition of registered co-operative company]  

In subsection (1):

registered co-operative company means a body of the kind referred to in paragraph 66A(4)(c).

SECTION 69   EXEMPT PROPRIETARY COMPANIES  (Repealed by No 115 of 1995, Sch 4 (effective 9 December 1995).)

SECTION 69A   EXEMPT SECURITIES  (Repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

SECTION 70   EXTENSION OF PERIOD FOR DOING AN ACT  

70    Where this Law 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.

SECTION 70A   FINANCIAL YEARS OF BODIES, OTHER ENTITIES AND PRESCRIBED INTEREST UNDERTAKINGS  (Repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

SECTION 71   FUTURES ADVICE BUSINESS  

71(1)  [Meaning of ``futures advice business'']  

A reference to a futures advice business, in relation to a person, is a reference to:

(a)  a business of advising other persons about futures contracts; or

(b)  a business in the course of which the person publishes futures reports.

71(2)  (Omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

71(3)  [Purposes of subsec (4) to (8)]  

The remaining provisions of this subsection apply forthe purposes of determining:

(a)  whether or not a person carries on a futures advice business; and

(b)  what constitutes a futures advice business carried on by a person; and

(c)  whether or not a person holds himself, herself or itself out to be a futures adviser.

71(4)  [Solicitors and accountants]  

If the person is a solicitor or accountant in public practice as such, an act that the person does shall be disregarded if it is merely incidental to the practice of his or her profession.

71(5)  [Advice in media]  

The fact that the person advises other persons about futures contracts, or publishes futures reports, in some or all of the following circumstances shall be disregarded:

(a)  in a newspaper or periodical:

(i) of which the person is the proprietor or publisher; and

(ii) that is generally available to the public otherwise than only on subscription;

(b)  in the course of, or by means of, transmissions that:

(i) the person makes by means of an information service; or

(ii) are made by means of an information service that the person owns, operates or makes available;

and are generally available to the public;

(c)  in sound recordings, video recordings, or data recordings, that the person makes generally available to the public in either or both of the following ways:

(i) by supplying copies of them to the public;

(ii) by causing the sound recordings to be heard by, the video recordings to be seen and heard by, or the contents of the data recordings to be displayed or reproduced for, the public, as the case may be.

71(6)  [Publication for purpose of advice]  

Subsection (5) does not apply in relation to a newspaper or periodical, or transmissions, sound recordings, video recordings or data recordings, whose sole or principal purpose is to advise other persons about futures contracts or to publish futures reports.

71(7)  [Person holding himself out as adviser]  

The fact that the person holds himself, herself or itself out as advising other persons, or publishing futures reports, as mentioned in subsection (5) shall be disregarded.

71(8)  [Employees]  

An act that the person does:

(a)  while employed by, or acting for or by arrangement with, another person;

(b)  as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the other person; and

(c)  in connection with a futures advice business carried on by the other person;

shall be disregarded.

SECTION 72   FUTURES CONTRACT  

72(1)  [Meaning of ``futures contract'']  

A futures contract is:

(a)  a Chapter 8 agreement that is, or has at any time been, an eligible commodity agreement or adjustment agreement;

(b)  a futures option; or

(c)  an eligible exchange-traded option;

other than:

(d)  a Chapter 8 agreement:

(i) that is:

(A) a currency swap;

(B) an interest rate swap;

(C) a forward exchange rate contract; or

(D) a forward interest rate contract; and

(ii) to which an Australian bank, or a merchant bank as defined by subsection (4), is a party; or

(e)  a Chapter 8 agreement that, when entered into, is in a class of agreements prescribed for the purposes of this paragraph.

Note:

Regulations under subsection 72A(2) may provide that specified provisions of this Law and the regulations apply in relation to Chapter 8 agreements to which section 72A applies as if the agreements were futures contracts.

72(2)  [Chapter 8 agreement becoming a futures contract]  

Where a Chapter 8 agreement that was not a futures contract when it was entered into becomes a futures contract at a later time:

(a)  the parties to the Chapter 8 agreement shall be deemed to enter into a futures contract at the later time; and

(b)  the Chapter 8 agreement shall be deemed to constitute the futures contract referred to in paragraph (a).

72(3)  [Determining a class of futures contracts]  

Nothing in this Law limits the manner in which a class of futures contracts may be determined and such a class may be determined according to any criteria relevant to futures contracts.

72(4)  [``merchant bank'']  

For the purposes of subparagraph (1)(d)(ii), a body corporate is a merchant bank at a particular time if, and only if, it is at that time a registered corporation in:

(a)  the category for authorised money market dealers or, if there is at that time no such category, a prescribed category; or

(b)  the category for money market corporations or, if there is at that time no such category, a prescribed category.

72(5)  [Financial Corporations Act]  

An expression has the same meaning in subsection (4) as in the Financial Corporations Act 1974.

SECTION 72A   LAW APPLIES TO CERTAIN CHAPTER 8 AGREEMENTS AS IF THEY WERE FUTURES CONTRACTS  

72A(1)  [Application to prescribed Chapter 8 agreements]  

This section applies to Chapter 8 agreements:

(a)  that are entered into on a futures market of a futures exchange; and

(b)  that are of a kind prescribed for the purposes of this paragraph.

72A(2)  [Application of Law by regulation]  

The regulations may, in relation to Chapter 8 agreements to which this section applies:

(a)  provide that specified provisions of this Law and the regulations apply in relation to the agreements as if the agreements were futures contracts; and

(b)  provide that specified provisions of this Law and the regulations do not apply in relation to the agreements; and

(c)  make modifications of this Law and the regulations as applying in relation to the agreements.

72A(3)  [Which provisions may be modified]  

Modifications made by regulations referred to in paragraph (2)(c) may be of provisions specified in regulations referred to in paragraph (2)(a) or of other provisions of this Law or the regulations.

SECTION 73   FUTURES REPRESENTATIVES  

73(1)  [Meaning of ``futures representative'']  

Subject to subsection (2), a person is a futures representative of another person if, and only if, the first-mentioned person:

(a)  is employed by; or

(b)  acts for or by arrangement with;

the other person in connection with a futures broking business or futures advice business carried on by the other person.

73(2)  [Holding of authority]  

Except for the purposes of paragraph 87(1)(b):

(a)  a person who holds a proper authority from a futures licensee is a futures representative of the licensee; and

(b)  a person who holds an invalid futures authority from another person is a futures representative of the other person.

73(3)  [Acts or conduct as representative]  

Subject to subsection (4), a person does an act, or engages in conduct, as a futures representative of another person if, and only if, the first-mentioned person does the act, or engages in the conduct:

(a)  in connection with a futures broking business or futures advice business carried on by the other person;

(b)  while the first-mentioned person is a futures representative of the other person;

(c)  as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the other person; and

(d)  otherwise than in the course of work of a kind ordinarily done by accountants, clerks or cashiers.

73(4)  [Holding out to be representative]  

Except for the purposes of Division 4 of Part 8.3, a person who holds himself, herself or itself out to be a futures representative of another person does an act as a futures representative of the other person.

SECTION 73A   WHEN A COURT IS TAKEN TO FIND A PERSON GUILTY OF AN OFFENCE  

73A    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.

SECTION 74   GROUP HOLDING COMPANIES  (Repealed by No 110 of 1991, Sch 3 (effective 1 August 1991).)

SECTION 75   INCLUSION IN OFFICIAL LIST  

75    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.

SECTION 76   INCORPORATED IN A JURISDICTION OR IN AUSTRALIA  (Repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

SECTION 77   INVESTMENT ADVICE BUSINESS  

77(1)  [Meaning of ``investment advice business'']  

A reference to an investment advice business, in relation to a person, is a reference to:

(a)  a business of advising other persons about securities; or

(b)  a business in the course of which the person publishes securities reports.

77(2)  (Omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

77(3)  [Purpose of subsections (4)-(9)]  

The remaining provisions of this section apply for the purposes of determining:

(a)  whether or not a person carries on an investment advice business; and

(b)  what constitutes an investment advice business carried on by a person; and

(c)  whether or not a person holds himself, herself, or itself out to be an investment adviser.

77(4)  [Grant of probate, etc]  

If the person is a body corporate authorised by a law of a State or Territory to take in its own name a grant of probate of the will, or a grant of letters of administration of the estate, of a dead person, an act done by the first-mentioned person shall be disregarded.

77(5)  [Solicitors and accountants]  

If the person is a solicitor or accountant in public practice as such, an act that the person does shall be disregarded if it is merely incidental to the practice of his or her profession.

77(6)  [Advice in media]  

The fact that the person advises other persons about securities, or publishes securities reports, in some or all of the following circumstances shall be disregarded:

(a)  in a newspaper or periodical:

(i) of which the person is the proprietor or publisher; and

(ii) that is generally available to the public otherwise than only on subscription;

(b)  in the course of, or by means of, transmissions that:

(i) the person makes by means of an information service; or

(ii) are made by means of an information service that the person owns, operates or makes available;

and are generally available to the public;

(c)  in sound recordings, video recordings, or data recordings, that the person makes generally available to the public in either or both of the following ways:

(i) by supplying copies of them to the public; or

(ii) by causing the sound recordings to be heard by, the video recordings to be seen and heard by, or the contents of the data recordings to be displayed or reproduced for, the public, as the case may be.

77(7)  [Publication for purpose of advice]  

Subsection (6) does not apply in relation to a newspaper or periodical, or transmissions, sound recordings, video recordings or data recordings, as the case may be, whose sole or principal purpose is to advise other persons about securities or to publish securities reports.

77(8)  [Holding oneself out as adviser]  

The fact that the person holds himself, herself or itself out as advising other persons, or publishing securities reports, as mentioned in subsection (6) shall be disregarded.

77(9)  [Employees]  

An act that the person does:

(a)  while employed by, or acting for or by arrangement with, another person;

(b)  as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the other person; and

(c)  in connection with an investment advice business carried on by the other person;

shall be disregarded.

SECTION 78   INVITATIONS, OFFERS AND FORMS OF APPLICATION  (Repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

SECTION 79   INVOLVEMENT IN CONTRAVENTIONS  

79    A person is involved in a contravention if, and only if, the person:

(a)  has aided, abetted, counselled or procured the contravention;

(b)  has induced, whether by threats or promises or otherwise, the contravention;

(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.

SECTION 80   JERVIS BAY TERRITORY TAKEN TO BE PART OF THE AUSTRALIAN CAPITAL TERRITORY  

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

SECTION 80A   REFERENCES TO MINISTERS  

80A(1)  [Definitions]  

In this Law:

``Minister'' means one of the Queen's Ministers of State for the Commonwealth and, in relation to any particular Minister, includes any other Minister or member of the Executive Council for the time being acting for or on behalf of that Minister;

``the Minister for a jurisdiction'' means the person who is the Minister for that jurisdiction for the purposes of the Corporations Law of that jurisdiction.

80A(2)  [``the Minister'']  

Where a provision of this Law refers to a Minister, using the expression ``the Minister'' without specifying which Minister is referred to, the expression means:

(a)  if, for the time being, 2 or more Ministers administer the Corporations Act 1989 -any one of those Ministers; or

(b)  otherwise - the Minister for the time being administering that Act.

80A(3)  [Where Minister administers specified Act or provision]  

Where this Law refers to a Minister, specifying the Minister merely by reference to the fact that the Minister administers a specified Act, or a specified provision of an Act, it refers to:

(a)  if, for the time being, different Ministers administer the specified Act or provision in respect of different matters:

(i) if 2 or more Ministers administer the specified Act or provision in respect of the relevant matter - any one of those Ministers; or

(ii) if only one Minister administers the specified Act or provision in respect of the relevant matter - that Minister; or

(b)  if paragraph (a) does not apply and, for the time being, 2 or more Ministers administer the specified Act or provision - any one of those Ministers; or

(c)  otherwise - the Minister for the time being administering the specified Act or provision.

80A(4)  [2 or more Ministers]  

To avoid doubt, where:

(a)  a provision of an Act is administered by 2 or more Ministers; and

(b)  because of this section, a provision of this Law requires or permits anything to be done by or in relation to any one of those Ministers;

that provision of this Law does not require or permit it to be done in any particular case by or in relation to more than one of those Ministers.

SECTION 81   NEW COMPANIES  (Repealed by No 110 of 1990, Sch 1 (effective 18 December 1990).)

SECTION 82   OFFERS AND INVITATIONS TO THE PUBLIC  

82    A reference in this Law to, or to the making of, an offer to the public or to, or to the issuing of, an invitation to the public shall, unless the contrary intention appears, 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 shall not be taken to be an offer or invitation to the public if it:

(a)  is an offer or invitation to enter into an underwriting agreement;

(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;

(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.

SECTION 82A   OFFICERS OF BODIES CORPORATE AND OTHER ENTITIES  

82A(1)  [``officer'']  

Subject to subsection (2), ``officer'' , in relation to:

(a)  a body corporate; or

(b)  an entity;

includes:

(c)  a director, secretary, executive officer or employee of the body or entity; and

(d)  a receiver and manager, appointed under a power contained in an instrument, of property of the body or entity; and

(e)  an administrator of the body or entity; and

(ea)  an administrator of a deed of company arrangement executed by the body or entity; and

(f)  a liquidator of the body or entity appointed in a voluntary winding up of the body or entity; and

(g)  a trustee or other person administering a compromise or arrangement made between the body or entity and any other person or persons.

82A(2)  [Exclusions]  

None of the following is an officer of a body corporate, or of an entity:

(a)  a receiver who is not also a manager;

(b)  a receiver and manager appointed by a court;

(c)  a liquidator appointed by a court.

SECTION 83   OFFICERS, AND OTHER PERSONS, IN DEFAULT  

83(1)  [Officer or person involved in contravention]  

A reference, in relation to a contravention, to an officer of a body corporate, or to a person, who is in default is a reference to an officer of the body (including a person who later ceases to be such an officer), or to a person, as the case may be, who is involved in the contravention.

83(2)  (Repealed by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000).)

SECTION 84   OWN ACCOUNT DEALINGS AND TRANSACTIONS: SECURITIES  

84    A person deals in, or enters into a transaction of sale or purchase of, securities on the person's own account if, and only if, the person deals in the securities, or enters into the transaction, as principal or on behalf of:

(a)  in any case - an associate of the person;

(b)  in any case - a body corporate in which the person has a controlling interest; or

(c)  if the person carries on a securities business in partnership - a body corporate in which the person's interest and the interests of the other partners together constitute a controlling interest.

SECTION 85   PARTICIPATION INTERESTS  (Repealed by No 62 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

SECTION 85A   PERSON ETC.  

85A    In this Law, expressions used to denote persons generally (such as ``person'', ``party'', ``someone'', ``anyone'', ``no-one'', ``one'', ``another'' and ``whoever''), include a body politic or corporate as well as an individual.

SECTION 86   POSSESSION  

86    A thing that is in a person's custody or under a person's control is in the person's possession.

SECTION 87   PROPER AUTHORITY FROM FUTURES LICENSEE; INVALID FUTURES AUTHORITY  

87(1)  [Meaning of ``proper authority'']  

A reference, in relation to a person (in this subsection called the ``representative''), to a proper authority from a futures licensee (in this subsection called the ``principal'') is a reference to a copy of the licence on which have been endorsed:

(a)  a statement:

(i) certifying the copy to be a true copy of the licence;

(ii) stating that the representative is employed by, or acts for or by arrangement with, the principal; and

(iii) signed by the principal; and

(b)  in relation to each futures licensee (if any), other than the principal, of whom the representative is a futures representative, a statement that:

(i) sets out the name of the licensee;

(ii) states that the representative is employed by, or acts for or by arrangement with, the licensee;

(iii) states that the licensee consents to the representative being employed by, or acting for or by arrangement with, the principal; and

(iv) is signed by the licensee.

87(1A)  [``representative'' and ``principal'']  

A reference, in relation to a person (in this subsection called the ``representative'' ), to a proper authority from a futures licensee (in this subsection called the ``principal'' ) includes a reference to a document that, immediately before the commencement of Division 3 of Part 8.3, was a proper authority from that principal in relation to that representative under a previous law that corresponds to subsection (1).

87(2)  [``Invalid futures authority'']  

A reference, in relation to a person (in this subsection called the ``representative'' ), to an invalid futures authority from a person (in this subsection called the ``principal'' ) is a reference to a document:

(a)  on whichis endorsed a statement:

(i) stating that the representative is employed by, or acts for or by arrangement with, the principal; and

(ii) signed by the principal; and

(b)  that purports to be a copy of a futures licence and to be a proper authority of the representative from the principal, but is not in fact such a proper authority;

whether or not:

(c)  the principal is, or has ever been, a futures licensee; or

(d)  the document is in fact a copy of a futures licence that exists or has ever existed.

87(3)  [Signing of statement]  

For the purposes of this section, a statement is signed by a person if, and only if, it is signed:

(a)  if the person is a natural person - by the person; or

(b)  if the person is a body corporate:

(i) by a director or secretary; or

(ii) by an executive officer who is authorised to sign the statement.

SECTION 88   PROPER AUTHORITY FROM SECURITIES LICENSEE; INVALID SECURITIES AUTHORITY  

88(1)  [Meaning of ``proper authority'']  

A reference, in relation to a person (in this subsection called the ``representative''), to a proper authority from a securities licensee (in this subsection called the ``principal'') is a reference to a copy of the licence on which are endorsed:

(a)  a statement:

(i) certifying the copy to be a true copy of the licence;

(ii) stating that the representative is employed by, or acts for or by arrangement with, the principal; and

(iii) signed by the principal; and

(b)  in relation to each licensee (if any), other than the principal, of whom the representative is a securities representative, a statement that:

(i) sets out the name of the licensee;

(ii) states that the representative is employed by, or acts for or by arrangement with, the licensee;

(iii) states that the licensee consents to the representative being employed by, or acting for or by arrangement with, the principal; and

(iv) is signed by the licensee.

88(1A)  [``representative'' and ``principal'']  

A reference, in relation to a person (in this subsection called the ``representative'' ), to a proper authority from a securities licensee (in this subsection called the ``principal'' ) includes a reference to a document that, immediately before the commencement of Division 3 of Part 7.3, was a proper authority from that principal in relation to that representative under a previous law that corresponds to subsection (1).

88(2)  [``Invalid securities authority'']  

A reference, in relation to a person (in this subsection called the ``representative''), to an invalid securities authority from a person (in this subsection called the ``principal'') is a reference to a document:

(a)  on which is endorsed a statement:

(i) stating that the representative is employed by, or acts for or by arrangement with, the principal; and

(ii) signed by the principal; and

(b)  that purports to be a copy of a securities licence and to be a proper authority of the representative from the principal, but is not in fact such a proper authority;

whether or not:

(c)  the principal is, or has ever been, a securities licensee; or

(d)  the document is in fact a copy of a securities licence that exists or has ever existed.

88(3)  [Signing of statement]  

For the purposes of this section, a statement is signed by a person if, and only if, it is signed:

(a)  if the person is a natural person - by the person; or

(b)  if the person is a body corporate:

(i) by a director or secretary; or

(ii) by an executive officer who is authorised to sign the statement.

SECTION 88A   PUBLIC DOCUMENT OF A BODY CORPORATE  

88A(1)  [``public document'']  

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 Law or the ASIC Law to be lodged; or

(ii) is signed, issued or published under or for the purposes of this Law, the ASIC Law 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.

88A(2)  [Qualification]  

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.

88A(3)  [``apply to'', ``label'' and ``package'']  

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.

SECTION 89   QUALIFIED PRIVILEGE  

89(1)  [Defamation]  

Where this Law 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.

89(2)  [Meaning of ``malice'']  

In subsection (1):

``malice'' includes ill will to the person concerned or any other improper motive.

89(3)  [Rights not limited]  

Neither this section nor a provision of this Law 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.

SECTION 90   RECEIVERS AND MANAGERS  

90    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.

SECTION 91   BEING OR BECOMING SUBJECT TO A SECTION 229 PROHIBITION, A SECTION 230 OR 599 ORDER, A SECTION 600 NOTICE OR A CIVIL PENALTY DISQUALIFICATION  

91(1)  [Prohibition under sec 229]  

For the purposes of this Law, a person shall be taken to be or become subject to a section 229 prohibition if, and only if, the person is or becomes, as the case may be, by virtue of section 229 or a corresponding previous law, prohibited as mentioned in that section or corresponding previous law.

91(2)  [Order under sec 230]  

For the purposes of this Law, a person shall be taken to be or become subject to a section 230 order if, and only if, an order relating to the person is in force, or is made, as the case may be, under section 230 or a corresponding previous law, and a reference in this Law to a section 230 order is a reference to an order so in force or made.

91(3)  [Order under sec 599]  

For the purposes of this Law, a person shall be taken to be or become subject to a section 599 order if, and only if, an order relating to the person is in force, or is made, as the case may be, under section 599 or a corresponding previous law, and a reference in this Law to a section 599 order is a reference to an order so in force or made.

91(4)  [Notice under sec 600]  

For the purposes of this Law, a person shall be taken to be or become subject to a section 600 notice if, and only if, a notice relating to the person is in force, or is served, as the case may be, under section 600 or a corresponding previous law, and a reference in this Law to a section 600 notice is a reference to a notice so in force or served.

91(4A)  (Repealed by No 156 of 1999, Sch 3, Pt 7 (effective 13 March 2000).)

91(5)  [Period of prohibition]  

For the purposes of this section, an order or notice that prohibits a person for a specified period from engaging in particular conduct shall, unless sooner revoked, be taken to cease to be in force at the end of that period.

SECTION 91A   EFFECT OF SUCH A PROHIBITION, ORDER, NOTICE OR DISQUALIFICATION  (Repealed by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000). )

SECTION 92   SECURITIES  

92(1)  [``securities'']  

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

(ca)  in Parts 7.3 to 7.6 (inclusive) - interests that would be interests in a managed investment scheme but for paragraph (h) of the definition of managed investment scheme in section 9; or

(d)  units of such shares; or

(e)  an option contract within the meaning of Chapter 7;

but does not include a futures contract or an excluded security.

Note:

Regulations under subsection 92A(2) may provide that specified provisions of this Law and the regulations apply in relation to relevant agreements to which section 92A applies as if the agreements were securities.

92(2)  [``securities'' in relation to a body]  

The expression ``securities'', when used in relation to a body, means:

(a)  shares in the body;

(b)  debentures of the body;

(c)  interests in a managed investment scheme made available by the body; or

(ca)  in Parts 7.3 to 7.6 (inclusive) - interests made available by the body that would be interests in a managed investment scheme but for paragraph (h) of the definition of managed investment scheme in section 9;

(d)  units of such shares;

but does not include a futures contract or an excluded security.

92(2A)  [Friendly society benefit fund]  

In Parts 7.3 to 7.6 (inclusive):

securities includes an interest in a friendly society benefit fund.

92(3)  [Definition of securities]  

In Chapters 6 to 6D (inclusive):

securities means:

(a)  shares in a body

(b)  debentures of a body

(c)  interests in a registered managed investment scheme

(d)  legal or equitable rights or interests in:

(i) shares; or

(ii) debentures; or

(iii) interests in a registered managed investment scheme

(e)  options to acquire (whether by way of issue or transfer) a security covered by paragraph (a), (b), (c) or (d).

It does not cover a futures contract or an option approved by a securities exchange as an exchange traded option.

Note:

Section 9 defines body and sections 9 and 72 define futures contract .

92(4)-(6)  (Repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000).)

SECTION 92A   LAW APPLIES TO CERTAIN RELEVANT AGREEMENTS AS IF THEY WERE SECURITIES  

92A(1)  [Application to prescribed relevant agreements]  

This section applies to relevant agreements (whether or not they are futures contracts):

(a)  that are entered into on a stock market of a securities exchange; and

(b)  that are of a kind prescribed for the purposes of this paragraph.

92A(2)  [Application of Law by regulation]  

The regulations may, in relation to relevant agreements to which this section applies:

(a)  provide that specified provisions of this Law and the regulations apply in relation to the agreements as if the agreements were securities; and

(b)  provide that specified provisions of this Law and the regulations do not apply in relation to the agreements; and

(c)  make modifications of this Law and the regulations as applying in relation to the agreements.

92A(3)  [Which provisions may be modified]  

Modifications made by regulations referred to in paragraph (2)(c) may be of provisions specified in regulations referred to in paragraph (2)(a) or of other provisions of this Law or the regulations.

SECTION 93   SECURITIES BUSINESS  

93(1)  [Meaning of ``securities business'']  

A securities business is a business of dealing in securities.

93(2)  (Omitted by No 110 of 1990, Sch 1 (effective 18 December 1990).)

93(3)  [Application]  

Subsections (5), (6) and (7) apply for the purposes of determining:

(a)  whether or not a person carries on, or holds himself, herself or itself out as carrying on, a securities business; and

(b)  what constitutes such a business carried on by a person.

93(4)  [Application]  

Subsection (7) also applies for the purposes of determining whether or not a person deals in securities.

93(5)  [Acts done by licensee or exempt dealer]  

An act done on behalf of the person by the holder of a dealers licence or an exempt dealer shall be disregarded.

93(6)  [Employees]  

An act that the person does:

(a)  while employed by, or acting for or by arrangement with, a dealer;

(b)  as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the dealer; and

(c)  in connection with a securities business carried on by the dealer;

shall be disregarded.

93(7)  [Futures contracts]  

An act or acts done by the person that constitutes or together constitute a dealing by the person in a futures contract shall be disregarded.

SECTION 94   SECURITIES REPRESENTATIVES  

94(1)  [Meaning of ``securities representative'']  

Subject to subsection (2), a person is a securities representative of another person if, and only if, the first-mentioned person:

(a)  is employed by; or

(b)  acts for or by arrangement with;

the other person in connection with a securities business or investment advice business carried on by the other person.

94(2)  [Persons who hold authorities]  

Except for the purposes of paragraph 88(1)(b):

(a)  a person who holds a proper authority from a securities licensee is a securities representative of the licensee; and

(b)  a person who holds an invalid securities authority from another person is a securities representative of the other person.

94(3)  [Acting as securities representative]  

Subject to subsection (4), a person does an act, or engages in conduct, as a securities representative of another person if, and only if, the first-mentioned person does the act, or engages in the conduct:

(a)  in connection with a securities business or investment advice business carried on by the other person;

(b)  while the first-mentioned person is a securities representative of the other person;

(c)  as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the other person; and

(d)  otherwise than in the course of work of a kind ordinarily doneby accountants, clerks or cashiers.

94(4)  [Holding out to be securities representative]  

Except for the purposes of Division 4 of Part 7.3, a person who holds himself, herself or itself out to be a securities representative of another person does an act as a securities representative of the other person.

SECTION 95   SIGNING OF CERTAIN DOCUMENTS BY BODIES CORPORATE  (Repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

SECTION 95A   SOLVENCY AND INSOLVENCY  

95A(1)  [When person is solvent]  

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.

95A(2)  [Insolvent person not solvent]  

A person who is not solvent is insolvent.

95A(3)  [Definition of when person is insolvent]  

Section 922 defines when a person becomes insolvent for the purposes of Part 7.10.

SECTION 96   STATEMENT IN A PROSPECTUS  (Repealed by No 201 of 1991, Sch 2 (effective 18 December 1991).)

SECTION 97   STOCK MARKET NOT TO INCLUDE FUTURES MARKET  

97    In determining whether a market, exchange, place or facility is a stock market, regard shall not be had to the making at that market, exchange or other place, or by means of that facility, as the case may be, of futures contracts.

SECTION 98   TRANSFER DAYS FOR BODIES CORPORATE  (Repealed by No 110 of 1990, Sch 1 (effective 18 December 1990).)

SECTION 99   UNDERLYING SECURITIES  (Repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000). )

Division 8 - Miscellaneous interpretation rules

SECTION 99A   ABBREVIATIONS CONTAINING FULL STOPS  (Repealed by No 61 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

SECTION 100   ADDRESS OF REGISTERED OFFICE ETC  

100(1)  (Contents of notice)  

Where a provision of this Law 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)  shall 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.

100(2)  (Consent)  

The Commission may require a person who has lodged a notice or application that includes a statement under paragraph (1)(d) to produce to the Commission the consent referred to in the statement.

SECTION 100A   OPERATION OF CERTAIN LAWS RELATING TO INSTRUMENTS ON WHICH STAMP DUTY HAS NOT BEEN PAID  

100A    Nothing in this Law 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.

SECTION 101   AMOUNT OF STOCK REPRESENTING A NUMBER OF SHARES  

101    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.

SECTION 102   APPLICATIONS TO BE IN WRITING  

102    An application to the Commission for the issuing of a document or the doing of any other act or thing by the Commission under this Law shall be in writing.

Note:

For electronic lodgment of documents with ASIC, see section 352.

SECTION 102A   APPLICATION NOT TO BE GRANTED UNLESS APPLICATIONS ALSO MADE UNDER CORRESPONDING LAWS  

102A(1)  [Purpose]  

This section facilitates the administration, on a national basis, of the Corporations Law of each jurisdiction by requiring some kinds of application to be made under the Corporations Law of each jurisdiction.

102A(2)  [Expressing an application for effect in each jurisdiction]  

This can be done by expressing an application to be made under the Corporations Law (rather than under the Corporations Law of a particular jurisdiction), so that it has effect as an application under the relevant provision of the Corporations Law of each jurisdiction.

102A(3)  [Application of section]  

Subject to subsection (6), this section applies to an application under section 601CB, 601CE, 769, 770, 770A, 779B, 782, 1067, 1126, 1131, 1132, 1144 or 1279 of the Corporations Law of this jurisdiction.

102A(4)  [Where application not to be granted]  

The application is not to be granted unless the applicant has also made (by the means described in subsection (2) or otherwise) a corresponding application under the corresponding section of the Corporations Law of each jurisdiction other than this jurisdiction.

102A(5)  [Where corresponding application has been refused]  

Also, the application is not to be granted if a corresponding application has been refused, or if it is proposed to refuse a corresponding application.

102A(6)  [Where section does not apply]  

This section does not apply in relation to an application that:

(a)  was made under a previous law of this jurisdiction corresponding to a provision of this Law; and

(b)  is taken because of a provision of this Law to have been made under the provision to which that previous law corresponds.

SECTION 102B   ``IN AUSTRALIA OR ELSEWHERE'', ``IN THIS JURISDICTION OR ELSEWHERE''  

102B    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.

SECTION 103   EFFECT OF CERTAIN CONTRAVENTIONS OF THIS LAW  

103(1)  [Effect of section]  

This section has effect except so far as this Law otherwise provides.

103(2)  [Certain acts, things, etc not invalid]  

An act, transaction, agreement, instrument, matter or thing is not invalid merely because of:

(a)  a contravention of section 115, 208, 209, 601CA, 601CD or of Chapter 8; or

(b)  a failure to comply with a requirement of this Law that a person cause a notice, or a copy of a document, to be published in the Gazette or in a newspaper.

103(3)  (Omitted by No 110 of 1991, Sch 5 (effective 27 June 1991).)

103(4)  [``invalid'']  

In this section:

``invalid'' includes void, voidable and unenforceable.

103(5)  [Generality of section]  

Nothing in this section limits the generality of anything else in it.

SECTION 104   EFFECT OF PROVISIONS EMPOWERING A PERSON TO REQUIRE OR PROHIBIT CONDUCT  

104    Where, in accordance with a provision of this Law other than the replaceable rules, a person requires another person to do, or prohibits another person from doing, a particular act, that provision shall be taken to require the other person to comply with the requirement or prohibition, as the case may be.

SECTION 105   CALCULATION OF TIME  

105(1)  [Particular days or events to be excluded from calculation]  

Where, for any purpose, this Law:

(a)  prohibits, permits or requires the doing of an act or thing within, or by or before the end of; or

(b)  otherwise prescribes, allows or provides for;

a period or time before or after a particular day, act or event, the period shall be calculated without counting that day, or the day of that act or event, as the case may be.

105(2)  [Period between days and events]  

Without limiting the generality of subsection (1), in calculating how many days a particular day, act or event is before or after another day, act or event, the first-mentioned day, or the day of the first-mentioned act or event, shall be counted but not the other day, or the day of the other act or event.

105(3)  [Day not a business day]  

Where the last day of any period prescribed or allowed by this Law for the doing of anything falls on a day that is not a business day in the place in which the thing is to be or may be done, the thing may be done on the first day following which is a business day in that place.

SECTION 106   PERFORMANCE OF FUNCTIONS BY COMMISSION DELEGATE  

106    For the purpose of the performance of a function, or the exercise of a power, under this Law by a Commission delegate, a reference to the Commission in a provision of this Law relating to the performance of the function, or the exercise of the power, includes a reference to the Commission delegate.

SECTION 107   HEADINGS TO CHAPTERS  (Repealed by No 110 of 1991, Sch 5 (effective 27 June 1991).)

SECTION 108   PARTS OF DOLLAR TO BE DISREGARDED IN DETERMINING MAJORITY IN VALUE OF CREDITORS ETC.  

108    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 shall be disregarded.

SECTION 109   REFERENCES TO PERSONS, THINGS AND MATTERS  

109(1)  [Two or more references can refer to same person or thing]  

Except so far as the contrary intention appears, a provision of this Law shall 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.

109(2)  [``referent'']  

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.

SECTION 109A   REFERENCE TO COMMONWEALTH ACTS  

109A    Unless the contrary intention appears, a reference in this Law to an Act by its short title is taken to be a reference to an Act of the Commonwealth having that short title.

SECTION 109B   REFERENCES TO AMENDED OR RE-ENACTED ACTS OF THE COMMONWEALTH, THIS JURISDICTION ETC.  

109B(1)  [Reference to a short title]  

This section applies to a reference in this Law to a short title that is or was provided by law for the citation of:

(a)  an Act of the Commonwealth or of this or another jurisdiction, as originally enacted; or

(b)  such an Act as amended.

109B(2)  [Act as enacted and amended]  

Except so far as the contrary intention appears, the reference is taken as a reference to that Act as originally enacted and as amended from time to time.

109B(3)  [Where Act repealed and re-enacted]  

Where the Act referred to has been repealed and re-enacted, with or without modifications:

(a)  the reference is taken as including a reference to the re-enacted Act as originally enacted and as amended from time to time; and

(b)  where:

(i) particular provisions of the repealed Act are referred to; and

(ii) provisions of the re-enacted Act correspond to those provisions;

the reference to those particular provisions is taken as including a reference to those corresponding provisions.

SECTION 109C   EVERY SECTION A SUBSTANTIVE ENACTMENT  

109C    Every section of this Law has effect as a substantive enactment, without introductory words.

SECTION 109D   HEADINGS, SCHEDULES, MARGINAL NOTES, FOOTNOTES AND END NOTES  

109D(1)  [Headings to Chapters, Parts, Divisions and Subdivisions]  

The headings of the Chapters, Parts, Divisions and Subdivisions into which this Law is divided are taken to be part of this Law.

109D(2)  [Schedule]  

A Schedule to this Law is taken to be part of this Law.

109D(3)  [Section heading, footnote and end note]  

Each heading to a section of this Law, and each footnote or end note to this Law, is taken not to be part of this Law.

SECTION 109DA   EXERCISE OF CERTAIN POWERS BETWEEN PASSING AND COMMENCING OF AMENDMENTS OF LAW  

109DA(1)  [Application]  

This section applies where an Act (in this section referred to as the Act concerned), being:

(a)  an Act enacted on or after the date of commencement of this section that is not to come into operation immediately upon its enactment; or

(b)  an Act enacted before the date of commencement of this section that did not come into operation on or before that date;

results in the amendment of this Law so that this Law, as amended, will confer power to make an appointment or to make an instrument of a legislative or administrative character (including rules, regulations or by-laws).

109DA(2)  [Before Act concerned commences]  

Unless the contrary intention appears, the power so conferred may be exercised, and anything may be done for the purpose of enabling the exercise of the power or of bringing the appointment or instrument into effect, before the Act concerned comes into operation as if it had come into operation.

109DA(3)  [Effective date of appointment or instrument]  

An appointment or instrument made under subsection (2) or, if the instrument contains a number of provisions, each of those provisions, takes effect:

(a)  on the day on which the Act concerned comes into operation; or

(b)  on the day on which the appointment, instrument or provision, as the case may be, would have taken effect if the Act concerned had been in operation when the appointment or instrument was made;

whichever is later.

109DA(4)  [Making or publication of proclamation or other instrument]  

Where a provision of this Law is to come into operation on a date to be fixed by a Proclamation or other instrument, the Proclamation or other instrument may be made and published at any time after the enactment of the originating provision.

109DA(5)  [Interpretation]  

In subsections (1), (2), (3) and (4):

``Act'' includes a provision or provisions of an Act;

``Law'' includes a provision or provisions of this Law.

109DA(6)  [Regulations]  

This section applies in relation to a regulation that results in the amendment of the Corporations Regulations so that those Regulations, as amended, will confer power to make an appointment or to make an instrument of a legislative or administrative character, and so applies as if:

(a)  the first-mentioned regulation were an Act; and

(b)  the Corporations Regulations were this Law.

SECTION 109E   EFFECT OF REPEAL  

109E    Where a provision of this Law is repealed, the repeal does not:

(a)  revive anything not in force or existing at the time at which the repeal takes effect; or

(b)  affect the previous operation of any provision so repealed, or anything duly done or suffered under any provision so repealed; or

(c)  affect any right, privilege, obligation or liability acquired, accrued or incurred under any provision so repealed; or

(d)  affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any provision so repealed; or

(e)  affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment;

and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed, as if the repeal had not taken effect.

SECTION 109F   IMPLIED REPEALS ETC.  

109F    A reference in section 109E to the repeal of a provision of this Law is a reference to the repeal of the originating provision concerned and includes a reference to:

(a)  such a repeal effected by implication; and

(b)  the abrogation or limitation (however effected) of the effect of the provision; and

(c)  the exclusion (however effected) of the application of the provision to any person, subject-matter or circumstance.

SECTION 109G   EFFECT OF EXPIRATION OF PROVISION  

109G    Where a provision of this Law expires, lapses or otherwise ceases to have effect, sections 109E and 109F apply as if the provision had been repealed.

SECTION 109H   REGARD TO BE HAD TO PURPOSE OR OBJECT OF LAW  

109H    In the interpretation of a provision of this Law, a construction that would promote the purpose or object underlying the Law (whether that purpose or object is expressly stated in the Law or not) is to be preferred to a construction that would not promote that purpose or object.

SECTION 109J   USE OF EXTRINSIC MATERIAL IN THE INTERPRETATION OF THIS LAW  

109J(1)  [Application of section]  

This section applies where, in the interpretation of a provision of this Law, any material not forming part of this Law is capable of assisting in working out the meaning of the provision.

109J(2)  [Material may be used to confirm or determine meaning]  

Subject to subsection (4), consideration may be given to that material:

(a)  to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Law and the purpose and object underlying the Law; or

(b)  to determine the meaning of the provision when:

(i) the provision is ambiguous or obscure; or

(ii) the ordinary meaning conveyed by the text of the provision, taking into account its context in the Law and the purpose or object underlying the Law, leads to a result that is manifestly absurd or is unreasonable.

109J(3)  [Material may include]  

The material that may be considered under subsection (2) in the interpretation of a provision of this Law includes, but is not limited to:

(a)  all matters not forming part of the Law that are set out in the Corporations Act 1989 or a corresponding law of a jurisdiction, or the document containing the text of the Law as printed by the Government Printer; and

(b)  any relevant report of the Advisory Committee, or of a Royal Commission, Law Reform Commission, committee of inquiry or other similar body, that was made before either House of the Parliament before the time when the originating provision was enacted; and

(c)  any relevant report of a committee of the Parliament or of either House of the Parliament that was made to the Parliament or that House of the Parliament before the originating provision was enacted; and

(d)  any treaty or other international agreement that is referred to in this Law; and

(e)  any explanatory memorandum relating to the Bill containing the originating provision, or any other relevant document, that was laid before, or furnished to the members of, either House of the Parliament by a Minister before the time when the originating provision was enacted; and

(f)  the speech made to a House of the Parliament by a Minister on the occasion of the moving by that Minister of a motion that the Bill containing the originating provision be read a second time in that House; and

(g)  any document (whether or not a document to which a preceding paragraph applies) that is declared by this Law to be a relevant document for the purposes of this section; and

(h)  any relevant material in the Journals of the Senate, in the Votes and Proceedings of the House of Representatives or in any official record of debates in the Parliament or either House of the Parliament.

109J(4)  [Determination of consideration or weight to be given to material]  

In determining whether consideration should be given to any material in accordance with subsection (2), or in considering the weight to be given to any such material, regard is to be had, in addition to any other relevant matters, to:

(a)  the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision taking into account its context in the law and the purpose or object underlying the law; and

(b)  the need to avoid prolonging legal or any other proceedings without compensating advantage.

SECTION 109K   CHANGES TO STYLE NOT TO AFFECT MEANING  

109K    Where:

(a)  a provision of this Law has expressed an idea in a particular form of words; and

(b)  another provision of this Law appears to have expressed the same idea in a different form of words for the purpose of using a clearer style;

the ideas are not taken to be different merely because different forms of words were used.

SECTION 109L   EXAMPLES  

109L    Where this Law includes an example of the operation of a provision:

(a)  the example is not taken to be exhaustive; and

(b)  if the example is inconsistent with the provision, the provision prevails.

SECTION 109M   PARTS OF SPEECH AND GRAMMATICAL FORMS OF WORDS  

109M    In this Law, unless the contrary intention appears, where a word or phrase is given a particular meaning, other parts of speech and grammatical forms of that word or phrase have corresponding meanings.

SECTION 109N   REFERENCES TO OFFICES AND OFFICERS  

109N(1)  [Occupant of position or person who performs duties]  

A reference in this Law in general terms to a person holding or occupying a particular office or position includes a reference to any person who at any time occupies that office or position for the time being, or performs the duties of that office for the time being.

109N(2)  [Office or officer in and for the Commonwealth]  

Unless the contrary intention appears, a reference in this Law to an office or officer is a reference to such office or officer in and for the Commonwealth.

SECTION 109P   REFERENCES TO COMPANIES ETC  

109P    Express references in this Law to companies, corporations or bodies corporate do not imply that expressions in this Law of the kind mentioned in section 85A do not include companies, corporations or bodies corporate.

SECTION 109Q   REFERENCES TO COMMONWEALTH LAWS  

109Q(1)  [Acts for administration etc of Territory]  

In this Law, unless the contrary intention appears, a reference to the law of the Commonwealth or to a law of the Commonwealth does not include a reference to a law in force in a Territory in so far as the law is so in force by virtue of an Act providing for the acceptance, administration or government of that Territory.

109Q(2)  [Acts not for administration etc of Territory]  

For the purposes of this section, none of the following is an Act providing for the administration or government of a Territory:

(a)  the Corporations Act 1989;

(b)  the Corporations Law of the Capital Territory;

(c)  the Australian Securities and Investments Commission Act 1989.

SECTION 109R   RULES AS TO GENDER AND NUMBER  

109R    In this Law, unless the contrary intention appears:

(a)  words importing a gender include every other gender; and

(b)  words in the singular number include the plural and words in the plural number include the singular.

SECTION 109S   PRODUCTION OF RECORDS KEPT IN COMPUTERS ETC.  

109S    Where a person who keeps a record of information by means of a mechanical, electronic or other device is required by or under this Law:

(a)  to produce the information or a document containing the information to a court, tribunal or person; or

(b)  to make a document containing the information available for inspection by a court, tribunal or person;

then, unless the court, tribunal or person otherwise directs:

(c)  the requirement is taken to oblige the person to produce or make available for inspection, as the case may be, a writing that reproduces the information in a form capable of being understood by the court, tribunal or person; and

(d)  the production of such a writing to the court, tribunal or person constitutes compliance with the requirement.

SECTION 109T   CHANGE OF NAME OF BODY OR OFFICE  

109T    Where:

(a)  the name of a body is changed by law (whether or not the body is incorporated); or

(b)  the name of an office is changed by law;

then, a reference in this Law to the body or office under the former name, except in relation to matters that occurred before the change took effect, is taken as a reference to the body or office under the new name.

SECTION 109U   COMPLIANCE WITH FORMS  

109U    Where this Law prescribes a form, strict compliance with the form is not required and substantial compliance is sufficient.

SECTION 109V   CONTENT OF STATEMENTS OF REASONS FOR DECISIONS  

109V    Where this Law requires a tribunal, body or person making a decision to give written reasons for the decision, whether the expression ``reasons'' , ``grounds'' or any other expression is used, the instrument giving the reasons must also:

(a)  set out the findings on material questions of fact; and

(b)  refer to the evidence or other material on which those findings were based.

SECTION 109W   ATTAINMENT OF PARTICULAR AGE  

109W    For the purposes of this Law, the time at which a person attains a particular age expressed in years is the commencement of the relevant anniversary of the date of the birth of that person.

SECTION 109X   SERVICE OF DOCUMENTS  

109X(1)  [Service]  

For the purposes of any law, a document may be served on a company or recognised 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.

109X(2)  [Director or company secretary]  

For the purposes of any law, a document may be served on a director or company secretary (in addition to the methods of service set out in subsection (4)) by leaving it at, or posting it to, the alternative address notified to ASIC under subsection 205B(1), (2) or (4) or section 117 or 601BC. 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.

109X(3)  [Service and Execution of Process Act 1992]  

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.

109X(4)  [Service on individual]  

For the purposes of this Law, a document may be served on an individual by:

(a)  delivering it to the person personally; or

(b)  leaving it at, or posting it to, the residential or business address of the person last known to the person serving the document.

109X(5)  [Service on body corporate]  

For the purposes of this Law, a document may be served on a body corporate other than a company, recognised company or registered body by leaving it at, or posting it to, the head office, a registered office or the principal place of business of the body corporate.

109X(6)  [Service in a different way]  

This section does not affect the operation of a law or the power of a court to authorise a document to be served in a different way.

109X(7)  [``serve'', ``give'', ``send'']  

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''.

SECTION 109Y   MEANING OF SERVICE BY POST  

109Y    Where a provision of this Law authorises or requires any document to be served by post, whether the expression ``serve'' or the expression ``give'' or ``send'' or any other expression is used, then:

(a)  the service is taken to be effected by properly addressing and posting (under pre-paid post) the document as a letter to the last known address of the person to be served; and

(b)  unless the contrary is proved, the service is taken to have been effected at the time at which the letter would have been delivered in the ordinary course of post.

SECTION 109Z   MEASUREMENT OF DISTANCE  

109Z    In the measurement of any distance for the purposes of this Law, that distance is, unless the contrary intention appears, to be measured in a straight line on a horizontal plane.

SECTION 109ZA   EXPRESSIONS OF TIME  

109ZA    Where in this Law any reference to time occurs, such time is, unless it is otherwise specifically stated, taken in each jurisdiction to mean the standard legal time in that jurisdiction.

SECTION 109ZB   EXERCISE OF POWERS AND DUTIES  

109ZB(1)  [Power may be exercised, duty to be performed]  

Where this Law confers a power or imposes a duty, then, unless the contrary intention appears, the power may be exercised and the duty must be performed from time to time as the occasion requires.

109ZB(2)  [Holder for the time being of an office]  

Where this Law confers a power or imposes a duty on the holder of an office as such, then, unless the contrary intention appears, the power may be exercised and the duty must be performed by the holder for the time being of the office.

109ZB(3)  [``may'']  

Where this Law provides that a person, court or body may do a particular act or thing, and the word ``may'' is used, the act or thing may be done at the discretion of the person, court or body.

109ZB(4)  [Vacancy/vacancies in membership of body]  

Where this Law confers a power or function, or imposes a duty, on a body, whether incorporated or unincorporated, the exercise of the power or the performance of the function or duty is not affected merely because of a vacancy or vacancies in the membership of the body.

109ZB(5)  [Like manner and like conditions]  

Where this Law confers a power to make, grant or issue any instrument (including rules, regulations or by-laws) the power is, unless the contrary intention appears, taken as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend or vary any such instrument.

109ZB(6)  [Some only; particular; different]  

Where this Law confers a power to make, grant or issue any instrument (including rules, regulations or by-laws) with respect to particular matters (however the matters are described), the power is taken to include a power to make, grant or issue such an instrument with respect to some only of those matters or with respect to a particular class or particular classes of those matters and to make different provision with respect to different matters or different classes of matters.

109ZB(7)  [Implication]  

Where this Law confers a power to make, grant or issue any instrument (including rules, regulations or by-laws), the power is not taken, by implication, not to include the power to make provision for or in relation to a particular aspect of a matter by reason only that provision is made by the Law in relation to another aspect of that matter or in relation to another matter.

109ZB(8)  [Power to appoint]  

Subject to subsection (9), where this Law confers upon any person or authority a power to make appointments to any office or place, the power is, unless the contrary intention appears, taken to include a power to appoint a person to act in the office or place until:

(a)  a person is appointed to the office or place; or

(b)  the expiration of 12 months after the office or place was created or became vacant, as the case requires;

whichever first happens, and also to include a power to remove or suspend any person appointed, and to appoint another person temporarily in the place of any person so suspended or in place of any sick or absent holder of such office or place.

109ZB(9)  [Recommendation, approval or consent]  

Where the power of such a person or authority to make any such appointment is only exercisable upon the recommendation or subject to the approval or consent of some other person or authority, the power to make an appointment to act in an office or place or the power of removal is, unless the contrary intention appears, only exercisable upon the recommendation or subject to the approval or consent of that other person or authority.

109ZB(10)  [Instrument may require making of statutory declaration]  

Where this Law confers a power to make, grant or issue an instrument (including rules, regulations or by-laws) prescribing penalties not exceeding a specified amount or imprisonment for a specified period, that limitation on the penalties that may be prescribed does not prevent the instrument from requiring the making of a statutory declaration.

SECTION 109ZBA   POWER TO MAKE INSTRUMENTS ETC. MAY BE EXERCISED BY REFERENCE TO CLASSES  

109ZBA    Where this Law confers upon an authority power to make an instrument (including rules, regulations or by-laws) or a resolution:

(a)  specifying, declaring or prescribing a matter or thing; or

(b)  doing anything in relation to a matter or thing;

then, in exercising the power, the authority may identify the matter or thing by referring to a class or classes of matters or things.

SECTION 109ZC   POWER TO DETERMINE INCLUDES AUTHORITY TO ADMINISTER OATH  

109ZC    Any court, Judge, justice of the peace, officer, commissioner, arbitrator, or other person authorised by law, or by consent of parties, to hear and determine any matter, has authority to receive evidence and examine witnesses and to administer an oath to all witnesses legally called before them respectively.

SECTION 109ZD   DELEGATIONS  

109ZD    Where this Law confers power to delegate a function or power, then, unless the contrary intention appears, the power of delegation is not limited to delegating the function or power to a specified person but includes a power to delegate the function or power to any person from time to time holding, occupying, or performing the duties of, a specified office or position.

SECTION 109ZE   EFFECT OF DELEGATION  

109ZE    Where this Law confers power on a person or body (in this section called the ``authority'' ) to delegate a function or power:

(a)  the delegation may be made either generally or as otherwise provided by the instrument of delegation; and

(b)  the powers that may be delegated do not include that power to delegate; and

(c)  a function or power so delegated, when performed or exercised by the delegate, is, for the purposes of this Law, taken to have been performed or exercised by the authority; and

(d)  a delegation by the authority does not prevent the performance or exercise of a function or power by the authority; and

(e)  if the authority is not a person, section 109ZF applies as if it were.

SECTION 109ZF   EXERCISE OF CERTAIN POWERS AND FUNCTIONS BY A DELEGATE  

109ZF    Where, under this Law, the exercise of a power or function by a person is dependent upon the opinion, belief or state of mind of that person in relation to a matter and that power or function has been delegated in pursuance of this Law or any Act of the Commonwealth, of a State or of a Territory, that power or function may be exercised by the delegate upon the opinion, belief or state of mind of the delegate in relation to that matter.

Division 9 - Interpreting the regulations

SECTION 110   EXPRESSIONS HAVE THE SAME MEANING AS IN THIS LAW  

110(1)  [Regulations]  

Subject to subsection (2), an expression has in the regulations the same meaning as it has in this Law.

110(2)  [Where regulations provision has effect]  

Where a provision of the regulations has effect for the purposes of a particular provision of this Law, an expression has in that provision of the regulations the same meaning as it has in that provision of this Law.

110(3)  [Application]  

Subject to subsection (2), this Part applies in relation to the regulations as if the provisions of the regulations were provisions of this Law.

110(4)  [Effect]  

This section has effect except so far as the contrary intention appears in the regulations.

SECTION 110A   SEVERING INVALID PROVISIONS  

110A(1)  [Interpretation]  

The regulations are to be interpreted subject to this Law.

110A(2)  [Inconsistencies]  

It is intended that where, but for this section, a provision of the regulations would have been interpreted as being inconsistent with this Law, the provision is nevertheless to be valid in so far as it is not so inconsistent.

Division 10 - Interpreting other subordinate instruments

SECTION 110B   EXPRESSIONS HAVE THE SAME MEANING AS IN THIS LAW  

110B(1)  [Same meaning as in Law]  

An expression has in an instrument made, granted or issued under this Law the same meaning as it has in this Law.

110B(2)  [Application]  

This Part applies in relation to an instrument made, granted or issued under this Law as if the instrument's provisions were provisions of this Law.

110B(3)  [Effect]  

This section has effect in relation to an instrument except so far as the contrary intention appears in the instrument.

SECTION 110C   SEVERING INVALID PROVISIONS  

110C(1)  [Interpretation of instrument]  

An instrument made, granted or issued under this Law is to be interpreted:

(a)  subject to this Law; and

(b)  so as not to exceed the powers under which it was made, granted or issued.

110C(2)  [Powers not to be exceeded]  

It is intended that where, but for this section, such an instrument would have been interpreted as exceeding the powers under which it was made, granted or issued, it is nevertheless to be valid in so far as it does not exceed those powers.

Division 11 - Application of certain provisions

SECTION 110D   CHAPTERS 1 TO 6 AND 9  

110D    Chapters 1 to 6, inclusive, and 9, apply, according to their tenor, in relation to:

(a)  natural persons, whether resident in this jurisdiction or in Australia or not and whether Australian citizens or not; and

(b)  all bodies corporate and unincorporated bodies, whether formed or carrying on business in this jurisdiction or in Australia or not; and

(c)  acts and omissions outside this jurisdiction, whether in Australia or not.

SECTION 110E   APPLICATION OF THIS LAW IN COASTAL SEA  

110E    This Law has effect in and in relation to the coastal sea of this jurisdiction as if that coastal sea were part of this jurisdiction.

PART 1.2A - DISCLOSING ENTITIES

Division 1 - Object of Part

SECTION 111AA   OBJECT OF PART  

111AA    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 Law 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 Law in relation to disclosing entities (this is done in Division 4).

Division 2 - Definitions

SECTION 111AB   TERMS DEFINED IN DIVISION  

111AB    This Division contains definitions of the following terms:

(a)  disclosing entity (section 111AC);

(b)  ED securities (section 111AD);

(c)  ED securities of a disclosing entity (section 111AK);

(d)  listed disclosing entity (subsection 111AL(1));

(e)  quoted ED securities (section 111AM);

(f)  unlisted disclosing entity (subsection 111AL(2)).

SECTION 111AC   DISCLOSING ENTITY  

111AC(1)  [Securities other than interests in a managed investment scheme]  

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 Law.

111AC(2)  [Interests in a managed investment scheme]  

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 Law.

SECTION 111AD   ED SECURITIES  

111AD(1)  [``ED securities'']  

Securities of a body are ED securities (short for ``enhanced disclosure securities'') for the purposes of this Law if, and only if:

(a)  they are ED securities under section 111AE, 111AF, 111AG or 111AI; and

(b)  they are not declared under section 111AJ not to be ED securities.

111AD(2)  [Units of securities included in class]  

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.

SECTION 111AE   SECURITIES QUOTED ON A STOCK MARKET  

111AE(1)  [ED securities quoted on stock market]  

Securities in a class of securities of a body are ED securities if securities in that class are quoted on a stock market of a securities exchange.

111AE(2)  [Commonwealth bodies]  

Subsection (1) does 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 of the body that are quoted as mentioned in subsection (1) are debentures; and

(c)  both the repayment of principal, and the payment of interest, in respect of those debentures is guaranteed by the Commonwealth.

111AE(3)  [State or Territory bodies]  

Subsection (1) does 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.

SECTION 111AF   SECURITIES TO WHICH LODGED OR DEEMED PROSPECTUS RELATES  

111AF(1)  [Securities other than debentures]  

Securities (except debentures) 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; or

(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).

111AF(2)  [``corresponding previous law'']  

In this section:

``corresponding previous law'' does not include a law, or part of a law, in force before 1 July 1982 (which is when the Companies Act 1981 commenced).

SECTION 111AG   SECURITIES ISSUED AS CONSIDERATION FOR AN ACQUISITION UNDER AN OFF-MARKET TAKEOVER BID OR PART 5.1 COMPROMISE OR ARRANGEMENT  

111AG(1)  [Securities issued for off-market takeover bid]  

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).

111AG(2)  [Securities issued under scheme]  

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 or a corresponding previous law; 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).

111AG(3)  [``corresponding previous law'']  

In this section:

``corresponding previous law'' :

(a)  when used in subsection (1), does not include a law, or part of a law, in force before 1 July 1981 (which is when the Companies (Acquisition of Shares) Act 1980 commenced); and

(b)  when used in subsection (2), does not include a law, or part of a law, in force before 1 July 1982 (which is when the Companies Act 1981 commenced).

SECTION 111AH   WHEN A PERSON HOLDS SECURITIES FOR THE PURPOSES OF SECTIONS 111AF AND 111AG  

111AH(1)  [Definition of holding securities]  

For the purposes of sections 111AF 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, 601CZB or 1070; or

(b)  the person is entitled to be so registered.

111AH(2)  [Joint holders count as one person]  

For the purposes of sections 111AF and 111AG, joint holders of securities count as one person.

SECTION 111AI   DEBENTURES THAT NEED TRUSTEE APPOINTED UNDER SECTION 260FA  

111AI    Debentures of a borrower are ED securities if section 260FA requires the borrower to appoint a trustee.

SECTION 111AJ   REGULATIONS MAY DECLARE SECURITIES NOT TO BE ED SECURITIES  

111AJ(1)  [Declaration]  

The regulations may declare specified securities of bodies not to be ED securities.

111AJ(2)  [Effect of regulations]  

Regulations in force for the purposes of subsection (1) have effect accordingly, despite anything else in this Division.

SECTION 111AK   ED SECURITIES OF A DISCLOSING ENTITY  

111AK    For the purposes of this Law, ED securities because of which (having regard to section 111AC) a disclosing entity is such an entity are ED securities of the entity.

SECTION 111AL   LISTED OR UNLISTED DISCLOSING ENTITY  

111AL(1)  [``listed disclosing entity'']  

For the purposes of this Law, a disclosing entity is a listed disclosing entity if all or any ED securities of the entity are quoted ED securities.

111AL(2)  [``unlisted disclosing entity'']  

For the purposes of this Law, a disclosing entity that is not a listed disclosing entity is an unlisted disclosing entity .

SECTION 111AM   QUOTED ED SECURITIES  

111AM    For the purposes of this Law, ED securities are quoted ED securities if they are ED securities because of section 111AE.

Division 3 - Significance of being a disclosing entity

SECTION 111AN   DIVISION CONTAINS OUTLINE OF SIGNIFICANCE OF BEING A DISCLOSING ENTITY  

111AN    This Division outlines the significance for this Law of being a disclosing entity.

SECTION 111AO   ACCOUNTING REQUIREMENTS  

111AO    A disclosing entity has to prepare financial statements and reports for half-years as well as full financial years. These requirements are set out in Chapter 2M.

SECTION 111AP   CONTINUOUS DISCLOSURE REQUIREMENTS  

111AP(1)  [Requirements of sec 1001A and 1001B]  

A disclosing entity is subject to the continuous disclosure requirements of sections 1001A and 1001B.

111AP(2)  [Application of sec 1001A]  

Section 1001A applies to listed disclosing entities and requires them to comply with certain obligations in the listing rules of a securities exchange requiring the notification of information.

111AP(3)  [Lodgment of documents]  

Section 1001B applies to unlisted disclosing entities and requires them to lodge documents containing information.

SECTION 111AQ   PROSPECTUS RELIEF  

111AQ    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.

Division 4 - Exemptions and modifications

SECTION 111AR   MEANING OF ``DISCLOSING ENTITY PROVISIONS''  

111AR(1)  [``disclosing entity provisions'']  

For the purposes of this Division, the disclosing entity provisions are the provisions of the following:

(a)  Chapter 2M as it applies to disclosing entities;

(b)  (Repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

(c)  (Repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)

(d)  sections 1001A and 1001B;

(e)  (Repealed by No 62 of 1998, Sch 2, Pt 1 (effective 1 July 1998).)

111AR(2)  [Regulations]  

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.

SECTION 111AS   EXEMPTIONS BY REGULATIONS  

111AS(1)  [Exemptions]  

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.

111AS(2)  [Specified securities may be exempted]  

Without limiting subsection (1), an exemption may relate to specified securities.

SECTION 111AT   EXEMPTIONS BYTHE COMMISSION  

111AT(1)  [Exemptions by Commission]  

The Commission 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.

111AT(2)  [Specified securities may be exempted]  

Without limiting subsection (1), an exemption may relate to specified securities.

111AT(3)  [Exemption to be published in Gazette]  

The Commission must cause a copy of an exemption to be published in the Gazette.

SECTION 111AU   ENFORCING CONDITIONS OF EXEMPTIONS  

111AU(1)  [Intentional or reckless contravention]  

A person must not intentionally or recklessly contravene a condition to which an exemption under section 111AS or 111AT is subject.

111AU(2)  [Powers of Court]  

If a person contravenes such a condition, the Court may, on the application of the Commission, order the person to comply with the condition.

SECTION 111AV   MODIFICATIONS BY REGULATIONS  

111AV(1)  [Modifications by regulations]  

The regulations may make modifications of all or specified disclosing entity provisions.

111AV(2)  [Modification may relate to specified securities]  

Without limiting subsection (1), a modification may relate to specified securities.

SECTION 111AW   EXEMPTIONS AND MODIFICATIONS HAVE EFFECT  

111AW    Exemptions and modifications under this Division have effect accordingly.

SECTION 111AX   EFFECT OF DIVISION  

111AX    Nothing in this Division limits, or is limited by, any other exemption or modification power (for example, section 340, 341 or 741).

PART 1.3 - APPLICATION ORDERS

SECTION 111A   POWER TO MAKE  

111A(1)  [Written application orders]  

The Minister may make written orders, to be known as application orders, specifying matters that this Law requires or permits to be specified by or in application orders.

111A(2)  [Not to be inconsistent with Law]  

An order under this section must not be inconsistent with this Law.

SECTION 111B   ORDERS UNDER THIS PART AND CORRESPONDING LAWS  

111B(1)  [Object]  

The object of this section is to make it easier to find out how the Corporations Law of each jurisdiction operates so far as concerns matters that, because of differences in the circumstances of the various jurisdictions, are dealt with by application orders under section 111A of that Law.

111B(2)  [Section 111A orders under Law of different jurisdictions]  

An order under section 111A of this Law may be included in the same document as an order that is, or as 2 or more orders each of which is, an order under section 111A of the Corporations Law of another jurisdiction.

111B(3)  [2 or more orders]  

Where, under subsection (2), 2 or more orders are included in the same document, the text of the respective orders:

(a)  may be integrated and arranged so as to present more clearly and simply the matters that are specified by or in the orders for the purposes of corresponding provisions of the laws of the jurisdictions concerned; and

(b)  in particular, may be arranged so as to allow the reader to compare more easily the matter specified for the purposes of a provision of one law with the matter specified for the purposes of the corresponding provision of another law.

111B(4)  [``principal orders'']  

Where:

(a)  under subsection (3), the text of 2 or more orders (in this subsection called the ``principal orders'' ) has been integrated and arranged as mentioned in that subsection; and

(b)  under subsection (2), 2 or more orders each of which amends any of the principal orders are included in the same document;

the text of the amending orders may be integrated and arranged so that the arrangement of the amendments corresponds to the arrangement of the text of the principal orders.

111B(5)  [Validity not prejudiced]  

Nothing in this section prejudices the validity of a document that purports to set out, in any form, an order under section 111A.

SECTION 111C   SPECIFYING A MATTER BY REFERENCE TO ANOTHER INSTRUMENT  

111C(1)  [Application order may specify]  

Subject to subsection 111A(2), an application order may specify a matter by applying, adopting or incorporating, with or without modifications:

(a)  the provisions of:

(i) an Act of this jurisdiction; or

(ii) regulations under such an Act;

as in force at a particular time or as in force from time to time; or

(b)  matter contained in any other instrument or writing as in force or existing when the order takes effect.

111C(2)  [Application must not specify a matter in some ways]  

Except as otherwise expressly provided in this Law, an application order must not specify a matter by applying, adopting or incorporating matter contained in an instrument or other writing as in force or existing from time to time.

SECTION 111D   NOTIFICATION IN THE GAZETTE  

111D    As soon as practicable after an application order is made, the Minister must cause to be published in the Gazette a notice of the order having been made, and of the place or places where copies of the order can be bought.

SECTION 111E   WHEN ORDER TAKES EFFECT  

111E    An application order takes effect from:

(a)  a specified day; or

(b)  a specified time on a specified day; or

(c)  the day, or day and time, of commencement of a specified Commonwealth Act or of a specified provision of a Commonwealth Act; or

(d)  otherwise - the day on which notice of the order having been made is published under subsection 111D(1).

SECTION 111F   INTERPRETATION OF APPLICATION ORDERS  

111F(1)  [Meaning as in Law]  

Subject to subsection (2), an expression has in an application order the same meaning as it has in this Law.

111F(2)  [Particular provision of Law]  

Where a provision of an application order has effect for the purposes of a particular provision of this Law or the regulations, an expression has in that provision of the order the same meaning as it has in that provision of this Law or the regulations.

111F(3)  [Part 1.2]  

Subject to subsection (2), Part 1.2 applies in relation to an application order as if the order's provisions were provisions of this Law.

111F(4)  [Contrary intention]  

This section has effect in relation to an order except so far as the contrary intention appears in the order.

SECTION 111G   SEVERING INVALID PROVISIONS  

111G(1)  [Interpretation of order]  

An application order is to be interpreted:

(a)  subject to this Law; and

(b)  so as not to exceed the powers conferred by this Part.

111G(2)  [Powers not to be exceeded]  

It is intended that where, but for this section, an application order would have been interpreted as exceeding the powers conferred by this Part, the order is nevertheless to be valid in so far as it does not exceed those powers.

SECTION 111H   EFFECT OF CERTAIN INSTRUMENTS MADE BEFORE 1 JANUARY 1991  

111H(1)  [Application of section]  

This section applies where:

(a)  before 1 January 1991, a Minister made an instrument that purported to be an application order specifying a matter for the purposes of a provision of this Law, or for the purposes of a provision of the Corporations Law of each of 2 or more jurisdictions including this jurisdiction; and

(b)  the instrument was expressed to take effect on 1 January 1991; and

(c)  if a law of this jurisdiction in force at the commencement of this section provides that an order under section 111A may only be made with the consent of the Minister for this jurisdiction - the person who was, when the instrument was made, the Minister for this jurisdiction within the meaning of that law as so in force, consented to the making of the instrument; and

(d)  a notice of the instrument having been made was published in the Gazette.

111H(2)  [Effect of instrument]  

The instrument has effect, and is taken always to have had effect, as an application order duly made under section 111A.

111H(3)  [Compliance with requirements]  

The requirements of this Division are taken to have been complied with in relation to the instrument.

111H(4)  [Effective date]  

The instrument is taken to have taken effect on 1 January 1991.

111H(5)  [Other effects of instrument]  

The effect that the instrument has, or is taken to have had, because of this section does not prejudice any other effect of the instrument, whether under a law corresponding to this section or otherwise.

PART 1.4 - TECHNICAL PROVISIONS ABOUT AIDS FOR READERS

SECTION 111J   SMALL BUSINESS GUIDE  

111J(1)  (Amendment by regulation)  

The regulations may amend the small business guide in Part 1.5 if the amendments are necessary to reflect the regulations or instruments issued by ASIC under this Law.

111J(2)  [Organisation of guide]  

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 Law 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 Law as it applies to those companies and directs readers to the operative provisions in the Law.

The notes in square brackets at the end of paragraphs in the guide indicate the main provisions of the Corporations Law, the regulations made under the Law, and Australian Securities and Investments Commission 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 Law 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 Law 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 Law. The company will need a constitution only if it wants to displace, modify or add to the replaceable rules.

[sections 134- 141, 224B]

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 Law, 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 Law sets out rules dealing with the calling and conduct of directors' meetings. Directors must keep a written record (minutes) of their resolutions and meetings.

There are 2 ways that directors may pass resolutions:

•  at a meeting; or

•  by having all of the directors record and sign their decision.

If a company has only 1 director, the sole director may also pass a resolution by recording and signing their decision.

[sections 224B, 226A, 248A- 248G, 251A]

1.9  Shareholders  

The shareholders of a company own the company, but the company has a separate legal existence and the company's assets belong to the company.

Shareholders can make decisions about the company by passing a resolution, usually at a meeting. A ``special resolution'' usually involves more important questions affecting the company as a whole or the rights of some or all of its shareholders.

There are 2 ways that shareholders may pass a resolution:

•  at a meeting; or

•  by having all of the shareholders record and sign their decision.

If a meeting is held, an ordinary resolution must be passed by a majority of the votes cast by shareholders of the company entitled to vote on the resolution at the meeting in person or by proxy (if proxies are allowed). A special resolution must be passed by at least 75% of the votes cast by shareholders of the company entitled to vote on the resolution and who vote at the meeting in person or by proxy (if proxies are allowed).

The sole shareholder of a company may pass a resolution by recording and signing their decision.

A company must keep a written record (minutes) of the members' resolutions and meetings.

[sections 9 (special resolution), 249A, 249B, 249L, 251A]

1.10  What others can assume about the company  

Anyone who does any business with the company is entitled to assume that the company has a legal right to conduct that business unless the person knows, or suspects, otherwise. For example, an outsider dealing with the company is entitled to assume:

•  that a person who is shown in a notice lodged with ASIC as being the director or company secretary of a company has been properly appointed and is authorised to act for the company; and

•  that a person who is held out by the company to be a director, company secretary or agent of the company has been properly appointed and is authorised to act for the company.

[sections 128- 130]

2   The company structure for small business  

2.1  Proprietary company for small business  

Generally, a proprietary company limited by shares is the most suitable company for use by small business. Such a proprietary company must have at least 1 shareholder but no more than 50 shareholders (not counting employee shareholders). It may have 1 or more directors.

[sections 112- 113]

3   Setting up a new company  

The operators of small businesses can either buy ``shelf'' companies or set up new companies themselves.

3.1  ``Shelf'' companies  

The operator of a small business may find it more convenient to buy a ``shelf'' company (a company that has already been registered but has not traded) from businesses which set up companies for this purpose or from some legal or accounting firms.

3.2  Setting up a company  

To set up a new company themselves, the operator must apply to ASIC for registration of the company.

A proprietary company limited by shares must have at least 1 shareholder.

To obtain registration, a person must lodge a properly completed application form with ASIC. The form must set out certain information including details of every person who has consented to be a shareholder, director or company secretary of the company.

The company comes into existence when ASIC registers it.

[sections 117- 119, 135- 136, 140]

3.3  ACN and name  

When a company is registered, ASIC allocates to it a unique 9 digit number called the Australian Company Number (ACN). (For use of the ACN see 4.1).

In practice, a new company must have a name that is different from the name of a company that is already registered. A proprietary company limited by shares must have the words ``Proprietary Limited'' as part of its name. Those words can be abbreviated to ``Pty Ltd''.

A proprietary company may adopt its ACN as its name. If it does so, its name must also contain the words ``Australian Company Number'' (which can be abbreviated to ``ACN''). For example, the company's name might be ``ACN 123 456 789 Pty Ltd''.

[sections 119, 147- 161]

3.4  Contracts entered into before the company is registered  

A company can ratify a contract entered into by someone on its behalf or for its benefit before it was registered. If the company does not ratify the contract, the person who entered into the contract may be personally liable.

[sections 131- 133]

3.5  First shareholders, directors and company secretary  

A person listed with their consent as a shareholder, director or company secretary in the application for registration of the company becomes a shareholder, director or company secretary of the company on its registration.

The same person may be both a director of the company and the company secretary.

See 5.1 and 5.2 for directors and 5.4 for company secretaries. See 6.1 for shareholders.

[section 120]

3.6  Issuing shares  

It is a replaceable rule (see 1.6) that, before issuing new shares, a company must first offer them to the existing shareholders in the proportions that the shareholders already hold. A company may issue shares at a price it determines.

[sections 254B, 254D]

3.7  Registered office  

A company must have a registered office in Australia and must inform ASIC of the location of the office. A post office box cannot be the registered office of a company. The purpose of the registered office is to have a place where all communications and notices to the company may be sent.

If the company does not occupy the premises where its registered office is located, the occupier of the premises must agree in writing to having the company's registered office located there.

A proprietary company is not required to open its registered office to the public but this does not affect its obligation to make documents available for inspection.

The company must notify ASIC of any change of address of its registered office.

[sections 100, 142, 143, 173, 1300]

3.8  Principal place of business  

If a company has a principal place of business that is different to its registered office, it must notify ASIC of the address of its principal place of business and of any changes to that address.

[sections 117, 146]

3.9  Registers kept by the company  

A company must keep registers, including a register of shareholders and a register of charges. A company must keep its registers at:

•  the company's registered office; or

•  the company's principal place of business; or

•  a place (whether on premises of the company or of someone else) where the work in maintaining the register is done; or

•  another place approved by ASIC.

A register may be kept either in a bound or looseleaf book or on computer.

If a register is kept on computer, its contents must be capable of being printed out in hard copy.

[sections 172, 1300- 1302, 1306]

3.10  Register of shareholders  

A company must keep in its register of shareholders such information as:

•  the names and addresses of its shareholders; and

•  details of shares held by individual shareholders.

[sections 168- 169]

3.11  Register of charges  

A company must keep a register of charges if the company gives a bank, trade creditor or anybody else a charge over company assets.

[section 271]

4   Continuing obligations after the company is set up  

The Corporations Law 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 Law 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 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, Australian Securities and Investments Commission Practice Note 4715-186]

4.2  Annual return  

A company must lodge with ASIC an annual return which contains such information as:

•  names and addresses of each director and company secretary; and

•  issued shares and options granted; and

•  details of its shareholders; and

•  address of its registered office; and

•  address of its principal place of business; and

•  a statement that the directors have resolved in the last month that, in the directors' opinion, there are reasonable grounds to believe the company will be able to pay its debts as and when they become payable (but if the company has lodged an annual financial report with ASIC within the last 12 months, it does not need to include this statement).

An annual return may be lodged with ASIC on a printed form or, if an agreement is in place to lodge electronically, in accordance with the agreement.

ASIC may send a partially completed annual return to a company that wants to lodge its annual return on a printed form for the company to check, amend if necessary, verify and send back to ASIC. However, a company must lodge an annual return with ASIC even if ASIC does not send a partially completed annual return to the company.

[sections 345- 348, 352]

4.3  Annual fee  

A company must pay an annual fee to ASIC on lodgment of the annual return.

[Corporations (Fees) Regulations]

4.4  Notification to ASIC of changes  

The company must notify ASIC if certain basic changes to the company occur. The following table sets out these notification requirements.

-------------------------------------------------------
Notification requirements                              
-------------------------------------------------------
   If ...        the company     using      see        
                 must notify     Form       section ...
                 ASIC of      No. ...               
                 the change ...                        
-------------------------------------------------------
1. a company     within 1        207        254X       
   issues        month after                           
   shares        the issue                             
                                                       
2. a company     within 7        909        172, 1302  
   changes       days after                            
   the           the change                            
   location                                            
   of a register                                       
                                                       
3. a company     within 14      203         142, 146   
   changes       days after                            
   the address   the change                            
   of its                                              
   registered                                          
   office or                                           
   principal                                           
   place of                                            
   business                                            
                                                       
4. a company     within 14      304         242        
   changes its   days after                            
   directors     the change                            
   or company                                          
   secretary                                           
                                                       
5. there is a    within 14      304         242        
   change in     days after                            
   the name      the change                            
   or address                                          
   of the company's                                    
   directors or                                        
   secretary                                           
                                                       
6. a company     within 45      309         263        
   creates       days after                            
   certain       the charge                            
   kinds of      is created                            
   charges                                             
-------------------------------------------------------

      

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 Law 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 Law.

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. The company must notify ASIC of a director's resignation. A director who resigns may also notify ASIC of the resignation.

[sections 60, 221, 222A, 224, 228- 230, 242, 242C, 599, 600, 206C, 1317G]

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.

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 Law and other laws. Some of the more important duties are:

•  to act in good faith

•  to act in the best interests of the company

•  to avoid conflicts between the interests of the company and the director's interests

•  to act honestly

•  to exercise care and diligence

•  to prevent the company trading while it is unable to pay its debts

•  if the company is being wound up - to report to the liquidator on the affairs of the company

•  if the company is being wound up - to help the liquidator (by, for example, giving to the liquidator any records of the company that the director has).

A director who fails to perform their duties:

•  may be guilty of a criminal offence with a penalty of $200,000 or imprisonment for up to 5 years, or both; and

•  may contravene a civil penalty provision (and the Court may order the person to pay to the Commonwealth an amount of up to $200,000); and

•  may be personally liable to compensate the company or others for any loss or damage they suffer; and

•  may be prohibited from managing a company.

A director's obligations may continue even after the company has been deregistered.

[sections 180, 181, 182, 183, 184, 475, 530A, 588G, 596, 601AE, 601AH, 1317H]

5.4  Company secretaries  

A company must 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. The company must notify ASIC of a company secretary's resignation. A company secretary who resigns may also notify ASIC of the resignation.

The company secretary is an officer of the company and, in that capacity, may be subject to the requirements imposed by the Corporations Law on company officers. The company secretary has specific responsibilities under the Corporations Law, 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 that the company lodges its annual return.

A company secretary's obligations may continue even after the company has been deregistered.

[sections 83, 142, 222A, 240, 242, 242C, 345, 601AD, 601AH]

6   Shares and shareholders  

A proprietary company limited by shares must have a share capital and at least 1 shareholder. ASIC may apply to a Court to have a company wound up if it does not have any shareholders.

[sections 461- 462]

6.1  Becoming a shareholder and ceasing to be a shareholder  

A person may become a shareholder of a company in several ways, including the following:

•  the person being listed as a shareholder of the company in the application for registration of the company

•  the company issuing shares to the person

•  the person buying shares in the company from an existing shareholder and the company registering the transfer.

Some of the ways in which a person ceases to be a shareholder are:

•  the person sells all of their shares in the company and the company registers the transfer of the shares

•  the company buys back all the person's shares

•  ASIC cancels the company's registration.

[sections 117, 120, 601AA- 601AD]

6.2  Classes of shares  

A company may have different classes of shares. The rights and restrictions attached to the shares in a class distinguish it from other classes of shares.

[sections 254A- 254B]

6.3  Meetings of shareholders  

Directors have the power to call meetings of all shareholders or meetings of only those shareholders who hold a particular class of shares.

Shareholders who hold at least 5% of the votes which may becast 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 Law sets out rules dealing with shareholders' meetings.

A shareholder of a company may ask the company for a copy of the record of a meeting or of a decision of shareholders taken without a meeting.

[sections 249A- 251B]

6.4  Voting rights  

Different rights to vote at meetings of shareholders may attach to different classes of shares. It is a replaceable rule (see 1.6) that, subject to those different rights, each shareholder has 1 vote on a show of hands and, on a poll, 1 vote for each share held.

[sections 250E, 254A- 254B]

6.5  Buying and selling shares  

A shareholder may sell their shares but only if the sale would not breach the company's constitution (if any). It is a replaceable rule (see 1.6) that the directors have a discretion to refuse to register a transfer of shares.

[sections 1091D- 1091E]

7   Signing company documents  

A company's power to sign, discharge and otherwise deal with contracts can be exercised by an individual acting with the company's authority and on its behalf. A company can deal with contracts without using a common seal.

A company may execute a document by having it signed by:

•  2 directors of the company; or

•  a director and the company secretary; or

•  for a company with a sole director who is also the sole secretary - that director.

If the document is to have effect as a deed, it should be expressed to be a deed.

[sections 126- 127, 240]

A company is not required to have a common seal. If it does, the seal must show the company's name and its ACN. The seal is equivalent to the company's signature and may be used on important company documents such as mortgages.

[sections 123, 127(2)]

8   Funding the company's operations  

The shareholders may fund the company's operations by lending money to the company or by taking up other shares in the company. Except if it is raising funds from its own employees or shareholders, a proprietary company must not engage in any fundraising activity that would require disclosure to investors under Chapter 6D (for example, advertising in a newspaper inviting people to invest in the company).

The company may also borrow money from banks and other financial organisations.

Anyone who has lent money, or provided credit, to the company may ask for a mortgage or charge over the company's assets to secure the performance by the company of its obligations.

[sections 113, 124]

9   Returns to shareholders  

Shareholders can take money out of the company in a number of ways, but only if the company complies with its constitution (if any), the Corporations Law 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, 1317H]

9.1  Dividends  

Dividends are payments to shareholders out of the company's after tax profits. 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]

9.3  [Omitted]  

[9.3 intentionally omitted by No 61 of 1998]

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 Law 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 Law, 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 Law requires a small proprietary company to prepare an annual financial report (an annual profit and loss statement, a balance sheet and a statement of cash flows) and a directors' report (about the company's operations, dividends paid or recommended, options issued etc.) if:

•  the shareholders with at least 5% of the votes in the company direct it to do so; or

•  ASIC directs it to do so.

Unless the shareholders' direction specifies otherwise, the company must prepare the annual financial report in accordance with the applicable accounting standards.

Although the Corporations Law 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 246AA, 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, 995, 1091D- 1091E]

12   Companies in financial trouble  

12.1  Voluntary administration  

If a company experiences financial problems, the directors may appoint an administrator to take over the operations of the company to see if the company's creditors and the company can work out a solution to the company's problems.

If the company's creditors and the company cannot agree, the company may be wound up (see 12.3).

[Part 5.3A]

12.2  Receivers  

A receiver, or receiver and manager, may be appointed by order of a Court or under an agreement with a secured creditor to take over some or all of the assets of a company. Generally this would occur if the company is in financial difficulty. A receiver may be appointed, for example, because an amount owed to a secured creditor is overdue.

[Part 5.2]

12.3  Winding up and distribution  

A company may be wound up by order of a Court, or voluntarily if the shareholders of the company pass a special resolution to do so.

A liquidator is appointed:

•  when a Court orders a company to be wound up; or

•  the shareholders of a company pass a resolution to wind up the company.

[Part 5.2, section 495]

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, 5.5]

12.5  Order of payment of debts  

Generally, creditors who hold security over company assets are paid first.

[Division 6 of Part 5.6]

12.6  Cancellation of registration  

If a company has ceased trading or has been wound up, it remains on the register until ASIC cancels the company's registration. Once a company is deregistered, it ceases to exist.

[sections 601AA- 601AB, 601AH]

CHAPTER 2A - REGISTERING A COMPANY

PART 2A.1 - WHAT COMPANIES CAN BE REGISTERED

SECTION 112   TYPES OF COMPANIES  

112(1)  Types of companies.  

The following types of companies can be registered under this Law:

+-----------------------+-----------------------------+
| Proprietary companies | Limited by shares           |
|                       +-----------------------------|
|                       | Unlimited with share capital|
|-----------------------+-----------------------------|
| Public companies      | Limited by shares           |
|                       +-----------------------------|
|                       | Limited by guarantee        |
|                       +-----------------------------|
|                       | Unlimited with share capital|
|                       +-----------------------------|
|                       | No liability company        |
+-----------------------+-----------------------------+

      

Note:

Other types of companies that were previously allowed continue to exist under section 1413.

112(2)  No liability companies.  

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 sections referred to in the following table:

-------------------------------------------------------
No liability company provisions                        
-------------------------------------------------------
item     topic              sections                   
-------------------------------------------------------
1        names              148, 156, 162              
                                                       
2        terms of issue     254B                       
         of shares                                     
                                                       
3        liability on       254M                       
         partly-paid                                   
         shares                                        
                                                       
4        calls              254P-254R                  
                                                       
5        winding up         477-478, 483, 514          
                                                       
6        registering        610BA                      
         a body as                                     
         a company                                     
                                                       
7       transitional        1413                       
-------------------------------------------------------

      

112(3)  [Mining purposes]  

A no liability company must not engage in activities that are outside its mining purposes objects.

112(4)  [Letting or contract]  

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.

112(5)  [Invalidity]  

An act or transaction is not invalid merely because of a contravention of subsection (3) or (4).

SECTION 113   PROPRIETARY COMPANIES  

113(1)  [Limitation of non-employee shareholders]  

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).

113(2)  [Application of subsection]  

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.

113(3)  [Share offers]  

A proprietary company must not engage in any activity that would require disclosure to investors under Chapter 6D, except for an offer of its shares to:

(a)  existing shareholders of the company; or

(b)  employees of the company or of a subsidiary of the company.

113(4)  [Invalidity]  

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).

SECTION 114   MINIMUM OF 1 MEMBER  

114    A company needs to have at least 1 member.

SECTION 115   RESTRICTIONS ON SIZE OF PARTNERSHIPS AND ASSOCIATIONS  

115    A person must not participate in the formation of a partnership or association which has as an object gain for itself or for any of its members and which either:

(a)  has more than 20 members; or

(b)  has more than the number of members it is allowed to have under an application order made by the Minister under Part 1.3;

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.

SECTION 116   TRADE UNIONS CANNOT BE REGISTERED  

116    A trade union cannot be registered under this Law.

PART 2A.2 - HOW A COMPANY IS REGISTERED

SECTION 117   APPLYING FOR REGISTRATION  

117(1)  Lodging application.  

To register a company, a person must lodge an application with ASIC.

Note:

For the types of companies that can be registered, see section 112.

117(2)  Contents of the application.  

The application must state the following:

(a)  the type of company that is proposed to be registered under the Corporations Law of this jurisdiction

(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

(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

(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.

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.

117(3)  [Copy of constitution]  

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.

117(4)  [Prescribed form]  

The application must be in the prescribed form.

117(5)  [Consents and agreements]  

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.

SECTION 118   ASIC GIVES COMPANY ACN, REGISTERS COMPANY AND ISSUES CERTIFICATE  

118(1)  Registration.  

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 the Corporations Law of this jurisdiction; and

(v) the date of registration.

Note:

For the evidentiary value of a certificate of registration, see subsection 1274(7A).

118(2)  ASIC must keep record of registration.  

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.

118(3)-(5)  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

SECTION 119   COMPANY COMES INTO EXISTENCE ON REGISTRATION  

119     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).

SECTION 120   MEMBERS, DIRECTORS AND COMPANY SECRETARY OF A COMPANY  

120(1)  [Consent]  

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.

120(2)  [Issue of shares]  

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).

SECTION 121   REGISTERED OFFICE  

121    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.

SECTION 122   EXPENSES INCURRED IN PROMOTING AND SETTING UP COMPANY  

122    The expenses incurred before registration in promoting and setting up a company may be paid out of the company's assets.

SECTION 123   COMPANY MAY HAVE COMMON SEAL  

123(1)  [Common seal]  

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, the expression ``Australian Company Number'' and the company's ACN.

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.

123(2)  [Duplicate]  

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.

123(3)  [Prohibition]  

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).

CHAPTER 2B - BASIC FEATURES OF A COMPANY

PART 2B.1 - COMPANY POWERS AND HOW THEY ARE EXERCISED

SECTION 124   LEGAL CAPACITY AND POWERS OF A COMPANY  

124(1)  (Capacity and powers)  

A company has the legal capacity and powers of an individual both in and outside this jurisdiction. A company also has all the powers of a body corporate, including the power to:

(a)  issue and cancel shares in the company

(b)  issue debentures (despite any rule of law or equity to the contrary, this power includes a power to issue debentures that are irredeemable, redeemable only if a contingency, however remote, occurs, or redeemable only at the end of a period, however long)

(c)  grant options over unissued shares in the company

(d)  distribute any of the company's property among the members, in kind or otherwise

(e)  give security by charging uncalled capital

(f)  grant a floating charge over the company's property

(g)  arrange for the company to be registered or recognised as a body corporate in any place outside this jurisdiction

(h)  do anything that it is authorised to do by any other law (including a law of a foreign country).

A company limited by guarantee does not have the power to issue shares.

Note:

For a company's power to issue bonus, partly-paid, preference and redeemable preference shares, see section 254A.

124(2)  (Company's interests)  

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.

SECTION 125   CONSTITUTION MAY LIMIT POWERS AND SET OUT OBJECTS  

125(1)  (Limitations in constitution)  

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.

125(2)  (Company's objects)  

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.

SECTION 126   AGENT EXERCISING A COMPANY'S POWER TO MAKE CONTRACTS  

126(1)  (Acting on company's behalf)  

A company's power to make, vary, ratify or discharge a contract may be exercised by an individual acting with the company's express or implied authority and on behalf of the company. The power may be exercised without using a common seal.

126(2)  (Non-application)  

This section does not affect the operation of a law that requires a particular procedure to be complied with in relation to the contract.

SECTION 127   EXECUTION OF DOCUMENTS (INCLUDING DEEDS) BY THE COMPANY ITSELF  

127(1)  (Execution without seal)  

A company may execute a document without using a common seal if the document is signed by:

(a)  2 directors of the company; or

(b)  a director and a company secretary of the company; or

(c)  for a proprietary company that has a sole director who is also the sole company secretary - that director.

Note:

If a company executes a document in this way, people will be able to rely on the assumptions in subsection 129(5) for dealings in relation to the company.

127(2)  (Execution with seal)  

A company with a common seal may execute a document if the seal is fixed to the document and the fixing of the seal is witnessed by:

(a)  2 directors of the company; or

(b)  a director and a company secretary of the company; or

(c)  for a proprietary company that has a sole director who is also the sole company secretary - that director.

Note:

If a company executes a document in this way, people will be able to rely on the assumptions in subsection 129(6) for dealings in relation to the company.

127(3)  (Execution as a deed)  

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).

127(4)  (No limitation)  

This section does not limit the ways in which a company may execute a document (including a deed).

PART 2B.2 - ASSUMPTIONS PEOPLE DEALING WITH COMPANIES ARE ENTITLED TO MAKE

SECTION 128   ENTITLEMENT TO MAKE ASSUMPTIONS  

128(1)  (Entitlement)  

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.

128(2)  (Title to property)  

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.

128(3)  (Fraud or forgery)  

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.

128(4)  (Knowledge or suspicion)  

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.

SECTION 129   ASSUMPTIONS THAT CAN BE MADE UNDER SECTION 128  

129(1)  Constitution and replaceable rules complied with.  

A person may assume that the company's constitution (if any), and any provisions of this Law that apply to the company as replaceable rules, have been complied with.

129(2)  Director or company secretary.  

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.

129(2A)  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

129(3)  Officer or agent.  

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.

129(4)  Proper performance of duties.  

A person may assume that the officers and agents of the company properly perform their duties to the company.

129(5)  Document duly executed without seal.  

A person may assume that a document has been duly executed by the company if the document appears to have been signed in accordance with subsection 127(1). For the purposes of making the assumption, a person may also assume that anyone who signs the document and states next to their signature that they are the sole director and sole company secretary of the company occupies both offices.

129(6)  Document duly executed with seal.  

A person may assume that a document has been duly executed by the company if:

(a)  the company's common seal appears to have been fixed to the document in accordance with subsection 127(2); and

(b)  the fixing of the common seal appears to have been witnessed in accordance with that subsection.

For the purposes of making the assumption, a person may also assume that anyone who witnesses the fixing of the common seal and states next to their signature that they are the sole director and sole company secretary of the company occupies both offices.

129(7)  Officer or agent with authority to warrant that document is genuine or true copy.  

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.

129(8)  [Application of assumptions]  

Without limiting the generality of this section, the assumptions that may be made under this section apply for the purposes of this section.

SECTION 130   INFORMATION AVAILABLE TO THE PUBLIC FROM ASIC DOES NOT CONSTITUTE CONSTRUCTIVE NOTICE  

130(1)  [Information available from ASIC]  

A person is not taken to have information about a company merely because the information is available to the public from ASIC.

130(2)  [Registrable charge]  

Subsection (1) does not apply in relation to a document that has been lodged with ASIC to the extent that the document relates to a charge that is registrable under this Law.

130(3)  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

PART 2B.3 - CONTRACTS BEFORE REGISTRATION

SECTION 131   CONTRACTS BEFORE REGISTRATION  

131(1)  (Company bound)  

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.

131(2)  (Liability for damages)  

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.

131(3)  (Powers of Court)  

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.

131(4)  (Failure to perform contracts)  

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.

SECTION 132   PERSON MAY BE RELEASED FROM LIABILITY BUT IS NOT ENTITLED TO INDEMNITY  

132(1)  [Release]  

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.

132(2)  [Indemnity]  

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.

SECTION 133   THIS PART REPLACES OTHER RIGHTS AND LIABILITIES  

133     This Part replaces any rights or liabilities anyone would otherwise have on the pre-registration contract.

PART 2B.4 - REPLACEABLE RULES AND CONSTITUTION

SECTION 134   INTERNAL MANAGEMENT OF COMPANIES  

134     A company's internal management may be governed by provisions of this Law 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 Law and also in the common law.

SECTION 135   REPLACEABLE RULES  

135(1)  Companies to which replaceable rules apply.  

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 registered after the commencement of this Part; and

(ii) any company registered before that commencement that repeals its constitution after that commencement; 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 registered after the commencement of this Part; and

(ii) as a replaceable rule to any company that is registered after that commencement and that changes to a proprietary company (but only while it is a proprietary company); and

(iii) as a replaceable rule to any proprietary company registered before that commencement that repeals its constitution after that commencement; and

(iv) as an ordinary provision of this Law 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.

135(2)  Company's constitution can displace or modify replaceable rules.  

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.

135(3)  Failure to comply with replaceable rules.  

A failure to comply with the replaceable rules as they apply to a company is not of itself a contravention of this Law (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).

SECTION 136   CONSTITUTION OF A COMPANY  

136(1)  [Adoption]  

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 memorandum and articles of a company immediately before the commencement of this Part are taken together to make up the company's constitution after commencement (see section 1414).

Note 2:

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 Law. Consequential amendments to the rest of the company's constitution can be made under that Act or this Law. See Subdivision 2 of Division 4 of Part 2A of that Act.

136(2)  [Modification or repeal]  

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)).

136(3)  [Further requirement]  

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.

136(4)  [Modification or repeal of further requirement]  

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.

136(5)  [Public company]  

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.

SECTION 137   DATE OF EFFECT OF ADOPTION, MODIFICATION OR REPEAL OF CONSTITUTION  

137    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.

SECTION 138   ASIC MAY DIRECT COMPANY TO LODGE CONSOLIDATED CONSTITUTION  

138     ASIC may direct a company to lodge a consolidated copy of its constitution with ASIC.

SECTION 139   COMPANY MUST SEND COPY OF CONSTITUTION TO MEMBER  

139     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.

SECTION 140   EFFECT OF CONSTITUTION AND REPLACEABLE RULES  

140(1)  [Contract]  

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.

140(2)  [Modification of constitution]  

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.

SECTION 141   TABLE OF REPLACEABLE RULES  

141     The following table sets out the provisions of this Law that apply as replaceable rules.

----------------------------------------------------------
CCH list of provisions that apply as replaceable rules    
----------------------------------------------------------

Directors
                                                  
Material interests -- directors of                
proprietary companies                         194 
Company may appoint a director                201G
Directors may appoint other directors         201H
Alternate directors                           201K
Powers of directors                           198A
Executing negotiable instruments              198B
Managing director                             198C, 201J, 203F
(Repealed)                                        
Proprietary company may remove director       203C
Director may resign by giving written         203A
  notice to company
Remuneration of directors                     202A
----------------------------------------------------------
Directors' meetings
                                                     
Circulating resolutions                       248A
Calling directors' meetings                   248C
Chairing directors' meetings                  248E
Quorum at directors' meetings                 248F
Passing of directors' resolutions             248G
----------------------------------------------------------
Meetings of members

Calling of meetings of members by a director  249C
Notice to joint members                       249J(2)
When notice by post or fax is given           249J(4)
Notice of adjourned meetings                  249M
Quorum                                        249T
Chairing meetings of members                  249U
Business at adjourned meetings                249W(2)
Who can appoint a proxy                       249X
[replaceable rule for proprietary companies only]
Proxy vote valid even if member dies,         250C(2)
  revokes appointment etc.
How many votes a member has                   250E
Jointly held shares                           250F
Objection to right to vote                    250G
How voting is carried out                     250J
When and how polls must be taken              250M
----------------------------------------------------------
Company secretary

Terms of office determined by directors       204F
----------------------------------------------------------
Inspection of books

Company or directors may allow member to      247D
  inspect books
----------------------------------------------------------
Shares

Pre-emption for existing shareholders on      254D
  issue of shares in proprietary company 
Other provisions about paying dividends       254U
Dividend rights for shares in proprietary     254W(2)
  companies
---------------------------------------------------------
Transfer of shares

Transmission of shares on death               1091AA
Transmission of shares on bankruptcy          1091AB
Transmission of shares on mental incapacity   1091B
Registration of transfers                     1091D
Additional general discretion for directors   1091E
  of proprietary companies to refuse to
  register transfers
---------------------------------------------------------
Share capital

(Omitted)                                            
---------------------------------------------------------

      

PART 2B.5 - REGISTERED OFFICE AND PLACES OF BUSINESS

SECTION 142   REGISTERED OFFICE  

142(1)  [Registered office]  

A company must have a registered office in Australia. Communications and notices to the company may be addressed to its registered office.

Note:

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)).

142(2)  [Change of address]  

A company must lodge notice of a change of address of its registered office with ASIC not later than 14 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).

142(3)  [Notice to take effect]  

A notice of change of address takes effect from the later of:

(a)  the 7th 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.

SECTION 143   ASIC MAY CHANGE ADDRESS OF REGISTERED OFFICE TO A DIRECTOR'S ADDRESS  

143(1)  [Written consent]  

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).

143(2)  [No consent or consent withdrawn]  

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 Australia that ASIC intends to change the address of the company's registered office to the director's address.

143(3)  [ASIC not notified]  

If ASIC is not notified of the address of the company's proposed new registered office under subsection 142(2) within 14 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.

SECTION 144   COMPANY'S NAME MUST BE DISPLAYED AT REGISTERED OFFICE ETC  

144(1)  [Display name]  

A company must display its name prominently at every place at which the company carries on business and that is open to the public.

144(2)  [Public company]  

A public company must also display its name and the words ``Registered Office'' prominently at its registered office.

SECTION 145   OPENING HOURS OF REGISTERED OFFICE OF PUBLIC COMPANY  

145(1)  [Opening hours]  

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.

145(2)  [Hours to be specified]  

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; 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).

145(3)  [Lodgment with ASIC]  

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.

SECTION 146   CHANGE OF ADDRESS OF PRINCIPAL PLACE OF BUSINESS  

146     A company must lodge with ASIC notice of a change of the address of its principal place of business not later than 14 days after the date on which the change occurs. The notice must be in the prescribed form.

PART 2B.6 - NAMES

Division 1 - Selecting and using a name

SECTION 147   WHEN A NAME IS AVAILABLE  

147(1)  Name is available unless identical or unacceptable.  

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 Law for another body; or

(b)  identical (under rules set out in the regulations) to a name that is included on the national business names register in respect of another individual or body who is not the person applying to have the name; or

(c)  unacceptable for registration under the regulations.

147(2)  Minister may consent to a name being available to a company.  

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 Law for another body; or

(b)  unacceptable for registration under the regulations.

147(3)  (Conditions)  

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.

147(4)  (Unacceptable name available)  

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 the Capital 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 the Capital Territory; or

(ii) a specified provision of an Act of the Commonwealth, a State or the Capital 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.

SECTION 147A   EFFECT OF REGISTRATION OF COMPANY UNDER CORPORATIONS LAW OF ANOTHER JURISDICTION  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

SECTION 148   A COMPANY'S NAME  

148(1)  Company may use available name or ACN.  

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).

148(2)  Limited companies.  

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.

148(3)  Unlimited proprietary companies.  

An unlimited proprietary company must have the word ``Proprietary'' at the end of its name.

148(4)  No liability companies.  

A no liability company must have the words ``No Liability'' at the end of its name.

148(5)  Public companies with ``Proprietary'' included in their name.  

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 the commencement of this section; and

(b)  the word ``Proprietary'' (or an abbreviation of it) was included in its name before that commencement.

SECTION 149   ACCEPTABLE ABBREVIATIONS  

149(1)  [Table of abbreviations]  

The abbreviations set out in the following table may be used:

(a)  instead of words that this Law requires to be part of a company's name or to be included in a document or on a company's common seal; and

(b)  instead of words that are part of a company's name; and

(c)  with or without full stops.

--------------------------------------------------------
Acceptable abbreviations               [operative table]
--------------------------------------------------------
    Word                        Abbreviation
--------------------------------------------------------
1   Company                     Co or Coy
2   Proprietary                 Pty
3   Limited                     Ltd
4   No Liability                NL
5   Australian                  Aust
6   Number                      No
7   and                         &
8   Australian Company Number   ACN
--------------------------------------------------------

      

149(2)  [Word may be used]  

If a company's name includes any of these abbreviations, the word corresponding to the abbreviation may be used instead.

SECTION 149A   EFFECT OF CERTIFICATE ISSUED UNDER PREVIOUS LAW  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

SECTION 150   EXCEPTION TO REQUIREMENT FOR USING ``LIMITED'' IN NAME  

150(1)  [Companies limited by guarantee]  

ASIC may register a company limited by guarantee without ``Limited'' in its name, or alter the registration of a company of that type by omitting ``Limited'' from its name, if its constitution:

(a)  requires the company to pursue charitable purposes only and to apply its income in promoting those purposes; and

(b)  prohibits the company making distributions to its members and paying fees to its directors; and

(c)  requires the directors to approve all other payments the company makes to directors.

150(2)  [Notify ASIC]  

The company must notify ASIC as soon as practicable if any of those requirements or prohibitions in its constitution are not complied with or if its constitution is modified to remove any of those requirements or prohibitions.

SECTION 151   EXCEPTION TO REQUIREMENT FOR USING ``LIMITED'' IN NAME - PRE-EXISTING LICENCES  

151(1)  [Licence in force]  

A licence in force immediately before the commencement of this section that allowed a company to omit ``Limited'' from its name continues in force subject to subsection (3).

151(2)  [Notify ASIC]  

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).

151(3)  [Revocation]  

ASIC may revoke the company's licence if the company does anything set out in paragraphs (2)(a) to (e).

SECTION 152   RESERVING A NAME  

152(1)  [Application to reserve]  

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.

152(2)  [Length of reservation]  

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.

152(3)  [Cancellation]  

ASIC must cancel a reservation if the applicant asks ASIC in writing to do so.

SECTION 153   USING A NAME AND ACN ON DOCUMENTS  

153(1)  [Name]  

A company must set out its name on all its public documents and negotiable instruments.

153(2)  [ACN]  

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, the expression ``Australian Company Number'' followed by its ACN. 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 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''.

SECTION 154   EXCEPTION TO REQUIREMENT TO HAVE ACN ON RECEIPTS  

154     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.

SECTION 155   REGULATIONS MAY EXEMPT FROM REQUIREMENT TO SET OUT INFORMATION ON DOCUMENTS  

155     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.

SECTION 156   CARRYING ON BUSINESS USING ``LIMITED'', ``NO LIABILITY'' OR ``PROPRIETARY'' IN NAME  

156    A person must not carry on business 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);

unless allowed or required to do so under an Australian law.

Division 2 - Changing a company's name

SECTION 157   COMPANY CHANGING ITS NAME  

157(1)  (Special resolution and application)  

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).

157(2)  (Lodgment with ASIC)  

The company must lodge a copy of the special resolution with ASIC within 14 days after it is passed.

157(3)  (Change of name)  

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.

SECTION 158   ASIC'S POWER TO DIRECT COMPANY TO CHANGE ITS NAME  

158(1)  (Direction to change name)  

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)).

158(2)  [Compliance]  

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.

158(3)  [Non-compliance]  

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.

158(4)  [Effect]  

A change of name under subsection (3) takes effect when ASIC alters the details of the company's registration.

SECTION 159   ASIC'S POWER TO INCLUDE ``LIMITED'' IN COMPANY'S NAME  

159(1)  [ASIC may change]  

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.

159(2)  [Effect]  

The change of name takes effect when ASIC alters the details of the company's registration.

SECTION 160   ASIC MUST ISSUE NEW CERTIFICATE IF COMPANY'S NAME CHANGES  

160     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).

SECTION 161   EFFECT OF NAME CHANGE  

161(1)  [Effect of change of name]  

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.

161(2)  [Legal proceedings]  

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.

PART 2B.7 - CHANGING COMPANY TYPE

SECTION 162   CHANGING COMPANY TYPE  

162(1)  (Change of type)  

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.

------------------------------------------------------------------
Allowed conversions                              [operative table]
------------------------------------------------------------------
This type of company may change ...    ... to this type of company
------------------------------------------------------------------
1  proprietary company limited       unlimited proprietary company
   by shares
                                     unlimited public company

                                     public company limited by
                                     shares
-----------------------------------------------------------------
2  unlimited proprietary company     proprietary company limited
                                     by  shares (but only if,
                                     within the last 3 years, it
                                     was not a limited company
                                     that became an unlimited
                                     company)

                                     public company limited by
                                     shares (but only if, within
                                     the last 3 years, it was not
                                     a limited company that
                                     became an unlimited company)

                                     unlimited public company
-----------------------------------------------------------------
3  public company limited by shares  unlimited public company

                                     unlimited proprietary
                                     company

                                     proprietary company limited
                                     by shares

                                     no liability company (see
                                     subsection (2))
-----------------------------------------------------------------
4  company limited by guarantee      public company limited by
                                     shares

                                     unlimited public company

                                     proprietary company limited
                                     by shares

                                     unlimited proprietary company
-----------------------------------------------------------------
5  unlimited public company          public company limited by
                                     shares (but only if, within
                                     the last 3 years, it was not
                                     a limited company that became
                                     an unlimited company)

                                     proprietary company limited by
                                     shares (but only if, within the
                                     last 3 years, it was not a
                                     limited company that became an
                                     unlimited company)

                                     unlimited proprietary company
-----------------------------------------------------------------
6  public no liability company       public company limited by
                                     shares (but only if all the
                                     issued shares are fully paid
                                     up)

                                     proprietary company limited
                                     by shares (but only if all
                                     the issued shares are fully
                                     paid up)
-----------------------------------------------------------------


      

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 section 1416.

162(2)  [Public company limited by shares]  

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 .

162(3)  [Lodgment with ASIC]  

The company must lodge a copy of the special resolution with ASIC within 14 days after it is passed.

162(4)  [Call if becomes externally administered]  

A special resolution to change an unlimited company that has share capital to a company limited by shares may also provide that a specific portion of its uncalled share capital may only be called up if the company becomes an externally-administered body corporate.

SECTION 163   APPLYING FOR CHANGE OF TYPE  

163(1)  Lodging application.  

To change its type, a company must lodge an application with ASIC.

163(2)  Contents of the application.  

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).

163(3)  Company limited by guarantee to company limited by shares.  

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 those 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 and 708).

163(4)  [Prescribed form]  

The application must be in the prescribed form.

163(5)  [Consents]  

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.

SECTION 164   ASIC CHANGES TYPE OF COMPANY  

164(1)  [Notice]  

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.

164(2)  [ASIC direction]  

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.

164(3)  [Publication of notice]  

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 Appeals Tribunal prevents it from doing so.

164(4)  [Alteration of details]  

Subject to an order made by a court or the Administrative Appeals 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.

164(5)  [Effect]  

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.

164(6)  [Certificate of registration]  

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).

164(7)  [Court not to make order]  

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 Appeals 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)).

SECTION 165   ASIC MAY DIRECT A PROPRIETARY COMPANY TO CHANGE TO A PUBLIC COMPANY IN CERTAIN CIRCUMSTANCES  

165(1)  [ASIC direction]  

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).

165(2)  [Compliance with direction]  

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.

165(3)  [Non-compliance]  

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.

165(4)  [Effect]  

A change of type under this section takes effect when ASIC alters the details of the company's registration.

165(5)  [Certificate of registration]  

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).

SECTION 166   EFFECT OF CHANGE OF TYPE  

166(1)  [Effect of change]  

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.

166(2)  [Company limited by guarantee]  

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).

SECTION 166A   RECOGNITION OF COMPANIES FROM OTHER JURISDICTIONS  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

SECTION 167   ISSUE OF SHARES BY COMPANY OR HOLDING COMPANY - COMPANY LIMITED BY GUARANTEE CHANGING TO COMPANY LIMITED BY SHARES  

167(1)  [Members]  

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.

167(2)  [Court not to make order]  

If shares are issued according to this section, a court is not to make an order reversing the issue of the shares.

CHAPTER 2C - REGISTERS

SECTION 167A   WHO IS COVERED BY THIS CHAPTER  

167A(1)  (Who is covered)  

This Chapter covers:

(a)  all companies; and

(b)  all registered schemes.

167A(2)  (Responsible entity)  

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.

SECTION 168   REGISTERS TO BE MAINTAINED  

168(1)  (Registers)  

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 1:

See also section 271 (register of charges).

Note 2:

The registers may be kept on computer (see section 1306).

168(2)  [Certain documents are debentures]  

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.

168(3)-(5)  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

SECTION 169   REGISTER OF MEMBERS  

169(1)  General requirements.  

The register of members must contain the following information about each member:

(a)  the member's name and address

(b)  the date on which the entry of the member's name in the register is made.

169(2)  Index to register.  

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.

169(3)  Companies with share capital.  

If the company has a share capital, the register must also show:

(a)  the date on which every allotment of shares takes place; and

(b)  the number of shares in each allotment; and

(c)  the shares held by each member; and

(d)  the class of shares; and

(e)  the share numbers (if any), or share certificate numbers (if any), of the shares; and

(f)  the amount unpaid on the shares (if any).

Note 1:

Transfers of shares are entered in the register under section 1092. Section 1091C 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).

169(4)  [Amount unpaid]  

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 Schedule 2 of the Company Law Review Act 1997 commenced; and

(b)  the register continues to show the par values of the shares as they were immediately before that commencement.

*169(5)  [Amount unpaid]  

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 Schedule 5 of the Company Law Review Act 1998 commenced; and

(b)  the register continues to show amount of unpaid par value for the shares as they were immediately before that commencement.

*169(5)  Non-beneficial ownership - companies other than listed companies.  

The register of a company that:

(a)  has a share capital; and

(b)  is not a listed company;

must indicate any shares that a member does not hold beneficially.

Note:

See also section 1096A (in particular, subsection 1096A(9) which contains relevant presumptions about beneficial ownership).

169(6)  [How beneficial ownership to be decided]  

In deciding for the purposes of subsection (5) whether a member holds shares beneficially or non-beneficially, the company is to have regard only to information in notices given to the company under section 1096A, 672B or 672C.

169(6A)  Registered schemes.  

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.

169(7)  Former members.  

A register of members must also show:

(a)  the name and details of each person who stopped being a member of the company 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.

169(8)  Joint holders.  

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.

SECTION 170   REGISTER OF OPTION HOLDERS AND COPIES OF OPTIONS DOCUMENTS  

170(1)  [Information to be contained in register]  

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.

170(2)  [Time limits]  

Information about the grant of an option must be entered in the register within 14 days after the grant of the option.

170(3)  Copies of options documents.  

The company or scheme must keep with the register a copy of every document that grants an option over unissued shares or interests unless the option has been granted official quotation by a securities exchange.

170(4)  [Written notice]  

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.

170(5)  [Option unaffected by failure to comply]  

A failure to comply with this section in relation to an option does not affect the option itself.

SECTION 170A   ASC MAY DETERMINE THAT A PROPRIETARY COMPANY IS A PUBLIC COMPANY IN CERTAIN CIRCUMSTANCES  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

SECTION 171   REGISTER OF DEBENTURE HOLDERS  

171(1)  [Information to be contained in register]  

The register of debenture holders must contain the following information about each holder of a debenture:

(a)  the debenture holder's name and address

(b)  the amount of the debentures held.

Note:

See subsection 168(2) for the coverage of ``debenture''.

171(2)  [Debenture unaffected by failure to comply]  

A company's failure to comply with this section in relation to a debenture does not affect the debenture itself.

171(3)-(13)  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

SECTION 172   LOCATION OF REGISTERS  

172(1)  [Where register to be kept]  

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 Australia; or

(c)  a place in Australia (whether of the company or of someone else) where the work involved in maintaining the register is done; or

(d)  another place in Australia approved by ASIC.

172(1A)  [Place where register to be kept]  

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; or

(c)  an office (whether of the responsible entity or of someone else) where the work involved in maintaining the register is done; or

(d)  another office approved by ASIC.

The office must be in Australia.

172(2)  Notice to ASIC.  

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 is neither the registered office, nor at the principal place of business, of the company or responsible entity; 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.

SECTION 173   RIGHT TO INSPECT AND GET COPIES  

173(1)  Right to inspect.  

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 a hard copy of the information on the register unless the person and the company or the responsible entity agree that the person can access the information by computer.

Note:

Other provisions that are relevant to the inspection of registers are:

•  section 1300 (place and times for inspection)

•  section 1301 (the location of documents that are kept on computers)

•  section 1306 (form and evidentiary value).

173(2)  Inspection fees.  

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.

173(3)  Right to get copies.  

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)  asks for the copy; 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 and the person asks for the data on floppy disk, the company or scheme must give the data to the person on floppy disk. The data must be readable but the floppy disk need not be formatted for the person's preferred operating system.

173(4)  [Inspection of options documents]  

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.

173(5)  [Share certificate numbers]  

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.

173(6)  ASIC power in relation to register of debenture holders.  

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.

173(7)  [Form of exemption]  

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.

173(8)  [Gazette]  

ASIC must publish a copy of the exemption in the Gazette.

173(9)  [Contravention of condition]  

A person must not contravene a condition of the exemption.

173(10)  [Court may order compliance with condition]  

On application by ASIC, the Court may order a person who contravenes a condition of the exemption to comply with the condition.

SECTION 174   AGENT'S OBLIGATIONS  

174    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.

SECTION 175   CORRECTION OF REGISTERS  

175(1)  [Application to Court]  

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.

175(2)  [Compensation]  

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.

175(3)  [Notification of correction to ASIC]  

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.

175(4)  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

SECTION 176   EVIDENTIARY VALUE OF REGISTERS  

176    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.

SECTION 177   USE OF INFORMATION ON REGISTERS  

177(1)  [Prohibited uses]  

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;

unless that use or disclosure of the information is:

(c)  relevant to the holding of the interests recorded in the register or the exercise of the rights attaching to them; or

(d)  approved by the company or scheme.

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.

177(2)  [Compensation]  

A person who contravenes subsection (1) is liable to compensate anyone else who suffers loss or damage because of the contravention.

177(3)  [Profit is debt to company]  

A person who makes a profit from a contravention of subsection (1) owes a debt to the company or the scheme. The amount of the debt is the amount of the profit.

177(4)  [Recovery of debt]  

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.

SECTION 178   OVERSEAS BRANCH REGISTERS  

178(1)  [Optional overseas register]  

A company may keep a branch register of members at a place outside Australia.

178(2)  [Requirements where branch register kept]  

If a company keeps an overseas branch register under subsection (1):

(a)  the company must keep the branch register in the same manner as this Law requires the company to keep the register kept under section 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.

CHAPTER 2D - OFFICERS AND EMPLOYEES

PART 2D.1 - DUTIES AND POWERS

SECTION 179   BACKGROUND TO DUTIES OF DIRECTORS, OTHER OFFICERS AND EMPLOYEES  

179(1)  [Duties]  

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 Law and other laws (including the general law).

179(2)  [Definition of director and officer]  

Section 9 defines both director and officer . Officer includes, as well as directors and secretaries, some other people who manage the corporation or its property (such as receivers and liquidators).

Division 1 - General duties

SECTION 180   CARE AND DILIGENCE - CIVIL OBLIGATION ONLY  

180(1)  Care and diligence - directors and other officers.  

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).

180(2)  Business judgment rule.  

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 Law or under any other laws.

180(3)  (Definition of business judgment)  

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.

SECTION 181   GOOD FAITH - CIVIL OBLIGATIONS  

181(1)  Good faith - directors and other officers.  

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.

181(2)  [Involvement]  

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).

SECTION 182   USE OF POSITION - CIVIL OBLIGATIONS  

182(1)  Use of position - directors, other officers and employees.  

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).

182(2)  [Involvement]  

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).

SECTION 183   USE OF INFORMATION - CIVIL OBLIGATIONS  

183(1)  Use of information - directors, other officers and employees.  

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).

183(2)  [Involvement]  

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).

SECTION 184   GOOD FAITH, USE OF POSITION AND USE OF INFORMATION - CRIMINAL OFFENCES  

184(1)  Good faith - directors and other officers.  

A director or other officer of a corporation commits an offence if they:

(a)  are reckless; or

(b)  are intentionally 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.

184(2)  Use of position - directors, other officers and employees.  

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.

184(3)  Use of information - directors, other officers and employees.  

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.

SECTION 185   INTERACTION OF SECTIONS 180 TO 184 WITH OTHER LAWS ETC  

185     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).

SECTION 186   TERRITORIAL APPLICATION OF SECTIONS 180 TO 184  

186     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 Australia; or

(b)  an act that the foreign company does, or proposes to do, in Australia; or

(c)  a decision by the foreign company whether or not to do, or refrain from doing, an act in Australia.

SECTION 187   DIRECTORS OF WHOLLY-OWNED SUBSIDIARIES  

187     A director of a corporation that is a wholly-owned subsidiary of a body corporate is to be 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.

SECTION 188   RESPONSIBILITY OF SECRETARIES AND DIRECTORS FOR CERTAIN CONTRAVENTIONS  

188(1)  Secretary's functions.  

A secretary of a company contravenes this subsection if the company contravenes:

(a)  section 142 (requirement for companies to have registered office); or

(b)  section 145 (requirement for registered office of public company to be open to public); or

(c)  section 345 (annual returns); or

(d)  section 205B (lodgment of notices with ASIC).

Note:

See section 203C for the circumstances in which a company must have a secretary.

188(2)  Consequence if director of proprietary company without secretary does not fulfil secretary's function.  

Each director of a proprietary company contravenes this subsection if:

(a)  the proprietary company contravenes section 142, 145, 205B or 345; and

(b)  the proprietary company does not have a secretary when it contravenes that section.

188(3)  Defence.  

A person does not contravene subsection (1) or (2) if they show that they took all reasonable steps to ensure that the company complied with the section.

SECTION 189   RELIANCE ON INFORMATION OR ADVICE PROVIDED BY OTHERS  

189     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.

SECTION 190   RESPONSIBILITY FOR ACTIONS OF DELEGATE  

190(1)  [Delegation by director]  

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.

190(2)  [Director not responsible in certain circumstances]  

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 Law 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.

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

SECTION 191   MATERIAL PERSONAL INTEREST - DIRECTOR'S DUTY TO DISCLOSE  

191(1)  Director's duty to notify other directors of material personal interest when conflict arises.  

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.

191(2)  (Notice not required in certain circumstances)  

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 companyor 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).

191(3)  (Details of notice)  

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.

191(4)  Effect of contravention by director.  

A contravention of this section by a director does not affect the validity of any act, transaction, agreement, instrument, resolution or other thing.

191(5)  Section does not apply to single director proprietary company.  

This section does not apply to a proprietary company that has only 1 director.

SECTION 192   DIRECTOR MAY GIVE OTHER DIRECTORS STANDING NOTICE ABOUT AN INTEREST  

192(1)  Power to give notice.  

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.

192(2)  (Details of notice)  

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.

192(3)  Standing notice must be tabled at meeting if given to directors individually.  

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.

192(4)  Nature and extent of interest must be recorded in minutes.  

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.

192(5)  Dates of effect and expiry of standing notice.  

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).

192(6)  Effect of material increase in nature or extent of interest.  

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.

192(7)  Effect of contravention by director.  

A contravention of this section by a director does not affect the validity of any act, transaction, agreement, instrument, resolution or other thing.

SECTION 193   INTERACTION OF SECTIONS 191 AND 192 WITH OTHER LAWS ETC  

193     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.

SECTION 194   VOTING AND COMPLETION OF TRANSACTIONS - DIRECTORS OF PROPRIETARY COMPANIES (replaceable rule - see section 135)  

194     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).

SECTION 195   RESTRICTIONS ON VOTING - DIRECTORS OF PUBLIC COMPANIES ONLY  

195(1)  Restrictions on voting and being present.  

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;

unless:

(c)  subsection (2) or (3) allows the director to be present; or

(d)  the interest does not need to be disclosed under section 191.

195(2)  Participation with approval of other directors.  

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.

195(3)  Participation with ASIC approval.  

The director may be present and vote if they are so entitled under a declaration or order made by ASIC under section 196.

195(4)  Director may consider or vote on resolution to deal with matter at general meeting.  

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.

195(5)  Effect of contravention by director.  

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.

SECTION 196   ASIC POWER TO MAKE DECLARATIONS AND CLASS ORDERS  

196(1)  ASIC's power to make specific declarations.  

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).

196(2)  [Declaration may be limited]  

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.

196(3)  ASIC's power to make class orders.  

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.

196(4)  [Order may be conditional]  

The order may be expressed to be subject to conditions.

196(5)  [Publication in the Gazette]  

Notice of the making, revocation or suspension of the order must be published in the Gazette.

Division 3 - Duty to discharge certain trust liabilities

SECTION 197   DIRECTORS LIABLE FOR DEBTS AND OTHER OBLIGATIONS INCURRED BY CORPORATION AS TRUSTEE  

197(1)  (Liability of director)  

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, 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.

This is so even if the trust does not have enough assets to indemnify the trustee. The person is liable both individually and jointly with the corporation and anyone else who is liable under this subsection.

197(2)  [Indemnification]  

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.

197(3)  [Jurisdictional limit]  

This section does not apply to a liability incurred outside Australia by a foreign company.

Division 4 - Powers

SECTION 198A   POWERS OF DIRECTORS (replaceable rule - see section 135)  

198A(1)  (Management of business)  

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.

198A(2)  (Exercise of powers)  

The directors may exercise all the powers of the company except any powers that this Law 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.

SECTION 198B   NEGOTIABLE INSTRUMENTS (replaceable rule - see section 135)  

198B(1)  (Use of negotiable instruments)  

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.

198B(2)  [Use of instrument in a different way]  

The directors may determine that a negotiable instrument may be signed, drawn, accepted, endorsed or otherwise executed in a different way.

SECTION 198C   MANAGING DIRECTOR (replaceable rule - see section 135)  

198C(1)  [Conferral of power]  

The directors of a company may confer on a managing director any of the powers that the directors can exercise.

198C(2)  [Power can be revoked or varied]  

The directors may revoke or vary a conferral of powers on the managing director.

SECTION 198D   DELEGATION  

198D(1)  [Delegation of powers]  

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:

The delegation must be recorded in the company's minute book (see section 251A).

198D(2)  [Exercise of powers]  

The delegate must exercise the powers delegated in accordance with any directions of the directors.

198D(3)  [Effect of exercise of powers]  

The exercise of the power by the delegate is as effective as if the directors had exercised it.

SECTION 198E   SINGLE DIRECTOR/SHAREHOLDER PROPRIETARY COMPANIES  

198E(1)  Powers of director.  

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 Law 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.

198E(2)  Negotiable instruments.  

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.

SECTION 198F   RIGHT OF ACCESS TO COMPANY BOOKS  

198F(1)  Right while director.  

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:

Section 290 gives the director a right of access to financial records.

198F(2)  Right during 7 years after ceasing to be director.  

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.

198F(3)  Right to take copies.  

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.

198F(4)  Company not to refuse access.  

A company must allow a person to exercise their rights to inspect or take copies of the books under this section.

198F(5)  Interaction with other rules.  

This section does not limit any right of access to company books that a person has apart from this section.

PART 2D.2 - RESTRICTIONS ON INDEMNITIES, INSURANCE AND TERMINATION PAYMENTS

Division 1 - Indemnities and insurance for officers and auditors

SECTION 199A   INDEMNIFICATION AND EXEMPTION OF OFFICER OR AUDITOR  

199A(1)  Exemptions not allowed.  

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.

199A(2)  When indemnity for liability (other than for legal costs) not allowed.  

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 1317H

(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.

199A(3)  When indemnity for legal costs not allowed.  

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 Law 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 or 206E (disqualification), section 232 (oppression), section 1317E, 1317G or 1317H (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).

199A(4)  [Outcome of proceedings]  

For the purposes of subsection (3), the outcome of proceedings is the outcome of the proceedings and any appeal in relation to the proceedings.

SECTION 199B   INSURANCE PREMIUMS FOR CERTAIN LIABILITIES OF DIRECTOR, SECRETARY, OTHER OFFICER OR AUDITOR  

199B     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.

SECTION 199C   CERTAIN INDEMNITIES, EXEMPTIONS, PAYMENTS AND AGREEMENTS NOT AUTHORISED AND CERTAIN DOCUMENTS VOID  

199C(1)  [Unlawful acts]  

Sections 199A and 199B do not authorise anything that would otherwise be unlawful.

199C(2)  [Purported cover void]  

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

SECTION 200A   WHEN BENEFIT GIVEN IN CONNECTION WITH RETIREMENT FROM OFFICE  

200A(1)  (Interpretation)  

For the purposes of this Division:

(a)  a benefit is given in connection with a person's retirement from an office 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

(ii) in connection with the person's retirement from the office; 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 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

(ii) in connection with the person's retirement from the office; and

(e)  retirement from an office includes:

(i) loss of the office; and

(ii) resignation from the office; and

(iii) death of a person at a time when they hold the office.

200A(2)  (Giving a benefit)  

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;

person A is taken to give benefit A in connection with the person B's retirement from that office.

SECTION 200B   RETIREMENT BENEFITS GENERALLY NEED MEMBERSHIP APPROVAL  

200B(1)  Benefits in connection with retirement from board or managerial office.  

The following must not give a person a benefit in connection with that person's, or someone else's, retirement from a board or managerial office in a company, or a related body corporate, without member approval under section 200E:

(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.

Note 1:

Sections 200F, 200G and 200H provide for exceptions to this rule.

Note 2: Section 9 defines board or managerial office .

200B(2)  Prescribed superannuation funds.  

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.

200B(3)  Prescribed circumstances.  

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 a person's retirement from an office 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 a person's retirement from an office 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.

200B(4)  [Definition]  

In this section:

superannuation fund means a provident, benefit, superannuation or retirement fund.

SECTION 200C   BENEFITS ON TRANSFER OF UNDERTAKING OR PROPERTY NEED MEMBERSHIP APPROVAL  

200C     A person must not give a benefit to a person who:

(a)  holds, or has at any previous time held, a board or managerial 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 inparagraph (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 without member approval under section 200E.

Note:

Section 9 defines board or managerial office .

SECTION 200D   CONTRAVENTION TO RECEIVE BENEFIT WITHOUT MEMBER APPROVAL  

200D     A person who:

(a)  holds, or has at any previous time held, a board or managerial 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.

Note:

Section 9 defines board or managerial office .

SECTION 200E   APPROVAL BY MEMBERS  

200E(1)  [Method for approval]  

If section 200B or 200C requires member approval for giving a person a benefit, it must 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.

200E(2)  [Details in notice]  

Details of the benefit must be set out in, or accompany, the notice of the meeting at which the resolution is to be considered. 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 prescribed benefit; or

(ii) if that value cannot be ascertained at the time of the disclosure - the manner in which that value is to be calculated and any matter, event or circumstance that will, or is likely to, affect the calculation of that value.

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.

200E(3)  [Extension of approval]  

The approval extends to 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.

200E(4)  [Duty to body corporate]  

The approval 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.

SECTION 200F   EXEMPT BENEFITS AND BENEFITS GIVEN IN CERTAIN CIRCUMSTANCES  

200F     Subsection 200B(1) does not apply to:

(a)  a benefit given in connection with a person's retirement from an office in relation to a company if the benefit is:

(i) given under an agreement entered into before 1 January 1991 if giving the benefit in accordance with the agreement would have been lawful if the benefit were given when the agreement was entered into; or

(ii) a genuine payment by way of damages for breach of contract; or

(iii) given to the person under an agreement made between the company and the person before the person became the holder of the office as the consideration, or part of the consideration, for the person agreeing to hold the office; or

(iv) a payment made in respect of leave of absence to which the person is entitled under an industrial instrument; or

(b)  a benefit given in prescribed circumstances.

SECTION 200G   GENUINE PAYMENTS OF PENSION AND LUMP SUM  

200G(1)  [Exceptions]  

Subsection 200B(1) does not apply to a benefit if:

(a)  the benefit is a payment in connection with a person's retirement from a board or managerial office (the relevant office ) 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 payments (if any) already made or payable in connection with the person's retirement from board or managerial offices in the company and related bodies corporate does not exceed the payment limit set by subsection (1A).

In applying paragraph (c), disregard any pensions or lump sums that section 200F applies to.

200G(2)  [Calculation of payment limit]  

The payment limit is:

(a)  the amount worked out under subsection (3) if the person:

(i) was an eligible employee in relation to the company at the time when the person retired from the relevant office; and

(ii) has been an eligible employee in relation to the company throughout a period (the relevant period ), or throughout periods totalling a period (also the relevant period ), of more than 3 years; or

(b)  otherwise - the total remuneration of the person from the company and related bodies corporate during the period of 3 years ending when the person retired from the relevant office.

Note:

Section 9 defines remuneration .

200G(3)  [Formula]  

The amount worked out under this subsection is the amount worked out using the formula:

Total remuneration x Relevant period
------------------------------------
                 3 

      

where:

total remuneration is the amount of the total remuneration of the person from the company and related bodies corporate during the last 3 years of the relevant period.

relevant period is the number of years in the relevant period or 7, whichever is the lesser number.

200G(4)  [Amounts to be disregarded]  

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.

200G(5)  [Definition of eligible employee]  

For the purposes of subparagraph (2)(a), a person is taken to have been an eligible employee in relation to a company at a particular time if:

(a)  the person was a genuine full-time employee of the company at that time; or

(b)  the person was a genuine full-time employee of a body corporate at that time and the body corporate was related to the company at that time.

200G(6)  [Definition]  

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.

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S 200G inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 200H   BENEFITS REQUIRED BY LAW  

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200H    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).

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S 200H inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 200J   BENEFITS TO BE HELD IN TRUST FOR COMPANY  

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200J(1)  [Creation of trust]  

If giving a benefit to a person contravenes section 200B, then:

(a)  if the benefit is a payment - the amount of the payment; or

(b)  otherwise - the money value of the prescribed benefit;

is taken to be received by the person in trust for the company concerned.

200J(2)  [Section applies to whole amount]  

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.

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S 200J inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2D.3 - APPOINTMENT, REMUNERATION AND CESSATION OF APPOINTMENT OF DIRECTORS

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Part 2D.3 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

Division 1 - Appointment of directors

SECTION 201A   MINIMUM NUMBER OF DIRECTORS  

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201A(1)  Proprietary companies.  

A proprietary company must have at least 1 director. That director must ordinarily reside in Australia.

201A(2)  Public companies.  

A public company must have at least 3 directors (not counting alternate directors). At least 2 directors must ordinarily reside in Australia.

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S 201A inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 201B   WHO CAN BE A DIRECTOR  

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201B(1)  [Minimum age]  

Only an individual who is at least 18 may be appointed as a director of a company.

201B(2)  [Previous disqualification]  

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 206F or leave granted by the Court under section 206G.

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S 201B inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 201C   DIRECTORS OF PUBLIC COMPANIES, OR SUBSIDIARIES, OVER 72  

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201C(1)  [Authority]  

A person who has turned 72 may only be appointed or act as a director of:

(a)  a public company; or

(b)  a company that is a subsidiary of a public company;

if authorised to do so under this section.

201C(2)  [Transitional period]  

A person may act as a director of a company during the period that:

(a)  starts on the day on which they turn 72; and

(b)  ends at the conclusion of the AGM beginning next after that day.

201C(3)  [When vacancy created]  

The office of a director of a public company, or of a subsidiary of a public company, becomes vacant at the conclusion of the AGM of the public company, or the subsidiary, beginning next after the director turns 72.

201C(4)  [Application to subsidiary company]  

If a proprietary company is a subsidiary of a public company:

(a)  subsection (3) does not apply to it; and

(b)  a person may continue to act as a director of the proprietary company until the next AGM of the public company after the person turns 72; and

(c)  the person's office of director becomes vacant at the end of that meeting.

Note:

Proprietary companies do not need to hold annual general meetings (see section 250N).

201C(5)  [Validity of acts]  

An act done by a person as a director is valid even if it is afterwards discovered that they had turned 72 at the time when they were appointed or that their appointment had terminated under subsection (3) or (4).

201C(6)  [No default provision]  

If the office of a director has become vacant under subsection (3) or (4), no provision for the automatic re-appointment of retiring directors in default of another appointment applies in relation to that director.

201C(7)  [Casual vacancy]  

If a vacancy created under subsection (3) or (4) is not filled at the meeting at which the office became vacant, the office may be filled as a casual vacancy.

201C(8)  [Appointment on special resolution]  

Subject to subsections (9) and (10), a person who has turned 72 may by special resolution be appointed or re-appointed as a director of that company to hold office until the conclusion of the company's next AGM if:

(a)  the resolution states the person's age; and

(b)  the notice of meeting states that the person is a candidate for election who has turned 72 and states the person's age.

201C(9)  [Appointment to subsidiary of public company]  

If the company is a subsidiary of a public company, the appointment or re-appointment referred to in subsection (8) does not have effect unless:

(a)  the person appointed or re-appointed is a director of the public company; or

(b)  the appointment or re-appointment of the person as a director of the company has been approved by a special resolution of the public company and the notice of meeting states that the person is a candidate for election as a director of the company who has turned 72 and states the person's age.

201C(10)  [Appointment to subsidiary company]  

If the subsidiary is a proprietary company:

(a)  the person may be appointed or re-appointed as a director of the subsidiary until the end of the next AGM of the holding company; and

(b)  the appointment does not need a resolution under subsection (8); and

(c)  the appointment must satisfy either paragraph (9)(a) or (b).

201C(11)  [Appointment to company limited by guarantee]  

If:

(a)  the constitution of a company limited by guarantee provides for the holding of postal ballots for the election of a director or directors; and

(b)  a postal ballot for the election of a director or directors is held and in the ballot:

(i) the members entitled to vote have been given notice in writing by the company stating that a candidate for election has turned 72 and stating the age of the candidate; and

(ii) that candidate is elected by a majority of not less than 75% of the members who, being entitled to vote, vote in the ballot;

that candidate may be appointed or re-appointed as a director to hold office until the conclusion of the next AGM of the company.

201C(12)  [ASIC declaration]  

If:

(a)  the constitution of a company limited by guarantee provides for the election or appointment of a director or directors otherwise than by members at a general meeting or by postal ballot of members; and

(b)  ASIC declares in writing that this section does not apply to the company or its directors;

then, subject to the conditions (if any) that ASIC specifies in the declaration, this section does not so apply.

201C(13)  [Effect of vacancy]  

A vacancy in the office of a director occurring under subsection (3) or (4) is not to be taken into account in determining when other directors are to retire.

201C(14)  [Effect of constitution]  

Nothing in this section limits, or affects the operation of, any provision of a company's constitution that prevents any person from being appointed as a director or requiring any director to vacate their office at any age less than 72 years.

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S 201C inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 201D   CONSENT TO ACT AS DIRECTOR  

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201D(1)  [Need for signed consent]  

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.

201D(2)  [Consent to be retained]  

The company must keep the consent.

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S 201D inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 201E   SPECIAL RULES FOR THE APPOINTMENT OF PUBLIC COMPANY DIRECTORS  

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201E(1)  [Method for passing resolution]  

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.

201E(2)  [Exclusions]  

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.

201E(3)  [Requirement of ballot or poll]  

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.

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S 201E inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 201F   SPECIAL RULES FOR THE APPOINTMENT OF DIRECTORS FOR SINGLE DIRECTOR/SINGLE SHAREHOLDER PROPRIETARY COMPANIES  

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201F(1)  [Appointment on recording and signing]  

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.

201F(2)  Appointment of new director on death, mental incapacity or bankruptcy.  

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.

201F(3)  [Appointment upon bankruptcy]  

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.

201F(4)  [Power of appointment]  

A person who has a power of appointment under subsection (2) or (3) may appoint themselves as director.

201F(5)  [Holding office]  

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.

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S 201F inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 201G   COMPANY MAY APPOINT A DIRECTOR (replaceable rule - see section 135)  

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201G     A company may appoint a person as a director by resolution passed in general meeting.

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S 201G inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 201H   DIRECTORS MAY APPOINT OTHER DIRECTORS (replaceable rule - see section 135)  

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201H(1)  Appointment by other directors.  

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.

201H(2)  Proprietary company - confirmation by meeting within 2 months.  

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.

201H(3)  Public company - confirmation by next AGM.  

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.

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S 201H inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 201J   APPOINTMENT OF MANAGING DIRECTORS (replaceable rule - see section 135)  

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201J     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.

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S 201J inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 201K   ALTERNATE DIRECTORS (replaceable rule - see section 135)  

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201K(1)  [Need for approval]  

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.

201K(2)  [Request for notice]  

If the appointing director requests the company to give the alternate notice of directors' meetings, the company must do so.

201K(3)  [Exercise of powers]  

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.

201K(4)  [Termination]  

The appointing director may terminate the alternate's appointment at any time.

201K(5)  [Documents required]  

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)).

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History

S 201K inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 201L   SIGNPOST - ASIC TO BE NOTIFIED OF APPOINTMENT  

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201L     Under section 205B, a company must notify ASIC within 14 days if a person is appointed as a director or as an alternate director.

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S 201L inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 201M   EFFECTIVENESS OF ACTS BY DIRECTORS  

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201M(1)  [Effectiveness of acts]  

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 Law.

201M(2)  [Ramifications not addressed]  

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 ASICor 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.

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History

S 201M inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

Division 2 - Remuneration of directors

SECTION 202A   REMUNERATION OF DIRECTORS (replaceable rule - see section 135)  

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202A(1)  (Remuneration by resolution)  

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.

202A(2)  (Expenses)  

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.

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S 202A inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 202B   MEMBERS MAY OBTAIN INFORMATION ABOUT DIRECTORS' REMUNERATION  

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202B(1)  (Disclosure upon direction)  

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 meetingof 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.

202B(2)  [Method for compliance]  

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.

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S 202B inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 202C   SPECIAL RULE FOR SINGLE DIRECTOR/SINGLE SHAREHOLDER PROPRIETARY COMPANIES  

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202C     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.

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S 202C inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

Division 3 - Resignation, retirement or removal of directors

SECTION 203A   DIRECTOR MAY RESIGN BY GIVING WRITTEN NOTICE TO COMPANY (replaceable rule - see section 135)  

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203A     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.

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S 203A inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 203B   SIGNPOST TO CONSEQUENCES OF DISQUALIFICATION FROM MANAGING CORPORATIONS  

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203B     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 206F and 206G).

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S 203B inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 203C   REMOVAL BY MEMBERS - PROPRIETARY COMPANIES (replaceable rule - see section 135)  

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203C     A proprietary company:

(a)  may by resolution remove a director from office; and

(b)  may by resolution appoint another person as a director instead.

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S 203C inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 203D   REMOVAL BY MEMBERS - PUBLIC COMPANIES  

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203D(1)  Resolution for removal of director.  

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.

203D(2)  Notice of intention to move resolution for removal of director.  

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)).

203D(3)  Director to be informed.  

The company must give the director a copy of the notice as soon as practicable after it is received.

203D(4)  Director's right to put case to members.  

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).

203D(5)  [Circulation of statement]  

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.

203D(6)  [Exceptions]  

The director's statement does not have to be circulated to members if it is more than 1,000 words long or defamatory.

203D(7)  Time of retirement.  

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.

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S 203D inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 203E   DIRECTOR CANNOT BE REMOVED BY OTHER DIRECTORS - PUBLIC COMPANIES  

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203E     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.

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S 203E inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 203F   TERMINATION OF APPOINTMENT OF MANAGING DIRECTOR (replaceable rule - see section 135)  

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203F(1)  [Cease to be managing director]  

A person ceases to be managing director if they cease to be a director.

203F(2)  [Powers to revoke or vary appointment]  

The directors may revoke or vary an appointment of a managing director.

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S 203F inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2D.4 - APPOINTMENT OF SECRETARIES

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Part 2D.4 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 204A   MINIMUM NUMBER OF SECRETARIES  

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204A(1)  Proprietary companies.  

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.

204A(2)  Public companies.  

A public company must have at least 1 secretary. At least 1 of them must ordinarily reside in Australia.

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S 204A inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 204B   WHO CAN BE A SECRETARY  

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204B(1)  (Minimum age)  

Only an individual who is at least 18 may be appointed as a secretary of a company.

204B(2)  (Previous disqualification)  

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 206F or leave granted by the Court under section 206G.

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S 204B inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 204C   CONSENT TO ACT AS SECRETARY  

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204C(1)  (Need for signed consent)  

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.

204C(2)  [Consent to be retained]  

The company must keep the consent.

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S 204C inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 204D   HOW A SECRETARY IS APPOINTED  

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204D     A secretary is to be appointed by the directors.

Note 1:

The company must notify ASIC of the appointment within 14 days (see subsection 205B(1)).

Note 2: Section 188 deals with the responsibilities of secretaries for contraventions by the company.

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S 204D inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 204E   EFFECTIVENESS OF ACTS BY SECRETARIES  

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204E(1)  [Effectiveness of acts]  

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 Law.

204E(2)  [Ramifications not addressed]  

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.

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S 204E inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 204F   TERMS AND CONDITIONS OF OFFICE FOR SECRETARIES (replaceable rule - see section 135)  

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204F     A secretary holds office on the terms and conditions (including as to remuneration) that the directors determine.

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S 204F inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 204G   SIGNPOST TO CONSEQUENCES OF DISQUALIFICATION FROM MANAGING CORPORATIONS  

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204G     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 206F and 206G).

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S 204G inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2D.5 - PUBLIC INFORMATION ABOUT DIRECTORS AND SECRETARIES

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Part 2D.5 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 205A   DIRECTOR, SECRETARY OR ALTERNATE DIRECTOR MAY NOTIFY ASIC OF RESIGNATION OR RETIREMENT  

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205A(1)  (Obligation to notify ASIC)  

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.

205A(2)  [Accompanied by resignation]  

To be effective, a notice of resignation must be accompanied by a copy of the letter of resignation given to the company.

205A(3)  [Company's obligations]  

Nothing in this section affects the company's obligations to notify ASIC of the resignation or retirement.

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History

S 205A inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 205B   NOTICE OF NAME AND ADDRESS OF DIRECTORS AND SECRETARIES TO ASIC  

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205B(1)  New directors or secretaries.  

A company must lodge with ASIC a notice of the personal details of a director or secretary within 14 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.

205B(2)  New alternate directors.  

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 14 days after their appointment as an alternate director. The notice must be in the prescribed form.

205B(3)  Personal details.  

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.

205B(4)  Changes in details.  

The company must lodge with ASIC notice of any change in the personal details of a director, alternate director or secretary within 14 days after the change. The notice must be in the prescribed form.

205B(5)  Notice required if person stops being a director or secretary.  

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 14 days. The notice must be in the prescribed form. However, the company does not need to lodge a notice if the person was an alternate director who stopped being a director in accordance with the terms of their appointment as an alternate director.

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History

S 205B inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 205C   DIRECTOR AND SECRETARY MUST GIVE INFORMATION TO COMPANY  

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205C(1)  [Obligation to provide information]  

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.

205C(2)  [Time limit for compliance ]  

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.

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History

S 205C inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 205D   ADDRESS FOR OFFICERS  

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205D(1)  Address is normally residential address.  

A person's address for the purposes of a notice or application under subsection 205B(1), (2), (3) or (5) or 117(2) 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).

205D(2)  Entitlement to have alternative address.  

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.

205D(3)  [Obligation to lodge notice]  

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.

205D(4)  [Details provided upon judgment debt]  

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.

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History

S 205D inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 205E   ASIC'S POWER TO ASK FOR INFORMATION ABOUT PERSON'S POSITION AS DIRECTOR OR SECRETARY  

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205E(1)  [Power to request information]  

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.

205E(2)  [Obligation to comply]  

The person must give the information to ASIC in writing by the date specified in the request.

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History

S 205E inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 205F   DIRECTOR MUST GIVE INFORMATION TO COMPANY  

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205F     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.

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History

S 205F inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 205G   LISTED COMPANY - DIRECTOR TO NOTIFY SECURITIES EXCHANGE OF SHAREHOLDINGS ETC  

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205G(1)  Notifiable interests.  

A director of a listed public company must notify the relevant securities exchange under subsections (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 collective investment scheme made available by,the company or a related body corporate.

205G(2)  [Details of notice]  

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.

205G(3)  Occasions for initial notification.  

The director must notify the exchange 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.

205G(4)  Updating notices.  

The director must notify the exchange within 14 days after any change in the director's interests.

205G(5)  [Exception]  

The director need not give the information to the exchange under this section if the director has already given the information to the exchange.

205G(6)  ASIC's power to make class orders.  

ASIC may make an order in writing relieving a director of the obligation to notify the relevant securities exchange 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.

205G(7)  [Order may be conditional]  

The order may be expressed to be subject to conditions.

205G(8)  [Publication in the Gazette]  

Notice of the making, revocation or suspension of the order must be published in the Gazette.

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History

S 205G inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2D.6 - DISQUALIFICATION FROM MANAGING CORPORATIONS

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History

Part 2D.6 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 206A   DISQUALIFIED PERSON NOT TO MANAGE CORPORATIONS  

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206A(1)  (Commission of offence)  

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.

It is a defence to the contravention if the person had permission to manage the corporation under either section 206F or 206G and their conduct was within the terms of that permission.

Note:

Under section 1274AA, ASIC is required to keep a record of persons disqualified from managing corporations.

206A(2)  (Cease to act)  

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 206F 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(1)).

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History

S 206A inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 206B   AUTOMATIC DISQUALIFICATION  

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206B(1)  Convictions.  

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 the Corporations Law 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.

206B(2)  [Period of disqualification]  

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.

206B(3)  Bankruptcy, deed of arrangement or composition with creditors.  

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.

206B(4)  [Effect of deed of arrangement or composition]  

A person is disqualified from managing corporations if:

(a)  the person has executed a deed of arrangement under Part X of the Bankruptcy Act 1966 (or a similar law of an external territory or another country) and the terms of the deed have not been fully complied with; or

(b)  the person's creditors have accepted a composition under Part X of the Bankruptcy Act 1966 (or a similar law of an external territory or another country) and final payment has not been made under the composition.

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History

S 206B inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 206C   COURT POWER OF DISQUALIFICATION - CONTRAVENTION OF CIVIL PENALTY PROVISION  

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206C(1)  [Power of Court]  

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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 section 1317E (civil penalty provision) that the person has contravened a civil penalty provision; and

(b)  the Court is satisfied that the disqualification is justified.

Note:

The civil penalty provisions are subsection 180(1) and (2), 181(1) and (2), 182(1) and (2), 183(1) and (2), 209(2), 254L(2), 256D(3), 259F(2), 260D(2) or 344(1) or section 588G.

206C(2)  [Relevant circumstances]  

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.

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History

S 206C inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 206D   COURT POWER OF DISQUALIFICATION - INSOLVENCY AND NON-PAYMENT OF DEBTS  

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206D(1)  [Power of Court]  

On application by ASIC, the Court may disqualify a person from managing corporations for up to 10 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.

206D(2)  [Failure of corporation]  

For the purposes of subsection (1), a corporation fails if:

(a)  a Court orders the corporation to be wound up under section 459B 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

(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; or

(h)  the corporation is wound up and a liquidator lodges a report under subsection 533(1) 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.

206D(3)  [Relevant circumstances]  

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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.

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History

S 206D inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 206E   COURT POWER OF DISQUALIFICATION - REPEATED CONTRAVENTIONS OF LAW  

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206E(1)  [Power of Court]  

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 Law 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 Law 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.

206E(2)  [Relevant circumstances]  

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.

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History

S 206E inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 206F   ASIC'S POWER OF DISQUALIFICATION  

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206F(1)  Power to disqualify.  

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) 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.

206F(2)  Grounds for disqualification.  

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) any other matters that ASIC considers appropriate.

206F(3)  Notice of disqualification.  

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.

206F(4)  Start of disqualification.  

The disqualification takes effect from the time when a notice referred to in subsection (3) is served on the person.

206F(5)  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.

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History

S 206F inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 206G   COURT POWER TO GRANT LEAVE  

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206G(1)  [Application for leave]  

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.

206G(2)  [Time limit]  

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The person must lodge a notice with ASIC at least 21 days before commencing the proceedings. The notice must be in the prescribed form.

206G(3)  [Order may be conditional]  

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.

206G(4)  [Lodgment with ASIC]  

The person must lodge with ASIC a copy of any order granting leave within 14 days after the order is made.

206G(5)  [Revocation of leave]  

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.

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History

S 206G inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 206H   TERRITORIAL APPLICATION OF THIS PART  

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206H     Part 2D.6 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 Australia; or

(b)  an act that the foreign company does, or proposes to do, in Australia; or

(c)  a decision by the foreign company whether or not to do, or refrain from doing, an act in Australia.

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History

S 206H inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

CHAPTER 2E - RELATED PARTY TRANSACTIONS

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History

Chapter 2E substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 207   PURPOSE  

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207     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.

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History

S 207 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2E.1 - MEMBER APPROVAL NEEDED FOR RELATED PARTY BENEFIT

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History

Part 2E.1 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

Division 1 - Need for member approval

SECTION 208   NEED FOR MEMBER APPROVAL FOR FINANCIAL BENEFIT  

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208(1)  (Giving a financial benefit)  

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:

Section 228 defines related party , section 9 defines entity , section 55AA defines control and section 229 affects the meaning of giving a financial benefit .

CCH Note: The reference in the legislative note to section 55AA appears to be an error. ``Control'' is defined in sec 50AA.

208(2)  [Effect of contract]  

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.

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History

S 208 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 209   CONSEQUENCES OF BREACH  

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209(1)  [Effect of contravention]  

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).

209(2)  [Involvement]  

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 .

209(3)  [Dishonesty]  

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.

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History

S 209 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

Division 2 - Exceptions to the requirement for member approval

SECTION 210   ARM'S LENGTH TERMS  

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210     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).

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S 210 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 211   REMUNERATION AND REIMBURSEMENT FOR OFFICER OR EMPLOYEE  

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211(1)  Benefits that are reasonable remuneration.  

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).

211(2)  Benefits that are payments of expenses incurred.  

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.

211(3)  [Definitions]  

For the purposes of this section:

(a)  a contribution made by a body corporate to a fund for the purpose of making provision for, or obtaining, superannuation benefits for an officer of the body, or for dependants of 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.

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S 211 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 212   INDEMNITIES, EXEMPTIONS, INSURANCE PREMIUMS AND PAYMENT FOR LEGAL COSTS FOR OFFICERS  

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212(1)  Indemnities, exemptions and insurance premiums.  

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.

212(2)  Payments in respect of legal costs.  

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.

212(3)  [Relevant criteria]  

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.

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S 212 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 213   SMALL AMOUNTS GIVEN TO DIRECTOR OR SPOUSE  

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213(1)  [Monetary limit]  

Member approval is not needed to give a financial benefit that is an amount of money for a director of the public company or their spouse or de facto spouse if the amount does not exceed $2,000 or a greater amount as prescribed by the regulations.

213(2)  [Calculation of amount]  

In working out the amount given:

(a)  add in all amounts previously given by the public company and any entities controlled by the public company to:

(i) the director; or

(ii) their spouse; or

(iii) their de facto spouse; and

(b)  disregard:

(i) amounts that have been repaid; and

(ii) amounts that fall under any other exception in this Part or a corresponding previous law.

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 amount is given.

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History

S 213 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 214   BENEFIT TO OR BY CLOSELY-HELD SUBSIDIARY  

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214(1)  [When approval not needed]  

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.

214(2)  [Definition of closely-held subsidiary]  

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).

214(3)  [Disregard non-voting shares]  

For the purposes of subsection (2), disregard shares that are not voting shares.

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History

S 214 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 215   BENEFITS TO MEMBERS THAT DO NOT DISCRIMINATE UNFAIRLY  

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215     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.

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History

S 215 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 216   COURT ORDER  

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216     Member approval is not needed to give a financial benefit under an order of a court.

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History

S 216 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 216A   REGISTERS TO BE MAINTAINED  (Renumbered as s 168 by No 61 of 1998, Sch 3 (effective 1 July 1998).)

PART 2.5 (Renumbered)

CCH Note:

Part 2.5 (sec 216A-216K) renumbered by No 61 of 1998, Sch 3 (effective 1 July 1998) and now contained in Chapter 2C (sec 168-178).

Division 3 - Procedure for obtaining member approval

SECTION 217   RESOLUTION MAY SPECIFY MATTERS BY CLASS OR KIND  

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217     A resolution under this Division may specify anything either in particular or by reference to class or kind.

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History

S 217 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 218   COMPANY MUST LODGE MATERIAL THAT WILL BE PUT TO MEMBERS WITH ASIC  

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218(1)  (Documents to be lodged)  

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.

218(2)  [Effect of ASIC approval]  

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.

218(3)  [Power of ASIC to approve]  

ASIC may give and revoke approvals for the purposes of subsection (2).

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History

S 218 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 219   REQUIREMENTS FOR EXPLANATORY STATEMENT TO MEMBERS  

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219(1)  [Details of statement]  

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.

219(2)  [Examples of information]  

An example of the kind of information referred to in paragraph (1)(d) is information about what, from an economic and commercial point of view, are the true potential costs and detriments of, or resulting from, giving financial benefits as permitted by the proposed resolution, including (without limitation):

(a)  opportunity costs; and

(b)  taxation consequences (such as liability to fringe benefits tax); and

(c)  benefits forgone by whoever would give the benefits.

Note:

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.

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History

S 219 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 220   ASIC MAY COMMENT ON PROPOSED RESOLUTION  

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220(1)  [ASIC comments]  

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).

220(2)  [Consultation with Exchange]  

ASIC may consult with the Exchange for the purposes of giving comments to a company that is included in the official list of the Exchange.

220(3)  [No limits on consultation]  

Subsection (2) does not limit the persons with whom ASIC may consult.

220(4)  [Retention of comments]  

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.

220(5)  [Consequences of decision]  

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.

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History

S 220 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 221   REQUIREMENTS FOR NOTICE OF MEETING  

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221     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.

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S 221 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 222   OTHER MATERIAL PUT TO MEMBERS  

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222     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).

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History

S 222 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 222A   CONSENT TO ACT AS DIRECTOR OR SECRETARY  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 223   PROPOSED RESOLUTION CANNOT BE VARIED  

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223     The resolution must be the same as the proposed resolution set out in the proposed notice lodged under section 218.

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History

S 223 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 224   VOTING BY OR ON BEHALF OF RELATED PARTY INTERESTED IN PROPOSED RESOLUTION  

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224(1)  [Who cannot vote]  

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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

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(b)  an associate of such a related party.

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224(2)  [Vote by proxy]  

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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).

224(3)  [Effect of regulations]  

The regulations may prescribe cases where subsection (1) does not apply.

224(4)  [ASIC declarations]  

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.

224(5)  [Effect of declarations]  

A declaration in force under subsection (4) has effect accordingly.

224(6)  [Contravention of section]  

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.

224(7)  [Definition of vote]  

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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.

224(8)  [Effect on validity of resolution]  

Subject to subsection 225(1), a contravention of this section does not affect the validity of a resolution.

224(9)  [Effect of section]  

This section has effect despite:

(a)  anything else in this Law or in any other law of this jurisdiction (including the general law); or

(b)  anything in a body corporate's constitution.

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History

S 224 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 224A   APPOINTMENT OF NEW DIRECTOR ON DEATH, MENTAL INCAPACITY OR BANKRUPTCY OF SINGLE DIRECTOR/SHAREHOLDER OF PROPRIETARY COMPANY  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 224B   SINGLE DIRECTOR/SHAREHOLDER PROPRIETARY COMPANIES  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 224C   COMPANY MAY APPOINT A DIRECTOR (replaceable rule - see section 135)  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 224D   DIRECTORS MAY APPOINT OTHER DIRECTORS (replaceable rule - see section 135)  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 225   VOTING ON THE RESOLUTION  

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225(1)  [Passing of resolution]  

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.

225(2)  [Poll]  

If a poll was duly demanded on the question that the resolution be passed, subsections (3) and (4) apply in relation to voting on the poll.

225(3)  [Details to be recorded]  

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.

225(4)  [Details of proxy or representative votes]  

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.

225(5)  [Retention of records]  

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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.

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History

S 225 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 225A   ALTERNATE DIRECTORS (replaceable rule - see section 135)  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 226   NOTICE OF RESOLUTION TO BE LODGED  

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226     The public company must lodge a notice setting out the text of the resolution within 14 days after the resolution is passed.

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History

S 226 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 226A   POWERS OF DIRECTORS (replaceable rule - see section 135)  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 226B   NEGOTIABLE INSTRUMENTS (replaceable rule - see section 135)  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 226C   MANAGING DIRECTOR (replaceable rule - see section 135)  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 226D   DELEGATION TO COMMITTEES (replaceable rule - see section 135)  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 226E   REMOVAL BY MEMBERS - PROPRIETARY COMPANIES (replaceable rule - see section 135)  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 227   DECLARATION BY COURT OF SUBSTANTIAL COMPLIANCE  

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227(1)  [Declaration of Court]  

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The Court may declare that the conditions prescribed by this Division have been satisfied if it finds that they have been substantially satisfied.

227(2)  [Need for application]  

A declaration may be made only on the application of an interested person.

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History

S 227 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 227A   DIRECTOR MAY RESIGN BY GIVING WRITTEN NOTICE TO COMPANY (replaceable rule - see section 135)  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

PART 2E.2 - RELATED PARTIES AND FINANCIAL BENEFITS

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History

Part 2E.2 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 228   RELATED PARTIES  

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228(1)  Controlling entities.  

An entity that controls a public company is a related party of the public company.

228(2)  Directors and their spouses.  

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 and de facto spouses of the persons referred to in paragraphs (a), (b) and (c).

228(3)  Relatives of directors and spouses.  

The following relatives of persons referred to in subsection (2) are related parties of the public company:

(a)  parents

(b)  children.

228(4)  Entities controlled by other related parties.  

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.

228(5)  Related party in previous 6 months.  

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.

228(6)  Entity has reasonable grounds to believe it will become related party in future.  

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.

228(7) 

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Acting in concert with related party.  

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.

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S 228 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 229   GIVING A FINANCIAL BENEFIT  

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229(1)  [Circumstances of financial benefit]  

In determining whether a financial benefit is given for the purposes of this Chapter:

(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.

229(2)  [Definition]  

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).

229(3)  [Examples]  

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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.

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History

S 229 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2E.3 - INTERACTION WITH OTHER RULES

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History

Part 2E.3 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 230   GENERAL DUTIES STILL APPLY  

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230     A director is not relieved from any of their duties under this Law (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.

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History

S 230 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

CHAPTER 2F - MEMBERS' RIGHTS AND REMEDIES

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Chapter 2F inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 231   MEMBERSHIP OF A COMPANY  

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231    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).

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History

S 246A renumbered as s 231 by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2F.1 - OPPRESSIVE CONDUCT OF AFFAIRS

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History

Part 2F.1 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 232   GROUNDS FOR COURT ORDER  

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232     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:

For affairs , see section 53.

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S 232 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 232A   VOTING BY INTERESTED DIRECTOR OF PUBLIC COMPANY  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 232B   COMMISSION MAY EXEMPT DIRECTORS FROM SECTION 232A IN APPROPRIATE CASES  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 233   ORDERS THE COURT CAN MAKE  

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233(1)  [Powers of Court]  

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.

233(2)  Order that the company be wound up.  

If an order that a company be wound up is made under this section, the provisions of this Law relating to the winding up of companies apply:

(a)  as if the order were made under section 461; and

(b)  with such changes as are necessary.

233(3)  Order altering constitution.  

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.

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S 233 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 234   WHO CAN APPLY FOR ORDER  

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234     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).

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History

S 234 inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 235   REQUIREMENT FOR PERSON TO LODGE ORDER  

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235     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.

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History

S 235 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2F.1A - PROCEEDINGS ON BEHALF OF A COMPANY BY MEMBERS AND OTHERS

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History

Part 2F.1A inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 236   BRINGING, OR INTERVENING IN, PROCEEDINGS ON BEHALF OF A COMPANY  

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236(1)  (Who may bring proceedings)  

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.

236(2)  [Use of company's name]  

Proceedings brought on behalf of a company must be brought in the company's name.

236(3)  [General law right abolished]  

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.

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S 236 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 236A   REMUNERATION OF DIRECTORS (replaceable rule - see section 135)  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 237   APPLYING FOR AND GRANTING LEAVE  

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237(1)  [Seeking leave to proceed or intervene]  

A person referred to in paragraph 236(1)(a) may apply to the Court for leave to bring, or to intervene in, proceedings.

237(2)  [Court's obligation]  

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.

237(3)  [Presumption]  

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.

237(4)  [Interpretation]  

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:

Related party is defined in section 228.

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S 237 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 238   SUBSTITUTION OF ANOTHER PERSON FOR THE PERSON GRANTED LEAVE  

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238(1)  [Application to be a substitute]  

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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.

238(2)  [Power of Court]  

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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.

238(3)  [Effects of order]  

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.

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History

S 238 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 239   EFFECT OF RATIFICATION BY MEMBERS  

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239(1)  [Consequences of ratification]  

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.

239(2)  [Effect of ratification on Court]  

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.

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History

S 239 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 240   LEAVE TO DISCONTINUE, COMPROMISE OR SETTLE PROCEEDINGS BROUGHT, OR INTERVENED IN, WITH LEAVE  

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240     Proceedings brought or intervened in with leave must not be discontinued, compromised or settled without the leave of the Court.

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History

S 240 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 241   GENERAL POWERS OF THE COURT  

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241(1)  [Power of Court]  

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.

241(2)  [Power to inspect]  

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.

241(3)  [Remuneration and expenses]  

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.

241(4)  [Costs]  

Subsection (3) does not affect the powers of the Court as to costs.

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History

S 241 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 241A   COMPANY NOT TO PAY INSURANCE PREMIUMS IN RESPECT OF CERTAIN LIABILITIES OF OFFICER OR AUDITOR  (Repealed by No 156 of 1999, Sch 1 (effective 13 March 2000). )

SECTION 242   POWER OF THE COURT TO MAKE COSTS ORDERS  

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242     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.

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History

S 242 substituted by No 156 of 1999, Sch 1 (effective 13 March 2000).

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.

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Note inserted by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).

Part 2F.2 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 246B   VARYING AND CANCELLING CLASS RIGHTS  

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246B(1)  If constitution sets out procedure.  

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.

246B(2)  If constitution does not set out procedure.  

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.

246B(3)  [Notice]  

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.

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History

S 246B inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 246C   CERTAIN ACTIONS TAKEN TO VARY RIGHTS ETC  

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246C(1)  Company with share capital.  

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.

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History

S 246C(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

246C(2)  [Variation of rights]  

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.

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S 246C(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

246C(3)  Company without share capital.  

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.

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History

S 246C(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

246C(4)  [Variation of rights]  

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.

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History

S 246C(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

246C(5) 

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Company with 1 class of shares issuing new class of shares.  

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.

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History

S 246C(5) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 246C(5) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

246C(6)  [Preference shares]  

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.

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S 246C(6) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 246D   VARIATION, CANCELLATION OR MODIFICATION WITHOUT UNANIMOUS SUPPORT OF CLASS  

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246D(1)  [Disagreement of members]  

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.

246D(2)  [Time for application]  

An application may only be made within 1 month after the variation, cancellation or modification is made.

246D(3)  [When variation etc takes effect]  

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.

246D(4)  [Appointment of applicant]  

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.

246D(5)  [Court may set aside]  

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.

246D(6)  [Lodgment with ASIC]  

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Within 14 days after the Court makes an order, the company must lodge a copy of it with ASIC.

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History

S 246D amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 246D inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

SECTION 246E   VARIATION, CANCELLATION OR MODIFICATION WITH UNANIMOUS SUPPORT OF CLASS  

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246E     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.

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S 246E inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 246F   COMPANY MUST LODGE DOCUMENTS AND RESOLUTIONS WITH ASIC  

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246F(1)  [Lodgment of notice]  

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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.

246F(2)  [Time for lodgment of notice]  

The notice must be lodged within 14 days after the division or conversion.

246F(3)  [Lodgment of certain documents]  

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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.

246F(4)  [Time for lodgment of documents]  

The document must be lodged within 14 days after it is made. The resolution must be lodged within 14 days after it is passed.

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History

S 246F amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 246F inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 246G   MEMBER'S COPIES OF DOCUMENTS AND RESOLUTIONS  

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246G(1)  [Copy]  

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.

246G(2)  [Payment]  

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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.

246G(3)  [Prescribed amount]  

The amount of any payment the company requires cannot exceed the prescribed amount.

246G(4)  [Payment not required]  

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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.

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History

S 246G amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 246G inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

PART 2F.3 - INSPECTION OF BOOKS

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Part 2F.3 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 247A   ORDER FOR INSPECTION OF BOOKS OF COMPANY OR REGISTERED MANAGED INVESTMENT SCHEME  

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247A(1)  (Court's power)  

On application by a member of a company or registered managed investment 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.

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S 247A(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

247A(2)  (Copies)  

A person authorised to inspect books may make copies of the books unless the Court orders otherwise.

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S 247A(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

247A(3)  (Application for leave)  

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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.

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S 247A(3) inserted by No 156 of 1999, Sch 3, Pt 6 (effective 13 March 2000).

247A(4)  [Order]  

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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.

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S 247A(4) inserted by No 156 of 1999, Sch 3, Pt 6 (effective 13 March 2000).

247A(5)  [Basis for order]  

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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.

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History

S 247A(5) inserted by No 156 of 1999, Sch 3, Pt 6 (effective 13 March 2000).

247A(6)  [Copies]  

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A person authorised to inspect books may make copies of the books unless the Court orders otherwise.

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S 247A(6) inserted by No 156 of 1999, Sch 3, Pt 6 (effective 13 March 2000).

SECTION 247B   ANCILLARY ORDERS  

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247B     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).

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S 247B inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 247C   DISCLOSURE OF INFORMATION ACQUIRED IN INSPECTION  

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247C     A person who inspects books on behalf of an applicant under section 247A must not disclose information obtained during the inspection unless the disclosure is to:

(a)  ASIC; or

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(b)  the applicant.

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S 247C amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 247C inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 247D   COMPANY OR DIRECTORS MAY ALLOW MEMBER TO INSPECT BOOKS (replaceable rule - see section 135)  

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247D     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.

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S 247D inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

CHAPTER 2G - MEETINGS

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Ch 2G inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

PART 2G.1 - DIRECTORS' MEETINGS

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Part 2G.1 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998)

Division 1 - Resolutions and declarations without meetings

SECTION 248A   CIRCULATING RESOLUTIONS OF COMPANIES WITH MORE THAN 1 DIRECTOR (replaceable rule - see section 135)  

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248A(1)  Resolutions.  

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.

248A(2)  Copies.  

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.

248A(3)  When the resolution is passed.  

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).

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S 248A inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 248B   RESOLUTIONS AND DECLARATIONS OF 1 DIRECTOR PROPRIETARY COMPANIES  

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248B(1)  Resolutions.  

The director of a proprietary companythat has only 1 director may pass a resolution by recording it and signing the record.

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S 248B(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

248B(2)  Declarations.  

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 Law 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).

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S 248B(2)(Note 1) amended by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000).

S 248B(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 2 - Directors' meetings

SECTION 248C   CALLING DIRECTORS' MEETINGS (replaceable rule - see section 135)  

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248C     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)).

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History

S 248C (Note) amended by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000).

S 248C inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 248D   USE OF TECHNOLOGY  

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248D     A directors' meeting may be called or held using any technology consented to by all the directors. The consent may be a standing one. A director may only withdraw their consent within a reasonable period before the meeting.

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S 248D inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 248E   CHAIRING DIRECTORS' MEETINGS (replaceable rule - see section 135)  

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248E(1)  [Election of chair]  

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.

248E(2)  [Requirement to elect]  

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.

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S 248E inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 248F   QUORUM AT DIRECTORS' MEETINGS (replaceable rule - see section 135)  

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248F     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.

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History

S 248F(Note 1) amended by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000).

S 248F inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 248G   PASSING OF DIRECTORS' RESOLUTIONS (replaceable rule - see section 135)  

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248G(1)  [Majority vote]  

A resolution of the directors must be passed by a majority of the votes cast by directors entitled to vote on the resolution.

248G(2)  [Casting vote]  

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.

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History

S 248G inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

PART 2G.2 - MEETINGS OF MEMBERS OF COMPANIES

Division 1 - Resolutions without meetings

SECTION 249A   CIRCULATING RESOLUTIONS OF PROPRIETARY COMPANIES WITH MORE THAN 1 MEMBER  

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249A(1)  (Application of section)  

This section applies to resolutions of the members of proprietary companies that this Law 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.

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S 249A(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249A(2)  (Resolution without general meeting)  

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.

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S 249A(2) amended by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).

S 249A(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249A(3)  (More than one copy)  

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.

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S 249A(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249A(4)  (When resolution passed)  

The resolution is passed when the last member signs.

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S 249A(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249A(5)  (Notification and lodgment)  

A company that passes a resolution under this section without holding a meeting satisfies any requirement in this Law:

(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

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(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).

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S 249A(5) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 249A(5) inserted by No 61 of 1998, Sch 1 (effective 1 July1998).

249A(6)  (Satisfaction of requirements)  

The passage of the resolution satisfies any requirement in this Law, or a company's constitution (if any), that the resolution be passed at a general meeting.

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S 249A(6) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249A(7)  [Scope of section]  

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).

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S 249A(7) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249B   RESOLUTIONS OF 1 MEMBER COMPANIES  

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249B(1)  [Recording and signing]  

A company that has only 1 member may pass a resolution by the member recording it and signing the record.

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S 249B(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249B(2)  [Lodgment]  

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If this Law 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).

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S 249B(2) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 249B(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 2 - Who may call meetings of members

SECTION 249C   CALLING OF MEETINGS OF MEMBERS BY A DIRECTOR (replaceable rule - see section 135)  

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249C     A director may call a meeting of the company's members.

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S 249C inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249CA   CALLING OF MEETINGS OF MEMBERS OF A LISTED COMPANY BY A DIRECTOR  

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249CA(1)  [Director]  

A director may call a meeting of the company's members.

249CA(2)  [Application of section]  

This section applies only to a company that is:

(a)  incorporated in Australia; and

(b)  included in an official list of the Exchange.

249CA(3)  [Constitution]  

This section applies despite anything in the company's constitution.

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History

S 249CA inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249D   CALLING OF GENERAL MEETING BY DIRECTORS WHEN REQUESTED BY MEMBERS  

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249D(1)  [Directors must call meetings]  

The directors of a company must call and arrange to hold a general meeting on the request of:

(a)  members with at least 5% of the votes that may be cast at the general meeting; or

(b)  at least 100 members who are entitled to vote at the general meeting.

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History

S 249D(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249D(1A)  [Subject to regulations]  

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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.

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History

S 249D(1A) inserted by 156 of 1999, Sch 6 (effective 1 January 2000).

249D(2)  [Request]  

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.

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History

S 249D(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249D(3)  [More than one copy]  

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.

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History

S 249D(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249D(4)  [Percentage of votes]  

The percentage of votes that members have is to be worked out as at the midnight before the request is given to the company.

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History

S 249D(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249D(5)  [Time for meeting]  

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.

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History

S 249D(5) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249E   FAILURE OF DIRECTORS TO CALL GENERAL MEETING  

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249E(1)  [Members may call meeting]  

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.

249E(2)  [Procedure for calling meeting]  

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.

249E(3)  [Register of members]  

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.

249E(4)  [Reasonable expenses]  

The company must pay the reasonable expenses the members incurred because the directors failed to call and arrange to hold the meeting.

249E(5)  [Directors' liability for expenses]  

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.

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History

S 249E inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249F   CALLING OF GENERAL MEETINGS BY MEMBERS  

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249F(1)  [Members may call general meeting]  

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.

249F(2)  [Procedure for calling meeting]  

The meeting must be called in the same way - so far as is possible - in which general meetings of the company may be called.

249F(3)  [Percentage of votes]  

The percentage of votes that members have is to be worked out as at the midnight before the meeting is called.

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History

S 249F inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249G   CALLING OF MEETINGS OF MEMBERS BY THE COURT  

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249G(1)  [Court's power]  

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.

249G(2)  [Application]  

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.

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History

S 249G inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 3 - How to call meetings of members

SECTION 249H   AMOUNT OF NOTICE OF MEETINGS  

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249H(1)  General rule.  

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.

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History

S 249H(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249H(2)  Calling meetings on shorter notice.  

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).

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History

S 249H(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249H(3)  Shorter notice not allowed - removing or appointing director.  

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

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(b)  appoint a director in place of a director removed under that section.

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(c)  (Repealed by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000).)

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History

S 249H(3) amended by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000).

S 249H(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249H(4)  Shorter notice not allowed - removing auditor.  

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.

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History

S 249H(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249HA   AMOUNT OF NOTICE OF MEETINGS OF LISTED COMPANY  

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249HA(1)  (28 days notice)  

Despite section 249H, at least 28 days notice must be given of a meeting of a company's members.

249HA(2)  (Application of section)  

This section applies only to a company that is:

(a)  incorporated in Australia; and

(b)  included in an official list of the Exchange.

249HA(3)  (Constitution)  

This section applies despite anything in the company's constitution.

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History

S 249HA inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249J   NOTICE OF MEETINGS OF MEMBERS TO MEMBERS AND DIRECTORS  

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249J(1)  Notice to members and directors individually.  

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.

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History

S 249J(1) amended by No 44 of 1999, Sch 3, Pt 2 (effective 1 July 1999).

S 249J(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249J(2)  Notice to joint members (replaceable rule - see section 135).  

Notice to joint members must be given to the joint member named first in the register of members.

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History

S 249J(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249J(3)  How notice is given.  

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)  by sending it to the fax number or electronic address (if any) nominated by the member; 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).

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History

S 249J(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249J(4)  When notice by post or fax is given (replaceable rule - see section 135).  

A notice of meeting sent by post is taken to be given 3 days after it is posted. A notice of meeting sent by fax, or other electronic means, is taken to be given on the business day after it is sent.

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S 249J(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249K   AUDITOR ENTITLED TO NOTICE AND OTHER COMMUNICATIONS  

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249K     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)).

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S 249K inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249L   CONTENTS OF NOTICE OF MEETINGS OF MEMBERS  

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249L     A notice of a meeting of a company's members must:

(a)  set out the place, date and time for the meeting (and, if the meeting is to be held in 2 or more places, the technology that will be used to facilitate this); 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.

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History

S 249L inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249M   NOTICE OF ADJOURNED MEETINGS (replaceable rule - see section 135)  

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249M     When a meeting is adjourned, new notice of the resumed meeting must be given if the meeting is adjourned for 1 month or more.

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History

S 249M inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 4 - Members' rights to put resolutions etc at general meetings

SECTION 249N   MEMBERS' RESOLUTIONS  

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249N(1)  (Who may give notice)  

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.

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S 249N(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249N(1A)  [Prescription of members by regulation]  

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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.

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History

S 249N(1A) inserted by 156 of 1999, Sch 6 (effective 13 March 2000).

249N(2)  [Requirements of notice]  

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.

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S 249N(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249N(3)  [More than one copy]  

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.

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History

S 249N(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249N(4)  [Percentage of votes]  

The percentage of votes that members have is to be worked out as at the midnight before the members give the notice.

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History

S 249N(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249O   COMPANY GIVING NOTICE OF MEMBERS' RESOLUTIONS  

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249O(1)  [When resolution is to be considered]  

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.

249O(2)  [Time for giving notice]  

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.

249O(3)  [Cost]  

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.

249O(4)  [Liability for company's expenses]  

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.

249O(5)  [Company need not give notice]  

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.

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S 249O inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249P   MEMBERS' STATEMENTS TO BE DISTRIBUTED  

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249P(1)  [Members' statement]  

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.

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S 249P(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249P(2)  [Who must make request]  

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.

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S 249P(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249P(2A)  [Prescription of members by regulation]  

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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.

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S 249P(2A) inserted by 156 of 1999, Sch 6 (effective 13 March 2000).

249P(3)  [Requirements for request]  

The request must be:

(a)  in writing; and

(b)  signed by the members making the request; and

(c)  given to the company.

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S 249P(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249P(4)  [More than one copy]  

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.

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History

S 249P(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249P(5)  [Percentage of votes]  

The percentage of votes that members have is to be worked out as at the midnight before the request is given to the company.

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History

S 249P(5) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249P(6)  [Distribution of statement]  

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.

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S 249P(6) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249P(7)  [Cost of distribution]  

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.

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History

S 249P(7) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249P(8)  [Members' liability]  

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.

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S 249P(8) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

249P(9)  [Company need not comply in certain circumstances]  

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.

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History

S 249P(9) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 5 - Holding meetings of members

SECTION 249Q   PURPOSE  

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249Q     A meeting of a company's members must be held for a proper purpose.

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S 249Q inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249R   TIME AND PLACE FOR MEETINGS OF MEMBERS  

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249R     A meeting of a company's members must be held at a reasonable time and place.

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S 249R inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249S   TECHNOLOGY  

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249S     A company may hold a meeting of its members at 2 or more venues using any technology that gives the members as a whole a reasonable opportunity to participate.

Note:

See section 1322 for the consequences of a member not being given a reasonable opportunity to participate.

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S 249S inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249T   QUORUM (replaceable rule - see section 135)  

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249T(1)  (Quorum)  

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.

249T(2)  (Determining whether quorum present)  

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.

249T(3)  (No quorum present)  

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 the date, time and place the directors specify. If the directors do not specify 1 or more of those things, the meeting is adjourned to:

(a)  if the date is not specified - the same day in the next week; and

(b)  if the time is not specified - the same time; and

(c)  if the place is not specified - the same place.

249T(4)  (No quorum at resumed meetings)  

If no quorum is present at the resumed meeting within 30 minutes after the time for the meeting, the meeting is dissolved.

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S 249T inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249U   CHAIRING MEETINGS OF MEMBERS (replaceable rule - see section 135)  

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249U(1)  (Chairman)  

The directors may elect an individual to chair meetings of the company's members.

249U(2)  (Directors must elect chairman)  

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).

249U(3)  (Members must elect chairman in certain circumstances)  

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).

249U(4)  [Adjournment of meeting]  

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.

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S 249U inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249V   AUDITOR'S RIGHT TO BE HEARD AT GENERAL MEETINGS  

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249V(1)  [Attendance at meeting]  

A company's auditor is entitled to attend any general meeting of the company.

249V(2)  [Entitlement to be heard]  

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.

249V(3)  [Retirement or removal from office]  

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.

249V(4)  [Auditor's representative]  

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.

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S 249V inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249W   ADJOURNED MEETINGS  

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249W(1)  When resolution passed.  

A resolution passed at a meeting resumed after an adjournment is passed on the day it was passed.

249W(2)  Business at adjourned meetings (replaceable rule - see section 135).  

Only unfinished business is to be transacted at a meeting resumed after an adjournment.

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S 249W inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 6 - Proxies and body corporate representatives

SECTION 249X   WHO CAN APPOINT A PROXY (replaceable rule for proprietary companies and mandatory rule for public companies - see section 135)  

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249X(1)  (Appointment of proxy)  

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.

249X(2)  (Proportion or number of votes)  

The appointment may specify the proportion or number of votes that the proxy may exercise.

249X(3)  (Members' entitlement to appoint proxies)  

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.

249X(4)  (Fractions of votes)  

Disregard any fractions of votes resulting from the application of subsection (2) or (3).

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S 249X inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249Y   RIGHTS OF PROXIES  

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249Y(1)  Rights of proxies.  

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.

249Y(2)  Proxy's right to vote.  

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.

249Y(3)  Effect of member's presence on proxy's authority.  

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.

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S 249Y inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 249Z   COMPANY SENDING APPOINTMENT FORMS OR LISTS OF PROXIES MUST SEND TO ALL MEMBERS  

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249Z     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.

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S 249Z inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250A   APPOINTING A PROXY  

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250A(1)  [Valid appointment]  

An appointment of a proxy is valid if it is signed 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.

250A(2)  [Company's constitution]  

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).

250A(3)  [Undated appointment]  

An undated appointment is taken to have been dated on the day it is given to the company.

250A(4)  [How proxy is to vote]  

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 proxymust 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)).

250A(5)  [Offence]  

A person who contravenes subsection (4) is guilty of an offence, but only if their appointment as a proxy resulted from the company 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.

250A(6)  [Witness]  

An appointment does not have to be witnessed.

250A(7)  [Later appointment]  

A later appointment revokes an earlier one if both appointments could not be validly exercised at the meeting.

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History

S 250A inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250B   PROXY DOCUMENTS  

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250B(1)  Documents to be received by company before meeting.  

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 by the appointor's attorney - the authority under which the appointment was signed or a certified copy of the authority.

250B(2)  Documents received following adjournment of meeting.  

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.

250B(3)  Receipt of documents.  

A company receives an appointment authority when it is received at any of the following:

(a)  the company's registered office

(b)  a fax number at the company's registered office

(c) a place, fax number or electronic address specified for the purpose in the notice of meeting.

250B(4)  Constitution or notice of meeting may provide for different notification period.  

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).

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S 250B inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250BA   PROXY DOCUMENTS - LISTED COMPANIES  

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250BA(1)  [Notice]  

In a notice of meeting for a meeting of the members of a company, the company:

(a)  must specify a place and a fax number; and

(b)  may specify an electronic address;

for the purposes of receipt of proxy appointments.

250BA(2)  [Application of section]  

This section applies only to a company that is:

(a)  incorporated in Australia; and

(b)  included in an official list of the Exchange.

250BA(3)  [Constitution]  

This section applies despite anything in the company's constitution.

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History

S 250BA inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250C   VALIDITY OF PROXY VOTE  

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250C(1)  Proxy vote valid even if proxy cannot vote as member.  

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.

250C(2)  Proxy vote valid even if member dies, revokes appointment etc (replaceable rule - see section 135).  

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)).

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History

S 250C inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250D   BODY CORPORATE REPRESENTATIVE  

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250D(1)  [Appointment of representative]  

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.

The appointment may be a standing one.

250D(2)  [Restrictions in representatives powers]  

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.

250D(3)  [More than 1 representative]  

A body corporate may appoint more than 1 representative but only 1 representative may exercise the body's powers at any one time.

250D(4)  [Representative's powers]  

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.

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S 250D inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 7 - Voting at meetings of members

SECTION 250E   HOW MANY VOTES A MEMBER HAS (replaceable rule - see section 135)  

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250E(1)  Company with share capital.  

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).

250E(2)  Company without share capital.  

Each member of a company that does not have a share capital has 1 vote, both on a show of hands and a poll.

250E(3)  Chair's casting vote.  

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.

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History

S 250E inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250F   JOINTLY HELD SHARES (replaceable rule - see section 135)  

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250F     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.

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S 250F inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250G   OBJECTIONS TO RIGHT TO VOTE (replaceable rule - see section 135)  

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250G     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.

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S 250G inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250H   VOTES NEED NOT ALL BE CAST IN THE SAME WAY  

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250H     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 250A(4).

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S 250H inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250J   HOW VOTING IS CARRIED OUT (replaceable rule - see section 135)  

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250J(1)  (Show of hands)  

A resolution put to the vote at a meeting of a company's members must be decided on a show of hands unless a poll is demanded.

250J(1A)  (Proxy votes)  

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.

250J(2)  (Result)  

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)).

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S 250J inserted by No 61 of 1998, Sch 1 (effective 1 July).

SECTION 250K   MATTERS ON WHICH A POLL MAY BE DEMANDED  

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250K(1)  (Any resolution)  

A poll may be demanded on any resolution.

250K(2)  (Constitution)  

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.

250K(3)  (Withdrawal of demand)  

A demand for a poll may be withdrawn.

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S 250K inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250L   WHEN A POLL IS EFFECTIVELY DEMANDED  

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250L(1)  (Who may demand a poll)  

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)).

250L(2)  [Constitution]  

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.

250L(3)  [When poll may be demanded]  

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.

250L(4)  [Working out percentage of votes]  

The percentage of votes that members have is to be worked out as at the midnight before the poll is demanded.

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S 250L inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250M   WHEN AND HOW POLLS MUST BE TAKEN (replaceable rule - see section 135)  

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250M(1)  [When poll must be taken]  

A poll demanded on a matter other than the election of a chair or the question of an adjournment must be taken when and in the manner the chair directs.

250M(2)  [Election of chair or adjournment]  

A poll on the election of a chair or on the question of an adjournment must be taken immediately.

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S 250M inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 8 - AGMs of public companies

SECTION 250N   PUBLIC COMPANY MUST HOLD AGM  

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250N(1)  (After registration)  

A public company must hold an annual general meeting (AGM) within 18 months after its registration.

250N(2)  (When AGM must be held)  

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).

250N(3)  (Other meetings)  

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, directors' report and auditor's report must be laid before the AGM (see section 317).

Note 2:

The rules in sections 249C-250M apply to an AGM.

250N(4)  (1 member company)  

A public company that has only 1 member is not required to hold an AGM under this section.

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S 250N inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250P   EXTENSION OF TIME FOR HOLDING AGM  

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250P(1)  (Application with ASIC)  

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A public company may lodge an application with ASIC to extend the period within which section 250N requires the company to hold an AGM.

250P(2)  (ASIC may extend period)  

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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.

250P(3)  (When AGM to be held)  

A company granted an extension under subsection (2) must hold its AGM within the extended period.

250P(4)  (Conditions)  

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ASIC may impose conditions on the extension and the company must comply with those conditions.

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S 250P amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 250P inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250R   BUSINESS OF AGM  

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250R     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, directors' report and auditor's report

(b)  the election of directors

(c) the appointment of the auditor

(d)  the fixing of the auditor's remuneration.

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S 250R inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250S   QUESTIONS AND COMMENTS BY MEMBERS ON COMPANY MANAGEMENT AT AGM  

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250S     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.

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S 250S inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 250T   QUESTIONS BY MEMBERS OF AUDITORS AT AGM  

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250T     If the company's auditor or their representative is at the meeting, the chair of an AGM must allow a reasonable opportunity for the members as a whole at the meeting to ask the auditor or their representative questions relevant to the conduct of the audit and the preparation and content of the auditor's report.

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S 250T inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

PART 2G.3 - MINUTES AND MEMBERS' ACCESS TO MINUTES

SECTION 251A   MINUTES  

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251A(1)  (Company must keep minute books)  

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.

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S 251A(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

251A(2)  [Minutes to be signed]  

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.

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S 251A(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

251A(3)  [Resolution without a meeting]  

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.

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S 251A(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

251A(4)  [1 director company]  

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.

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S 251A(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

251A(5)  [Where minute books to be kept]  

A company must keep its minute books at:

(a)  its registered office; or

(b)  its principal place of business in Australia; or

(c)  another place approved by ASIC.

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S 251A(5) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 251A(5) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

251A(6)  [Evidence]  

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.

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S 251A(6) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 251AA   DISCLOSURE OF PROXY VOTES - LISTED COMPANIES  

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251AA(1)  [Recording of proxy votes]  

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 apointed 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.

251AA(2)  [Notification to ASX]  

A company that must notify the Exchange of a resolution passed by members at a meeting of the company must, at the same time, give the Exchange the information specified in subsection (1).

251AA(3)  [Listed companies]  

This section applies only to a company that is:

(a)  incorporated in Australia; and

(b)  included in an official list of the Exchange.

251AA(4)  [Constitution]  

This section applies despite anything in the company's constitution.

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S 251AA inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 251B   MEMBERS' ACCESS TO MINUTES  

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251B(1)  [Inspection by members]  

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.

251B(2)  [Requests by members]  

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.

251B(3)  [No payment required]  

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.

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251B(4)  [Payment required]  

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.

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The amount of any payment the company requires cannot exceed the prescribed amount.

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S 251B amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 251B inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

PART 2G.4 - MEETINGS OF MEMBERS OF REGISTERED MANAGED INVESTMENT SCHEMES

Division 1 - Who may call meetings of members

SECTION 252A   CALLING OF MEETINGS OF MEMBERS BY RESPONSIBLE ENTITY  

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252A     The responsible entity of a registered scheme may call a meeting of the scheme's members.

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S 252A inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252B   CALLING OF MEETINGS OF MEMBERS BY RESPONSIBLE ENTITY WHEN REQUESTED BY MEMBERS  

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252B(1)  (Members' request for meeting)  

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.

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S 252B(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252B(1A)  (Prescription of members by regulation)  

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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.

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S 252B(1A) inserted by 156 of 1999, Sch 6 (effective 1 January 2000).

252B(2)  [Form of request]  

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.

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S 252B(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252B(3)  [Statement about resolution]  

The request may be accompanied by a statement about the proposed resolution provided by the members making the request.

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S 252B(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252B(4)  [Separate copies]  

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.

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S 252B(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252B(5)  [Determining votes]  

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.

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S 252B(5) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252B(6)  [When meeting must be held]  

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.

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S 252B(6) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252B(7)  [Copy of proposed resolution and statement]  

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.

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S 252B(7) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252B(8)  [1,000 words or defamatory]  

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.

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S 252B(8) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252B(9)  [Expenses]  

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.

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S 252B(9) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252C   FAILURE OF RESPONSIBLE ENTITY TO CALL MEETING OF THE SCHEME'S MEMBERS  

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252C(1)  [Members may call meeting]  

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.

252C(2)  [Distribution of information]  

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.

252C(3)  [Register of members]  

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.

252C(4)  [Expenses]  

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.

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S 252C inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252D   CALLING OF MEETINGS OF MEMBERS BY MEMBERS  

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252D(1)  [Members may call meeting]  

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.

252D(2)  [How meeting to be called]  

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.

252D(3)  [Determining number of votes]  

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.

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S 252D inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252E   CALLING OF MEETINGS OF MEMBERS BY THE COURT  

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252E(1)  [Court may order meeting]  

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.

252E(2)  [When Court may make order]  

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.

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S 252E inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 2 - How to call meetings of members

SECTION 252F   AMOUNT OF NOTICE OF MEETINGS  

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252F     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.

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S 252F inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252G   NOTICE OF MEETINGS OF MEMBERS TO MEMBERS, DIRECTORS AND AUDITORS  

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252G(1)  Notice to members, directors and auditors individually.  

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.

252G(2)  Notice to joint members.  

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.

252G(3)  How notice is given.  

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)  by sending it to the fax number or electronic address (if any) nominated by the member.

Note:

A defect in the notice given may not invalidate a meeting (see section 1322).

252G(4)  When notice by post or fax is given.  

Unless the scheme's constitution provides otherwise, a notice of meeting sent by post is taken to be given 3 days after it is posted. A notice of meeting sent by fax, or other electronic means, is taken to be given on the business day after it is sent.

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S 252G inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252H   AUDITORS ENTITLED TO OTHER COMMUNICATIONS  

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252H     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.

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S 252H inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252J   CONTENTS OF NOTICE OF MEETINGS OF MEMBERS  

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252J     A notice of a meeting of a registered scheme's members must:

(a)  set out the place, date and time for the meeting (and, if the meeting is to be held in 2 or more places, the technology that will be used to facilitate this); 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.

Note:

There may be other requirements for disclosure to members.

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History

S 252J inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252K   NOTICE OF ADJOURNED MEETINGS  

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252K     When a meeting is adjourned, new notice of the adjourned meeting must be given if the meeting is adjourned for 1 month or more.

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History

S 252K inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 3 - Members' rights to put resolutions etc at meetings of members

SECTION 252L   MEMBERS' RESOLUTIONS  

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252L(1)  (Notice of resolution)  

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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.

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History

S 252L(1) amended by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000).

S 252L(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

*252L(1A)  [Resolution]  

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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.

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History

S 252L(1A) inserted by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000).

*252L(1A)  [Regulations]  

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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.

*CCH Note: No 156 of 1999 inserted two versions of subsection 252L(1A). We have reproduced both subsections.

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History

S 252L(1A) inserted by No 156 of 1999, Sch 6 (effective 13 March 2000).

252L(2)  [Form and content of notice]  

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.

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History

S 252L(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252L(3)  [Separate copies]  

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.

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History

S 252L(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252L(4)  [Determining votes]  

The percentage of the votes that members have is to be worked out as at the midnight before the members give the notice.

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History

S 252L(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252M   RESPONSIBLE ENTITY GIVING NOTICE OF MEMBERS' RESOLUTIONS  

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252M(1)  [When resolution to be considered]  

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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.

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History

S 252M(1) amended by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000).

S 252M(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252M(2)  [Notice to be given]  

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.

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History

S 252M(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252M(3)  [Cost]  

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.

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History

S 252M(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252M(4)  [Expenses]  

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.

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History

S 252M(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252M(5)  [When notice need not be given]  

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.

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History

S 252M(5) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252N   MEMBERS' STATEMENTS TO BE DISTRIBUTED  

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252N(1)  [Statement requested by members]  

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.

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History

S 252N(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252N(2)  [Who may make request]  

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.

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History

S 252N(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252N(2A)  [Prescription of members by regulation]  

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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.

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History

S 252N(2A) inserted by 156 of 1999, Sch 6 (effective 13 March 2000).

252N(3)  [Form of request]  

The request must be:

(a)  in writing; and

(b)  signed by the members making the request; and

(c)  given to the responsible entity.

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History

S 252N(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252N(4)  [Separate copies]  

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.

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History

S 252N(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252N(5)  [Determining votes]  

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.

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History

S 252N(5) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252N(6)  [Distribution of statement]  

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.

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History

S 252N(6) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252N(7)  [Cost]  

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.

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History

S 252N(7) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252N(8)  [Expenses]  

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.

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History

S 252N(8) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

252N(9)  [Responsible entity need not comply in certain circumstances]  

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.

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History

S 252N(9) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 4 - Holding meetings of members

SECTION 252P   TIME AND PLACE FOR MEETINGS OF MEMBERS  

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252P     A meeting of a registered scheme's members must be held at a reasonable time and place.

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History

S 252P inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252Q   TECHNOLOGY  

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252Q     A responsible entity of a registered scheme may hold a meeting of the scheme's members at 2 or more venues using any technology that gives the members as a whole a reasonable opportunity to participate.

Note:

See section 1322 for the consequences of members not being given a reasonable opportunity to participate.

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History

S 252Q inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252R   QUORUM  

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252R(1)  (Application)  

This section applies to a registered scheme subject to the provisions of the scheme's constitution.

252R(2)  (Quorum)  

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.

252R(3)  (Proxies and representatives)  

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.

252R(4)  (No quorum present)  

A meeting of the scheme's members that does not have a quorum present within 30 minutes after the time for the start of the meeting set out in the notice of meeting is adjourned to the date, time and place the responsible entity specifies. If the responsible entity does not specify 1 or more of those things, the meeting is adjourned to:

(a)  if the date is not specified - the same day in the next week; and

(b)  if the time is not specified - the same time; and

(c)  if the place is not specified - the same place.

252R(5)  (No quorum at resumed meeting)  

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.

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History

S 252R inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252S   CHAIRING MEETINGS OF MEMBERS  

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252S(1)  [Appointment of chairman]  

The responsible entity may, in writing, appoint an individual to chair a meeting called under section 252A or 252B.

252S(2)  [When chairman must be elected]  

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).

252S(3)  [Member to chair meeting]  

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.

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History

S 252S inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252T   AUDITORS' RIGHT TO BE HEARD AT MEETINGS OF MEMBERS  

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252T(1)  [Attendance at meeting]  

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.

252T(2)  [Entitlement to be heard]  

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.

252T(3)  [Representative]  

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.

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S 252T inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252U   ADJOURNED MEETINGS  

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252U(1)  [Resolution]  

A resolution passed at a meeting resumed after an adjournment is passed on the day it was passed.

252U(2)  [Unfinished business]  

Only unfinished business is to be transacted at a meeting resumed after an adjournment.

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S 252U inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 5 - Proxies and body corporate representatives

SECTION 252V   WHO CAN APPOINT A PROXY  

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252V(1)  (Proxy)  

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.

252V(2)  (Number of votes)  

The appointment may specify the proportion or number of votes that the proxy may exercise.

252V(3)  (1 or 2 proxies)  

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.

252V(4)  (Fractions of votes)  

Disregard any fractions of votes resulting from the application of subsection (2) or (3).

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S 252V inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252W   RIGHTS OF PROXIES  

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252W(1)  Rights of proxies.  

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).

252W(2)  Proxy's right to vote.  

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).

252W(3)  Effect of member's presence on proxy's authority.  

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.

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S 252W inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252X   RESPONSIBLE ENTITY SENDING APPOINTMENT FORMS OR LISTS OF PROXIES MUST SEND TO ALL MEMBERS  

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252X     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.

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S 252X inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252Y   APPOINTING A PROXY  

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252Y(1)  (When proxy appointment valid)  

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.

252Y(2)  An appointment may be a standing one.  

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).

CCH Note: Section 252Y(2) is reproduced exactly as per the Company Law Review Act 1998. However, it appears that the words "An appointment may be a standing one" were intended to be part of sec 252Y(1) rather than the heading to sec 252Y(2). (See by way of comparison sec 250A(1).)

252Y(3)  (Undated appointment)  

An undated appointment is taken to have been dated on the day it is given to the responsible entity.

252Y(4)  (Specifying vote)  

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)).

252Y(5)  (Offence)  

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.

252Y(6)  (Witnessing appointment)  

An appointment does not have to be witnessed.

252Y(7)  (Later appointment)  

A later appointment revokes an earlier one if both appointments could not be validly exercised at the meeting.

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S 252Y inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 252Z   PROXY DOCUMENTS  

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252Z(1)  Section applies subject to scheme's constitution.  

Subsections (2), (3) and (4) apply to a registered scheme subject to the provisions of the scheme's constitution.

252Z(2)  Documents to be received by responsible entity before meeting.  

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.

*252Z(3) 

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Documents received following adjournment of meeting.  

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.

*252Z(3) 

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Receipt of documents.  

A responsible entity receives an appointment 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.

*CCH Note: Section 252Z is reproduced exactly as per the Company Law Review Act 1998 (including the inclusion of two subsections (3).

252Z(4)  Ineffective appointments of fax or electronic notification.  

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.

252Z(5)  Constitution or notice of meeting may provide for different notification period.  

The scheme's constitution or the notice of meeting may reduce the period of 48 hours referred to in subsection (2) or (3).

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S 252Z inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 253A   VALIDITY OF PROXY VOTE  

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253A(1)  Proxy vote valid even if member dies, revokes appointment etc.  

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)).

253A(2)  Proxy vote valid even if proxy cannot vote as member.  

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.

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S 253A inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 253B   BODY CORPORATE REPRESENTATIVE  

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253B(1)  [Appointment of representative]  

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.

253B(2)  [Content of appointment]  

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.

253B(3)  [More than 1 representative]  

A body corporate may appoint more than 1 representative but only 1 representative may exercise the body's powers at any one time.

253B(4)  [Representative's powers]  

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.

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S 253B inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 6 - Voting at meetings of members

SECTION 253C   HOW MANY VOTES A MEMBER HAS  

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253C(1)  (Show of hands)  

On a show of hands, each member of a registered scheme has 1 vote.

253C(2)  (Poll)  

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).

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S 253C inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 253D   JOINTLY HELD INTERESTS  

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253D     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.

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S 253D inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 253E   RESPONSIBLE ENTITY AND ASSOCIATES CANNOT VOTE IF INTERESTED IN RESOLUTION  

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253E     Theresponsible 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)).

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S 253E amended by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000).

S 253E inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 253F   HOW TO WORK OUT THE VALUE OF AN INTEREST  

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253F    The value of an interest in a registered scheme is:

(a)  if it is quoted on a stock market of a stock exchange - 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 stock market of a stock exchange 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.

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S 253F inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 253G   OBJECTIONS TO A RIGHT TO VOTE  

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253G     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.

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S 253G inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 253H   VOTES NEED NOT ALL BE CAST IN THE SAME WAY  

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253H     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).

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S 253H inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 253J   HOW VOTING IS CARRIED OUT  

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253J(1)  [Special or extraordinary resolution]  

A special or extraordinary resolution put to the vote at a meeting of a registered scheme's members must be decided on a poll.

253J(2)  [Other resolutions]  

Any other resolution put to the vote at a meeting of the scheme's members must be decided on a show of hands unless a poll is demanded. The resolution is passed on a poll if it has been passed by at least 50% of the votes cast by members entitled to vote on the resolution.

253J(3)  [Chair's declaration]  

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)).

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History

S 253J inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 253K   MATTERS ON WHICH A POLL MAY BE DEMANDED  

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253K(1)  [Demanding a poll]  

A poll may be demanded on any resolution.

253K(2)  [Constitution may provide certain things]  

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.

253K(3)  [Withdrawal of demand]  

A demand for a poll may be withdrawn.

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S 253K inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 253L   WHEN A POLL IS EFFECTIVELY DEMANDED  

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253L(1)  [Who may demand a poll]  

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.

253L(2)  [Constitution]  

A registered scheme's constitution may provide that fewer members or members with a lesser percentage of votes may demand a poll.

253L(3)  [When poll may be demanded]  

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.

253L(4)  [Determining votes]  

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.

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History

S 253L inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 7 - Minutes and members' access to minutes

SECTION 253M   MINUTES  

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253M(1)  (Minute books)  

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.

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History

S 253M(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

253M(2)  (Signing of minute books)  

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.

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History

S 253M(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

253M(3)  (Where minute books must be kept)  

The responsible entity must keep the minute books at:

(a)  its registered office; or

(b)  its principal place of business in Australia; or

(c)  another place approved by ASIC.

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History

S 253M(3) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 253M(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

253M(4)  (Evidence)  

A minute that is so recorded and signed is evidence of the proceeding or resolution to which it relates, unless the contrary is proved.

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History

S 253M(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 253N   MEMBERS' ACCESS TO MINUTES  

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253N(1)  (Inspection by numbers)  

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.

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History

S 253N(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

253N(2)  (Copy of minutes)  

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.

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History

S 253N(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

253N(3)  (No payment required)  

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.

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History

S 253N(3) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 253N(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

253N(4)  (Payment required)  

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.

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The amount of any payment the responsible entity requires cannot exceed the prescribed amount.

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History

S 253N(4) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 253N(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

CHAPTER 2H - SHARES

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Chapter 2H inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254AA   SHARES TO HAVE NOMINAL VALUE  (Repealed by No 61 of 1998, Sch 5 (effective 1 July 1998).)

PART 2H.1 - ISSUING AND CONVERTING SHARES

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Part 2H.1 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254A   POWER TO ISSUE BONUS, PARTLY-PAID, PREFERENCE AND REDEEMABLE PREFERENCE SHARES  

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254A(1)  [Power to issue shares]  

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.

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History

S 254A(1) (Note 3) added by No 61 of 1998, Sch 5 (effective 1 July 1998).

S 254A(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

254A(2)  [Preference shares]  

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.

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History

S 254A(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

254A(3)  [Redeemable preference shares]  

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.

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History

S 254A(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254B   TERMS OF ISSUE  

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254B(1)  [Terms, rights and restrictions]  

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).

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History

S 254B(1) (Notes 1 and 2) amended by No 54 of 1998, Sch 5 (effective 1 July 1998).

S 254B(1) (Note 4) inserted by No 61 of 1998, Sch 5 (effective 1 July 1998).

S 254B(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

254B(2)  No liability companies - special terms of issue.  

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.

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S 254B(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

254B(3)  Companies incorporated as no liability companies - special terms of issue.  

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.

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History

S 254B(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

254B(4)  [Shares issued to vendors or promoters]  

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.

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History

S 254B(4) inserted by No 61 of 1998, Sch 1, 5 (effective 1 July 1998).

SECTION 254C   NO PAR VALUE SHARES  

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254C    Shares of a company have no par value.

Note:

Sections 1444-1449 contain application and transitional provisions that deal with the introduction of no par value shares. See also subsection 169(4).

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History

S 254C inserted by No 61 of 1998, Sch 5 (effective 1 July 1998).

CCH Note : Sections 254CA to 254CC were repealed by No 61 of 19998, Sch 5 (effective 1 July 1998).

SECTION 254CA   NOMINAL VALUE OF SHARES ISSUED AFTER REGISTRATION  (Repealed by No 61 of 1998, Sch 5 (effective 1 July 1998).)

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S 254CA inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254CB   SHARE PREMIUM  (Repealed by No 61 of 1998, Sch 5 (effective 1 July 1998).)

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S 254CB inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254CC   ISSUE OF SHARES AT A DISCOUNT  (Repealed by No 61 of 1998, Sch 5 (effective 1 July 1998).)

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S 254CC inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254D   PRE-EMPTION FOR EXISTING SHAREHOLDERS ON ISSUE OF SHARES IN PROPRIETARY COMPANY (replaceable rule - see section 135)  

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254D(1)  [Pre-emption]  

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.

254D(2)  [Statement of offer]  

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.

254D(3)  [Shares not taken up]  

The directors may issue any shares not taken up under the offer under subsection (1) as they see fit.

254D(4)  [Authorisation]  

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).

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S 254D inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254E   COURT VALIDATION OF ISSUE  

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254E(1)  [Court may make order]  

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 Law; or

(ii) another law of this jurisdiction; or

(iii) the company's constitution (if any).

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History

S 254E(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

254E(2)  [Lodgment with ASIC]  

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On lodgment of acopy of the order with ASIC, the order has effect from the time of the purported issue.

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S 254E(2) amended by No 54 of 1998, Sch 5 (effective 1 July 1998).

S 254E(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254F   BEARER SHARES AND STOCK MUST NOT BE ISSUED  

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254F     A company does not have the power to:

(a)  issue bearer shares; or

(b)  issue stock or convert shares into stock.

Note:

Section 1432 contains transitional provisions for the conversion of existing stock into shares.

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S 254F inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254G   CONVERSION OF SHARES  

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254G(1)  [Company may convert]  

A company may:

(a)  convert an ordinary share into a preference share; and

(b)  convert a preference share into an ordinary share.

Note:

The variation of class rights provisions (sections 246B-246G) will apply to the conversion.

254G(2)  [Ordinary shares to preference shares]  

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 or preference shares.

254G(3)  [Redeemable preference shares]  

A share that is not a redeemable preference share when issued cannot afterwards be converted into a redeemable preference share.

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S 254G inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254H   RESOLUTION TO CONVERT SHARES INTO LARGER OR SMALLER NUMBER  

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254H(1)  [Consolidation or division]  

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:

The variation of class rights provisions (sections 246B-246G) may apply to the conversion.

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S 254H(1) inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

254H(2)  [Conversion]  

The conversion takes effect on:

(a)  the day the resolution is passed; or

(b)  a later date specified in the resolution.

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S 254H(2) inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

254H(3)  [Unpaid amount]  

Any amount unpaid on shares being converted is to be divided equally among the replacement shares.

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S 254H(3) inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

254H(4)  [Lodgment with ASIC]  

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The company must lodge a copy of the resolution with ASIC within 1 month after it is passed.

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S 254H(4) amended by No 54 of 1998, Sch 5 (effective 1 July 1998).

S 254H(4) inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

PART 2H.2 - REDEMPTION OF REDEEMABLE PREFERENCE SHARES

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Part 2H.2 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254J   REDEMPTION MUST BE IN ACCORDANCE WITH TERMS OF ISSUE  

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254J(1)  [Redemption]  

A company may redeem redeemable preference shares only on the terms on which they are on issue. On redemption, the shares are cancelled.

Note:

For the power to issue redeemable preference shares see paragraph 254A(1)(b) and subsections 254A(2) and (3).

254J(2)  [Reduction of capital or share buy-back]  

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.

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S 254J inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254K   OTHER REQUIREMENTS ABOUT REDEMPTION  

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254K    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:

For a director's duty to prevent insolvent trading on redeeming redeemable preference shares, see section 588G.

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S 254K inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

SECTION 254L   CONSEQUENCES OF CONTRAVENING SECTION 254J OR 254K  

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254L(1)  [Effect of contravention]  

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.

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S 254L(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

254L(2)  [Person involved in contravention]  

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 .

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S 254L(2) (Note 1) amended and (Note 2) inserted by No 156 of 1999, Sch 3, Pt 7 (effective 13 March 2000).

S 254L(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

254L(3)  [Dishonest involvement]  

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A person commits an offence if they are involved in a company's contravention of section 254J or 254K and the involvement is dishonest.

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S 254L(3) inserted by No 156 of 1999, Sch 3, Pt 7 (effective 13 March 2000).

PART 2H.3 - PARTLY-PAID SHARES

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Part 2H.3 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254M   LIABILITY ON PARTLY-PAID SHARES  

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254M(1)  General rule about shareholder's liability for calls.  

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.

254M(2)  No liability companies.  

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.

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S 254M inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254N   CALLS MAY BE LIMITED TO WHEN COMPANY IS EXTERNALLY-ADMINISTERED  

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254N(1)  [Calls may be limited]  

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 an externally-administered body corporate.

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S 254N(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

254N(2)  [Lodgment with ASIC]  

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The company must lodge with ASIC a copy of the special resolution within 14 days after it is passed.

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S 254N(2) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 254N(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254P   NO LIABILITY COMPANIES - CALLS ON SHARES  

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254P(1)  Making calls.  

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.

254P(2)  Notice of call.  

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;

(b)  the day when it is payable; and

(c)  the place for payment.

The notice must be sent by post. If the notice is not given, the call is not payable.

254P(3)  [Forfeited shares]  

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.

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S 254P inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254Q   NO LIABILITY COMPANIES - FORFEITURE AND SALE OF SHARES FOR FAILURE TO MEET CALL  

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254Q(1)  Forfeiture and sale of shares.  

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.

254Q(2)  [Sale by public auction]  

The forfeited share must then be offered for sale by public auction within 6 weeks after the call became payable.

254Q(3)  Advertisement of sale.  

At least 14 days, and not more than 21 days, before the day of the sale, the sale must be advertised in a daily newspaper circulating generally throughout Australia. The specific number of shares to be offered need not be specified in the advertisement and it is sufficient to give notice of the sale by advertising to the effect that all shares on which a call remains unpaid will be sold.

254Q(4)  Postponement of sale.  

An intended sale of forfeited shares that has been duly advertised may be postponed for not more than 21 days from the advertised date of sale. The date to which the sale is postponed must be advertised in a daily newspaper circulating generally in Australia.

254Q(5)  [More than 1 postponement]  

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.

254Q(6)  Shares may be offered as credited to a particular amount.  

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.

254Q(7)  Reserve price.  

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.

254Q(8)  Withdrawal from sale.  

The share may be withdrawn from sale if no bid at least equal to the reserve price is made at the sale.

254Q(9)  Disposal of shares withdrawn from sale.  

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.

254Q(10)  Suspension of voting rights attached to share held in trust.  

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).

254Q(11)  Application of proceeds of sale.  

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.

254Q(12)  Validity of sale.  

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.

254Q(13)  Failure to comply an offence.  

If there is failure to comply with subsection (2) or (3), the company and any officer of the company who is involved in the contravention are each guilty of an offence.

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S 254Q inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254R   NO LIABILITY COMPANIES - REDEMPTION OF FORFEITED SHARES  

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254R(1)  [Redemption]  

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.

254R(2)  [Registered office]  

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 Law required to be open and accessible to the public.

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S 254R inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

PART 2H.4 - CAPITALISATION OF PROFITS

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Part 2H.4 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254S   CAPITALISATION OF PROFITS  

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254S     A company may capitalise profits. The capitalisation need not be accompanied by the issue of shares.

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S 254S inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

PART 2H.5 - DIVIDENDS

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Part 2H.5 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254T   DIVIDENDS TO BE PAID OUT OF PROFITS  

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254T     A dividend may only be paid out of profits of the company.

Note:

For a director's duty to prevent insolvent trading on payment of dividends, see section 588G.

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S 254T inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

SECTION 254U   OTHER PROVISIONS ABOUT PAYING DIVIDENDS (replaceable rule - see section 135)  

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254U(1)  [Directors may fix certain matters]  

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.

254U(2)  [Interest]  

Interest is not payable on a dividend.

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S 254U inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254V   WHEN DOES THE COMPANY INCUR A DEBT?  

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254V(1)  [Fixing amount or time]  

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.

254V(2)  [Declaration of dividend]  

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.

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S 254V inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254W   DIVIDEND RIGHTS  

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254W(1)  Shares in public companies.  

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.

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S 254W(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

254W(2)  Shares in proprietary companies (replaceable rule - see section 135).  

Subject to the terms on which shares in a proprietary company are on issue, the directors may pay dividends as they see fit.

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S 254W(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

254W(3)  No liability companies.  

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.

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S 254W(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

254W(4)  [Payment of dividend]  

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.

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S 254W(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

PART 2H.6 - NOTICE REQUIREMENTS

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Part 2H.6 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254X   NOTICE TO ASIC OF SHARE ISSUE  

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254X(1)  [Notice in the prescribed form]  

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Within 1 month 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.

Note:

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).

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History

S 254X(1) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 254X(1) amended by No 61 of 1998, Sch 5 (effective 1 July 1998).

S 254X(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

254X(2)  [Non-cash consideration]  

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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.

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S 254X(2) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 254X(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

254X(3)  [Registration or change of type]  

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 117(2), 163(3) and 601BC(2).

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S 254X(3) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 254X(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 254Y   NOTICE TO ASIC OF SHARE CANCELLATION  

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254Y     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.

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).

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S 254Y (Note) amended by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000).

S 254Y amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 254Y amended by No 61 of 1998, Sch 1 and 5 (effective 1 July 1998).

CHAPTER 2J - TRANSACTIONS AFFECTING SHARE CAPITAL

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Chapter 2J inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

PART 2J.1 - SHARE CAPITAL REDUCTIONS AND SHARE BUY-BACKS

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Part 2J.1 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 256A   PURPOSE  

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256A     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.

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S 256A inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

Division 1 - Reductions in share capital not otherwise authorised by law

SECTION 256B   COMPANY MAY MAKE REDUCTION NOT OTHERWISE AUTHORISED  

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256B(1)  (Reductions not otherwise authorised)  

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.

256B(2)  (Equal or selective reduction)  

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 .

256B(3)  [Certain differences ignored]  

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.

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S 256B inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

SECTION 256C   SHAREHOLDER APPROVAL  

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256C(1)  Ordinary resolution required for equal reduction.  

If the reduction is an equal reduction, it must be approved by a resolution passed at a general meeting of the company.

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S 256C(1) inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

256C(2)  Special shareholder approval for selective reduction.  

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.

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S 256C(2) inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

256C(3)  [Lodge with ASIC]  

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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.

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S 256C(3) amended by No 54 of 1998, Sch 5, Pt 5 (effective 1 July 1998).

S 256C(3) inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

256C(4)  Information to accompany the notice of meeting.  

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.

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S 256C(4) inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

256C(5) 

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Documents to be lodged with ASIC.  

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.

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S 256C(5) amended by No 54 of 1998, Sch 5, Pt 5 (effective 1 July 1998).

S 256C(5) inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

SECTION 256D   CONSEQUENCES OF FAILING TO COMPLY WITH SECTION 256B  

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256D(1)  [Compliance with sec 256B(1)]  

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The company must not make the reduction unless it complies with subsection 256B(1).

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S 256D(1) inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

256D(2)  [Contravention]  

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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.

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S 256D(2) inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

256D(3)  [Person involved in contravention]  

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 .

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S 256D(3) (Note 1) amended and (Note 2) inserted by No 156 of 1999, Sch 3, Pt 7 (effective 13 March 2000).

S 256D(3) inserted by No 61 of 1998, Sch 5 (effective 1 July 1998).

256D(4)  [Dishonest involvement]  

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A person commits an offence if they are involved in a company's contravention of section 256B and the involvement is dishonest.

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S 256D(4) inserted by No 156 of 1999, Sch 3, Pt 7 (effective 13 March 2000).

SECTION 256E   SIGNPOSTS TO OTHER RELEVANT PROVISIONS  

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256E     The following table lists other provisions of this Law that are relevant to reductions in share capital.

                                                        
--------------------------------------------------------
Other provisions relevant to reductions in share capital
--------------------------------------------------------
1 section 588G    liability of directors on insolvency  
                                                        
  section 1317H   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.    
--------------------------------------------------------
2 section 1324    injunctions to restrain contravention 
                                                        
                  Under this section the Court may grant
                  an injunction against conduct that    
                  constitutes or would constitute a     
                  contravention of this Law.            
--------------------------------------------------------
3 (Repealed)                                            
--------------------------------------------------------
4 sections       continuous disclosure provisions       
  1001A-1001D    Under these sections a disclosing entity
                 is required to disclose information    
                 about its securities that is material  
                 and not generally available.           
--------------------------------------------------------
5 Chapter 2E     benefits to related parties to be      
                 disclosed                              
                                                        
                 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.                
--------------------------------------------------------
6 section 125    provisions in constitution             
                                                        
                 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.         
--------------------------------------------------------
7 sections       variation of class rights              
  246A-246F                                             
                 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.
--------------------------------------------------------

      

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S 256E, item 3 repealed by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000).

S 256E, item 1 amended by No 156 of 1999, Sch 3, Pt 7 (effective 13 March 2000).

S 256E, item 5 amended by No 156 of 1999, Sch 3, Pt 4 (effective 13 March 2000).

S 256E inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998)

SECTION 256F   CONSEQUENCES OF FAILING TO COMPLY WITH SECTION 256A  (Repealed by No 61 of 1998, Sch 5 (effective 1 July 1998).)

Division 2 - Share buy-backs

SECTION 257AA   PURPOSE  (Repealed by No 61 of 1998, Sch 5 (effective 1 July 1998).)

SECTION 257A   THE COMPANY'S POWER TO BUY BACK ITS OWN SHARES  

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257A     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.

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S 257A amended by No 61 of 1998, Sch 5 (effective 1 July 1998).

S 257A inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 257B   BUY-BACK PROCEDURE - GENERAL  

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257B(1)  (Table of steps required)  

The following table specifies the steps required for, and the sections that apply to, the different types of buy-back.

+-------------------------------------------------------------------+
| Procedures| minimum | employee   | on-market  | equal      |selec-|
| [and      | holding | share      |            | access     |tive  |
| sections  |         | scheme     |            |            |buy-  |
| applied]  |         |            |            |            |back  |
|           |         |------+-----+------+-----+------+-----|      |
|           |         |within|over |within|over |within|over |      |
|           |         |10/12 |10/12|10/12 |10/12|10/12 |10/12|      |
|           |         |limit |limit|limit |limit|limit |limit|      |
|-----------+---------+------+-----+------+-----+------+-----+------|
| ordinary  | -       | -    | yes | -    | yes | -    | yes | -    |
| resolution|         |      |     |      |     |      |     |      |
| [257C]    |         |      |     |      |     |      |     |      |
|-----------+---------+------+-----+------+-----+------+-----+------|
| special/  | -       | -    | -   | -    | -   | -    | -   | yes  |
| unanimous |         |      |     |      |     |      |     |      |
| resolution|         |      |     |      |     |      |     |      |
| [257D]    |         |      |     |      |     |      |     |      |
|-----------+---------+------+-----+------+-----+------+-----+------|
| lodge     | -       | -    | -   | -    | -   | yes  | yes | yes  |
| offer     |         |      |     |      |     |      |     |      |
| documents |         |      |     |      |     |      |     |      |
| with ASC  |         |      |     |      |     |      |     |      |
| [257E]    |         |      |     |      |     |      |     |      |
|-----------+---------+------+-----+------+-----+------+-----+------|
| 14 days   | -       | yes  | yes | yes  | yes | yes  | yes | yes  |
| notice    |         |      |     |      |     |      |     |      |
| [257F]    |         |      |     |      |     |      |     |      |
|-----------+---------+------+-----+------+-----+------+-----+------|
| disclose  | -       | -    | -   | -    | -   | yes  | yes | yes  |
| relevant  |         |      |     |      |     |      |     |      |
| inform-   |         |      |     |      |     |      |     |      |
| ation     |         |      |     |      |     |      |     |      |
| when offer|         |      |     |      |     |      |     |      |
| made      |         |      |     |      |     |      |     |      |
| [257G]    |         |      |     |      |     |      |     |      |
|-----------+---------+------+-----+------+-----+------+-----+------|
| cancel    | yes     | yes  | yes | yes  | yes | yes  | yes | yes  |
| shares    |         |      |     |      |     |      |     |      |
| [257H]    |         |      |     |      |     |      |     |      |
|-----------+---------+------+-----+------+-----+------+-----+------|
| notify    | yes     | yes  | yes | yes  | yes | yes  | yes | yes  |
| cancel-   |         |      |     |      |     |      |     |      |
| lation to |         |      |     |      |     |      |     |      |
| ASC       |         |      |     |      |     |      |     |      |
| [254Y]    |         |      |     |      |     |      |     |      |
+-----------+---------+------+-----+------+-----+------+-----+------+

      

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 scheme buy-back and selective buy-back.

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S 257B(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

257B(2)  Equal access scheme.  

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.

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S 257B(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

257B(3)  [Certain differences ignored]  

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.

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S 257B(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

257B(4)  10/12 limit.  

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.

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S 257B(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

257B(5)  Exceeding the 10/12 limit.  

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.

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S 257B(5) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

257B(6)  On-market buy-backs.  

A buy-back is an on-market buy-back if it results from an offer made by a listed corporation at an official meeting of a securities exchange in Australia in the ordinary course of trading on a stock market of that exchange.

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S 257B(6) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

257B(7)  [Buy-backs on securities market]  

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 on a stock market of a body corporate that:

(a)  operates a securities market outside Australia; and

(b)  ASIC declares in writing to be an approved overseas securities exchange for the purposes of this subsection.

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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 stock market of a securities exchange in Australia at the same time.

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S 257B(7) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 257B(7) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

257B(8)  [Declared markets]  

A declaration under paragraph (7)(b) may be subject to conditions. Notice of the making of the declaration must be published in the Gazette.

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S 257B(8) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 257C   BUY-BACK PROCEDURE - SHAREHOLDER APPROVAL IF THE 10/12 LIMIT EXCEEDED  

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257C(1)  Ordinary resolution required.  

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.

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S 257C(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

257C(2)  Information to accompany the notice of meeting.  

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.

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S 257C(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

257C(3) 

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Documents to be lodged with ASIC.  

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.

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S 257C(3) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 257C(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 257D   BUY-BACK PROCEDURE - SPECIAL SHAREHOLDER APPROVAL FOR SELECTIVE BUY-BACK  

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257D(1)  Selective buy-back requires special or unanimous resolution.  

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.

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S 257D(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

257D(2)  Information to accompany the notice of meeting.  

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.

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S 257D(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

257D(3) 

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Documents to be lodged with ASIC.  

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.

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S 257D(3) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 257D(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

257D(4)  [ASIC may grant exemption]  

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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.

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S 257D(4) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 257D(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 257E   BUY-BACK PROCEDURE - LODGMENT OF OFFER DOCUMENTS WITH ASIC  

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Heading amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

257E     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.

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S 257E amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 257E inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 257F   NOTICE OF INTENDED BUY-BACK  

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257F(1)  [When to lodge]  

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.

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S 257F(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

257F(2)  [Notice to be lodged]  

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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:

•  under a particular scheme; or

•  as part of particular on-market buy-back activity.

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History

S 257F(2) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 257F(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 257G   BUY-BACK PROCEDURE - DISCLOSURE OF RELEVANT INFORMATION WHEN OFFER MADE  

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257G     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.

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History

S 257G inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 257H   ACCEPTANCE OF OFFER AND TRANSFER OF SHARES TO THE COMPANY  

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257H(1)  Effect of acceptance of the buy-back offer on share rights.  

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.

257H(2)  Shares transferred to the company and cancelled.  

A company must not deal in shares it buys back. An agreement entered into in contravention of this subsection is void.

257H(3)  [Cancellation on transfer back]  

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.

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History

S 257H (Note) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 257H inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 257J   SIGNPOSTS TO OTHER RELEVANT PROVISIONS  

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257J     The following table sets out other provisions of this Law that are relevant to buy-backs.

---------------------------------------------------------------------
Other provisions relevant to buy-backs
---------------------------------------------------------------------
     provision          comment
 1   section 588G       liability of directors on insolvency

     section 1317H     The directors may have to compensate the
                        company if the company is, or becomes,
                        insolvent when the company enters into
                        the buy-back agreement.

 2    section 1324      injunctions to restrain contravention

                        The Court may grant an injunction against
                        conduct that constitutes, or would
                        constitute, a contravention of this Law.
 
 3    (Repealed)                                                 
                                                                 
 4    section 609(4)    application of takeover provisions       

      section 632A      These sections deal with the application
                        of Chapter 6 to buy-backs.

 5    section 259A      consequences of failure to follow
                        procedures - the company and the officers

                        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 9.4B and may
                        commit an offence.

 6    section 256F      consequences of failure to follow procedures
                        if reduction in share capital involved - the
                        company and the officers

                        If the buy-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 9.4B and may
                        commit an offence.

 7     section 256D     consequences of failure to follow procedures
                        if reduction in share capital involved - the
                        transaction

                        This section provides that a failure to
                        follow the procedures for share capital
                        reductions does not affect the validity of
                        the buy-back transaction itself.

 8     sections 1001A-  continuous disclosure provisions
       1001D

                         A disclosing entity is required to
                         disclose information about its securities
                         that is material and not generally
                         available.

 9     Chapter 2E        benefits to related parties to be
                         disclosed

                         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.

10     section 125       provisions in constitution

                         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.

11     sections 246A-    variation of class rights
       246F
                         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.

--------------------------------------------------------------------

      

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S 257J, item 3 repealed and item 4 amended by No 156 of 1999, Sch 3, Pt 9 (effective 13 March 2000).

S 257J, item 1 amended by No 156 of 1999, Sch 3, Pt 7 (effective 13 March 2000).

S 257J inserted by No 61 of 1998, Sch 1 and amended by Sch 5 (effective 1 July 1998).

Division 3 - Other share capital reductions

SECTION 258A   UNLIMITED COMPANIES  

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258A     An unlimited company may reduce its share capital in any way.

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S 258A inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 258B   RIGHT TO OCCUPY OR USE REAL PROPERTY  

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258B(1)  (Shareholder right to occupy or use)  

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.

258B(2)  (Transfer of interest in land)  

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).

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.

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S 258B inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 258C   BROKERAGE OR COMMISSION  

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258C     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.

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S 258C inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 258D   CANCELLATION OF FORFEITED SHARES  

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258D     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.

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S 258D inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 258E   OTHER SHARE CANCELLATIONS  

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258E(1)  (Authorised reduction of share capital)  

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.

(c)  (Repealed by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000).)

is authorised by this section.

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History

S 258E(1) amended by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000).

S 258E(1) inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

258E(2)  (Cancellation of returned shares)  

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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.

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History

S 258E(2) inserted by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000).

258E(3)  (Reduction by order)  

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Any reduction in a company's share capital because of an order under section 1325A is authorised by this subsection.

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S 258E(3) inserted by No 156 of 1999, Sch 3, Pt 1 (effective 13 March 2000).

SECTION 258F   REDUCTIONS BECAUSE OF LOST CAPITAL  

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258F     A company may reduce its share capital by cancelling any paid-up share capital that is lost or is not represented by available assets. This power does not apply if the company also cancels shares.

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S 258F inserted by No 61 of 1998, Sch 1 and substituted by Sch 5 (effective 1 July 1998).

PART 2J.2 - SELF-ACQUISITION AND CONTROL OF SHARES

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Part 2J.2 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 259A   DIRECTLY ACQUIRING OWN SHARES  

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259A     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).

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S 259A inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 259B   TAKING SECURITY OVER OWN SHARES OR SHARES IN HOLDING COMPANY  

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259B(1)  [Security over shares]  

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).

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S 259B(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

259B(2)  [Employee share schemes]  

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.

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History

S 259B(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

259B(3)  Special exemptions for financial institutions.  

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.

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S 259B(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

259B(4)  [Cease to hold within 12 months]  

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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.

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History

S 259B(4) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 259B(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

259B(5)  [Voting rights]  

Any voting rights attached to the shares (or units of shares) cannot be exercised while the company continues to hold them.

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S 259B(5) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

259B(6)  [Offence]  

If, at the end of the 12 months (or extended period), the companystill holds any of the shares (or units of shares), the company commits an offence for each day while that situation continues.

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S 259B(6) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 259C   ISSUING OR TRANSFERRING SHARES TO CONTROLLED ENTITY  

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259C(1)  [Issue to controlled entity void]  

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.

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History

S 259C(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

259C(2)  [ASIC may exempt]  

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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.

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S 259C(2) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 259C(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

259C(3)  [Cease to hold or control]  

If paragraph (1)(c) or (d) applies to an issue or transfer of shares (or units of shares), section 259D applies.

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S 259C(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 259D   COMPANY CONTROLLING ENTITY THAT HOLDS SHARES IN IT  

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259D(1)  [12 month limit]  

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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.

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History

S 259D(1) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 259D(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

259D(2)  [Bonus shares]  

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.

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History

S 259D(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

259D(3)  [Voting shares controlled]  

Any voting rights attached to the shares (or units of shares) cannot be exercised while the company continues to control the entity.

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History

S 259D(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

259D(4)  [Offence]  

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.

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History

S 259D(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

259D(5)  [Exceptions]  

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.

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History

S 259D(5) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

259D(6)  [No effect on validity]  

A contravention of this section does not affect the validity of any transaction.

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History

S 259D(6) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 259E   WHEN A COMPANY CONTROLS AN ENTITY  

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259E(1)  [Control of entity]  

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.

259E(2)  [Influence and behaviour]  

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).

259E(3)  [Joint capacity]  

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.

259E(4)  [Exercise of legal obligation]  

A company is not to be 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.

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S 259E inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 259F   CONSEQUENCES OF FAILING TO COMPLY WITH SECTION 259A OR 259B  

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259F(1)  [Contravention]  

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.

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History

S 259F(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

259F(2)  [Person involved]  

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 .

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History

S 259F(2) (Note 1) amended and (Note 2) inserted by No 156 of 1999, Sch 3, Pt 7 (effective 13 March 2000).

S 259F(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

259F(3)  [Dishonest involvement]  

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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.

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S 259F(3) inserted by No 156 of 1999, Sch 3, Pt 7 (effective 13 March 2000).

PART 2J.3 - FINANCIAL ASSISTANCE

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Part 2J.3 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 260   REMEDY IN CASES OF OPPRESSION OR INJUSTICE  (Renumbered to s 246AA by No 61 of 1998, Sch 3 (effective 1998).)

SECTION 260A   FINANCIAL ASSISTANCE BY A COMPANY FOR ACQUIRING SHARES IN THE COMPANY OR A HOLDING COMPANY  

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260A(1)  [May assist in limited circumstances]  

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

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(c)  the assistance is exempted under section 260C.

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S 260A(1) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 260A(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

260A(2)  [Timing of assistance]  

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.

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S 260A(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

260A(3)  [Mode of acquisition]  

Subsection (1) extends to the acquisition of shares (or units of shares) by:

(a)  issue; or

(b)  transfer; or

(c)  any other means.

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S 260A(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 260B   SHAREHOLDER APPROVAL  

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260B(1)  Approval by company's own shareholders.  

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.

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S 260B(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

260B(2)  Approval by shareholders of listed holding corporation.  

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.

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History

S 260B(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

260B(3)  Approval by shareholders in ultimate Australian holding company.  

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.

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S 260B(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

260B(4)  Information to accompany the notice of meeting.  

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.

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S 260B(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

260B(5) 

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Documents to be lodged with ASIC before notice of meeting is sent out.  

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.

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S 260B(5) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 260B(5) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

260B(6)  [Timing of lodgment]  

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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.

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S 260B(6) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 260B(6) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

260B(7) 

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Lodgment of special resolutions.  

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.

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S 260B(7) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 260B(7) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 260C   EXEMPTED FINANCIAL ASSISTANCE  

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260C(1)  General exemptions based on ordinary course of commercial dealing.  

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.

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History

S 260C(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

260C(2)  Special exemptions for financial institutions.  

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.

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History

S 260C(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

260C(3)  Special exemptions for subsidiaries of debenture issuers.  

Financial assistance is exempted from section 260A if:

(a)  the company is a subsidiary of a borrower in relation to debentures; and

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(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

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(c)  the borrower is a borrower in relation to the debentures because it is or will be liable to repay the money; and

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(d)  the guarantee or security is given by the company in the ordinary course of commercial dealing.

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History

S 260C(3) amended by No 156 of 1999, Sch 3, Pt 2 (effective 13 March 2000).

S 260C(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

260C(4)  Special exemption for approved employee share schemes.  

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.

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History

S 260C(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

260C(5)  Other exemptions.  

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.

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S 260C(5) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 260D   CONSEQUENCES OF FAILING TO COMPLY WITH SECTION 260A  

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260D(1)  [No effect on validity]  

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.

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History

S 260D(1) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

260D(2)  [Civil penalty]  

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 .

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History

S 260D(2) (Note 1) amended and (Note 2) inserted by No 156 of 1999, Sch 3, Pt 7 (effective 13 March 2000).

S 260D(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

260D(3)  [Dishonest involvement]  

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A person commits an offence if they are involved in a company's contravention of section 260A and the involvement is dishonest.

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History

S 260D(3) inserted by No 156 of 1999, Sch 3, Pt 7 (effective 13 March 2000).

PART 2J.4 - INTERACTION WITH GENERAL DIRECTORS' DUTIES

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History

Part 2J.4 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 260E   GENERAL DUTIES STILL APPLY  

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260E     A director is not relieved from any of their duties under this Law (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.

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History

S 260E amended by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000).

S 260E inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

CHAPTER 2K - CHARGES

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PART 2K.1 - PRELIMINARY

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History

Part 2K.1 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 261   INTERPRETATION AND APPLICATION  

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261(1)  [Definitions]  

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In this Chapter, unless the contrary intention appears:

``company'' (Omitted by No 201 of 1991, Sch 4 (effective 1 January 1991).)

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History

Definition of ``company'' amended by No 110 of 1990, Sch 1 (effective 18 December 1990).

``document of title'' means a document:

(a)  used in the ordinary course of business as proof of possession or control, or of the right to possession or control, of property other than land; or

(b)  authorising or purporting to authorise, whether by endorsement or delivery, the possessor of the document to transfer or receive property other than land;

and includes:

(c)  a bill of lading;

(d)  a warehousekeeper's certificate;

(e)  a wharfinger's certificate;

(f)  a warrant or order for the delivery of goods; and

(g)  a document that is, or evidences title to, a marketable security;

``present liability'' , in relation to a charge, means a liability that has arisen, being a liability the extent or amount of which is fixed or capable of being ascertained, whether or not the liability is immediately due to be met;

``property'' , in relation to a company, means property:

(a)  in the case of a registrable Australian body - within this jurisdiction; or

(b)  in the case of a foreign company - within Australia or an external Territory*; or

(c)  otherwise - within or outside Australia;

held by the company, whether or not as trustee;

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History

Definition of ``property'' amended by No 110 of 1990, Sch 1 (effective 18 December 1990).

* CCH Note: The words ``or an external Territory'' do not appear in the 1992 edition of the Corporations Law published by the Australian Government Publishing Service (Cat No 92 8420 7).

``prospective liability'' , in relation to a charge, means any liability that may arise in the future, or any other liability, but does not include a present liability;

``Register'' means the Australian Register of Company Charges referred to in section 265;

``registrable charge'' means a charge in relation to which, by virtue of section 262, the provisions of this Chapter mentioned in subsection 262(1) apply.

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History

Definition of ``registrable charge'' amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

261(2)  [Certain charges not treated as registrable]  

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A charge referred to in subsection 263(3) or section 264 shall, until the charge is registered, be treated for the purposes of this Chapter as if it were not a registrable charge but, when the charge is so registered, it has the priority accorded to a registered charge as from the time of registration.

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History

S 261(2) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

261(3)  [Effect of registration]  

The registration of a charge referred to in subsection 263(3) or section 264 does not prejudice any priority that would have been accorded to the charge under any other law (whether an Australian law or not) if the charge had not been registered.

261(4)  [Lodgment of notices or documents]  

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For the purposes of this Chapter, a notice or other document shall be taken to be lodged when it is received at an office of the Commission (in this jurisdiction or elsewhere) by an officer authorised to receive it.

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History

S 261(4) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 261(4) amended by No 110 of 1990, Sch 1 (effective 18 December 1990).

PART 2K.2 - REGISTRATION

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History

Div 2 renumbered to Pt 2K.2 by No 61 of 1998, Sch 3 (effective 1 July 1998).

SECTION 262   CHARGES REQUIRED TO BE REGISTERED  

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262(1)  (Charges to be registered)  

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Subject to this section, the provisions of this Chapter relating to the giving of notice in relation to, the registration of, and the priorities of, charges apply in relation to the following charges (whether legal or equitable) on property of a company and do not apply in relation to any other charges:

(a)  a floating charge on the whole or a part of the property, business or undertaking of the company;

(b)  a charge on uncalled share capital;

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(c)  a charge on a call on shares made but not paid;

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(d)  a charge on a personal chattel, including a personal chattel that is unascertained or is to be acquired in the future, but not including a ship registered in an official register kept under an Australian law relating to title to ships;

(e)  a charge on goodwill, on a patent or licence under a patent, on a trade mark or service mark or a licence to use a trade mark or service mark, on a copyright or a licence under a copyright or on a registered design or a licence to use a registered design;

(f)  a charge on a book debt;

(g)  a charge on a marketable security, not being:

(i) a charge created in whole or in part by the deposit of a document of title to the marketable security; or

(ii) a mortgage under which the marketable security is registered in the name of the chargee or a person nominated by the chargee;

(h)  a lien or charge on a crop, a lien or charge on wool or a stock mortgage;

(j)  a charge on a negotiable instrument other than a marketable security.

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History

S 262(1) amended by No 61 of 1998, Sch 2, Pt 3 and Sch 3 (effective 1 July 1998).

262(2)  (Charges etc not requiring registration)  

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The provisions of this Chapter mentioned in subsection (1) do not apply in relation to:

(a)  a charge, or a lien over property, arising by operation of law;

(b)  a pledge of a personal chattel or of a marketable security;

(c)  a charge created in relation to a negotiable instrument or a document of title to goods, being a charge by way of pledge, deposit, letter of hypothecation or trust receipt;

(d)  a transfer of goods in the ordinary course of the practice of any profession or the carrying on of any trade or business; or

(e)  a dealing, in the ordinary course of the practice of any profession or the carrying on of any trade or business, in respect of goods outside Australia.

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History

S 262(2) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

262(3)  (Charges on personal chattels)  

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The reference in paragraph (1)(d) to a charge on a personal chattel is a reference to a charge on any article capable of complete transfer by delivery, whether at the time of the creation of the charge or at some later time, and includes a reference to a charge on a fixture or a growing crop that is charged separately from the land to which it is affixed or on which it is growing, but does not include a reference to a charge on:

(a)  a document evidencing title to land;

(b)  a chattel interest in land;

(c)  a marketable security;

(d)  a document evidencing a thing in action; or

(e)  stock or produce on a farm or land that by virtue of a covenant or agreement ought not to be removed from the farm or land where the stock or produce is at the time of the creation of the charge.

262(4)  [Charges on book debts]  

The reference in paragraph (1)(f) to a charge on a book debt is a reference to a charge on a debt due or to become due to the company at some future time on account of or in connection with a profession, trade or business carried on by the company, whether entered in a book or not, and includes a reference to a charge on a future debt of the same nature although not incurred or owing at the time of the creation of the charge, but does not include a reference to a charge on a marketable security, on a negotiable instrument or on a debt owing in respect of a mortgage, charge or lease of land.

262(5)  [Liens or charges on crops or wool; stock mortgages]  

The reference in paragraph (1)(h) to a lien or charge on a crop, a lien or charge on wool or a stock mortgage includes a reference to a security (however described) that is registrable under a prescribed law of a State or Territory.

262(6)  [Deemed deposit of document of title]  

For the purposes of this section, a company shall be deemed to have deposited a document of title to property with another person (in this subsection referred to as the ``chargee'') in a case where the document of title is not in the possession of the company if:

(a)  the person who holds the document of title acknowledges in writing that the person holds the document of title on behalf of the chargee; or

(b)  a government, an authority or a body corporate that proposes to issue a document of title in relation to the property agrees, in writing, to deliver the document of title, when issued, to the chargee.

262(7)  [Charges over various kinds of property]  

For the purposes of this section, a charge shall be taken to be a charge on property of a kind to which a particular paragraph of subsection (1) applies even though the instrument of charge also charges other property of the company including other property that is of a kind to which none of the paragraphs of that subsection applies.

262(8)  [Charges on land]  

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The provisions of this Chapter mentioned in subsection (1) do not apply in relation to a charge on land.

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History

S 262(8) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

262(9)  [Charges on fixtures]  

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The provisions of this Chapter mentioned in subsection (1) do not apply in relation to a charge on fixtures given by a charge on the land to which they are affixed.

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History

S 262(9) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

262(10)  [Charges created by trustees, legal personal representatives]  

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The provisions of this Chapter mentioned in subsection (1) do not apply in relation to a charge created by a company in its capacity as legal personal representative of a deceased person or as trustee of the estate of a deceased person.

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History

S 262(10) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

262(11)  [Effect of non-lodgment on validity]  

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A charge on property of a company is not invalid merely because of the failure to lodge with the Commission, or give to the company or another person, a notice or other document that is required by this Part to be so lodged or given.

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History

S 262(11) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

SECTION 263   LODGMENT OF NOTICE OF CHARGE AND COPY OF INSTRUMENT  

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263(1)  [Lodgment within 45 days]  

Where a company creates a charge, the company shall ensure that there is lodged, within 45 days after the creation of the charge:

(a)  a notice in the prescribed form setting out the following particulars:

(i) the name of the company and the date of the creation of the charge;

(ii) whether the charge is a fixed charge, a floating charge or both a fixed and floating charge;

(iii) if the charge is a floating charge - whether there is any provision in the resolution or instrument creating or evidencing the charge that prohibits or restricts the creation of subsequent charges;

(iv) a short description of the liability (whether present or prospective) secured by the charge;

(v) a short description of the property charged;

(vi) whether the charge is created or evidenced by a resolution, by an instrument or by a deposit or other conduct;

(vii) if the charge is constituted by the issue of a debenture or debentures - the name of the trustee (if any) for debenture holders;

(viii) if the charge is not constituted by the issue of a debenture or debentures or there is no trustee for debenture holders - the name of the chargee;

(ix) such other information as is prescribed;

(b)  if, pursuant to a resolution or resolutions passed by the company, the company issues a series of debentures constituting a charge to the benefit of which all the holders of debentures in the series are entitled in equal priority, and the charge is evidenced only by the resolution or resolutions and the debentures - a copy of the resolution or of each of the resolutions verified by a statement in writing to be a true copy, and a copy of the first debenture issued in the series and a statement in writing verifying the execution of that first debenture; and

(c)  if, in a case to which paragraph (b) does not apply, the charge was created or evidenced by an instrument or instruments:

(i) the instrument or each of the instruments; or

(ii) a copy of the instrument or of each of the instruments verified by a statement in writing to be a true copy, and a statement in writing verifying the execution of the instrument or of each of the instruments.

263(2)  [Series of debentures]  

In a case to which paragraph (1)(b) applies:

(a)  the charge shall, for the purposes of subsection (1), be deemed to be created when the first debenture in the series of debentures is issued; and

(b)  if, after the issue of the first debenture in the series, the company passes a further resolution authorising the issue of debentures in the series, the company shall ensure that a copy of that resolution, verified by a statement in writing to be a true copy of that resolution, is lodged within 45 days after the passing of that resolution.

263(3)  [Application for registration]  

A body that applies for registration as a company under Part 5B.1, or for registration under Part 5B.2, shall lodge with the application for registration the documents specified in subsection (4) in relation to any charge on property of the body that would be registrable under this Part if the body were already registered under Part 5B.1, or Part 5B.2, as the case may be.

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History

S 263(3) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 263(3) amended by No 110 of 1990, Sch 1 (effective 18 December 1990).

263(4)  [Documents required to be lodged pursuant to Part 5B.1 or 5B.2 applications]  

The documents required to be lodged under subsection (3) in relation to a charge on property of a body are the following documents:

(a)  a notice in the prescribed form:

(i) setting out the name of the body;

(ii) if the charge was created by the body - specifying the date of the creation of the charge;

(iii) if the charge was a charge existing on property acquired by the body - setting out the date on which the property was so acquired; and

(iv) otherwise complying with the requirements of paragraph (1)(a);

(b)  if the charge was created or evidenced as mentioned in paragraph (1)(b):

(i) in the case of a charge created by the body - a copy of the resolution or of each of the resolutions referred to in that paragraph verified by a statement in writing to be a true copy and a copy of the first debenture issued in the series referred to in that paragraph and a statement in writing verifying the execution of that first debenture; or

(ii) in the case of a charge that existed on property acquired by the body - the copies referred to in subparagraph (i) verified by statements in writing to be true copies;

(c)  if the charge was created or evidenced by an instrument or instruments (otherwise than as mentioned in paragraph (1)(b)):

(i) in the case of a charge created by the body:

(A) the instrument or each of the instruments; or

(B) a copy of the instrument or of each of the instruments verified by a statement in writing to be a true copy, and a statement in writing verifying the execution of the instrument or of each of the instruments; or

(ii) in the case of a charge that existed on property acquired by the body - a copy of the instrument or of each of the instruments verified by a statement in writing to be a true copy;

(d)  if the charge was created or evidenced as mentioned in paragraph (1)(b) and, after the issue of the first debenture in the series, the body passed a further resolution or resolutions authorising the issue of debentures in the series - a copy of that resolution or of each of those resolutions verified by a statement in writing to be a true copy.

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History

S 263(4) amended by No 110 of 1990, Sch 1 (effective 18 December 1990).

263(5)  [Lodgment of notice]  

A notice in relation to a charge, being a charge in relation to which paragraph (1)(b) or (c) or (4)(b) or (c) applies, shall not be taken to have been lodged under subsection (1) or (3) unless the notice is accompanied by the documents specified in that paragraph.

263(6)  [Series of debentures - priority]  

Where a notice with respect to an instrument creating a charge has been lodged under subsection (1) or (3), being a charge in respect of an issue of several debentures the holders of which are entitled under the instrument in equal priority to the benefit of the charge, sections 279 to 282 (inclusive) have effect as if any charges constituted by those debentures were registered at the time when the charge to which the notice relates was registered.

263(7)  [Details of payment or discount]  

Where a payment or discount has been made or allowed, either directly or indirectly, by a company or registrable body to a person in consideration of the person's subscribing or agreeing to subscribe, whether absolutely or conditionally, for debentures, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for debentures, the notice required to be lodged under subsection (1) or (3) shall include particulars as to the amount or rate per centum of the payment or discount.

263(8)  [Issue as security for company debt]  

Where a company or registrable body issues debentures as security for a debt of the company or registrable body, the company or registrable body shall not thereby be regarded, for the purposes of subsection (7), as having allowed a discount in respect of the debentures.

SECTION 264   ACQUISITION OF PROPERTY SUBJECT TO CHARGE  

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264(1)  [Notice by company acquiring property]  

Where a company acquires property that is subject to a charge, being a charge that would have been registrable when it was created if it had been created by a company, the company shall, within 45 days after the acquisition of the property:

(a)  ensure that there is lodged:

(i) a notice in the prescribed form in relation to the charge, setting out the name of the company and the date on which the property was so acquired and otherwise complying with the requirements of paragraph 263(1)(a);

(ii) if the charge was created or evidenced as mentioned in paragraph 263(1)(a) - a copy of the resolution or of each of the resolutions referred to in that paragraph verified by a statement in writing to be a true copy and a copy of the first debenture issued in the series referred to in that paragraph verified by a statement in writing to be a true copy; and

(iii) if the charge was created or evidenced by an instrument or instruments (otherwise than as mentioned in paragraph 263(1)(b)):

(A) the instrument or each of the instruments; or

(B) a copy of the instrument or of each of the instruments verified by a statement in writing to be a true copy; and

(b)  give to the chargee notice that it has acquired the property and the date on which it was so acquired.

264(2)  [Notice to be accompanied by specified documents]  

A notice in relation to a charge, being a charge in relation to which subparagraph (1)(a)(ii) or (iii) applies, shall not be taken to have been lodged under subsection (1) unless it is accompanied by the documents specified in that subparagraph.

SECTION 265   REGISTRATION OF DOCUMENTS RELATING TO CHARGES  

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265(1)  [Australian Register of company charges]  

The Commission shall keep a register to be known as the Australian Register of Company Charges.

265(2)  [Particulars to be included in Register]  

Where a notice in respect of a charge on property of a company that is required by section 263 or 264 to be lodged is lodged (whether during or after the period within which the notice was required to be lodged) and the notice contains all the particulars required by the relevant section to be included in the notice, the Commission shall as soon as practicable cause to be entered in the Register the time and date when the notice was lodged and the following particulars in relation to the charge:

(a)  if the charge is a charge created by the company, the date of its creation or, if the charge was a charge existing on property acquired by the company, the date on which the property was so acquired;

(b)  a short description of the liability (whether present or prospective) secured by the charge;

(c)  a short description of the property charged;

(d)  the name of the trustee for debenture holders or, if there is no such trustee, the name of the chargee.

265(3)  [Deemed registration]  

Subject to subsection (9), where particulars in respect of a charge are entered in the Register in accordance with subsection (2), the charge shall be deemed to be registered, and to have been registered from and including the time and date entered in the Register under that subsection.

265(4)  [``provisional'' entries]  

Where:

(a)  a notice in respect of a charge on property of a company is lodged under section 263 or 264 (whether during or after the period within which the notice was required to be lodged); and

(b)  the notice is not accompanied by a certificate to the effect that all documents accompanying the notice have been duly stamped as required by any applicable law relating to stamp duty;

the Commission must cause to be entered in the Register the time and date when the notice was lodged and the particulars referred to in paragraphs (2)(a), (b), (c) and (d), but must cause the word ``provisional'' to be entered in the Register in relation to the entry specifying that time and date.

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History

S 265(4) amended by No 201 of 1991, Sch 4 (effective 1 January 1991).

S 265(4) substituted by No 110 of 1990, Sch 1 (effective 18 December 1990).

265(5)  [Treatment of provisional entries]  

Where:

(a)  in accordance with subsection (4), the word ``provisional'' is entered in the Register in relation to an entry specifying the time and date on which a notice in respect of a charge was lodged; and

(b)  within a period of 30 days or such longer period as is prescribed after the notice was lodged, or within such further period as the Commission, if it considers it to be appropriate in a particular case, allows, a certificate to the effect set out in paragraph (4)(b) has been produced to the Commission;

the Commission shall delete the word ``provisional'' that was so entered in relation to the entry relating to that charge, but if such a certificate is not produced within the period, or the further period, referred to in paragraph (b), the Commission shall delete from the Register all the particulars that were entered in relation to the charge.

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History

S 265(5) amended by No 201 of 1991, Sch 4 (effective 1 January 1991).

S 265(5) amended by No 110 of 1990, Sch 4 (effective 1 January 1991).

S 265(5) amended by No 110 of 1990, Sch 1 (effective 18 December 1990).

265(6)  [Provisional entries - purported notices]  

Where a document that purports to be a notice in respect of a charge on property of a company for the purposes of section 263 or 264 is lodged (whether during or after the period within which the notice was required to be lodged) and the document contains the name of the company concerned and the particulars referred to in subparagraph 263(1)(a)(vii) or (viii), as the case requires, but does not contain some or all of the other particulars that are required to be included in the notice or is otherwise defective:

(a)  the Commission shall cause to be entered in the Register the time and date when the document was lodged and such of the particulars referred to in paragraphs (2)(a), (b), (c) and (d) as are ascertainable from the document, but shall cause the word ``provisional'' to be entered in the Register in relation to the entry specifying that time and date; and

(b)  the Commission shall, by notice in writing to the person who lodged the document, direct the person to ensure that there is lodged, on or before the day specified in the notice, a notice in relation to the charge that complies with the requirements of section 263 or 264, as the case may be, but the giving by the Commission of a direction to the person under this paragraph does not affect any liability that the company may have incurred or may incur by reason of a contravention of section 263 or 264.

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History

S 265(6) amended by No 201 of 1991, Sch 4 (effective 1 January 1991).

265(7)  [Removal of provisional entries]  

Where the Commission gives a direction to a person under paragraph (6)(b) in relation to a charge:

(a)  if the direction is complied with on or before the day specified in the notice containing the direction, the Commission shall:

(i) delete from the Register the word ``provisional'' that was inserted pursuant to paragraph (6)(a); and

(ii) cause to be entered in the Register in relation to the charge any particulars referred to in subsection (2) that have not previously been entered;

(b)  if the direction is not complied with on or before that day - the Commission shall delete from the Register all the particulars that were entered in relation to the charge; and

(c)  if the direction is complied with after that day - the Commission shall cause to be entered in the Register in relation to the charge the time at which and day on which the direction was complied with and the particulars referred to in paragraphs (2)(a), (b), (c) and (d).

265(8)  [Entry of other particulars]  

The Commission may enter in the Register in relation to a charge, in addition to the particulars expressly required by this section to be entered, such other particulars as the Commission thinks fit.

265(9)  [Effect of provisional entry on registration]  

If the word ``provisional'' is entered in the Register in relation to an entry specifying a time and day in relation to a charge, the charge shall be deemed not to have been registered but:

(a)  where the word ``provisional'' is deleted from the Register pursuant to subsection (5) or paragraph (7)(a) - the charge shall be deemed to be registered and to have been registered from and including the time and day specified in the Register pursuant to subsection (4) or paragraph (6)(a), as the case may be; or

(b)  where the particulars in relation to the charge are deleted from the Register pursuant to paragraph (7)(b) and those particulars and a time and day are subsequently entered in the Register in relation to the charge pursuant to paragraph (7)(c) - the charge shall be deemed to be registered from and including that last-mentioned time and day.

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History

S 265(9) amended by No 201 of 1991, Sch 4 (effective 1 January 1991).

265(10)  [Two or more charges - registrable body]  

Where, pursuant to subsection 263(3), a registrable body lodges notices relating to 2 or more charges on the same property of the registrable body, the time and day that shall be entered in the Register in relation to each of those charges are the time and day when the first notice was lodged.

265(11)  [Respective priorities - registrable body]  

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Where, in accordance with subsection (10), the time and day that are entered in the Register are the same in relation to 2 or more charges on property of a registrable body, those charges shall, as between themselves, have the respective priorities that they would have had if they had not been registered under this Part.

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History

S 265(11) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

265(12)  [Two or more charges - company acquiring property]  

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Where, pursuant to section 264, a company lodges notices relating to 2 or more charges on the same property acquired by the company (being charges that are not already registered under this Part), the time and day that shall be entered in the Register in relation to each of those charges are the time and day when the first notice was lodged.

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History

S 265(12) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

265(13)  [Respective priorities - company acquiring property]  

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Where, in accordance with subsection (12), the time and day that are entered in the Register are the same in relation to 2 or more charges on property acquired by a company, those charges shall, as between themselves, have the respective priorities that they would have had if they had not been registered under this Part.

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History

S 265(13) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

265(14)  [Notice of assignment or variation]  

Where a notice is lodged under section 268 (whether during or after the period within which it was required to be lodged), the Commission shall as soon as practicable cause to be entered in the Register the time and day when the notice was so lodged and the particulars set out in the notice.

SECTION 265A   STANDARD TIME FOR THE PURPOSES OF SECTION 265  

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265A(1)  [Declared by Gazette notice]  

The Commission may, by Gazette notice, declare a specified standard time to be the standard time for the purposes of section 265 of the Corporations Law.

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History

S 265A(1) inserted by No 110 of 1990, Sch 1 (effective 18 December 1990).

265A(2)  [Entering of time on registers, etc]  

Where a notice is in force under subsection (1) of this section and each corresponding law, a reference in subsection 265(2) or (4), paragraph 265(6)(a) or (7)(c), or subsection 265(10), (12) or (14), to entering the time when a particular event happened is a reference to entering that time as expressed in terms of the standard time specified in the notice.

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History

S 265A(2) inserted by No 110 of 1990, Sch 1 (effective 18 December 1990).

SECTION 266   CERTAIN CHARGES VOID AGAINST LIQUIDATOR OR ADMINISTRATOR  

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266(1)  [Charges void against liquidator or administrator]  

Where:

(a)  an order is made, or a resolution is passed, for the winding up of a company; or

(b)  an administrator of a company is appointed under section 436A, 436B or 436C; or

(ba)  a company executes a deed of company arrangement;

a registrable charge on property of the company is void as a security on that property as against the liquidator, the administrator of the company, or the deed's administrator, as the case may be, unless:

(c)  a notice in respect of the charge was lodged under section 263 or 264, as the case requires:

(i) within the relevant period; or

(ii) at least 6 months before the critical day;

(d)  in relation to a charge other than a charge to which subsection 263(3) applies - the period within which a notice in respect of the charge (other than a notice under section 268) is required to be lodged, being the period specified in the relevant section or that period as extended by the Court under subsection (4), has not ended at the start of the critical day and the notice is lodged before the end of that period;

(e)  in relation to a charge to which subsection 263(3) applies - the period of 45 days after the chargee becomes aware that the registrable body has been registered as a company under Part 5B.1, or registered under Part 5B.2, has not ended at the start of the critical day and the notice is lodged before the end of that period; or

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(f)  in relation to a charge to which section 264 applies - the period of 45 days after the chargee becomes aware that the property charged has been acquired by a company has not ended at the start of the critical day and the notice is lodged before the end of that period.

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History

S 266(1) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 266(1) amended by No 210 of 1992, Sch 1 (effective 23 June 1993).

266(2)  [Relevant period]  

The reference in paragraph (1)(c) to the relevant period shall be construed as a reference to:

(a)  in relation to a charge to which subsection 263(1) applies - the period of 45 days specified in that subsection, or that period as extended by the Court under subsection (4) of this section;

(b)  in relation to a charge to which subsection 263(3) applies - the period of 45 days after the chargee becomes aware that the registrable body has been registered as a company under Part 5B.1 or registered under Part 5B.2; or

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(c)  in relation to a charge to which section 264 applies - the period of 45 days after the chargee becomes aware that the property has been acquired by a company.

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History

S 266(2) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

266(3)  [Notice of variation]  

Where, after there has been a variation in the terms of a registrable charge on property of a company having the effect of increasing the amount of the debt or increasing the liabilities (whether present or prospective) secured by the charge:

(a)  an order is made, or a resolution is passed, for the winding up of the company; or

(b)  an administrator of a company is appointed under section 436A, 436B or 436C; or

(ba)  a company executes a deed of company arrangement;

the registrable charge is void as a security on that property to the extent that it secures the amount of the increase in that debt or liability unless:

(c)  a notice in respect of the variation was lodged under section 268:

(i) within the period of 45 days specified in subsection 268(2) or that period as extended by the Court under subsection (4) of this section; or

(ii) not later than 6 months before the critical day; or

(d)  the period of 45 days specified in subsection 268(2), or that period as extended by the Court under subsection (4) of this section, has not ended at the start of the critical day and the notice is lodged before the end of that period.

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History

S 266(3) amended by No 210 of 1992, Sch 1 (effective 23 June 1993).

266(4)  [Court may extend period]  

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The Court, if it is satisfied that the failure to lodge a notice in respect of a charge, or in respect of a variation in the terms of a charge, as required by any provision of this Part:

(a)  was accidental or due to inadvertence or some other sufficient cause; or

(b)  is not of a nature to prejudice the position of creditors or shareholders;

or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested and on such terms and conditions as seem to the Court just and expedient, by order, extend the period for such further period as is specified in the order.

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History

S 266(4) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

266(5)  [Avoidance of certain later charges]  

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Where:

(a)  a registrable charge (in this subsection referred to as the ``later charge'') is created before the end of 45 days after the creation of an unregistered registrable charge (in this subsection referred to as the ``earlier charge'');

(b)  the later charge relates to all or any of the property to which the earlier charge related; and

(c)  the later charge is given as a security for the same liability as is secured by the earlier charge or any part of that liability;

the later charge, to the extent to which it is a security for the same liability or part thereof, and so far as it relates to the property comprised in the earlier charge, is void as a security on that property as against a liquidator or administrator of the company, or an administrator of a deed of company arrangement executed by the company, even if a notice in respect of the later charge was lodged under section 263 within a period mentioned in paragraph (1)(c) or (d) of this section, unless it is proved to the satisfaction of the Court that the later charge was given in good faith for the purpose of correcting some material error in the earlier charge or under other proper circumstances and not for the purposes of avoiding or evading the provisions of this Part.

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History

S 266(5) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 266(5) amended by No 210 of 1992, Sch 1 (effective 23 June 1993).

266(6)  [Rights of third parties without notice]  

Nothing in subsection (1) or (3) operates to affect the title of a person to property purchased for value from a chargee or from a receiver appointed by a chargee in the exercise of powers conferred by the charge or implied by law if that person purchased the property in good faith and without notice of:

(a)  the filing of an application for an order for the winding up of the company; or

(b)  the passing of a resolution for the voluntary winding up of the company; or

(c)  an administrator of the company being appointed under section 436A, 436B or 436C; or

(d)  the company executing a deed of company arrangement.

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History

S 266(6) amended by No 210 of 1992, Sch 1 (effective 23 June 1993).

266(7)  [Onus of proof]  

The onus of proving that a person purchased property in good faith and without notice of any of the matters referred to in paragraphs (6)(a), (b), (c) and (d) is on the person asserting that the property was so purchased.

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History

S 266(7) amended by No 210 of 1992, Sch 1 (effective 23 June 1993).

266(8)  [``critical day'']  

In this section:

``critical day'' , in relation to a company, means:

(a)  if the company is being wound up - the day when the winding up began; or

(b)  if the company is under administration - the section 513C day in relation to the administration; or

(c)  if the company has executed a deed of company arrangement - the section 513C day in relation to the administration that ended when the deed was executed.

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History

S 266(8) inserted by No 210 of 1992, Sch 1 (effective 23 June 1993).

SECTION 267   CHARGES IN FAVOUR OF CERTAIN PERSONS VOID IN CERTAIN CASES  

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267(1)  [Charges on property of a company]  

Where:

(a)  a company creates a charge on property of the company in favour of a person who is, or in favour of persons at least one of whom is, a relevant person in relation to the charge; and

(b)  within 6 months after the creation of the charge, the chargee purports to take a step in the enforcement of the charge without the Court having, under subsection (3), given leave for the charge to be enforced;

the charge, and any powers purported to be conferred by an instrument creating or evidencing the charge, are, and shall be deemed always to have been, void.

267(2)  [Deemed enforcement of charge]  

Without limiting the generality of subsection (1), a person who:

(a)  appoints a receiver of property of a company under powers conferred by an instrument creating or evidencing a charge created by the company; or

(b)  whether directly or by an agent, enters into possession or assumes control of property of a company for the purposes of enforcing a charge created by the company;

shall be taken, for the purposes of subsection (1), to take a step in the enforcement of the charge.

267(3)  [Leave for charge to be enforced]  

On application by the chargee under a charge, the Court may, if it is satisfied that:

(a)  immediately after the creation of the charge, the company that created the charge was solvent; and

(b)  in all the circumstances of the case, it is just and equitable for the Court to do so;

give leave for the charge to be enforced.

267(4)  [Exemptions]  

Nothing in subsection (1) affects a debt, liability or obligation of a company that would, if that subsection had not been enacted, have been secured by a charge created by the company.

267(5)  [Title of person to property purchased for value]  

Nothing in subsection (1) operates to affect the title of a person to property (other than the charge concerned or an interest in the charge concerned) purchased for value from a chargee under a charge, from an agent of a chargee under a charge, or from a receiver appointed by a chargee under a charge in the exercise of powers conferred by the charge or implied by law, if that person purchased the property in good faith and without notice that the charge was created in favour of a person who is, or in favour of persons at least one of whom is, as the case may be, a relevant person in relation to the charge.

267(6)  [Onus of proof]  

The onus of proving that a person purchased property in good faith and without notice that a charge was created as mentioned in subsection (5) is on the person asserting that the property was so purchased.

267(7)  [Definitions]  

In this section:

``chargee'' , in relation to a charge, means:

(a)  in any case - the holder, or all or any of the holders, of the charge; or

(b)  in the case of a charge that is an agreement to give or execute a charge in favour of a person or persons, whether upon demand or otherwise - that person, or all or any of those persons;

``officer'' , in relation to a company, includes, in the case of a registered foreign company, a local agent of the foreign company;

``receiver'' includes a receiver and manager;

``relevant person'' , in relation to a charge created by a company, means:

(a)  a person who is at the time when the charge is created, or who has been at any time during the period of 6 months ending at that time, an officer of the company; or

(b)  a person associated, in relation to the creation of the charge, with a person of a kind referred to in paragraph (a).

SECTION 268   ASSIGNMENT AND VARIATION OF CHARGES  

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268(1)  [Notice to be given]  

Where, after a registrable charge on property of a company has been created, a person other than the original chargee becomes the holder of the charge, the person who becomes the holder of the charge shall, within 45 days after he, she or it becomes the holder of the charge:

(a)  lodge a notice stating that he, she or it has become the holder of the charge; and

(b)  give the company a copy of the notice.

268(2)  [Notice of certain variations to be lodged by company]  

Where, after a registrable charge on property of a company has been created, there is a variation in the terms of the charge having the effect of:

(a)  increasing the amount of the debt or increasing the liabilities (whether present or prospective) secured by the charge; or

(b)  prohibiting or restricting the creation of subsequent charges on the property;

the company shall, within 45 days after the variation occurs, ensure that there is lodged a notice setting out particulars of the variation and accompanied by the instrument (if any) effecting the variation or a certified copy of that instrument.

268(3)  [Debts involving unspecified amounts or further advances]  

Where a charge created by a company secures a debt of an unspecified amount or secures a debt of a specified amount and further advances, a payment or advance made by the chargee to the company in accordance with the terms of the charge shall not be taken, for the purposes of subsection (2), to be a variation in the terms of the charge having the effect of increasing the amount of the charge or the liabilities (whether present or prospective) secured by the charge.

268(4)  [Reference to chargee]  

A reference in this section to the chargee in relation to a charge shall, if the charge is constituted by a debenture and debentures and there is a trustee for debenture holders, be construed as a reference to the trustee for debenture holders.

268(5)  [Notice of charges under sec 263]  

Nothing in section 263 requires the lodgment of a notice under that section in relation to a charge merely because of the fact that the terms of the charge are varied only in a manner mentioned in this section.

SECTION 268A   ASSIGNMENT OF CHARGES UNDER THE STATE BANK (CORPORATISATION) ACT 1994 OF SOUTH AUSTRALIA  

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268A(1)  Application of section.  

This section applies if:

(a)  after one or more registrable charges on property of a company have been created, a person other than the original chargee becomes the holder of the charges; and

(b)  the person is the State Bank of South Australia or Bank of South Australia Limited; and

(c)  the person becomes the holder of the charges as a result of the operation of:

(i) section 7 or 23 of the State Bank (Corporatisation) Act 1994 of South Australia; or

(ii) a corresponding provision of a law of another State or of a Territory.

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History

S 268A(1) inserted by No 69 of 1994, s 9 (effective 9 June 1994).

268A(2)  Lodgment of notice with Commission.  

The person may lodge a notice stating that it has become the holder of the charges.

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History

S 268A(2) inserted by No 69 of 1994, s 9 (effective 9 June 1994).

268A(3)  Notice to be in a form approved by Commission.  

The notice must be in a form approved by the Commission.

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History

S 268A(3) inserted by No 69 of 1994, s 9 (effective 9 June 1994).

268A(4)  Time within which notice must be lodged.  

The notice must be lodged within:

(a)  6 months after the commencement of the State Bank (Corporatisation) Act 1994 of South Australia (the ``initial period'' ); or

(b)  such longer period as the Commission allows.

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History

S 268A(4) inserted by No 69 of 1994, s 9 (effective 9 June 1994).

268A(5)  When Commission may allow longer period for lodgment of notice.  

The Commission may only allow a longer period under paragraph (4)(b) if:

(a)  the person applies in writing to the Commission within the initial period; and

(b)  the Commission is satisfied that, having regard to the nature of the charges involved, it would not be practicable for the person to lodge a notice in relation to those charges within the initial period.

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History

S 268A(5) inserted by No 69 of 1994, s 9 (effective 9 June 1994).

268A(6)  Effect of notice.  

A person who lodges a notice under subsection (2) in respect of one or more charges on property of a company is taken, for the purposes of this Law and the Corporations (Fees) Regulations:

(a)  to have lodged a separate notice in accordance with subsection 268(1) in respect of each of those charges; and

(b)  to have given a copy of each of those notices to the company in accordance with that subsection.

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History

S 268A(6) inserted by No 69 of 1994, s 9 (effective 9 June 1994).

268A(7)  Debentures.  

If:

(a)  a charge is constituted by a debenture or debentures; and

(b)  there is a trustee for debenture holders;

a reference in this section to the chargee in relation to a charge is a reference to that trustee.

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History

S 268A(7) inserted by No 69 of 1994, s 9 (effective 9 June 1994).

SECTION 269   SATISFACTION OF, AND RELEASE OF PROPERTY FROM, CHARGES  

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269(1)  [Memorandum of satisfaction of debt]  

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Where, with respect to a charge registered under this Part:

(a)  the debt or other liability the payment or discharge of which was secured by the charge has been paid or discharged in whole or in part; or

(b)  the property charged or part of that property is released from the charge;

the person who was the holder of the charge at the time when the debt or other liability was so paid or discharged or the property or part of the property was released shall, within 14 days after receipt of a request in writing made by the company on whose property the charge exists, give to the company a memorandum in the prescribed form acknowledging that the debt or other liability has been paid or discharged in whole or in part or that the property or that part of it is no longer subject to the charge, as the case may be.

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History

S 269(1) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

269(2)  [Lodgment]  

The company may lodge the memorandum and, upon the memorandum being lodged, the Commission shall enter in the Register particulars of the matters stated in the memorandum.

269(3)  [Interpretation]  

The reference in subsection (1) to the person who was the holder of a charge at the time when the debt or other liability was so paid or discharged or the property or part of the property was released shall, if the charge was constituted by a debenture or debentures and there was a trustee for debenture holders, be construed as a reference to the person who was, at that time, the trustee for debenture holders.

SECTION 270   LODGMENT OF NOTICES, OFFENCES ETC.  

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270(1)  [Who may lodge]  

Where a notice in respect of a charge on property of a company is required to be lodged under section 263 or 264 or subsection 268(2), the notice may be lodged by the company or by any interested person.

270(2)  [Contravention of section]  

Where default is made in complying with section 263 or 264 or subsection 268(2) in relation to a registrable charge on property of a company, the company and any officer of the company who is in default each contravene this subsection.

270(3)  [Contravention by holder of a registrable charge]  

Where a person who becomes the holder of a registrable charge fails to comply with subsection 268(1), the person and, if the person is a body corporate, any officer of the body corporate who is in default, each contravene this subsection.

270(4)  [Lodgment by a person other than a company]  

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Where a document required by this Part other than subsection 268(1) to be lodged is lodged by a person other than the company concerned, that person:

(a)  shall, within 7 days after the lodgment of the document, give to the company a copy of the document; and

(b)  is entitled to recover from the company the amount of any fees properly paid by the person on lodgment of the document.

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History

S 270(4) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

SECTION 271   COMPANY TO KEEP DOCUMENTS RELATING TO CHARGES AND REGISTER OF CHARGES  

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271(1)  [Company to keep copies]  

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A company shall keep, at the place where the register referred to in subsection (2) is kept, a copy of every document relating to a charge on property of the company that is lodged under this Part or was lodged with a person under a corresponding previous law, and a copy of every document given to the company under this Part or a corresponding previous law.

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History

S 271(1) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 271(1) amended by No 110 of 1990, Sch 1 (effective 18 December 1990).

271(2)  [Company to keep register of charges]  

A company shall keep a register and shall, upon the creation of a charge (whether registrable or not) on property of the company, or upon the acquisition of property subject to a charge (whether registrable or not), as soon as practicable enter in the register particulars of the charge, giving in each case:

(a)  if the charge is a charge created by the company, the date of its creation or, if the charge was a charge existing on property acquired by the company, the date on which the property was so acquired;

(b)  a short description of the liability (whether present or prospective) secured by the charge;

(c)  a short description of the property charged;

(d)  the name of the trustee for debenture holders or, if there is no such trustee, the name of the chargee; and

(e)  the name of the person whom the company believes to be the holder of the charge.

271(3)  [Inspection of register of charges]  

A register kept by a company pursuant to subsection (2) shall be open for inspection:

(a)  by any creditor or member of the company - without charge; and

(b)  by any other person - on payment for each inspection of such amount, not exceeding the prescribed amount, as the company requires or, where the company does not require the payment of an amount, without charge.

271(4)  [Copies]  

A person may request a company to furnish the person with a copy of the register or any part of the register and, where such a request is made, the company shall send the copy to that person:

(a)  if the company requires payment of an amount not exceeding the prescribed amount - within 21 days after payment of the amount is received by the company or within such longer period as the Commission approves; or

(b)  in a case to which paragraph (a) does not apply - within 21 days after the request is made or within such longer period as the Commission approves.

271(5)  [Offence]  

If default is made in complying with any provision of this section, the company and any officer of the company who is in default are each guilty of an offence.

SECTION 272   CERTIFICATES  

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272(1)  [Commission's certificate - particulars of charge]  

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Where particulars of a charge are entered in the Register in accordance with this Part, the Commission shall, on request by any person, issue to that person a certificate under the common seal of the Commission setting out those particulars and stating the time and day when a notice in respect of the charge containing those particulars was lodged with the Commission and, if the word ``provisional'' appears in the Register in relation to the reference to that time and day, stating that fact.

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History

S 272(1) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 272(1) amended by No 201 of 1991, Sch 4 (effective 1 January 1991).

272(2)  [Prima facie evidence]  

A certificate issued under subsection (1) is prima facie evidence of the matters stated in the certificate.

272(3)  [Commission's certificate - entry of particulars in Register]  

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Where particulars of a charge are entered in the Register in accordance with this Part, and the word ``provisional'' does not appear in the register in relation to the reference to the time and day when a notice in respect of the charge was lodged, the Commission shall, on request by any person, issue to that person a certificate under the common seal of the Commission stating that particulars of the charge are entered in the Register in accordance with this Part.

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History

S 272(3) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 272(3) amended by No 201 of 1991, Sch 4 (effective 1 January 1991).

272(4)  [Conclusive evidence as to registration]  

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A certificate issued under subsection 272(3) of the Corporations Law of this or another jurisdiction is conclusive evidence that the requirements of Part 2K.2 of that Law as to registration (other than the requirements relating to the period after the creation of the charge within which notice in respect of the charge is required to be lodged) have been complied with.

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History

S 272(4) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 272(4) amended by No 104 of 1994, Sch 8 (effective 15 July 1994).

SECTION 273   REGISTRATION UNDER OTHER LEGISLATION RELATING TO CHARGES  

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273(1)  [Registration may not be necessary]  

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Where, whether before or after the prescribed time, a notice in relation to a charge is required to be lodged under this Part:

(a)  the charge need not be registered under a specified law of this jurisdiction; and

(b)  no provision of a specified law of this jurisdiction relating to priorities applies to or in relation to the charge; and

(c)  a failure to register the charge under a specified law of this jurisdiction does not affect the validity, or limit the effect, of the charge.

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History

S 273(1) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 273(1) amended by No 201 of 1991, Sch 4 (effective 1 January 1991).

S 273(1) amended by No 110 of 1990, Sch 1 (effective 18 December 1990).

273(2)  [Validity]  

Where:

(a)  a transfer, assignment, or giving of security, by a company is registrable under a specified law of this jurisdiction;

(b)  notice in relation to the transfer, assignment or giving of security is required to be lodged under this Part; and

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(c)  the transfer, assignment or giving of security is registered under this Part;

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then:

(d)  the transfer, assignment or giving of security is, subject to paragraph (1)(b), as valid and effectual; and

(e)  by force of this subsection, the specified provisions (if any) of a law of this jurisdiction have effect, with the prescribed modifications (if any), inrelation to the transfer, assignment or giving of security;

as if it had been duly registered under that specified law.

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History

S 273(2) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 273(2) amended by No 110 of 1990, Sch 1 (effective 18 December 1990).

273(3)  [Crop and wool liens and stock mortgages]  

Where:

(a)  a crop lien, wool lien, or stock mortgage, given by a company is registrable under a specified law of this jurisdiction;

(b)  notice in relation to the crop lien, wool lien, or stock mortgage, is required to be lodged under this Part; and

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(c)  the crop lien, wool lien, or stock mortgage, is registered under this Part;

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then:

(d)  the crop lien, wool lien or stock mortgage is, subject to paragraph (1)(b), as valid and effectual; and

(e)  by force of this subsection, the specified provisions (if any) of a law of this jurisdiction have effect, with the prescribed modifications (if any), in relation to the crop lien, wool lien, or stock mortgage;

as if it had been duly registered under that specified law.

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History

S 273(3) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 273(3) amended by No 110 of 1990, Sch 1 (effective 18 December 1990).

273(4)  [Regulations affecting application of other legislation]  

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Subject to this Chapter, the regulations may provide that specified provisions of a law of this jurisdiction:

(a)  do not apply; or

(b)  apply, because of the regulations and with the prescribed modifications (if any);

in relation to specified charges in relation to which notices must be lodged under this Part.

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History

S 273(4) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 273(4) amended by No 201 of 1991, Sch 4 (effective 1 January 1991).

S 273(4) amended by No 110 of 1990, Sch 1 (effective 18 December 1990).

273(5)  [Exemption for certain joint charges]  

Nothing in this section applies in relation to a charge given by a company jointly with another person who is not, or other persons at least one of whom is not, a company.

273(6)  [``specified'']  

In this section:

``specified'' means specified in an application order.

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History

S 273(6) inserted by No 110 of 1990, Sch 1 (effective 18 December 1990).

SECTION 274   POWER OF COURT TO RECTIFY REGISTER  

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274    Where the Court is satisfied:

(a)  that a particular with respect to a registrable charge on property of a company has been omitted from, or mis-stated in, the Register or a memorandum referred to in section 269; and

(b)  that the omission or mis-statement:

(i) was accidental or due to inadvertence or to some other sufficient cause; or

(ii) is not of a nature to prejudice the position of creditors or shareholders;

or that on other grounds it is just and equitable to grant relief;

the Court may, on the application of the company or any person interested and on such terms and conditions as seem to the Court just and expedient, order that the omission or mis-statement be rectified.

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History

S 274 amended by No 110 of 1990, Sch 4 (effective 1 January 1991).

SECTION 275   CHARGES OF COMPANY EXISTING BEFORE 1 JANUARY 1991  

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History

Heading amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

275(1)  [Application]  

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This section applies where a body corporate is taken to be registered as a company according to section 1362CB.

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History

S 275(1) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 275(1) substituted by No 110 of 1990, Sch 1 (effective 18 December 1990).

275(2)  [Application of this Chapter from registration day]  

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On and after 1 January 1991, this Chapter (other than this section) applies in relation to the company, with such modifications as the circumstances require, as if:

(a)  the company had always been a company as defined in section 9;

(b)  this Law had always been in operation;

(c)  an act or thing done by or in relation to the company under, or for the purposes of, a previous law of this jurisdiction corresponding to a provision of this Chapter had been done under, or for the purposes of, that provision; and

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(d)  a reference in this Chapter to the Register included a reference to a register of company charges kept under a previous law of this jurisdiction corresponding to section 265.

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History

S 275(2) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 275(2) amended by No 201 of 1991, Sch 4 (effective 1 January 1991).

S 275(2) amended by No 110 of 1990, Sch 1 (effective 18 December 1990).

275(3)  [Exemption from contravention]  

Nothing in subsection (2) makes a person guilty of a contravention of this Law in respect of an act or thing done, or an omission made, when the company was not a company as defined in section 9.

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History

S 275(3) amended by No 110 of 1990, Sch 1 (effective 18 December 1990).

275(4)  [Registered charges before 1 January 1991]  

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Subsection (5) applies to each charge on property of the company that, immediately before 1 January 1991, was registered under a previous law of this jurisdiction corresponding to this Part.

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History

S 275(4) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 275(4) amended by No 201 of 1991, Sch 4 (effective 1 January 1991).

S 275(4) substituted by No 110 of 1990, Sch 1 (effective 18 December 1990).

275(5)  [Deemed entry according to subsec 265(2)]  

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At the beginning of 1 January 1991:

(a)  there are taken to be entered in the Register the time and date, and the particulars, entered in relation to that charge in the Register kept under that corresponding previous law; and

(b)  the time and date, and the particulars, are taken to have been entered in the Register in accordance with subsection 265(2).

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History

S 275(5) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 275(5) inserted by No 110 of 1990, Sch 1 (effective 18 December 1990).

SECTION 275A   CHARGES OF BODIES TO WHICH SECTION 1362CJ APPLIES  

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History

Heading amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

275A(1)  [Registrable body]  

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This section applies if a registrable body is taken to have been registered according to section 1362CJ.

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History

S 275A(1) substituted by No 61 of 1998, Sch 3 (effective 1 July 1998).

275A(2)  [Application of Chapter in relation to registrable body]  

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This Chapter (other than this section) applies in relation to the body, with such modifications as the circumstances require, as if:

(a)  this Law had always been in operation; and

(b)  the body had been a registered body throughout each period before 1 January 1991 throughout which it was registered under a previous law of this jurisdiction relating to foreign companies within the meaning of that law; and

(c)  an act or thing done by or in relation to the body under, or for the purposes of, a previous law of this jurisdiction corresponding to a provision of this Chapter had been done under, or for the purposes of, that provision; and

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(d)  a reference in this Chapter to the Register included a reference to a register of company charges kept under a previous law of this jurisdiction corresponding to section 265.

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History

S 275A(2) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 275A(2) inserted by No 201 of 1991, Sch 4 (effective 1 January 1991).

275A(3)  [Person not guilty]  

Nothing in subsection (2) makes a person guilty of a contravention of this Law in respect of an act or thing done, or an omission made, before 1 January 1991.

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History

S 275A(3) inserted by No 201 of 1991, Sch 4 (effective 1 January 1991).

275A(4)  [Charge on property]  

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Subsection (5) applies to each charge on property of the body that, immediately before 1 January 1991, was registered under a previous law of this jurisdiction corresponding to this Part.

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History

S 275A(4) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 275A(4) inserted by No 201 of 1991, Sch 4 (effective 1 January 1991).

275A(5)  [Entry in Register]  

The Commission is taken to have entered in the Register at the beginning of 1 January 1991, in accordance with subsection 265(2), the time and date, and the particulars, entered in relation to the charge under the previous law referred to in subsection (4) of this section.

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History

S 275A(5) inserted by No 201 of 1991, Sch 4 (effective 1 January 1991).

SECTION 276   CHARGES OF BODY CORPORATE REGISTERED AS A COMPANY  

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History

Heading amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

276    If, immediately before the day on which a body corporate was registered as a company under Part 5B.1, or a previous law of this jurisdiction corresponding to a provision of that Part, a charge on property of the companywas registered under a law corresponding to this Part and was not also registered under this Part, the Commission is taken to have entered in the Register at the beginning of that day, in accordance with subsection 265(2), the time and date, and the particulars, entered in relation to the charge under that corresponding law.

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History

S 276 amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 276 substituted by No 201 of 1991, Sch 4 (effective 1 January 1991).

SECTION 276AA   CHARGES OF COMPANY TRANSFERRING JURISDICTION  

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History

Heading amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

276AA    If, immediately before the day on which a recognised company was registered as a company under section 1362B or a previous law of this jurisdiction corresponding to that section:

(a)  the company was, because of the definition of ``company'' in section 9 of the Corporations Law of another jurisdiction, a company for the purposes of that section of that Law; and

(b)  a charge on property of the company was registered under Part 2K.2 of that Law and was not also registered under this Part;

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the Commission is taken to have entered in the Register at the beginning of that day, in accordance with subsection 265(2) of this Law, the time and date, and the particulars, entered in relation to the the charge under Part 2K.2 of that Law.

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History

S 276AA amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 276AA inserted by No 201 of 1991, Sch 4 (effective 1 January 1991).

SECTION 276A   CHARGES OF RECOGNISED COMPANIES AND CERTAIN FOREIGN COMPANIES  

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276A    Chapter 2K (except section 276A) of the Corporations Law of another jurisdiction, and the Corporations Regulations of that jurisdiction, so far as they have effect for the purposes of that Chapter, apply in and in relation to this jurisdiction:

(a)  in relation to property (within the meaning of that Chapter) of a body corporate that, because of the definition of ``company'' in section 9 of that Law, is a company for the purposes of section 9 of that Law; or

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(b)  in relation to property in Australia or an external Territory of a foreign company that is registered under Division 2 of Part 5B.2 of that Law.

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History

S 276A amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 276A amended by No 201 of 1991, Sch 4 (effective 1 January 1991).

S 276A inserted by No 110 of 1991, Sch 2 (effective 1 January 1991).

SECTION 277   POWER TO EXEMPT FROM COMPLIANCE WITH CERTAIN REQUIREMENTS OF DIVISION  

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277(1)  [Commission may exempt]  

The Commission may, by instrument in writing, exempt a person, as specified in the instrument and subject to such conditions (if any) as are specified in the instrument, from compliance with such of the requirements of section 263, 264 or 268 relating to:

(a)  the particulars to be contained in a notice under the relevant section;

(b)  the documents (other than the notice) to be lodged under the relevant section; or

(c)  the verification of any document required to be lodged under the relevant section;

as are specified in the instrument.

277(2)  [Conditional exemption]  

A person who is exempted by the Commission, subject to a condition, from compliance with a requirement of section 263, 264 or 268 shall not contravene the condition.

277(3)  [Order as to compliance]  

Where a person has contravened or failed to comply with a condition to which an exemption under this section is subject, the Court may, on the application of the Commission, order the person to comply with the condition.

PART 2K.3 - ORDER OF PRIORITY

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History

Div 3 renumbered as Pt 2K.3 by No 61 of 1998, Sch 3 (effective 1 July 1998).

SECTION 278   INTERPRETATION  

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278(1)  (Definitions)  

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In this Part:

``priority time'' , in relation to a registered charge, means:

(a)  except as provided by paragraph (b) or (c) - the time and date appearing in the Register in relation to the charge, being a time and day entered in the Register pursuant to section 265;

(b)  where a notice has been lodged under section 264 in relation to a charge on property, being a charge that, at the time when the notice was lodged, was already registered under Part 2K.2 - the earlier or earliest time and day appearing in the Register in relation to the charge, being a time and day entered in the Register pursuant to section 264; and

(c)  to the extent that the charge has effect as varied by a variation notice of which was required to be lodged under subsection 268(2) - the time and day entered in the Register in relation to the charge pursuant to subsection 265(14);

``prior registered charge'' , in relation to another registered charge, means a charge the priority time of which is earlier than the priority time of the other charge;

``subsequent registered charge'' , in relation to another registered charge, means a charge the priority time of which is later than the priority time of the other registered charge;

``registered charge'' means a charge that is registered under Part 2K.2;

``unregistered charge'' means a charge that is not registered under Part 2K.2 but does not include a charge that is not a registrable charge.

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History

S 278(1) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

278(2)  [Notice of charge includes constructive notice]  

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A reference in this Part to a person having notice of a charge includes a reference to a person having constructive notice of the charge.

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History

S 278(2) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

278(3)  [More than 1 priority time]  

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Where, by virtue of the definition of ``priority time'' in subsection (1), a registered charge has 2 or more priority times each of which relates to a particular liability secured by the charge, each of those liabilities shall, for the purposes of this Part, be deemed to be secured by a separate registered charge the priority time of which is the priority time of the first-mentioned registered charge that relates to the liability concerned.

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History

S 278(3) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

SECTION 279   PRIORITIES OF CHARGES  

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279(1)  [Application]  

Subject to this section, sections 280 to 282, inclusive, have effect with respect to the priorities, in relation to each other, of registrable charges on the property of a company.

279(2)  [Order of priorities subject to consent and agreement]  

The application, in relation to particular registrable charges, of the order of priorities of charges set out in sections 280 to 282, inclusive, is subject to:

(a)  any consent (express or implied) that varies the priorities in relation to each other of those charges, being a consent given by the holder of one of those charges, being a charge that would otherwise be entitled to priority over the other charge; and

(b)  any agreement between those chargees that affects the priorities in relation to each other of the charges in relation to which those persons are the chargees.

279(3)  [Deemed postponement of registered charge]  

The holder of a registered charge, being a floating charge, on property of a company shall be deemed, for the purposes of subsection (2), to have consented to that charge being postponed to a subsequent registered charge, being a fixed charge that is created before the floating charge becomes fixed, on any of that property unless:

(a)  the creation of the subsequent registered charge contravened a provision of the instrument or resolution creating or evidencing the floating charge; and

(b)  a notice in respect of the floating charge indicating the existence of the provision referred to in paragraph (a) was lodged with the Commission under section 263, 264 or 268 before the creation of the subsequent registered charge.

279(4)  [Application of sec 262]  

Where a charge relates to property of a kind or kinds to which a particular paragraph or paragraphs of subsection 262(1) applies or apply and also relates to other property, sections 280 to 282, inclusive, apply so as to affect the priority of the charge only in so far as it relates to the first-mentioned property and do not affect the priority of the charge in so far as it relates to the other property.

279(5)  [Exemptions]  

Sections 280 to 282, inclusive, do not apply so as to affect the operation of:

(a)  the Copyright Act 1968;

(b)  the Designs Act 1906;

(c)  the Life Insurance Act 1995;

(d)  the Patents Act 1952; or

(e)  the Trade Marks Act 1955.

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History

S 279(5) amended by No 5 of 1995, Sch (effective 1 July 1995).

SECTION 280   GENERAL PRIORITY RULES IN RELATION TO REGISTERED CHARGES  

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280(1)  [Registered charge on property]  

A registered charge on property of a company has priority over:

(a)  a subsequent registered charge on the property, unless the subsequent registered charge was created before the creation of the prior registered charge and the chargee in relation to the subsequent registered charge proves that the chargee in relation to the prior registered charge had notice of the subsequent registered charge at the time when the prior registered charge was created;

(b)  an unregistered charge on the property created before the creation of the registered charge, unless the chargee in relation to the unregistered charge proves that the chargee in relation to the registered charge had notice of the unregistered charge at the time when the registered charge was created; and

(c)  an unregistered charge on the property created after the creation of the registered charge.

280(2)  [Postponement]  

A registered charge on property of a company is postponed to:

(a)  a subsequent registered charge on the property, where the subsequent registered charge was created before the creation of the prior registered charge and the chargee in relation to the subsequent registered charge proves that the chargee in relation to the prior registered charge had notice of the subsequent registered charge at the time when the prior registered charge was created; and

(b)  an unregistered charge on the property created before the creation of the registered charge, where the chargee in relation to the unregistered charge proves that the chargee in relation to the registered charge had notice of the unregistered charge at the time when the registered charge was created.

SECTION 281   GENERAL PRIORITY RULE IN RELATION TO UNREGISTERED CHARGES  

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281    An unregistered charge on property of a company has priority over:

(a)  a registered charge on the property that was created after the creation of the unregistered charge and does not have priority over the unregistered charge under subsection 280(1); and

(b)  another unregistered charge on the property created after the first-mentioned unregistered charge.

SECTION 282   SPECIAL PRIORITY RULES  

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282(1)  [Priority only applies to present liabilities]  

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Except as provided by this section, any priority accorded by this Part to a charge over another charge does not extend to any liability that, at the priority time in relation to the first-mentioned charge, is not a present liability.

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History

S 282(1) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

S 282(1) amended by No 110 of 1990, Sch 4 (effective 1 January 1991).

282(2)  [Extension to prospective liability]  

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Where a registered charge on property of a company secures:

(a)  a present liability and a prospective liability of an unspecified amount; or

(b)  a prospective liability of an unspecified amount;

any priority accorded by this Part to the charge over another charge of which the chargee in relation to the first-mentioned charge does not have actual knowledge extends to the prospective liability, whether the prospective liability became a present liability before or after the registration of the first-mentioned charge.

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History

S 282(2) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

282(3)  [Secured charge to a specified maximum amount]  

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Where a registered charge on property of a company secures:

(a)  a present liability and a prospective liability up to a specified maximum amount; or

(b)  a prospective liability up to a specified maximum amount;

and the notice lodged under section 263 or 264 in relation to the charge sets out the nature of the prospective liability and the amount so specified, then any priority accorded by this Part to the charge over another charge extends to any prospective liability secured by the first-mentioned charge to the extent of the maximum amount so specified, whether the prospective liability became a present liability before or after the registration of the first-mentioned charge and notwithstanding that the chargee in relation to the first-mentioned charge had actual knowledge of the other charge at the time when the prospective liability became a present liability.

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History

S 282(3) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

282(4)  [Priority where prospective liability secured]  

Where:

(a)  a registered charge on property of a company secures:

(i) a present liability and a prospective liability up to a specified maximum amount; or

(ii) aprospective liability up to a specified maximum amount;

but the notice lodged under section 263 or 264 in relation to the charge does not set out the nature of the prospective liability or the maximum amount so specified; or

(b)  a registered charge on property of a company secures a prospective liability of an unspecified amount;

the following paragraphs have effect:

(c)  any priority accorded by this Part to the charge over another charge of which the chargee in relation to the first-mentioned charge has actual knowledge extends to any prospective liability secured by the first-mentioned charge that had become a present liability at the time when the chargee in relation to the first-mentioned charge first obtained actual knowledge of the other charge;

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(d)  any priority accorded by this Part to the charge over another charge of which the chargee in relation to the first-mentioned charge has actual knowledge extends to any prospective liability secured by the first-mentioned charge that became a present liability, as the result of the making of an advance, after the time when the chargee in relation to the first-mentioned charge first obtained actual knowledge of the other charge if, at that time, the terms of the first-mentioned charge required the chargee in relation to that charge to make the advance after that time, and so extends to that prospective liability whether the advance was made before or after the registration of the first-mentioned charge and notwithstanding that the chargee in relation to the first-mentioned charge had actual knowledge of the other charge at the time when the advance was made.

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History

S 282(4) amended by No 61 of 1998, Sch 3 (effective 1 July 1998).

CHAPTER 2L - DEBENTURES

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History

Chapter 2L was inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2L.1 - REQUIREMENT FOR TRUST DEED AND TRUSTEE

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History

Part 2L.1 was inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260FA   REQUIREMENT FOR TRUST DEED AND TRUSTEE  

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260FA(1)  (Need for trust deed and trustee)  

Before a body:

(a)  makes an offer of debentures in this jurisdiction that needs disclosure to investors under Chapter 6D, or does not need disclosure to investors under Chapter 6D because of subsection 708(14) (disclosure document exclusion for debenture roll overs); or

(b)  makes an offer of debentures in this jurisdiction or elsewhere as consideration for the acquisition of securities under an off-market takeover bid; or

(c)  issues debentures in this jurisdiction or elsewhere under a compromise or arrangement under Part 5.1 approved at a meeting held as a result of an order under subsection 411(1) or (1A);

regardless of where any resulting issue, sale or transfer occurs, the body must enter into a trust deed that complies with section 260FB and appoint a trustee that complies with section 260FC.

Note:

For rules about when an offer of debentures will need disclosure to investors under Chapter 6D, see sections 706, 707 and 708.

260FA(2)  [Revocation]  

The body may revoke the trust deed after it has repaid all amounts payable under the debentures in accordance with the debentures' terms and the trust deed.

260FA(3)  [Obligation to comply]  

The body must comply with this Chapter.

Note:

Sections 168 and 601CZB require a register of debenture holders to be set up and kept.

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History

S 260FA inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260FB   TRUST DEED  

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260FB     The trust deed must provide that the following are held in trust by the trustee for the benefit of the debenture holders:

(a)  the right to enforce the borrower's duty to repay

(b)  any charge or security for repayment

(c)  the right to enforce any other duties that the borrower and any guarantor have under:

(i) the terms of the debentures; or

(ii) the provisions of the trust deed or this Chapter.

Note:

For information about the duties that the borrower and any guarantor body have under this Chapter, see sections 260GB to 260HE.

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History

S 260FB inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260FC   WHO CAN BE A TRUSTEE  

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260FC(1)  Who can be trustee.  

The trustee must be:

(a)  the Public Trustee of any State or Territory; or

(b)  a body corporate authorised by a law of any State or Territory to take in its own name a grant of probate of the will, or letters of administration of the estate, of a deceased person; or

(c)  a body corporate registered under the Life Insurance Act 1995; or

(d)  an Australian ADI; or

(e)  a body corporate, all of whose shares are held beneficially by a body corporate or bodies corporate of the kind referred to in paragraph (b), (c) or (d) if that body or those bodies:

(i) are liable for all of the liabilities incurred, or to be incurred, by the trustee as trustee; or

(ii) have subscribed for and beneficially hold shares in the trustee and there is an uncalled liability of at least $500,000 in respect of those shares that can only be called up if the trustee becomes an externally-administered body corporate (see section 254N); or

(f)  a body corporate approved by ASIC (see section 260MB).

Note:

Section 260GD provides that if the borrower becomes aware that the trustee cannot be a trustee, the trustee must be replaced.

260FC(2)  Circumstances in which a person cannot be trustee.  

A person may only be appointed or act as trustee (except to the extent provided for by section 260FD) if the appointment or acting will not result in a conflict of interest or duty. This subsection is not intended to affect any rule of law or equity.

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History

S 260FC inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260FD   EXISTING TRUSTEE CONTINUES TO ACT UNTIL NEW TRUSTEE TAKES OFFICE  

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260FD     An existing trustee continues to act as the trustee until a new trustee is appointed and has taken office as trustee, despite any rule of law or equity to the contrary.

Note:

This section applies even if the existing trustee resigns.

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S 260FD inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260FE   REPLACEMENT OF TRUSTEE  

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260FE(1)  Related party of existing trustee may be appointed as a new trustee.  

In addition to any other powers of appointment under the terms of the debentures or provisions of the trust deed, the borrower may appoint a body corporate that is related to the existing trustee as trustee in place of the existing trustee if:

(a)  the body corporate can be a trustee under section 260FC; and

(b)  the existing trustee consents in writing to the appointment.

The appointment has effect despite any terms of the debentures or provisions of the trust deed.

260FE(2)  Appointment by Court.  

The Court may:

(a)  appoint a person who may be a trustee under section 260FC as trustee on the application of the borrower, a debenture holder or ASIC if:

(i) a trustee has not been validly appointed; or

(ii) the trustee has ceased to exist; or

(b)  terminate the existing trustee's appointment and appoint a person who may be a trustee under section 260FC as trustee in the existing trustee's place on the application of the borrower, the existing trustee, a debenture holder or ASIC if:

(i) the existing trustee cannot be trustee under section 260FC; or

(ii) the existing trustee fails, or refuses, to act.

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History

S 260FE inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2L.2 - DUTIES OF BORROWER

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History

Part 2L.2 was inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260GA   DUTIES OF BORROWER  

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260GA     A borrower that is required to enter into a trust deed under section 260FA has the duties imposed by this Part.

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S 260GA inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260GB   GENERAL DUTIES  

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260GB     The borrower must:

(a)  carry on and conduct its business in a proper and efficient manner; and

(b)  provide a copy of the trust deed to:

(i) a debenture holder; or

(ii) the trustee;

if they request a copy; and

(c)  make all of its financial and other records available for inspection by:

(i) the trustee; or

(ii) an officer or employee of the trustee authorised by the trustee to carry out the inspection; or

(iii) a registered company auditor appointed by the trustee to carry out the inspection;

and give them any information, explanations or other assistance that they require about matters relating to those records.

Note:

The borrower also has a duty to call a meeting of debenture holders in certain circumstances (see section 260KA).

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History

S 260GB inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260GC   DUTY TO NOTIFY ASIC OF NAME OF TRUSTEE  

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260GC     The borrower must lodge with ASIC a notice of the name of a trustee within 14 days after they are appointed. The notice must be in the prescribed form.

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History

S 260GC inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260GD   DUTY TO REPLACE TRUSTEE  

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260GD     The borrower must take all reasonable steps to replace the trustee under section 260FE as soon as practicable after the borrower becomes aware that the trustee:

(a)  has ceased to exist; or

(b)  has not been validly appointed; or

(c)  cannot be a trustee under section 260FC; or

(d)  has failed or refused to act as trustee.

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History

S 260GD inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260GE   DUTY TO INFORM TRUSTEE ABOUT CHARGES  

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260GE     If the borrower creates a charge, it must:

(a)  give the trustee written details of the charge within 21 days after it is created; and

(b)  if the total amount to be advanced on the security of the charge is indeterminate and the advances are not merged in a current account with bankers, trade creditors or anyone else - give the trustee written details of the amount of each advance within 7 days after it is made.

Note:

If the advances are merged in a current account the borrower must give the trustee the details in the quarterly report (see subsection 260GF(4)).

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History

S 260GE inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260GF   DUTY TO GIVE TRUSTEE AND ASIC QUARTERLY REPORTS  

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260GF(1)  Quarterly reports.  

Within 1 month after the end of each quarter, the borrower must:

(a)  give the trustee a quarterly report that sets out the information required by subsections (4), (5) and (6); and

(b)  lodge a copy of the report with ASIC (see section 351).

260GF(2)  First quarter.  

The first quarter is the period of 3 months ending on a day fixed by the borrower, by written notice to the trustee. The day must be less than 6 months after the first issue of a debenture under the trust deed.

260GF(3)  Subsequent quarters.  

Each of the subsequent quarters are periods of 3 months. The trustee may allow a particular quarter to be a period of less than 3 months if the trustee is satisfied that special circumstances justify doing so.

260GF(4)  Content of quarterly report.  

The report for a quarter must include details of:

(a)  any failure by the borrower and each guarantor to comply with the terms of the debentures or the provisions of the trust deed or this Chapter during the quarter; and

(b)  any event that has happened during the quarter that has caused, or could cause, 1 or more of the following:

(i) any amount deposited or lent under the debentures to become immediately payable

(ii) the debentures to become immediately enforceable

(iii) any other right or remedy under the terms of the debenture or provisions of the trust deed to become immediately enforceable; and

(c)  any circumstances that have occurred during the quarter that materially prejudice:

(i) the borrower, any of its subsidiaries, or any of the guarantors; or

(ii) any security or charge included in or created by the debentures or the trust deed; and

(d)  any substantial change in the nature of the business of the borrower, any of its subsidiaries, or any of the guarantors that has occurred during the quarter; and

(e)  any of the following events that happened in the quarter:

(i) the appointment of a guarantor

(ii) the cessation of liability of a guarantor body for the payment of the whole or part of the money for which it was liable under the guarantee

(iii) a change of name of a guarantor (if this happens, the report must also disclose the guarantor's new name); and

(f)  the net amount outstanding on any advances at the end of the quarter if the borrower has created a charge where:

(i) the total amount to be advanced on the security of the charge is indeterminate; and

(ii) the advances are merged in a current account with bankers, trade creditors or anyone else; and

(g)  any other matters that may materially prejudice any security or the interests of the debenture holders.

Note:

Paragraph (f) - the borrower has a duty to inform the trustee about charges as they are created (see section 260GE).

260GF(5)  [Money to related body corporate]  

If the borrower has deposited money with, or lent money to, a related body corporate during the quarter, the report must also include details of:

(a)  the total of the money deposited with, or lent to, the related body corporate during the quarter (see subsection (7)); and

(b)  the total amount of money owing to the borrower at the end of the quarter in respect of the deposits or loans to the related body corporate.

Disregard any amount that the borrower deposits with an ADI in the normal course of the borrower's business.

260GF(6)  [Liability of related body corporate]  

If the borrower has assumed a liability of a related body corporate during the quarter, the report must also include details of the extent of the liability assumed during the quarter and the extent of the liability as at the end of the quarter.

260GF(7)  [Details of deposits and liabilities]  

For the purposes of subsections (5) and (6), the report:

(a)  must distinguish between deposits, loans and assumptions of liability that are secured and those that are unsecured; and

(b)  may exclude any deposit, loan or assumption of liability on behalf of the related body corporate if it has:

(i) guaranteed the repayment of the debentures of the borrower; and

(ii) secured the guarantee by a charge over all of its property in favour of the trustee.

260GF(8)  Formalities.  

The report must:

(a)  be made in accordance with a resolution of the directors; and

(b)  specify the date on which the report is made.

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S 260GF inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260GG   EXCEPTIONS  

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260GG     Sections 260GE and 260GF do not apply in respect of the borrower while:

(a)  it is under external administration; or

(b)  a receiver, or a receiver and manager, of property of the borrower has been appointed and has not ceased to act under that appointment.

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History

S 260GG inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260GH   HOW DEBENTURES MAY BE DESCRIBED  

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260GH(1)  [Where description is to be contained]  

The borrower may describe or refer to the debentures in:

(a)  any disclosure in relation to the offer of the debentures; or

(b)  any other document constituting or relating to the offer of the debentures; or

(c)  the debentures themselves;

only in accordance with the following table:

--------------------------------------------------------
 How debentures may be described                        
--------------------------------------------------------
 Item   Description         When description may be used
--------------------------------------------------------
 1      mortgage debenture  only if the circumstances   
                            set out in subsection (2)   
                            are satisfied               
--------------------------------------------------------
 2      debenture           only if the circumstancesset out in subsection (2)   
                            or (3) are satisfied        
--------------------------------------------------------
 3      unsecured note or    in any other case          
        unsecured deposit                               
        note                                            

      

260GH(2)  When debentures can be called mortgage debentures or debentures.  

The borrower may describe or refer to the debentures as:

(a)  mortgage debentures; or

(b)  debentures;

if:

(c)  the repayment of all money that has been, or may be, deposited or lent under the debentures is secured by a first mortgage given to the trustee over land vested in the borrower or in any of the guarantors; and

(d)  the mortgage has been registered, or is a registrable mortgage that has been lodged for registration, in accordance with the law relating to the registration of mortgages of land in the place where the land is situated; and

(e)  the total amount of that money and of all other liabilities (if any) secured by the mortgage of that land ranking equally with the liability to repay that money does not exceed 60% of the value of the borrower's or guarantor's interest in that land as shown in the valuation included in the disclosure document for the debentures.

260GH(3)  When debentures can be called debentures.  

The borrower may describe or refer to the debentures as debentures if:

(a)  the repayment of all money that has been, or may be, deposited or lent under the debentures has been secured by a charge in favour of the trustee over the whole or any part of the tangible property of the borrower or of any of the guarantors; and

(b)  the tangible property that constitutes the security for the charge is sufficient and is reasonably likely to be sufficient to meet the liability for the repayment of all such money and all other liabilities that:

(i) have been or may be incurred; and

(ii) rank in priority to, or equally with, that liability.

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History

S 260GH inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260GI   OFFENCES FOR FAILURE TO COMPLY WITH STATUTORY DUTIES  

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260GI     The borrower commits an offence if it intentionally or recklessly contravenes section 260GB, 260GC, 260GD, 260GE, 260GF or 260KA.

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History

S 260GI inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2L.3 - DUTIES OF GUARANTOR

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Part 2L.3 was inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260HA   DUTIES OF GUARANTOR  

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260HA     If a borrower is required to enter into a trust deed under section 260FA in relation to debentures, a guarantor in respect of the debentures has the duties imposed by this Part.

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S 260HA inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260HB   GENERAL DUTIES  

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260HB     The guarantor must:

(a)  carry on and conduct its business in a proper and efficient manner; and

(b)  make all of its financial and other records available for inspection by:

(i) the trustee; or

(ii) an officer or employee of the trustee authorised by the trustee to carry out the inspection; or

(iii) a registered company auditor appointed by the trustee to carry out the inspection;

and give them any information, explanations or other assistance that they require about matters relating to those records.

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S 260HB inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260HC   DUTY TO INFORM TRUSTEE ABOUT CHARGES  

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260HC     If the guarantor creates a charge, it must:

(a)  give the trustee written details of the charge within 21 days after it is created; and

(b)  if the total amount to be advanced on the security of the charge is indeterminate, give the trustee written details of:

(i) the amount of each advance made within 7 days after it is made; or

(ii) where the advances are merged in a current account with bankers, trade creditors or anyone else - the net amount outstanding on the advances at the end of every 3 months.

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S 260HC inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260HD   EXCEPTIONS  

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260HD     Section 260HC does not apply in respect of the guarantor while:

(a)  it is under external administration; or

(b)  a receiver, or a receiver and manager, of property of the guarantor has been appointed and has not ceased to act under that appointment.

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History

S 260HD inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260HE   OFFENCES FOR FAILURE TO COMPLY WITH STATUTORY DUTIES  

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260HE     The guarantor commits an offence if it intentionally or recklessly contravenes paragraph 260HB(b) or section 260HC.

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History

S 260HE inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2L.4 - TRUSTEE

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History

Part 2L.4 was inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260JA   TRUSTEE'S DUTIES  

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260JA     The trustee of a trust deed entered into under section 260FA must:

(a)  exercise reasonable diligence to ascertain whether the property of the borrower and of each guarantor that is or should be available (whether by way of security or otherwise) will be sufficient to repay the amount deposited or lent when it becomes due; and

(b)  exercise reasonable diligence to ascertain whether the borrower or any guarantor has committed any breach of:

(i) the terms of the debentures; or

(ii) the provisions of the trust deed or this Chapter; and

(c)  do everything in its power to ensure that the borrower or a guarantor remedies any breach known to the trustee of:

(i) any term of the debentures; or

(ii) any provision of the trust deed or this Chapter;

unless the trustee is satisfied that the breach will not materially prejudice the debenture holders' interests or any security for the debentures; and

(d)  ensure that the borrower and each guarantor complies with Part 2K to the extent that it applies to the debentures; and

(e)  notify ASIC as soon as practicable if:

(i) the borrower has not complied with section 260GE, 260GF or subsection 318(1) or (4); or

(ii) a guarantor has not complied with section 260HC; and

(f)  notify ASIC and the borrower as soon as practicable if the trustee discovers that it cannot be a trustee under section 260FC; and

(g)  give the debenture holders a statement explaining the effect of any proposal that the borrower submits to the debenture holders before any meeting that:

(i) the Court calls in relation to a scheme under subsection 411(1) or (1A); or

(ii) the trustee calls under subsection 260KB(1); and

(h)  comply with any directions given to it at a debenture holders' meeting referred to in section 260KA, 260KB or 260KC unless:

(i) the trustee is of the opinion that the direction is inconsistent with the terms of the debentures or the provisions of the trust deed or this Law or is otherwise objectionable; and

(ii) has either obtained, or is in the process of obtaining, an order from the Court under section 260NA setting aside or varying the direction; and

(i)  apply to the Court for an order under section 260NB if the borrower requests it to do so.

Note 1:

Paragraph (g) - Section 411 relates to compromises and arrangements.

Note 2: Section 260JC deals with indemnification in respect of a trustee's liability to the debenture holders.

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History

S 260JA inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260JB   EXEMPTIONS AND INDEMNIFICATIONS OF TRUSTEE FROM LIABILITY  

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260JB(1)  [Exemptions and indemnifications]  

A term of a debenture, provision of a trust deed or a term of a contract with holders of debentures secured by a trust deed, is void in so far as the term or provision would have the effect of:

(a)  exempting a trustee from liability for breach of section 260JA for failure to show the degree of care and diligence required of it as trustee; or

(b)  indemnifying the trustee against that liability;

unless the term or provision:

(c)  releases the trustee from liability for something done or omitted to be done before the release is given; or

(d)  enables a meeting of debenture holders to approve the release of the trustee from liability for something done or omitted to be done before the release is given.

260JB(2)  [Definition of release]  

For the purposes of paragraph (1)(d):

(a)  a release is approved if the debenture holders who vote for the resolution hold 75% of the nominal value of the debentures held by all the debenture holders who attend the meeting and vote on the resolution; and

(b)  a debenture holder attends the meeting and votes on the resolution if:

(i) they attend the meeting in person and vote on theresolution; or

(ii) if proxies are permitted - they are represented at the meeting by a proxy and the proxy votes on the resolution.

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History

S 260JB inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260JC   INDEMNITY  

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260JC     The trustee is not liable for anything done or omitted to be done in accordance with a direction given to it by the debenture holders at any meeting called under section 260KA, 260KB or 260KC.

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History

S 260JC inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2L.5 - MEETINGS OF DEBENTURE HOLDERS

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History

Part 2L.5 was inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260KA   BORROWER'S DUTY TO CALL MEETING  

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260KA(1)  Duty to call meeting.  

The borrower must call a meeting of debenture holders if:

(a)  debenture holders who together hold 10% or more of the nominal value of the issued debentures to which the trust relates direct the borrower to do so; and

(b)  the direction is given to the borrower in writing at its registered office; and

(c)  the purpose of the meeting is to:

(i) consider the financial statements that were laid before the last AGM of the borrower; or

(ii) give the trustee directions in relation to the exercise of any of its powers.

Note:

The trustee usually must comply with any directions given to it by the debenture holders at the meeting (see paragraph 260JA(h)).

260KA(2)  Duty to give notification of meeting.  

If the borrower is required to call a meeting, it must give notice of the time and place of the meeting to:

(a)  the trustee; and

(b)  the borrower's auditor; and

(c)  each of the debenture holders whose names are entered on the register of debenture holders.

Notice to joint holders of a debenture must be given to the joint holder named first in the register of debenture holders.

260KA(3)  [How notice is to be given]  

The borrower may give the notice to a debenture holder:

(a)  personally; or

(b)  by sending it by post to the address for the debenture holder in the register of debenture holders; or

(c)  by sending it to the fax number or electronic address (if any) nominated by the debenture holder; or

(d)  by any other means that the trust deed or the terms of the debentures permit.

Note:

A defect in the notice may not invalidate a meeting (see section 1322).

260KA(4)  When notice by post or fax is given.  

A notice of meeting sent to a debenture holder is taken to be given:

(a)  3 days after it is posted, if it is posted; or

(b)  on the business day after it is sent, if it is sent by fax or other electronic means;

unless the trust deed or the terms of the debentures provide otherwise.

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History

S 260KA inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260KB   TRUSTEE'S POWER TO CALL MEETING  

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260KB(1)  Trustee may call meeting in event of breach.  

If the borrower or a guarantor fails to remedy any breach of the terms of the debentures or provisions of the trust deed or this Chapter when required by the trustee, the trustee may:

(a)  call a meeting of debenture holders; and

(b)  inform the debenture holders of the failure at the meeting; and

(c)  submit proposals for protection of the debenture holders' interests to the meeting; and

(d)  ask for directions from the debenture holders in relation to the matter.

260KB(2)  Trustee may appoint person to chair meeting.  

The trustee may appoint a person to chair a meeting of debenture holders called under subsection (1). If the trustee does not exercise this power, the debenture holders present at the meeting may appoint a person to chair the meeting.

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History

S 260KB inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260KC   COURT MAY ORDER MEETING  

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260KC(1)  [Content of order]  

Without limiting section 260NA or 260NB, the Court may make an order under either of those sections for a meeting of all or any of the debenture holders to be held to give directions to the trustee. The order may direct the trustee to:

(a)  place before the debenture holders any information concerning their interests; and

(b)  place before the debenture holders any proposals to protect their interests that the Court directs or the trustee considers appropriate; and

(c)  obtain the debenture holders' directions concerning the protection of their interests.

260KC(2)  [Conduct of meeting]  

The meeting is to be held and conducted in the manner the Court directs. The trustee may appoint a person to chair the meeting. If the trustee does not exercise this power, the debenture holders present at the meeting may appoint a person to chair the meeting.

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History

S 260KC inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2L.6 - CIVIL LIABILITY

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History

Part 2L.6 was inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260L   CIVIL LIABILITY FOR CONTRAVENING THIS CHAPTER  

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260L(1)  (Recovery from whom)  

A person who suffers loss or damage because a person contravenes a provision of this Chapter may recover the amount of the loss or damage from:

(a)  the person who contravened the provision; or

(b)  a person involved in the contravention.

This is so even if the person did not commit, and was not involved in, the contravention.

260L(2)  [Limitation on cause of action]  

An action under subsection (1) may begin at any time within 6 years after the day on which the cause of action arose.

260L(3)  [Effect on other law]  

This Part does not affect any liability that a person has under any other law.

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History

S 260L inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2L.7 - ASIC POWERS

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History

Part 2L.7 was inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260MA   ASIC'S POWER TO EXEMPT AND MODIFY  

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260MA(1)  (Power to exempt and modify)  

ASIC may:

(a)  exempt a person from a provision of this Chapter; or

(b)  declare that this Chapter applies to a person as if specified provisions were omitted, modified or varied as specified in the declaration.

260MA(2)  [Extent of exemption or declaration]  

The exemption or declaration may do all or any of the following:

(a)  apply to all or specified provisions of this Chapter

(b)  apply to all persons, specified persons, or a specified class of persons

(c)  relate to all debentures, specified debentures or a specified class of debentures

(d)  relate to any other matter generally or as specified.

260MA(3)  [Conditions on exemption]  

An exemption may apply unconditionally or subject to specified conditions. A person to whom a condition specified in an exemption applies must comply with the condition. The Court may order the person to comply with the condition in a specified way. Only ASIC may apply to the Court for the order.

260MA(4)  [Publication in the Gazette ]  

The exemption or declaration must be in writing and ASIC must publish notice of it in the Gazette.

260MA(5)  [Definition of provisions]  

For the purposes of this section, the provisions of this Chapter include:

(a)  regulations made for the purposes of this Chapter; and

(b)  definitions in this Law or the regulations as they apply to references in:

(i) this Chapter; or

(ii) regulations made for the purposes of this Chapter; and

(c)  Division 12 of Part 11.2.

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History

S 260MA inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260MB   ASIC MAY APPROVE BODY CORPORATE TO BE TRUSTEE  

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260MB(1)  [Approval to be trustee]  

ASIC may approve a body corporate in writing to be a trustee for the purposes of paragraph 260FC(1)(f). The approval may allow the body corporate to act as trustee:

(a)  in any circumstances; or

(b)  in relation to a particular borrower or particular class of borrower; or

(c)  in relation to a particular trust deed;

and may be given subject to conditions.

260MB(2)  [Publication in the Gazette ]  

ASIC must publish notice of the approval in the Gazette.

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History

S 260MB inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2L.8 - COURT

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History

Part 2L.8 was inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260NA   GENERAL COURT POWER TO GIVE DIRECTIONS AND DETERMINE QUESTIONS  

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260NA     If the trustee applies to the Court for any direction in relation to the performance of the trustee's functions or to determine any question in relation to the interests of the debenture holders, the Court may give any direction and make any declaration or determination in relation to the matter that the Court considers appropriate. The Court may also make ancillary or consequential orders.

Note:

Under this section, the Court may order a meeting of debenture holders to be held, see section 260KC.

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S 260NA inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260NB   SPECIFIC COURT POWERS  

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260NB(1)  (Court orders)  

If the trustee or ASIC applies to the Court, the Court may make any or all of the following orders:

(a)  an order staying an action or other civil proceedings before a court by or against the borrower or a guarantor body

(b)  an order restraining the borrower from paying any money to the debenture holders or any holders of any other class of debentures

(c)  an order that any security for the debentures be enforceable immediately or at the time the Court directs (even if the debentures are irredeemable or redeemable only on the happening of a contingency)

(d)  an order appointing a receiver of any property constituting security for the debentures

(e)  an order restricting advertising by the borrower for deposits or loans

(f)  an order restricting borrowing by the borrower

(g)  any other order that the Court considers appropriate to protect the interests of existing or prospective debenture holders.

260NB(2)  [Relevant circumstances]  

In deciding whether to make an order under subsection (1), the Court must have regard to:

(a)  the ability of the borrower and each guarantor to repay the amount deposited or lent as and when it becomes due; and

(b)  any contravention of section 260MA by the borrower; and

(c)  the interests of the borrower's members and creditors; and

(d)  the interests of the members of each of the guarantors.

Note:

The Court may order a meeting of debenture holders to be held (see section 260KC).

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S 260NB inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

PART 2L.9 - LOCATION OF OTHER DEBENTURE PROVISIONS

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History

Part 2L.9 was inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

SECTION 260P   SIGNPOST TO OTHER DEBENTURE PROVISIONS  

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260P     There are other rules relating to debentures in paragraph 124(1)(b) and section 563AAA.

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History

S 260P inserted by No 156 of 1999, Sch 1 (effective 13 March 2000).

CHAPTER 2M - FINANCIAL REPORTS AND AUDIT

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Chapter 2M inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

PART 2M.1 - OVERVIEW

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Part 2M.1 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

CCH Note: Sec 283, 283A, 283B, 283C, 283D and 284 were repealed by No 61 of 1998, Sch 1 (effective 1 July 1998) and not replaced.

SECTION 285   OVERVIEW OF OBLIGATIONS UNDER THIS CHAPTER  

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285(1)  Obligations under this Chapter.  

Under this Chapter, all companies, registered schemes and disclosing entities must keep financial records (see sections 286-291) - and some must prepare financial reports (see sections 292-323D). All those that have to prepare financial reports have to prepare them annually; disclosing entities have to prepare half-year financial reports as well. The following table sets out what is involved in annual financial reporting:

---------------------------------------------------------------
 Annual financial reporting
---------------------------------------------------------------
 steps                        sections  comments
---------------------------------------------------------------
 2  prepare financial report  s. 295    The financial report
                                        includes:
                                         * financial statements
                                         * disclosures and
                                           notes
                                         * directors'
                                           declaration.
---------------------------------------------------------------
 2   prepare directors'      s. 298      The report has both a
     reportgeneral component
                                         (s. 299) and a
                                         specific component
                                         (s. 300).
 ---------------------------------------------------------------
 3   have the financial      s. 301,     A small proprietary
     report audited and      307, 308    company preparing a
     obtain auditor's                    financial report in
     report                              response to a share-
                                         holder direction under
                                         s. 293 only has to
                                         have an audit if the
                                         direction asks for it.

                                         Under s. 312, officers
                                         must assist the auditor
                                         in the conduct of the
                                         audit.

                                         ASIC may use its
                                         exemption powers under
                                         s. 340 and 341 to
                                         relieve large prop-
                                         rietary companies from
                                         the audit requirements
                                         in appropriate cases
                                         (s. 342(2) and (3)).
---------------------------------------------------------------
 4   send the financial      s. 314      A concise financial report
     report, directors'                  may be sent to members
     report and auditor's                instead of the full
     report to members                   financial statements
                                         (s. 314(1)-(2)).

                                         For deadline see
                                         s. 315(1)-(4).
---------------------------------------------------------------
 5   lodge the financial      s. 319     For deadline see
     report, directors'                  s. 319(3).
     report and auditor's
     report with ASIC                    Companies that have the
                                         benefit of the grand-
                                         fathering in s. 319(4)
                                         do not have to lodge.
---------------------------------------------------------------
 6    [public companies only] s. 317     For the AGM deadline.
      lay financial report,              see s. 250N
      directors' report and
      auditor's report before
      AGM 

---------------------------------------------------------------

      

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S 285(1) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 285(1) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

285(2)  Application to disclosing entities.  

This Chapter covers all disclosing entities incorporated or formed in this jurisdiction (whether or not they are companies or registered schemes).

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History

S 285(2) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

285(3)  Application to registered schemes.  

For the purposes of applying this Chapter to a registered scheme:

(a)  the scheme's responsible entity is responsible for the performance of obligations in respect of the scheme; and

(b)  the directors and officers of the responsible entity are to be taken to be the directors and officers of the scheme; and

(c)  the debts incurred in operating the scheme are to be taken to be the debts of the scheme.

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History

S 285(3) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

285(3A),(4)  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

SECTION 285A   ACCOUNTING STANDARDS TO BE MADE FOR THE PURPOSES OF THIS PART AND PART 3.7  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

PART 2M.2 - FINANCIAL RECORDS

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History

Part 2M.2 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 286   OBLIGATION TO KEEP FINANCIAL RECORDS  

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286(1)  (Obligation to keep records)  

A company, registered scheme or disclosing entity must keep written financial records that:

(a)  correctly record and explain its transactions and financial position and performance; and

(b)  would enable true and fair financial statements to be prepared and audited.

The obligation to keep financial records of transactions extends to transactions undertaken as trustee.

Note:

Section 9 defines financial records .

286(2)  Period for which records must be retained.  

The financial records must be retained for 7 years after the transactions covered by the records are completed.

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History

S 286 substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

CCH Note: Former sec 286A-286B (inserted by No 110 of 1990, Sch 1 (effective 18 December 1990) were repealed by No 61 of 1998, Sch 1 (effective 1 July 1998) and not replaced.

SECTION 286A   SEVERING INVALID PROVISIONS  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

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S 286A inserted by No 110 of 1990, Sch 1 (effective 18 December 1990).

SECTION 286B   EVIDENCE OF TEXT OF ACCOUNTING STANDARD  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

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History

S 286B inserted by No 110 of 1990, Sch 1 (effective 18 December 1990).

SECTION 287   LANGUAGE REQUIREMENTS  

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287(1)  [Language]  

The financial records may be kept in any language.

287(2)  [English translation]  

An English translation of financial records not kept in English must be made available within a reasonable time to a person who:

(a)  is entitled to inspect the records; and

(b)  asks for the English translation.

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History

S 287 substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 288   PHYSICAL FORMAT  

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288     If financial records are kept in electronic form, they must be convertible into hard copy. Hard copy must be made available within a reasonable time to a person who is entitled to inspect the records.

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History

S 288 substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 289   PLACE WHERE RECORDS ARE KEPT  

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289(1)  [Place to keep records]  

A company, registered scheme or disclosing entity may decide where to keep the financial records.

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History

S 289(1) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

289(2) 

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Records kept outside Australia.  

If financial records about particular matters are kept outside Australia, sufficient written information about those matters must be kept in Australia to enable true and fair financial statements to be prepared. The company, registered scheme or disclosing entity must give ASIC written notice in the prescribed form of the place where the information is kept.

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History

S 289(2) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 289(2) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

289(3)  [Direction to produce]  

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ASIC may direct a company, registered scheme or disclosing entity to produce specified financial records that are kept outside Australia.

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History

S 289(3) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 289(3) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

289(4)  [Direction requirements]  

The direction must:

(a)  be in writing; and

(b)  specify a place in Australia where the records are to be produced (the place must be reasonable in the circumstances); and

(c)  specify a day (at least 14 days after the direction is given) by which the records are to be produced.

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History

S 289(4) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

289(5)-(10)  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

289(11)-(12)  (Omitted by No 110 of 1990, Sch 3 (effective 1 January 1991).)

SECTION 290   DIRECTOR ACCESS  

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290(1)  Personal access.  

A director of a company, registered scheme or disclosing entity has a right of access to the financial records at all reasonable times.

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History

S 290(1) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

290(2)  Court order for inspection on director's behalf.  

On application by a director, the Court may authorise a person to inspect the financial records on the director's behalf.

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History

S 290(2) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

290(3)  [Copies]  

A person authorised to inspect records may make copies of the records unless the Court orders otherwise.

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History

S 290(3) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

290(4)  [Court's powers to make orders]  

The Court may make any other orders it consider appropriate, including either or both of the following:

(a)  an order limiting the use that a person who inspects the records may make of information obtained during the inspection

(b)  an order limiting the right of a person who inspects the records to make copies in accordance with subsection (3).

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History

S 290(4) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

290(5)-(14)  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

SECTION 291   SIGNPOSTS TO OTHER RELEVANT PROVISIONS  

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291     The following table sets out other provisions that are relevant to access to financial records.

---------------------------------------------------------------
Other provisions relevant to access to financial records
---------------------------------------------------------------

                    members
 1   section 247A   A member may apply to the Court for an
                    order to inspect the records.

                    auditor
 2   section 310    The auditor has a right of access to the
                    records.

                    controllers
 3   section 431    A controller of a corporation's property
                    (for example, a receiver or receiver and
                    manager) has a right of access to the
                    records.

                    ASIC

 4    sections 28   ASIC has power to inspect the records.
      to 39 of the  It also has power under subsection 289(3)
      Australian    of this Law to call for the production 
      Securities    of financial records kept outside
      Commission    Australia.
      Act 1989

---------------------------------------------------------------

      

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History

S 291 substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

CCH Note: The reference in item 4 to the ``Australian Securities Commission Act 1989'' should be read as a reference to the Australian Securities and Investments Act 1989'' by virtue of sec 268(1) of that Act.

PART 2M.3 - FINANCIAL REPORTING

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Part 2M.3 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

Division 1 - Annual financial reports and directors' reports

SECTION 292   WHO HAS TO PREPARE ANNUAL FINANCIAL REPORTS AND DIRECTORS' REPORTS  

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292(1)  (Financial report and directors' report)  

A financial report and a directors' report must be prepared for each financial year by:

(a)  all disclosing entities; and

(b)  all public companies; and

(c)  all large proprietary companies; and

(d)  all registered schemes.

Note:

This Chapter only applies to disclosing entities incorporated or formed in Australia (see subsection 285(2)).

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S 292(1) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

292(2)  (Small proprietary company)  

A small proprietary company has to prepare the financial report and directors' report only if:

(a)  it is directed to do so under section 293 or 294; or

(b)  it was controlled by a foreign company for all or part of the year and it is not consolidated for that period in financial statements for that year lodged with ASIC by:

(i) a registered foreign company; or

(ii) a company, registered scheme or disclosing entity.

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The rest of this Part does not apply to any other small proprietary company.

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History

S 292(2) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 292(2) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 293   SMALL PROPRIETARY COMPANY - SHAREHOLDER DIRECTION  

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293(1)  [Shareholder direction]  

Shareholders with at least 5% of the votes in a small proprietary company may give the company a direction to:

(a)  prepare a financial report and directors' report for a financial year; and

(b)  send them to all shareholders.

293(2)  [Requirements for direction]  

The direction must be:

(a)  signed by the shareholders giving the direction; and

(b)  made no later than 12 months after the end of the financial year concerned.

293(3)  [Direction may specify certain matters]  

The direction may specify all or any of the following:

(a)  that the financial report does not have to comply with some or all of the accounting standards

(b)  that a directors' report or a part of that report need not be prepared

(c)  that the financial report is to be audited.

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S 293 substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 293A   SECTIONS 292 AND 293 DO NOT APPLY TO HALF-YEAR OF CHIEF ENTITY  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

SECTION 294   SMALL PROPRIETARY COMPANY - ASIC DIRECTION  

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294(1)  [ASIC direction]  

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ASIC may give a small proprietary company a direction to comply with requirements of this Division and Divisions 3, 4, 5 and 6 for a financial year.

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History

S 294(1) amended by No 54 of 1998, Sch 5, Pt 2 (effective 1 July 1998).

S 294(1) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

294(2)  [General or specific requirements]  

The direction may be general or may specify the particular requirements that the company is to comply with.

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History

S 294(2) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

294(3)  [Date]  

The direction must specify the date by which the documents have to be prepared, sent or lodged. Thedate must be a reasonable one in view of the nature of the direction.

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S 294(3) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

294(4)  [Requirements for direction]  

The direction must:

(a)  be made in writing; and

(b)  specify the financial year concerned; and

(c)  be made no later than 6 years after the end of that financial year.

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S 294(4) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

CCH Note: Former sec 294A-294B (inserted by No 110 of 1991, Sch 3 (effective 1 August 1991) were repealed by No 61 of 1998, Sch 1 (effective 1 July 1998) and not replaced.

SECTION 294A   ENTITIES, PARENT ENTITIES, ECONOMIC ENTITIES AND REPORTING ENTITIES  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

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S 294A(1) amended by No 31 of 1994, Sch 1, Pt 1 (effective 1 July 1994).

S 294A(1) inserted by No 110 of 1991, Sch 3 (effective 1 August 1991).

S 294A(2)-(5) inserted by No 110 of 1991, Sch 3 (effective 1 August 1991).

S 294A(3) amended by No 31 of 1994, Sch 1, Pt 2-3 (effective 1 July 1994).

SECTION 294B   WHEN ONE ENTITY CONTROLS ANOTHER  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

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S 294B(1) amended by No 31 of 1994, Sch 1, Pt 1 (effective 1 July 1994).

S 294B(1) inserted by No 110 of 1991, Sch 3 (effective 1 August 1991).

S 294B(2) inserted by No 110 of 1991, Sch 3 (effective 1 August 1991).

S 294B(3) amended by No 31 of 1994, Sch 1, Pt 2-3 (effective 1 July 1994).

S 294B(3) inserted by No 110 of 1991, Sch 3 (effective 1 August 1991).

SECTION 295   CONTENTS OF ANNUAL FINANCIAL REPORT  

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295(1)  Basic contents.  

The financial report for a financial year consists of:

(a)  the financial statements for the year; and

(b)  the notes to the financial statements; and

(c)  the directors' declaration about the statements and notes.

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S 295(1) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

295(2)  Financial statements.  

The financial statements for the year are:

(a)  a profit and loss statement for the year; and

(b)  a balance sheet as at the end of the year; and

(c)  a statement of cash flows for the year; and

(d)  if required by the accounting standards - a consolidated profit and loss statement, balance sheet and statement of cash flows.

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S 295(2) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

295(3)  Notes to financial statements.  

The notes to the financial statements are:

(a)  disclosures required by the regulations; and

(b)  notes required by the accounting standards; and

(c)  any other information necessary to give a true and fair view (see section 297).

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S 295(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

295(4)  Directors' declaration.  

The directors' declaration is a declaration by the directors:

(a)  that the financial statements, and the notes referred to in paragraph (3)(b), comply with the accounting standards; and

(b)  that the financial statements and notes give a true and fair view (see section 297); and

(c)  whether, in the directors' opinion, there are reasonable grounds to believe that the company, registered scheme or disclosing entity will be able to pay its debts as and when they become due and payable; and

(d)  whether, in the directors' opinion, the financial statement and notes are in accordance with this law, including:

(i) section 296 (compliance with accounting standards); and

(ii) section 297 (true and fair view).

Note:

See paragraph 285(3)(c) for the reference to the debts of a registered scheme.

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S 295(4) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

295(5)  [Requirements]  

The declaration must:

(a)  be made in accordance with a resolution of the directors; and

(b)  specify the date on which the declaration is made; and

(c)  be signed by a director.

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S 295(5) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

CCH Note: Former sec 295A-295B (inserted by No 110 of 1991, Sch 3 (effective 1 August 1991) were repealed by No 61 of 1998, Sch 1 (effective 1 July 1998) and not replaced.

SECTION 295A   CONSOLIDATED PROFIT AND LOSS ACCOUNT  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

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S 295A amended by No 31 of 1994, Sch 1, Pt 3 (effective 1 July 1994).

[ CCH Note: See s 1393.]

S 295A inserted by No 110 of 1991, Sch 3 (effective 1 August 1991).

SECTION 295B   CONSOLIDATED BALANCE-SHEET  (Repealed by No 61 of 1998, Sch 1 (effective 1 July 1998).)

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S 295B amended by No 31 of 1994, Sch 1, Pt 1, 3 (effective 1 July 1994).

[ CCH Note: See s 1393.]

S 295B inserted by No 110 of 1991, Sch 3 (effective 1 August 1991).

SECTION 296   COMPLIANCE WITH ACCOUNTING STANDARDS AND REGULATIONS  

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296(1)  [Accounting standards]  

The financial report for a financial year must comply with the accounting standards. However, a small proprietary company's report does not have to comply with particular accounting standards if:

(a)  the report is prepared in response to a shareholder direction under section 293; and

(b)  the direction specifies that the report does not have to comply with those accounting standards.

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S 296(1) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

296(2)  [Regulations]  

The financial report must comply with any further requirements in the regulations.

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S 296(2) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 297   TRUE AND FAIR VIEW  

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297     The financial statements and notes for a financial year must give a true and fair view of:

(a)  the financial position and performance of the company, registered scheme or disclosing entity; and

(b)  if consolidated financial statements are required - the financial position and performance of the consolidated entity.

This section does not affect the obligation under section 296 for a financial report to comply with accounting standards.

Note:

If the financial statements and notes prepared in compliance with the accounting standards would not give a true and fair view, additional information must be included in the notes to the financial statements under paragraph 295(3)(c).

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S 297 substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 298   ANNUAL DIRECTORS' REPORT  

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298(1)  [Directors' report]  

The company, registered scheme or disclosing entity must prepare a directors' report for each financial year. The report must include:

(a)  the general information required by section 299; and

(b)  the specific information required by section 300.

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S 298(1) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

298(2)  [Requirements]  

The report must:

(a)  be made in accordance with a resolution of the directors; and

(b)  specify the date on which the report is made; and

(c)  be signed by a director.

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S 298(2) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

298(3)  [Small proprietary company]  

A small proprietary company does not have to comply with subsection (1) for a financial year if:

(a)  it is preparing financial statements for that year in response to a shareholder direction under section 293; and

(b)  the direction specified that a directors' report need not be prepared.

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S 298(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 299   ANNUAL DIRECTORS' REPORT - GENERAL INFORMATION  

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299(1)  General information about operations and activities.  

The directors' report for a financial year must:

(a)  contain a review of operations during the year of the entity reported on and the results of those operations; and

(b)  give details of any significant changes in the entity's state of affairs during the year; and

(c)  state the entity's principal activities during the year and any significant changes in the nature of those activities during the year; and

(d)  give details of any matter or circumstance that has arisen since the end of the year that has significantly affected, or may significantly affect:

(i) the entity's operations in future financial years; or

(ii) the results of those operations in future financial years; or

(iii) the entity's state of affairs in future financial years; and

(e)  refer to likely developments in the entity's operations in future financial years and the expected results of those operations; and

(f)  if the entity's operations are subject to any particular and significant environmental regulation under a law of the Commonwealth or of a State or Territory - details of the entity's performance in relation to environmental regulation.

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S 299(1) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

299(2)  [Entity reported on]  

The entity reported on is:

(a)  the company, registered scheme or disclosing entity (if consolidated financial statements are not required); or

(b)  the consolidated entity (if consolidated financial statements are required).

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S 299(2) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

299(3)  Prejudicial information need not be disclosed.  

The report may omit material that would otherwise be included under paragraph (1)(e) if it is likely to result in unreasonable prejudice to:

(a)  the company, registered scheme or disclosing entity; or

(b)  if consolidated financial statements are required - the consolidated entity or any entity (including the company, registered scheme or disclosing entity) that is part of the consolidated entity.

If material is omitted, the report must say so.

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S 299(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

SECTION 300   ANNUAL DIRECTORS' REPORT - SPECIFIC INFORMATION  

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300(1)  [Content of report]  

The directors' report for a financial year must include details of:

(a)  dividends or distributions paid to members during the year; and

(b)  dividends or distributions recommended or declared for payment to members, but not paid, during the year; and

(c)  the name of each person who has been a director of the company, registered scheme or disclosing entity at any time during or since the end of the year and the period for which they were a director; and

(d)  options that are:

(i) granted over unissued shares or unissued interests during or since the end of the year; and

(ii) granted to any of the directors or any of the 5 most highly remunerated officers of the company; and

(iii) granted to them as part of their remuneration;

(see subsections (3), (4) and (5)); and

(e)  unissued shares or interests under option as at the day the report is made (see subsections (3) and (6)); and

(f)  shares or interests issued during or since the end of the year as a result of the exercise of an option over unissued shares or interests (see subsections (3) and (7)); and

(g)  indemnities given and insurance premiums paid during or since the end of the year for a person who is or has been an officer or auditor (see subsections (8) and (9)).

Public companies, listed companies and registered schemes must include additional information under subsections (10), (11), (12) and (13).

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History

S 300(1) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

300(2)  [Details in financial report]  

Details do not have to be included in the directors' report under this section if they are included in the company's financial report for the financial year.

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S 300(2) substituted by No 61 of 1998, Sch 1 (effective 1 July 1998).

300(3)  [Options over unissued shares]  

Paragraphs (1)(d), (e) and (f) cover:

(a)  options over unissued shares and interests of the company, registered scheme or disclosing entity; and

(b)  if consolidated financial statements are required - options over unissued shares and interests of any controlled entity that is a company, registered scheme or disclosing entity.

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S 300(3) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

300(4) 

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(Repealed by No 156 of 1999, Sch 3, Pt 4 (effective 13 March 2000).)

300(5)  Options details.  

The details of an option granted are:

(a)  the company, registered scheme or disclosing entity granting the option; and

(b)  the name of the person to whom the option is granted; and

(c)  the number and class of shares or interests over which the option is granted.

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S 300(5) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

300(6)  [Unissued shares or options]  

The details of unissued shares or interests under option are:

(a)  the company, registered scheme or disclosing entity that will issue shares or interests when the options are exercised; and

(b)  the number and classes of those shares or interests; and

(c)  the issue price, or the method of determining the issue price, of those shares or interests; and

(d)  the expiry date of the options; and

(e)  any rights that option holders have under the options to participate in any share issue or interest issue of the company, registered scheme or disclosing entity or of any other body corporate or registered scheme.

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S 300(6) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

300(7)  Shares or interests issued as a result of exercise of option.  

The details of shares or interests issued as a result of the exercise of an option are:

(a)  the company, registered scheme or disclosing entity issuing the shares or interests; and

(b)  the number of shares or interests issued; and

(c)  if the company, registered scheme or disclosing entity has different classes of shares or interests - the class to which each of those shares or interests belongs; and

(d)  the amount unpaid on each of those shares or interests; and

(e)  the amount paid, or agreed to be considered as paid, on each of those shares or interests.

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S 300(7) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

300(8) 

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Indemnities and insurance premiums for officers or auditors.  

The report for a company must include details of:

(a)  any indemnity that is given to a current or former officer or auditor against a liability and that is covered by subsection 199A(2) or (3), or any relevant agreement under which an officer or auditor may be given an indemnity of that kind; and

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(b)  any premium that is paid, or agreed to be paid, for insurance against a current or former officer's or auditor's liability for legal costs.

Note:

Sections 199A and 199B contain general prohibitions against giving certain indemnities and paying certain insurance premiums. This subsection requires transactions that are exceptions to these prohibitions to be reported.

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S 300(8) and Note amended by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000).

S 300(8) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

300(9)  [Indemnities and insurance premiums details]  

The details required under subsection (8) are:

(a)  for an officer - their name or the class of officer to which they belong or belonged; and

(b)  for an auditor - their name; and

(c)  the nature of the liability; and

(d)  for an indemnity given - the amount the company paid and any other action the company took to indemnify the officer or auditor; and

(e)  for an agreement to indemnify - the amount that the relevant agreement requires the company to pay and any other action the relevant agreement requires the company to take to indemnify the officer or auditor; and

(f)  for an insurance premium - the amount of the premium.

The report need not give details of the nature of the liability covered by, or the amount of the premium payable under, a contract of insurance to the extent that disclosure of those details is prohibited by the insurance contract.

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S 300(9) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

300(10)  Special rules for public companies.  

The report for a public company that is not a wholly-owned subsidiary of another company or of a recognised company must also include details of:

(a)  each director's qualifications, experience and special responsibilities; and

(b)  the number of meetings of the board of directors held during the year and each director's attendance at those meetings; and

(c)  the number of meetings of each board committee held during the year and each director's attendance at those meetings.

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S 300(10) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

300(11)  Special rules for listed companies.  

The report for a listed company must also include the following details for each director:

(a)  their relevant interests in shares of the company or a related body corporate

(b)  their relevant interests in debentures of, or interests in a registered scheme made available by, the company or a related body corporate

(c)  their rights or options over shares in, debentures of or interests in a registered scheme made available by, the company or a related body corporate

(d)  contracts:

(i) to which the director is a party or under which the director is entitled to a benefit; and

(ii) that confer a right to call for or deliver shares in, or debentures of or interests in a registered scheme made available by the company or a related body corporate.

Note:

Directors must also disclose interests of these kinds to the ASX under section 205G as they are acquired.

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History

S 300(11) (Note) amended by No 156 of 1999, Sch 3, Pt 3 (effective 13 March 2000).

S 300(11) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

300(12)  Special rules for listed registered schemes.  

The report for a registered scheme whose interests are quoted on a stock market of a securities exchange must also include the following details for each director of the company that is the responsible entity for the scheme:

(a)  their relevant interests in interests in the scheme

(b)  their rights or options over interests in the scheme

(c)  contracts to which the director is a party or under which the director is entitled to a benefit and that confer a right to call for or deliver interests in the scheme.

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S 300(12) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

300(13)  Special rules for registered schemes.  

The report for a registered scheme must also include details of:

(a)  the fees paid to the responsible entity and its associates out of scheme property during the financial year; and

(b)  the number of interests in the scheme held by the responsible entity or its associates as at the end of the financial year; and

(c)  interests in the scheme issued during the financial year; and

(d)  withdrawals from the scheme during the financial year; and

(e)  the value of the scheme's assets as at the end of the financial year, and the basis for the valuation; and

(f)  the number of interests in the scheme as at the end of the financial year.

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S 300(13) inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).

300(14) 

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Proceedings on behalf of a company.  

The report for a company must also include the following details of any application for leave under section 237 made in respect of the company:

(a)  the applicant's name; and

(b)  a statement whether leave was granted.

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S 300(14) inserted by No 156 of 1999, Sch 3, Pt 6 (effective 13 March 2000).

300(15)  [Details of proceedings]  

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The report for a company must also include the following details of any proceedings that a person has brought or intervened in on behalf of the company with leave under section 237:

(a)  the person's name

(b)  the names of the parties to the proceedings

(c)  sufficient information to enable members to understand the nature and status of the proceedings (including the cause of action and any orders made by the court).

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S 300(15) inserted by No 156 of 1999, Sch 3, Pt 6 (effective 13 March 2000).

SECTION 300A   ANNUAL DIRECTORS' REPORT - SPECIFIC INFORMATION TO BE PROVIDED BY LISTED COMPANIES  

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300A(1)  [Information to be provided]  

The directors' report for a financial year for a company must also include:

(a)  discussion of broad policy for determining the nature and amount of emoluments of board members and senior executives of the company; and

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(b)  discussion of the relationship between such policy and the company's performance; and

(c)  details of the nature and amount of each element of the emolument of each director and each of the 5 named officers of the company receiving the highest emolument.

300A(2)  [Applies if listed company]  

This section only applies to a company that is:

(a)  incorporated in Australia; and

(b)  included in an official list of the Exchange.

300A(3)  [Applies despite constitution]  

This section applies despite anything in the company's constitution.

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