CHAPTER 2B
-
BASIC FEATURES OF A COMPANY
PART 2B.4
-
REPLACEABLE RULES AND CONSTITUTION
SECTION 134
134
INTERNAL MANAGEMENT OF COMPANIES
A company's internal management may be governed by provisions of this Act that apply to the company as replaceable rules, by a constitution or by a combination of both.
Note: There are additional rules about internal management in ordinary provisions of this Act and also in the common law.
SECTION 135
REPLACEABLE RULES
Companies to which replaceable rules apply
135(1)
A section or subsection (except subsection
129(1)
, this section and sections
140
and
141
) whose heading contains the words:
(a)
replaceable rule
-
applies as a replaceable rule to:
(i)
each company that is or was registered after 1 July 1998; and
(ii)
any company registered before 1 July 1998 that repeals or repealed its constitution after that day; and
(b)
replaceable rule for proprietary companies and mandatory rule for public companies
-
applies:
(i)
as a replaceable rule to any proprietary company that is or was registered after 1 July 1998; and
(ii)
as a replaceable rule to any company that is or was registered after 1 July 1998 and that changes or changed to a proprietary company (but only while it is a proprietary company); and
(iii)
as a replaceable rule to any proprietary company that is or was registered before 1 July 1998 that repeals or repealed its constitution after that day; and
(iv)
as an ordinary provision of this Act to any public company whenever registered.
The section or subsection does not apply to a proprietary company while the same person is both its sole director and sole shareholder.
Note 1: See sections
198E
,
201F
and
202C
for the special provisions that apply to a proprietary company while the same person is both its sole director and sole shareholder.
Note 2: A company may include in its constitution (by reference or otherwise) a replaceable rule that does not otherwise apply to it.
Note 3: Paragraph
(a)
does not apply for CCIVs: see section
1223A
.
History
S 135(1) amended by No 8 of 2022, s 3, Sch 2[50] (effective 1 July 2022).
S 135(1) amended by No 49 of 2019, s 3, Sch 4[14] (effective 6 April 2019).
Company
'
s constitution can displace or modify replaceable rules
135(2)
A provision of a section or subsection that applies to a company as a replaceable rule can be displaced or modified by the company
'
s constitution.
Failure to comply with replaceable rules
135(3)
A failure to comply with the replaceable rules as they apply to a company is not of itself a contravention of this Act (so the provisions about criminal liability, civil liability and injunctions do not apply).
Note: Replaceable rules that apply to a company have effect as a contract (see section
140
).
SECTION 136
CONSTITUTION OF A COMPANY
136(1)
A company adopts a constitution:
(a)
on registration
-
if each person specified in the application for the company
'
s registration as a person who consents to become a member agrees in writing to the terms of a constitution before the application is lodged; or
(b)
after registration
-
if the company passes a special resolution adopting a constitution or a court order is made under section
233
that requires the company to adopt the constitution.
Note 1: The
Life Insurance Act 1995
has rules about how benefit fund rules become part of a company
'
s constitution and about amending those rules. They override this Act (see section
1348
of this Act). Consequential amendments to the rest of the company
'
s constitution can be made under that Act or this Act (see Subdivision
2
of Division
4
of Part
2A
of that Act).
Note 2: Section
1223B
applies instead of this section in relation to the constitution of a CCIV (see also subsection
1223D(6)
).
[
CCH Note:
S 136(1) will be amended by No 69 of 2020, s 3, Sch 1[431], by inserting
"
with the Registrar
"
after
"
is lodged
"
in para (a) (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
History
S 136(1) amended by No 8 of 2022, s 3, Sch 2[51] and
[
52] (effective 1 July 2022).
136(2)
The company may modify or repeal its constitution, or a provision of its constitution, by special resolution.
Note: The company may need leave of the Court to modify or repeal its constitution if it was adopted as the result of a Court order (see subsection
233(3)
).
136(3)
The company
'
s constitution may provide that the special resolution does not have any effect unless a further requirement specified in the constitution relating to that modification or repeal has been complied with.
136(4)
Unless the constitution provides otherwise, the company may modify or repeal a further requirement described in subsection
(3)
only if the further requirement is itself complied with.
136(5)
A public company must lodge with ASIC a copy of a special resolution adopting, modifying or repealing its constitution within 14 days after it is passed. The company must also lodge with ASIC within that period:
(a)
if the company adopts a constitution
-
a copy of that constitution; or
(b)
if the company modifies its constitution
-
a copy of that modification.
This also applies to a proprietary company that has applied under Part
2B.7
to change to a public company, while its application has not yet been determined.
[
CCH Note 1:
S 136(5) will be amended by No 69 of 2020, s 3, Sch 1[432], by substituting
"
the Registrar
"
for
"
ASIC
"
(wherever occurring) (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
[
CCH Note 2:
S 136(5A) will be inserted by No 69 of 2020, s 3, Sch 1[433] (effective 1 July 2026 or a day or days to be fixed by Proclamation). S 136(5A) will read:
136(5A)
The lodgement must meet any requirements of the data standards.]
136(6)
An offence based on subsection
(5)
is an offence of strict liability.
Note: For
strict liability
, see section
6.1
of the
Criminal Code
.
History
S 136(6) inserted by No 117 of 2001, s 3, Sch 1
[
7].
SECTION 137
137
DATE OF EFFECT OF ADOPTION, MODIFICATION OR REPEAL OF CONSTITUTION
If a new constitution is adopted or an existing constitution is modified or repealed, that adoption, modification or repeal takes effect:
(a)
if it is the result of a special resolution:
(i)
on the date on which the resolution is passed if it specified no later date; or
(ii)
on a date specified in, or determined in accordance with, the resolution if the relevant date is later than the date on which the resolution is passed; or
(b)
if it is the result of a Court order made under section 233:
(i)
on the date on which the order is made if it specifies no later date; or
(ii)
on a date specified by the order.
SECTION 138
138
ASIC MAY DIRECT COMPANY TO LODGE CONSOLIDATED CONSTITUTION
ASIC may direct a company to lodge a consolidated copy of its constitution with ASIC.
[
CCH Note:
S 138 will be substituted by No 69 of 2020, s 3, Sch 1
[
434] (effective 1 July 2026 or a day or days to be fixed by Proclamation). S 138 will read:
SECTION 138 ASIC MAY DIRECT COMPANY TO LODGE CONSOLIDATED CONSTITUTION
138
ASIC may do either or both of the following:
(a)
direct a company to lodge a consolidated copy of its constitution with ASIC;
(b)
direct a company to lodge a consolidated copy of its constitution with the Registrar.]
SECTION 139
COMPANY MUST SEND COPY OF CONSTITUTION TO MEMBER
139(1)
[
Requirements]
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.
139(2)
[
Strict liability offence]
An offence based on subsection (1) is an offence of strict liability.
Note: For
strict liability
, see section 6.1 of the
Criminal Code
.
History
S 139(2) inserted by No 117 of 2001, s 3, Sch 1
[
8] (effective 15 December 2001).
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)
[
Binding nature of modification to 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
141
TABLE OF REPLACEABLE RULES
The following table sets out the provisions of this Act that apply as replaceable rules.
Table for replaceable rules
Table for replaceable rules
Provisions that apply as replaceable rules
|
|
Officers and Employees
|
|
1 |
Voting and completion of transactions
-
directors of proprietary companies |
194 |
2 |
Powers of directors |
198A |
3 |
Negotiable instruments |
198B |
4 |
Managing director |
198C |
5 |
Company may appoint a director |
201G |
6 |
Directors may appoint other directors |
201H |
7 |
Appointment of managing directors |
201J |
8 |
Alternate directors |
201K |
9 |
Remuneration of directors |
202A |
10 |
Director may resign by giving written notice to company |
203A |
11 |
Removal by members
-
proprietary company |
203C |
12 |
Termination of appointment of managing director |
203F |
13 |
Termsand conditions of office for secretaries |
204F |
|
Inspection of books
|
|
14 |
Company or directors may allow member to inspect books |
247D |
|
Director
'
s Meetings
|
|
15 |
Circulating resolutions of companies with more than 1 director |
248A |
16 |
Calling directors
'
meetings |
248C |
17 |
Chairing directors
'
meetings |
248E |
18 |
Quorum at directors
'
meetings |
248F |
19 |
Passing of directors
'
resolutions |
248G |
|
Meetings of members
|
|
20 |
Calling of meetings of members by a director |
249C |
21 |
Notice to joint members |
249J(2) |
22 |
When notice is given |
249J(4) |
22A |
(Repealed) |
|
23 |
Notice of adjourned meetings |
249M |
24 |
Quorum |
249T |
25 |
Chairing meetings of members |
249U |
26 |
Business at adjourned meetings |
249W(2) |
27 |
Who can appoint a proxy |
249X |
|
[
replaceable rule for proprietary companies only
] |
|
28 |
Proxy vote valid even if member dies, revokes appointment etc. |
250C(2) |
29 |
How many votes a member has |
250E |
30 |
Jointly held shares |
250F |
31 |
Objections to right to vote |
250G |
32 |
How voting is carried out |
250J |
33 |
When and how polls must be taken |
250M |
|
Shares
|
|
33A |
Pre-emption for existing shareholders on issue of shares in proprietary company |
254D |
33B |
Other provisions about paying dividends |
254U |
34 |
Dividend rights for shares in proprietary companies |
254W(2) |
|
Transfer of shares
|
|
35 |
Transmission of shares on death |
1072A |
36 |
Transmission of shares on bankruptcy |
1072B |
37 |
Transmission of shares on mental incapacity |
1072D |
38 |
Registration of transfers |
1072F |
39 |
Additional general discretion for directors of proprietary companies to refuse to register transfers |
1072G |
History
S 141 amended by No 82 of 2021, s 3, Sch 1[10] (effective 14 August 2021).
S 141 amended by No 103 of 2004, s 3, Sch 8
[
1].
S 141 amended by No 116 of 2003, s 3, Sch 3
[
21].
S 141 amended by No 122 of 2001, s 3, Sch 1, Pt 2
[
333].