Corporations Act 2001

CHAPTER 2B - BASIC FEATURES OF A COMPANY  

PART 2B.7 - CHANGING COMPANY TYPE  

SECTION 162   CHANGING COMPANY TYPE  

162(1)    
A company may change to a company of a different type as set out in the following table by:

(a)    passing a special resolution resolving to change its type; and

(b)    complying with sections 163 and 164 .

Allowed conversions	[ operative table]
	This type of company may change …	… to this type of company
1	proprietary company limited by shares	unlimited proprietary company
		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 tochange to a proprietary company must comply with the requirements for proprietary companies set out in section 113 .

Note 2: Other types of companies that were previously allowed can change type under the Part 10.1 transitionals.

162(2)    
A public company limited by shares may only convert to a no liability company if:

(a)    the company ' s constitution states that its sole objects are mining purposes; and

(b)    under the constitution the company has no contractual right to recover calls made on its shares from a shareholder who fails to pay them; and

(c)    all the company ' s issued shares are fully paid up.

Note: Section 9 defines mining purposes and minerals .

162(3)    
The company must lodge a copy of the special resolution with ASIC within 14 days after it is passed.

162(3A)    

An offence based on subsection (3) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

162(4)    

A special resolution to change an unlimited company that has share capital to a company limited by shares may also provide that a specified portion of its uncalled share capital may only be called up if the company becomes a Chapter 5 body corporate.

SECTION 163   APPLYING FOR CHANGE OF TYPE  
Lodging application

163(1)    
To change its type, a company must lodge an application with ASIC.

Contents of the application

163(2)    
The application must be accompanied by the following:

(a)    a copy of:

(i) the special resolution that resolves to change the type of the company, specifies the new type and the company ' s new name (if a change of name is necessary); and

(ii) any other special resolution passed in connection with the change of type;

(b)    for a company limited by guarantee changing to a company limited by shares:

(i) a statement signed by the directors of the company that in their opinion the company ' s creditors are not likely to be materially prejudiced by the change of type and that sets out their reasons for that opinion; and

(ii) any special resolution dealing with an issue of shares according to section 167 ;

(c)    for a company limited by shares or a company limited by guarantee changing to an unlimited company:

(i) an assent to the change of type in the prescribed form signed by all the members of the company; and

(ii) a statement signed by a director or a company secretary of the company that all the members of the company have signed the assent;

(d)    

for a proprietary company changing to a public company:

(i) a consolidated copy of the company ' s constitution (if any) as at the date of lodgment; and

(ii) a copy of each document (including an agreement or consent) or resolution that is necessary to ascertain the rights attached to issued or unissued shares of the company.

Note 1: The company must lodge a copy of any special resolution modifying its constitution passed after the application is lodged (see subsection 136(5) ).

Note 2: The company must lodge information relating to any change of rights attached to its shares, or any division or conversion of its shares into new classes, occurring after the application is lodged (see section 246F ).

Company limited by guarantee to company limited by shares

163(3)    
If shares will be issued to persons under paragraph 166(2)(c) on the change of type from a company limited by guarantee to a company limited by shares, the application must state:

(a)    that the company has prepared a list that sets out the following details about each person to whom the shares will be issued:

(i) name and address;

(ii) the number and class of shares the person will take up;

(iii) the amount (if any) the person will pay for the shares;

(iv) the amount (if any) that will be unpaid on the shares; and

(b)    the number and class of shares those persons will take up; and

(c)    the amount (if any) those persons will pay for the shares; and

(ca)    the amount (if any) that will be unpaid on the shares; and

(d)    if the shares will be issued for non-cash consideration - the prescribed particulars about the issue of the shares, unless the shares will be issued under a written contract and a copy of the contract is lodged with the application; and

(e)    that each of those persons who is not a member of the company when the application is made consents in writing to the inclusion in the list of the details about them that are referred to in paragraph (a).

The shares may be issued to existing members only, to new members only or to existing and new members.

Note: An offer of shares associated with a proposed change of type may need disclosure to investors under Part 6D.2 (see sections 706 , 707 , 708 , 708AA and 708A ).

163(3A)    

For a company changing to a proprietary company, if any of the particulars in the register kept by the company under section 169 and mentioned in paragraph 178A(1)(b) are different from the particulars set out:

(a)    in the latest extract of particulars received by the company; or

(b)    if the company responded to the latest extract it received - in the company ' s extract taken together with the company ' s response to the extract;

the application must set out those different particulars in addition to the other information required by this section.

163(3B)    

If the company has more than 20 members, the company is only required to set out the different particulars under subsection (3A) that relate to a person who is a top 20 member of a class of the company.

Note: See also section 107 .

163(3C)    

If subsection (3A) applies and any details mentioned in subsection 178C(1) are different from the details set out:

(a)    in the latest extract of particulars received by the company; or

(b)    if the company responded to the latest extract it received - in the company ' s extract taken together with the company ' s response to the extract;

the application must set out those different details as well.

163(4)    
The application must be in the prescribed form.

163(5)    
The company must have the consents referred to in paragraph (3)(e) (if any) when the application is lodged. The company must keep the consents.

163(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 .

SECTION 164   ASIC CHANGES TYPE OF COMPANY  

164(1)    
ASIC must give notice under subsection (3) that it intends to alter the details of the company ' s registration if:

(a)    

ASIC is satisfied that:

(i) the application complies with section 163 ; and

(ii) for an application by a company limited by guarantee to change to a company limited by shares - the company ' s creditors are not likely to be materially prejudiced by the change; and

(b)    for an application by a company limited by guarantee to change to a company limited by shares that is accompanied by a copy of a special resolution dealing with an issue of shares according to section 167 - ASIC is not of the opinion that the obligations that would attach to the shares are unreasonable compared with the obligations that attach to membership of the company limited by guarantee.

164(2)    
To make a decision under subparagraph (1)(a)(ii), ASIC may direct the company in writing to:

(a)    notify some or all of its creditors of the proposed change in the way ASIC specifies; and

(b)    invite those creditors to make submissions to ASIC.

164(3)    
The notice that ASIC intends to alter the details of the company ' s registration must be:

(a)    included on ASIC [ sic ] 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(3)    
The notice that ASIC intends to alter the details of the company ' s registration must be:

(a)    included on ASIC [ sic ] 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)    
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)    
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)    
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)    
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 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)    
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(2A)    

An offence based on subsection (2) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

165(3)    
If a proprietary company does not comply with subsection (2) , ASIC may change the company from a proprietary to a public company by altering the details of the company ' s registration to reflect the company ' s new type.

165(4)    
A change of type under this section takes effect when ASIC alters the details of the company ' s registration.

165(5)    
ASIC must give the company a new certificate of registration after it alters the details of the company ' s registration under subsection (3) . The company ' s name is the name specified in the certificate of registration issued under this section.

Note: For the evidentiary value of a certificate of registration, see subsection 1274(7A) .

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 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.

SECTION 167AA   APPLICATION OF PART TO COMPANY LIMITED BOTH BY SHARES AND BY GUARANTEE  

167AA(1)   [ Company limited both by shares and guarantee]  

A company limited both by shares and by guarantee may change to one of the following types of companies under this Part:

(a) a proprietary company limited by shares;

(b) a public company limited by shares;

(c) a company limited by guarantee.

167AA(2)   [ Application]  

This Part applies to the change with any modifications that are necessary.