Corporations Act 2001 – 14 April 2015 (CTH)
Corporations Act 2001 – 14 April 2015
Corporations Regulations 2001 – 19 June 2015
Corporations (Fees) Act 2001 – 1 October 2012
Corporations (Fees) Regulations 2001 – 1 July 2015
Corporations (Review Fees) Act 2003 – 1 September 2007
Corporations (Review Fees) Regulations 2003 – 1 July 2013
Corporations (Compensation Arrangements Levies) Act 2001 – 11 March 2002
Corporations (National Guarantee Fund Levies) Act 2001 – 22 October 2007
Corporations (Change of Incorporation) Regulations 2002 – 11 July 2002
Corporations (Derivatives) Determination 2013 – 2 May 2013
Corporations (Low Volume Financial Markets) Exemption Notice 2003 – 19 December 2003
*Note: For Commonwealth Coverage: update is limited, proclamations will not have been covered, and the following Acts/regulations at this point in time have not been included/covered:
Corporations (Aboriginal and Torres Strait Islander) Act 2006 – 1 July 2014
Corporations (Aboriginal and Torres Strait Islander) Consequential, Transitional and Other Measures Act 2006 – 4 March 2010
Corporations (Aboriginal and Torres Strait Islander) Regulations 2007 – 4 November 2014
Corporations (Aboriginal and Torres Strait Islander) Determination 1/2009 – 26 June 2009
Corporations (Aboriginal and Torres Strait Islander) Determination 2/2009 – 26 June 2009
Corporations (Aboriginal and Torres Strait Islander) Determination 1/2014 – 25 September 2014
Suggested Constitutional head of power
- 51(i) trade and commerce with other countries, and among the States
- 51(xvii) bankruptcy and insolvency
- 51(xx) foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth
- 51(xxxvii) matters referred to the Parliament of the Commonwealth by the Parliament or Parliaments of any State or States, but so that the law shall extend only to States by whose Parliaments the matter is referred, or which afterwards adopt the law – see section 3 of the Act
A document may be served on a company by: leaving it at, or posting it to, the company’s registered office; or delivering a copy of the document personally to a director of the company who resides in Australia or in an external Territory (among other ways). For a full listing of a way a company may be served, refer to section 109X of the Act. For information relating to service of a registered foreign company, refer to section 601CX of the Act.
- Sections 109X, 601CX
Part 1.5 of the Corporations Act contains the Small business guide. As per the Part heading, the guide summarises the main rules in the Corporations Act that apply to proprietary companies limited by shares (which is the most common type of company used by small business). The Part appears after section 111J of the Act.
- Part 1.5 of the Act
The types of companies that can be registered under the Corporations Act are set out in subsection 112(1) of the Act. They include: proprietary company limited by share; proprietary company unlimited with share capital; public company limited by shares; public company limited by guarantee; public company unlimited with share capital; public company no liability company. To register a company, a person must lodge an application with ASIC. For application requirements, refer to section 117 of the Act. Once registered, the company has the legal capacity and powers of an individual and also has powers of a body corporate pursuant to section 124 of the Act. 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 constitution may also set out the company’s objects. For the definition of ‘constitution’, refer to section 9 of the Act.
- Sections 9, 45A, 112, 113, 114, 116, 118, 119, 119A, 120, 121, 122, 123, 124, 125, 136, 148, 149, 168, 169, 172, 178, 201A, 201B, 201D, 201E, 201F, 204A, 204B, 204C, 205B, 206B, 231, 250R, 251A, 254A, 254B, 254F, 254G, 254H, 254S, 254SA, 254T, 254U, 254W, 256B, 257A, 258A, 258B, 258C 258D, 259A, 259B, 260A, 260B, 260C, 317, 327A, 328A, 328B, 345A, 347A, 347B, 347C, 351, 352, 436A, 601BA, 601BB, 601BC, 601BM, 601EA, 601EC, 601ED, 601FA, 672DA, 1070B, 1364; Regulations 1.0.11, 1.2.01, 2A.2.01, 2A.2.02, 2A.2.03, 2C.1.01, 2D.6.01, 5C.1.01, 5C.11.03, 5C.11.05A of the Corporations Regulations 2001
A person must not participate in the formation of a partnership or association that: (a) has as an object gain for itself or for any of its members; and (b) has more than 20 members; unless the partnership or association is incorporated or formed under an Australian law.
- Sections 115, 1364; Regulation 2A.1.01 of the Corporations Regulations 2001
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.
- Section 126
A company may execute a document without using a common seal if the document is signed by: 2 directors of the company; or a director and a company secretary of the company; or for a proprietary company that has a sole director who is also the sole company secretary—that director. A similar rule applies to deeds pursuant to subsection 127(3) of the Act.
- Sections 52A, 127
A person may assume that the company’s constitution (if any), and any provisions of this Act that apply to the company as replaceable rules, have been complied with.
- Sections 128, 129, 134, 135, 141
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.
- Sections 131, 132, 133
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 a copy of the constitution/modification where the company has adopted a constitution or modified its constitution. For the definition of ‘special resolution’, refer to section 9 of the Act.
- Sections 9, 136, 1364; Regulation 1.0.12 of the Corporations Regulations 2001
A company must send a copy of its constitution to a member of the company within 7 days if the member: asks the company, in writing, for the copy; and pays any fee (up to the prescribed amount) required by the company.
- Section 139
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. Note: exceptions may apply as per subsection 140(2) of the Act.
- Section 140
A company must display its name prominently at every place at which the company carries on business and that is open to the public. A public company must also display its name and the words “Registered Office” prominently at its registered office.
- Section 144
A company must allow anyone to inspect their register of members, register of option holders and/or register of debenture holders. Inspection fees may apply to non-members. Note: Subsection 173(3) prescribes a process for a person to apply for a copy of the register.
- Sections 173, 177, 672DA, 1364; Regulations 2C.1.02, 2C.1.03, 2C.1.04, 2C.1.05 of the Corporations Regulations 2001
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: were a director or officer of a corporation in the corporation’s circumstances; and occupied the office held by, and had the same responsibilities within the corporation as, the director or officer. Pursuant to subsection 180(2), a director or other officer of a corporation who makes a business judgment is taken to meet requirements 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. For the definition of ‘officer’ of a coporation, refer to section 9 of the Act. For the definition of ‘corporation’, refer to section 57A of the Act.
- Sections 9, 57A, 180, 181, 182, 183, 184, 185, 189, 199B
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: has not discharged, and cannot discharge, the liability or that part of it; and is not entitled to be fully indemnified against the liability out of trust assets solely because of one or more of the following: (i) a breach of trust by the corporation; (ii) the corporation’s acting outside the scope of its powers as trustee; (iii) a term of the trust denying, or limiting, the corporation’s right to be indemnified against the liability.
- Section 197
The directors may exercise all the powers of the company except any powers that this Act or the company’s constitution (if any) requires the company to exercise in general meeting. Note: 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 Act or the company’s constitution (if any) requires the company to exercise in general meeting.
- Sections 198A, 198E
Before a company enters into a remuneration consultancy contract, the proposed consultant must be approved by the directors of the company; or the members of a committee (the remuneration committee) that: (i) is a committee of the board of directors of the company; and (ii) has functions relating to the remuneration of key management personnel for the company. A remuneration consultancy contract is a contract that is for services that include making a remuneration recommendation in relation to one or more members of the key management personnel for a company that is a disclosing entity; and that is between the company and a person (the proposed consultant) who, by making the recommendation under the contract, will be a remuneration consultant. For the definition of ‘remuneration recommendation’, refer to section 9B of the Act.
- Sections 9B, 206K, 206L, 206M
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: the public company or entity must obtain the approval of the public company’s members in the way set out in sections 217 to 227; and give the benefit within 15 months after the approval; or the giving of the benefit must fall within an exception set out in sections 210 to 216.
- Sections 208, 209, 210, 211, 212, 213, 214, 215, 216, 218, 219, 220, 221, 222, 223, 224, 225, 226, 228, 229, 1364; Regulation 2E.1.01 of the Corporations Regulations 2001
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: contrary to the interests of the members as a whole; or oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity, the court may make appropriate orders pursuant to section 233 of the Act. To apply for the relevant court order, the person must have standing pursuant to section 234 of the Act.
- Sections 232, 233, 234, 235
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, if: 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. Where leave is granted, the court has general powers to make an order appointing an independent person to investigate, and report to the Court on: the financial affairs of the company; the facts or circumstances which gave rise to the cause of action the subject of the proceedings (among other orders).
- Sections 236, 237, 238, 239, 240, 241, 242, 247E
On application by a member of a company or registered managed investment scheme, the Court may make an order: authorising the inspection of books of the company or scheme. 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. A person authorised to inspect books may make copies of the books unless the Court orders otherwise.
- Sections 247A, 247C
The directors of a company must call and arrange to hold a general meeting on the request of members with at least 5% of the votes that may be cast at the general meeting. The request must: be in writing; state any resolution to be proposed at the meeting; be signed by the members making the request; and be given to the company. After the request is given to the company, the directors must call the meeting within 21 days after the request is given to the company. Alternatively, members with at least 5% of the votes may call and hold a general meeting at their own expense.
- Sections 249D, 249E, 249F, 249H, 249HA, 249J, 249K, 249L, 249LA
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; (b) or at least 100 members who are entitled to vote at a general meeting. The notice must: be in writing; set out the wording of the proposed resolution; and be signed by the members proposing to move the resolution.
- Sections 249N, 249O, 249P
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.
- Section 250S
In addition to inspection rights, a member of a company may ask the company in writing for a copy of: any minutes of a meeting of the company’s members or an extract of the minutes; or any minutes of a resolution passed by members without a meeting.
- Section 251B
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.
- Section 254M
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: calls in respect of the share; or any contribution to the debts and liabilities of the company. However, calls on such shares can be made pursuant to section 254P of the Act. Note: A share in a no liability company is immediately forfeited if: a call is made on the share; and the call is unpaid at the end of 14 days after it became payable.
- Sections 254M, 254P, 254Q, 254R, 254W
A company must keep written financial records that: correctly record and explain its transactions and financial position and performance; and would enable true and fair financial statements to be prepared and audited. A director of a company, registered scheme or disclosing entity has a right of access to the financial records at all reasonable times. Pursuant to section 292 of the Act, entities may be required to prepare annual financial reports and a directors’ reports. For the content of financial reports, refer to section 295 of the Act. For the content of directors’ reports, refer to sections 299, 299A, 300, 300A and 300B of the Act. Reports are to be provided to members pursuant to section 314 of the Act.
- Sections 285, 285A, 286, 287, 290, 292, 293, 294A, 295, 295A, 296, 297, 298, 299, 299A, 300, 300A, 300B, 301, 302, 307, 307A, 307C, 308, 311, 314, 315, 316, 316A, 319, 323D, 325, 327A, 327B, 328A, 328B, 1364; Regulations 2M.3.01, 2M.3.03 of the Corporations Regulations 2001
A report or notice that purports to be made or given by a firm appointed as auditor of a company or registered scheme is not taken to be duly made or given unless it is signed by a member of the firm who is a registered company auditor both: in the firm name; and in his or her own name.
- Sections 324AB, 324AD
The Australian Accounting Standards Board (AASB) may, by legislative instrument, make accounting standards for the purposes of this Act.
- Section 334
The Auditing and Assurance Standards Board (AUASB) may, by legislative instrument, make auditing standards for the purposes of this Act.
- Section 336
Where the security interest is perfected under the Personal Property Securities Act 2009, a person who is entitled to enforce a security interest in the whole, or substantially the whole, of a company’s property may by writing appoint an administrator of the company if the security interest has become, and is still, enforceable. For the definition of ‘enforce’, refer to section 9 of the Act.
- Sections 9, 436C, 436D
Where a company under administration purports to enter into a transaction or dealing affecting property of the company, the transaction or dealing is void unless: the administrator entered into it on the company’s behalf; or the administrator consented to it in writing before it was entered into; or it was entered into under an order of the Court.
- Sections 437D, 437E
A transfer of shares in a company that is made during the administration of the company is void except if: the administrator gives written consent to the transfer and that consent is unconditional; or all of the following applies: (i) the administrator gives written consent to the transfer; (ii) that consent is subject to one or more specified conditions; (iii) those conditions have been satisfied; or the Court makes an order authorising the transfer.
- Section 437F
During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except: with the administrator’s written consent; or with the leave of the Court and in accordance with such terms (if any) as the Court imposes.
- Section 440D
During the administration of a company: a guarantee of a liability of the company cannot be enforced, as against: a director of the company who is a natural person or a spouse or relative of such a director, except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.
- Section 440J
A person must not consent to be appointed, and must not act, as administrator of a company or of a deed of company arrangement unless the person is a registered liquidator.
- Section 448B
On an application under section 459P, the Court may order that an insolvent company be wound up in insolvency. The Court must presume that the company is insolvent if, during or after the 3 months ending on the day when the application was made: the company failed (as defined by section 459F) to comply with a statutory demand; execution or other process issued on a judgment, decree or order of an Australian court in favour of a creditor of the company was returned wholly or partly unsatisfied, etc. For the full list of presumptions, refer to section 459C of the Act. Other grounds for an application for winding up in insolvency are provided by section 461 of the Act and the triggering application is provided by section 462 of the Act. For the definition of ‘insolvency’, refer to section 95A of the Act.
- Sections 95A, 459A, 459B, 459C, 459D, 459F, 459G, 459H, 459J,459K, 459L, 459M, 459N, 459P, 459Q, 459R, 459S, 461, 462, 465A, 465C, 466, 467, 467A, 470, 471, 471B, 472, 1364; Regulations 1.0.12, 5.4.01, 5.4.01A of the Corporations Regulations 2001
A person may serve on a company a demand relating to: a single debt that the company owes to the person, that is due and payable and whose amount is at least the statutory minimum; or 2 or more debts that the company owes to the person, that are due and payable and whose amounts total at least the statutory minimum. For the statutory demand requirements, refer to section 459E of the Act. For the definition of ‘statutory minimum’, refer to section 9 of the Act.
- Sections 9, 459E, 459N, 1364; Schedule 2 (Form 509H) of the Corporations Regulations 2001 of the Corporations Regulations 2001
Any disposition of property of the company, other than an exempt disposition, made after the commencement of the winding up by the Court is, unless the Court otherwise orders, void
- Section 468
A transfer of shares in a company that is made after the commencement of the winding up by the Court is void except if: both the liquidator gives written consent to the transfer and that consent is unconditional; or all of the following applies: (i) the liquidator gives written consent to the transfer; (ii) that consent is subject to one or more specified conditions; (iii) those conditions have been satisfied; or the Court makes an order authorising the transfer.
- Section 468A
A director may commit an offence if: a company incurs a debt at a particular time; and the company is insolvent at that time, or becomes insolvent by incurring that debt, or by incurring at that time debts including that debt; and the director suspected at the time when the company incurred the debt that the company was insolvent or would become insolvent.
- Sections 588G, 588H, 588J, 588K
Where on application by an eligible applicant, the Court is satisfied that: a person is guilty of fraud, negligence, default, breach of trust or breach of duty in relation to a corporation; and the corporation has suffered, or is likely to suffer, loss or damage as a result of the fraud, negligence, default, breach of trust or breach of duty; the Court may make such order or orders as it thinks appropriate against or in relation to the person and may so make an order against or in relation to a person even though the person may have committed an offence in respect of the matter to which the order relates. For remedies in relation to managed investment funds, refer to sections 601MA and 601MB of the Act. For remedies relating to defective disclosure statements, refer to section 729 of the Act.
- Sections 598, 601MA, 601MB, 729, 1318, 1324, 1324B, 1325
A licensed trustee company, when acting alone in relation to any estate of a deceased person, is not required to file, or file and pass, accounts relating to the estate unless the Court, of its own motion or on application by or on behalf of a person with a proper interest in the estate, so orders.
- Sections 601RAD, 601SBA, 601SBB
If the Court is of the opinion that fees charged by a licensed trustee company in respect of any estate are excessive, the Court may review the fees and may, on the review, reduce the fees.
- Section 601TEA
A person must not acquire a relevant interest in issued voting shares in a company if: the company is a listed company; or an unlisted company with more than 50 members; and the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person; and because of the transaction, that person’s or someone else’s voting power in the company increases from 20% or below to more than 20%; or from a starting point that is above 20% and below 90%. Note exceptions apply and are set out in section 611 of the Act. For the definition of ‘securities’, refer to section 9 of the Act.
- Sections 9, 606, 607, 609, 610, 611, 612, 1364; Regulations 6.2.01, 6.2.02; Schedule 3 of the Corporations Regulations 2001
A person must give the specified information to a listed company, or the responsible entity for a listed registered managed investment scheme, if: the person begins to have, or ceases to have, a substantial holding in the company or scheme; or the person has a substantial holding in the company or scheme and there is a movement of at least 1% in their holding; or the person makes a takeover bid for securities of the company or scheme. The person must also give the information to each relevant market operator. For the definition of ‘substantial holding’, refer to section 9 of the Act.
- Sections 9, 671B, 671C
Fundraising: An offer of securities for issue needs disclosure to investors unless section 708 or 708AA says otherwise. An offer of securities for sale may require disclosure to investors pursuant to section 707 of the Act. If disclosure is required, section 705 of the Act shows as a guide the relevant disclosure document for use. Pursuant to section 715A of the Act, the information in a disclosure document must be worded and presented in a clear, concise and effective manner. Subsection 716(3) of the Act provides a disclosure document may only include a statement by a person, or a statement said in the document to be based on a statement by a person, if: the person has consented to the statement being included in the document in the form and context in which it is included; and the document states that the person has given this consent; and the person has not withdrawn this consent before the document is lodged with ASIC. Note: A disclosure document to be used for an offer of securities must (in most instances) be lodged with ASIC; and lodgement requires the consents set out in section 720 of the Act. For advertising and marketing restrictions that may apply, refer to sections 734 and 736 of the Act.
- Sections 705, 706, 707, 708, 708AA, 709, 710, 711, 712, 713A, 713B, 713C, 713D, 713E, 714, 715, 715A, 716, 717, 718, 720, 721, 722, 723, 724, 725, 727, 728, 729, 734, 736, 737, 738, 1364; Regulations 6D.2.04, 6D.2.05 of the Corporations Regulations 2001
A financial product is a facility through which, or through the acquisition of which, a person makes a financial investment, manages financial risk, or makes non-cash payments (as per the prescribed definitions set out in sections 763B, 763C and 763D of the Act). For what specifically constitutes a financial product, refer to section 764A of the Act. For specific exclusions, refer to section 765A of the Act.
- Sections 763A, 763B, 763C, 763D, 763E, 764A, 765A, 766A, 1364; Regulations 7.1.04N, 7.1.05, 7.1.06, 7.1.06A, 7.1.06A, 7.1.07, 7.1.07A, 7.1.07B, 7.1.07C, 7.1.07D, 7.1.07E, 7.1.07F, 7.1.07G, 7.1.07H, 7.1.07I, 7.1.28A, 7.1.29, 7.1.29A, 7.1.30, 7.1.31, 7.1.32, 7.1.33, 7.1.33A, 7.1.33B, 7.1.33D, 7.1.33E, 7.1.33F, 7.1.33G, 7.1.33H of the Corporations Regulations 2001
A person may only operate a financial market in Australia if the person has an Australian market licence that authorises the person to operate the market in Australia (unless the market is exempt). For how to apply for such a licence, refer to section 795A of the Act. Where the person intends to operate a clearing and settlement facility, they will need to apply for an Australian CS facility licence pursuant to section 820A of the Act. Another type of licence available under the Act is an Australian derivative trade repository licence. For the definition of ‘financial market’, refer to section 767A of the Act.
- Sections 791A, 791C, 792A, 729F, 795A, 795B, 795C, 798A, 820A, 821A, 821E, 824A, 824B, 824C, 827A, 881B, 881D, 882A, 882B, 885C, 885D, 885E, 887A, 888A, 905A, 905B, 905C, 905P, 1364; Regulations 7.1.50, 7.2.06, 7.2.10, 7.2.11, 7.2.12, 7.2.13, 7.2.14, 7.2.15, 7.3.04, 7.3.10, 7.3.11, 7.3.12, 7.3.13, 7.3.14, 7.5.14, 7.5.15, 7.5.17, 7.5.18, 9.12.03 of the Corporations Regulations 2001
The operating rules (other than listing rules) of a licensed market have effect as a contract under seal: (a) between the licensee and each participant in the market; and (b) between a participant and each other participant; under which each of those persons agrees to observe the operating rules to the extent that they apply to the person and to engage in conduct that the person is required by the operating rules to engage in. For the legal effect of operating rules for a licenced CS facility, refer to section 822B of the Act.
- Sections 793B, 793C, 798H, 822B, 822C, 883A, 883B, 1364; Regulations 7.2A.04, 7.2A.05, 7.2A.06, 7.2A.07, 7.2A.08, 7.2A.09, 7.2A.10, 7.2A.11, 7.2A.12, 7.2A.13, 7.2A.14, 7.2A.15 of the Corporations Regulations 2001
A person must comply with provisions of the derivative transaction rules that apply to the person. The derivative transaction rules are made by ASIC and may impose any of the following kinds of requirements: (a) execution requirements; (b) reporting requirements; (c) clearing requirements; (d) requirements that are incidental or related to execution requirements, reporting requirements or clearing requirements.
- Sections 901A, 901E, 901F, 901G, 1364; Regulations 7.5A.30, 7.5A.101, 7.5A.102 of the Corporations Regulations 2001
A person who carries on a financial services business in this jurisdiction must hold an Australian financial services licence covering the provision of the financial services. Note exceptions apply – see subsection 911A(2) of the Act. A financial services licensee must do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly. For the process on how to apply for a licence, refer to section 913A of the Act. A financial services licensee must give a Financial Services Guide to a retail client prior to providing a financial service. For the main requirements of a financial services guide, refer to section 942B of the Act. A financial services licensee may in addition be required to give a statement of advice to a retail client where personal advice is given to that client. For the main requirements of a statement of advice, refer to section 947B of the Act. Where general advice is given to a retail client, the warning prescribed by section 949A of the Act may be a requirement. If it is reasonably apparent that information relating to the objectives, financial situation and needs of the client on which the advice is based is incomplete or inaccurate, the provider must warn the client that: the advice is, or may be, based on incomplete or inaccurate information relating to the client’s relevant personal circumstances; and because of that, the client should, before acting on the advice, consider the appropriateness of the advice, having regard to the client’s objectives, financial situation and needs – refer to section 961H of the Act. Where there is a failure by a licensee to comply with disclosure document/statement requirements, a person suffering loss or damage may be able to make a claim pursuant to section 953B or section 961M of the Act.
- Sections 911A, 911B, 911D, 912A, 912B, 912CA, 912F, 913A, 913B, 913C, 916A, 916B, 916C, 916D, 916F, 917B, 917C, 917D, 917E, 917F, 924A, 925A, 925B, 925E, 925F, 925G, 925H, 925I, 940C, 941A, 941B, 941C, 941D, 941E, 942A, 942B, 942C, 944A, 946A, 946AA, 946AB, 946C, 947A, 947B, 947D, 947E, 948A, 949A, 949B, 953B, 953C, 961B, 961E, 961G, 961M, 961N, 981B, 981C, 981H, 1011B, 1012A, 1012B, 1012C, 1018A, 1364; Regulations 7.1.04F, 7.6.01, 7.6.01AAA, 7.6.01A, 7.6.01B, 7.6.01C, 7.6.02, 7.6.02AAA, 7.6.02AA, 7.6.03, 7.6.03A, 7.6.03B, 7.6.04A, 7.7.01, 7.7.02, 7.7.03, 7.7.03A, 7.7.04, 7.7.04A, 7.7.04AA, 7.7.04AB, 7.7.05, 7.7.05A, 7.7.05B, 7.7.05C, 7.7.06, 7.7.06A, 7.7.06B, 7.7.07, 7.7.07A, 7.7.08, 7.7.08C, 7.7.09A, 7.7.09AA, 7.7.09B, 7.7.09BC, 7.7.10, 7.7.11, 7.7.11B, 7.7.13A, 7.7.13B, 7.7.20, 7.7.20A, 7.7A.1, 7.8.01, 7.8.02, 7.8.04, 7.8.05, 7.9.07CA, Schedule 8AC of the Corporations Regulations 2001
A financial services licensee must not, in or in relation to the provision of a financial service, engage in conduct that is, in all the circumstances, unconscionable. If a person suffers loss or damage because of such conduct, the person may recover the amount of the loss or damage by action against the licensee.
- Section 991A
A person must not (in most instances) offer financial products for issue or sale in the course of, or because of, an unsolicited meeting with another person.
- Sections 992A, 992AA, 1364; Regulations 7.822, 7.8.22B, 7.8.23, 7.8.24, 7.8.25 of the Corporations Regulations 2001
Where a financial product is a superannuation product, the issuer must, on request by a concerned person (defined to include a member), give the concerned person information that the concerned person reasonably requires for the purposes of understanding any benefit entitlements that the concerned person may have, has or used to have under the superannuation product; understanding the main features of the superannuation entity; and/or making an informed judgment about the management and financial condition of the superannuation entity. Note: Section 1017D of the Act requires the issue of periodic statements to the holder of a superannuation product.
- Sections 1017C, 1017D, 1017DA, 1364; Regulations 7.9.19, 7.9.19A, 7.9.19B, 7.9.20, 7.9.20AA, 7.9.20A, 7.9.20B, 7.9.21, 7.9.22, 7.9.23, 7.9.26, 7.9. 28, 7.9.30, 7.9.30B, 7.9.32, 7.9.33, 7.9.35, 7.9.36, 7.9.37, 7.9.38, 7.9.39, 7.9.41, 7.9.42, 7.9.44, 7.9.45, 7.9.46, 7.9.48, 7.9.48B, 7.9.48C, 7.9.48D, 7.9.49, 7.9.53, 7.9.54, 7.9.55, 7.9.57, 7.9.58, 7.9.59, 7.9.74B, 7.9.75, 7.9.75B, 7.9.75BA, 7.9.75C, 7.9.75D, 7.9.78, 7.9.88, 7.9.89, 7.9.92, 7.9.93, Schedule 10A of the Corporations Regulations 2001
A client has the right to return a financial product to the responsible person and to have the money they paid to acquire the product repaid during the cooling-off period set out in section 1019B of the Act.
- Sections 1019B, 1364; Regulations 7.9.64A, 7.9.65, 7.9.65A, 7.9.66, 7.9.67 of the Corporations Regulations 2001
A person must not, in the course of carrying on a financial services business, engage in dishonest conduct in relation to a financial product or financial service. For remedies available, refer to section 1041I of the Act.
- Sections 1041G, 1041I
A person must not, in this jurisdiction, engage in conduct, in relation to a financial product or a financial service, that is misleading or deceptive or is likely to mislead or deceive. For remedies available, refer to section 1041I of the Act.
- Sections 1041H, 1041I, 1041L, 1044B, 1364; Regulation 7.10.02 of the Corporations Regulations 2001
A share, other interest of a member in a company or interest of a person in a registered scheme: is personal property; is transferable or transmissible as provided by the company’s or scheme’s, constitution or the operating rules of a prescribed CS facility if they are applicable; and is capable of devolution by will or by operation of law.
- Section 1070A
A company must ensure that a certificate it issues specifying the shares held by a member of the company states: (a) the name of the company and the fact that it is registered under this Act; and (b) the class of the shares; and (c) the amount (if any) unpaid on the shares. A certificate so issued in compliance is generally evidence of the title of the member to the shares.
- Section 1070C
A company must only register a transfer of securities (shares, debentures, interests in a registered scheme) if a proper instrument of transfer has been delivered to the company. Pursuant to section 1071C of the Act, a document transferring securities need not state the occupation of the transferor or transferee and, if it is signed by a person, the signature need not be witnessed. An alternative process is registration at the request of the transferor pursuant to section 1071D of the Act. Note: The directors are not required to register a transfer of shares in the company unless: (a) the transfer and any share certificate have been lodged at the company’s registered office; and (b) any fee payable on registration of the transfer has been paid; and (c) the directors have been given any further information they reasonably require to establish the right of the person transferring the shares to make the transfer – refer to subsection 1072F(2) of the Act. The directors may refuse to register a transfer of shares in the company if the shares are not fully-paid; or (b) the company has a lien on the shares – see subsection 1072E(3) of the Act.
- Sections 1071A, 1071B, 1071C, 1071D, 1071E, 1071F, 1071G, 1071H, 1072A, 1072B, 1072D, 1072E, 1072F, 1072H; 1364; Regulation 7.11.22 of the Corporations Regulations 2001
A copy of or extract from any document lodged with ASIC, and certified by ASIC, is, in any proceeding, admissible in evidence as of equal validity with the original document.
- Sections 1274, 1274C, 1364; Regulation 9.1.01 of the Corporations Regulations 2001
A natural person may make an application to ASIC for registration as an auditor or liquidator. ASIC may accept the application as an auditor where satisfied the applicant has satisfied all the components of an auditing competency standard approved by ASIC or had such practical experience in auditing as is prescribed; and ASIC is satisfied that the applicant is capable of performing the duties of an auditor and is otherwise a fit and proper person to be registered as an auditor. Where ASIC grants an application by a person for registration as an auditor, ASIC must cause to be issued to the person a certificate by ASIC stating that the person has been registered as an auditor and specifying the day on which the application was granted. ASIC may accept the application as a liquidator if: the applicant holds a degree, diploma or certificate from a prescribed university or another prescribed institution in Australia and has passed examinations in such subjects, under whatever name, as the appropriate authority of the university or other institution certifies to ASIC to represent a course of study in accountancy of not less than 3 years duration and in commercial law (including company law) of not less than 2 years duration; or has other qualifications and experience that, in the opinion of ASIC, are equivalent to the qualifications; ASIC is satisfied as to the experience of the applicant in connection with externally-administered bodies corporate; and ASIC is satisfied that the applicant is capable of performing the duties of a liquidator and is otherwise a fit and proper person to be registered as a liquidator. Where the liquidator application is successful, ASIC must cause to be issued to the person a certificate stating that the person has been registered as a liquidator or as a liquidator of a specified body corporate.
- Sections 1279, 1280, 1282, 1283, 1284, 1285, 1286, 1287A, 1288, 1289, 1299A, 1299B, 1299C, 1299E, 1299G, 1364; Regulations 9.2.01, 9.2.02, 9.2.03, 9.2.08, 9.2A.01, 9.2A.03 of the Corporations Regulations 2001
A book kept by a body corporate under a requirement of this Act is admissible in evidence in any proceeding and is basic evidence of any matter stated or recorded in the book.
- Section 1305
Where a corporation is plaintiff in any action or other legal proceeding, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence, require sufficient security to be given for those costs and stay all proceedings until the security is given.
- Section 1335
The costs of any proceeding before a court under this Act are to be borne by such party to the proceeding as the court, in its discretion, directs.
- Section 1335
Jurisdiction is conferred on the Federal Court of Australia with respect to civil matters arising under the Corporations legislation. In addition, jurisdiction is also conferred on the Supreme Court (and lower courts) of each State and Territory with respect to civil matters arising under the Corporations legislation.
- Sections 1337B, 1337C, 1337E, 1337S, 1337T, 1337U
An annexure to a form (lodged with ASIC) must: (a) have an identifying mark; and (b) be endorsed with the words: ‘This is the annexure of (insert the number of pages) pages marked (insert an identifying mark) mentioned in the (insert a description of the form) signed by (insert ‘me’ or ‘us’) and dated (insert the date of signing)’; and (c) be signed by each person signing the form to which the document is annexed.
- Section 1364; Regulation 1.0.06 of the Corporations Regulations 2001
An affidavit or statement in writing must be sworn or made, on behalf of a corporation, by a director or a secretary of the corporation.
- Section 1364; Regulation 1.0.15 of the Corporations Regulations 2001
Reason for law
Australian Securities & Investment Commission (ASIC)
Search ASIC’s Registers
Enforceable Undertakings Register
ASIC Enforcement Outcomes
Financial Advisors Register
Forms [see also Schedules 1 and 2 of the Corporations Regulation 2001]
Codes of Practice
Market Integrity Rules
Small Business Hub
International Trade Statistics [World Trade Organization]
Export and Import Publications [Export Council of Australia]
Free Trade Agreement Portal [DFAT]
Free Trade Agreement Tool [ftatool.com.au]
ePing – Accessing Export Alerts
List of countries by tax rates [Wikipedia]
International Organization for Standardization
The Naked CEO
Sections 5A, 9 and 147 of the Act; section 3 of the Corporations (Fees) Act 2001; and section 3 of the Corporations (Review Fees) Act 2003 contain the term ‘Crown’. This term may be replaced with a modern alternative.
Subsection 173(4) of the Act contains a transcription error.
Sections 245C, 601BQ and Schedule 4 (ss18, 20) contain the term ‘par’. This term may not be understood by members of the public.
Sections 440H and 469 contain the phrase ‘lis pendens’. This phrase may not be understood by members of the public.
Sections 459P, 483, 500, 601CS, 1070C, 1071G, 1274, 1274B, 1305 and 1306 contain the phrase ‘prima facie’. This phrase may not be understood by members of the public.
Section 601CZA contains the phrase ‘choses in action’. This phrase may not be understood by members of the public.
Section 725F contains the phrase ‘quantum meruit’. This phrase may not be understood by members of the public.
Section 940B of the Act is unique as its heading is framed as a question. This heading format may be encouraged to aid understanding of sections by members of the public.
Section 1337D contains the phrases ‘writ of mandamus’ and ‘writ of prohibition’. These phrases may not be understood by members of the public.
Section 1346 contains the phrase ‘rules of law relating to perpetuities’. This phrase may not be understood by members of the public.
There is duplication of regulations 7.9.48A and 7.9.48B in the Corporations Regulation 2001.
The statutory demand template found in the regulations (Form 509H) could be published on the ASIC website for the benefit of the public.
Suggested further reading
- Australian Corporate Law – 5th Edition (2015)
- Commercial and Corporations Law – 2nd Edition (2015)
- Horsley’s Meetings: Procedure, Law and Practice – 7th Edition (2015)
- Business and Law in Australia – 2nd Edition (2015)
- Directors’ Powers and Duties – 2nd Edition (2015)
- Directors’ Duties: Principles and Application (2014)
- Company Law Perspectives – 2nd Edition (2014)
- Ford, Austin & Ramsay’s Principles of Corporations Law – 16th Edition (2014)
- Directors’ Duties: Principles and Application (2014)
- Corporations and Financial Markets Law – 6th Edition (2013)
- Understanding Company Law – 17th Edition (2013)
- Corporations Law – 4th Edition (2013)
- Corporate Law – 3rd Edition (2013)
- Business and Corporations Law – 2nd Edition (2013)
- Corporate Information and The Law (2013)
- Corporations Law: Text and Essential Cases – 4th Edition (2013)
- Deregistration and Reinstatment of Companies and Schemes (2013)
- Joske’s Law & Procedures at Meetings in Australia – 11th Edition (2012)
- Takeovers Law & Strategy – 4th Edition (2012)
- Director’s at Work: A Practical Guide for Boards (2012)
- Corporations Law: In Principle – 9th Edition (2012)
- Securities & Financial Services Law – 8th Edition (2012)
- Company Disclosure in Australia (2012)
- Corporations and Associations: Principles and Issues – 5th Edition (2011)
- Law of Investments – 3rd Edition (2011)
- Managed Investment Schemes (2011)
- Schemes of Arrangement (2010)
- Sale of Businesses in Australia – 2nd Edition (2009)
- Concise Corporations Law – 5th Edition (2006)
- Company Directors: Principles of Law and Corporate Governance (2005)
- The Law of Insider Trading in Australia (2005)
- Business Law – 12th Edition (2004)
- Experts’ Reports in Corporate Transactions (2003)
Australian Consumer Law
- Australian Commercial Law – 30th Edition (2014)
- The Construction and Performance of Commercial Contracts (2014)
- Competition Law in Australia – 6th Edition (2014)
- The Law of Misleading or Deceptive Conduct – 4th Edition (2014)
- Unfair Contract Terms in Australia (2011)
- Commercial Law: Commentary & Materials – 3rd Edition (2010)
- Australian Insolvency Law – 3rd Edition (2015)
- Insolvent Investments (2015)
- Insolvency Law: Commentary and Materials (2014)
- Voidable Transactions in Company Insolvency (2014)
- Keay’s Insolvency: Personal & Corporate Law – 8th Edition (2013)
- Statutory Demands and Winding up in Insolvency – 2nd Edition (2012)
- Company Administrators & Scheme Mangers (2011)
- Directors’ Duties During Insolvency – 2nd Edition (2006)
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