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Company Law Review Bill 1997
Schedule 2 Consequential amendment of the Corporations Law

Part 1 Registering a company (new Chapter 2A)

Basic features of a company (new Chapter 2B)

Members’ rights and remedies (new Chapter 2F)

1  Section 9 (definition of abbreviation)

Repeal the definition.

2  Section 9

Insert:

ACN (short for “Australian Company Number”) is the number given by the ASC to a company on registration (see sections 118 and 601BD).

3  Section 9

Insert:

ARBN (short for “Australian Registered Body Number”) is the number given by the ASC to a registrable body on registration under Part 5B.2.

4  Section 9 (definition of articles )

Repeal the definition.

5  Section 9 (definition of available )

Repeal the definition.

6  Section 9 (definition of company )

Omit “incorporated” (first and second occurring), substitute “registered”.

7  Section 9 (paragraph (a) of the definition of company )

Omit “220”.

8  Section 9 (after paragraph (c) of the definition of company )

Insert:

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

9  Section 9 (definition of company having a share capital )

Repeal the definition.

10  Section 9 (definition of company limited by guarantee )

Omit “by the memorandum”.

11  Section 9 (definition of company limited by shares )

Omit “by the memorandum”.

12  Section 9 (paragraph (a) of the definition of constitution )

Repeal the paragraph, substitute:

                     (a)  in the case of a company or a recognised company—the constitution referred to in section 136; or

13  Section 9 (paragraph (a) of the definition of contributory )

Repeal the paragraph, substitute:

                     (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

14  Section 9 (paragraph (c) of the definition of contributory )

Repeal the paragraph.

15  Section 9 (definition of Division 1 company )

Repeal the definition.

16  Section 9 (definition of Division 2 company )

Repeal the definition.

17  Section 9 (definition of Division 2 or 3 company )

Repeal the definition.

18  Section 9 (definition of Division 3 company )

Repeal the definition.

19  Section 9 (definition of Division 4 company )

Repeal the definition.

20  Section 9 (definition of eligible negotiable instrument )

Omit “ eligible ”.

21  Section 9 (definition of incorporate )

Repeal the definition.

22  Section 9 (definition of incorporated in Australia )

Repeal the definition, substitute:

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.

23  Section 9

Insert:

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).

24  Section 9 (definition of limited company )

Repeal the definition, substitute:

limited company means a company limited by shares or a company limited by guarantee but does not include a no liability company.

25  Section 9 (at the end of the definition of member )

Add:

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

26  Section 9 (definition of memorandum )

Repeal the definition.

27  Section 9 (definition of mining company )

Repeal the definition.

28  Section 9 (definition of no liability company )

Repeal the definition, substitute:

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).

29  Section 9 (definition of non-company )

Repeal the definition.

30  Section 9 (definition of open )

Repeal the definition.

31  Section 9 (definition of paid up )

Repeal the definition.

32  Section 9 (paragraph (c) of the definition of public company )

Repeal the paragraph, substitute:

                     (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.

33  Section 9 (definition of register )

Repeal the definition, substitute:

register means register under this Law.

34  Section 9 (definition of registration application )

Repeal the definition.

35  Section 9 (definition of registration day )

Repeal the definition.

36  Section 9 (definition of registration number )

Repeal the definition.

37  Section 9 (definition of reserve )

Repeal the definition.

38  Section 9 (definition of sign )

Repeal the definition.

39  Section 9

Insert:

standard opening hours means 10 am to 12 noon and 2 pm to 4 pm each business day.

40  Section 9 (definition of Table A )

Repeal the definition.

41  Section 9 (definition of Table A proprietary company )

Repeal the definition.

42  Section 9 (definition of Table B )

Repeal the definition.

43  Section 9 (definition of unlimited company )

Repeal the definition, substitute:

unlimited company means a company whose members have no limit placed on their liability.

44  Subsection 45A(1)

Repeal the subsection, substitute:

             (1)  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 lodgment of a prospectus under Part 7.12 (except in limited circumstances).

                   (see section 113).

45  Section 76

Repeal the section.

46  Subsection 88A(1)

Omit “body corporate”, substitute “body”.

47  Subsection 88A(2)

Omit “body corporate”, substitute “body”.

48  Section 95

Repeal the section.

49  Section 99A

Repeal the section.

50  Subsection 100(1)

Omit “requires a notice to be lodged of”, substitute “requires a notice to be lodged of, or information in an application to specify”.

51  Paragraph 100(1)(d)

Omit “notice” (twice occurring), substitute “notice or application”.

52  Subsection 100(2)

Omit “notice”, substitute “notice or application”.

53  Paragraph 103(2)(a)

Repeal the paragraph, substitute:

                     (a)  a contravention of section 115, 232A, 232B, 243H, 243ZE, 601CA, 601CD or of Chapter 8; or

54  Section 104

Omit “a provision of this Law”, substitute “a provision of this Law other than the replaceable rules”.

55  Section 109X

Repeal the section, substitute:

109X   Service of documents

             (1)  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 the ASC; 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 the ASC.

             (2)  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 the ASC under subsection 242(1) or (3) 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.

             (3)  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 .

             (4)  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.

             (5)  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.

             (6)  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.

             (7)  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”.

56  Subsection 216E(1)

Repeal the subsection, substitute:

             (1)  A register kept under this Chapter 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 the ASC.

57  Paragraph 216E(2)(a)

Repeal the paragraph, substitute:

                     (a)  established at a place that is neither the company’s registered office nor its principal place of business; or

58  Paragraph 216E(2)(b)

Omit “office”, substitute “place”.

59  Subsection 216E(2)

Omit “an office at”.

60  Paragraph 216J(1)(c)

Repeal the paragraph, substitute:

                     (c)  relevant to the holding of the interests recorded in the register or the exercise of the rights attaching to them; or

61  Section 222

Repeal the section.

62  Section 223

Repeal the section.

63  Paragraphs 224(1)(a) and (b)

Repeal the paragraphs.

64  At the end of subsection 224(1)

Add:

                ; or (i)  cannot manage the company because of their mental incapacity and is a person whose estate or property has had a personal representative or trustee appointed to administer it.

65  Subsection 224(2)

Repeal the subsection.

66  Subsection 224(7)

Repeal the subsection.

67  Subsection 224A(4)

Omit “articles of association”, substitute “constitution”.

68  After section 224A

Insert:

224B   Single director/shareholder proprietary companies

Section applies to single director/shareholder proprietary companies

             (1)  This section applies to a proprietary company while its only director is also its only shareholder.

Appointment of director

             (2)  The director may appoint another director by recording the appointment and signing the record.

Powers and duties of director

             (3)  The director 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.

Negotiable instruments

             (4)  The director 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.

Director’s remuneration

             (5)  The director 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.

224C   Company may appoint a director (replaceable rule—see section 135)

                   A company may appoint a person as a director by resolution passed in general meeting.

224D   Directors may appoint other directors (replaceable rule—see section 135)

Appointment by other directors

             (1)  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.

Proprietary company—confirmation by meeting within 2 months

             (2)  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.

Public company—confirmation by next AGM

             (3)  If a person is appointed under this section 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.

69  Subsection 225(5)

Omit “articles”, substitute “constitution”.

70  After section 226

Insert:

226A   Powers of directors (replaceable rule—see section 135)

             (1)  The business of a company is to be managed by or under the direction of the directors.

             (2)  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.

226B   Negotiable instruments (replaceable rule—see section 135)

             (1)  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.

             (2)  The directors may determine that a negotiable instrument may be signed, drawn, accepted, endorsed or otherwise executed in a different way.

226C   Managing director (replaceable rule—see section 135)

             (1)  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.

             (2)  A person ceases to be managing director if they cease to be a director.

             (3)  The directors may confer on a managing director any of the powers that the directors can exercise.

             (4)  The directors may revoke or vary:

                     (a)  an appointment; or

                     (b)  any of the powers conferred on the managing director.

226D   Delegation to committees (replaceable rule—see section 135)

             (1)  The directors may delegate any of their powers to a committee of directors.

             (2)  A committee must exercise the powers delegated to it in accordance with any directions of the directors. The effect of the committee exercising a power in this way is the same as if the directors exercised it.

Note:          The delegation must be recorded in the company’s minute book (see section 251A).

226E   Removal by members—proprietary companies (replaceable rule—see section 135)

                   A proprietary company:

                     (a)  may by resolution remove a director from office; and

                     (b)  may by resolution appoint another person as a director instead.

71  Subsection 227(1)

Omit “articles”, substitute “constitution”.

72  Subsection 227(12)

Omit “articles”, substitute “company’s constitution”.

73  After section 227

Insert:

227A   Director may resign by giving written notice to company (replaceable rule—see section 135)

                   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.

74  Paragraph 228(9)(a)

Omit “articles”, substitute “constitution”.

75  Paragraph 228(9)(a)

Omit “provide”, substitute “provides”.

76  Subsection 228(10)

Omit “articles”, substitute “constitution”.

77  Subsection 228(10)

Omit “provide”, substitute “provides”.

78  Subsection 228(12)

Omit “memorandum or articles”, substitute “constitution”.

79  Subsection 229(3)

Omit “this Part”, substitute “this Chapter”.

80  Subsection 229(8)

Omit “Part”, substitute “Chapter”.

81  Subsection 230(4)

Omit “Part”, substitute “Chapter”.

82  After subsection 231(1)

Insert:

Director interested in contract with proprietary company (replaceable rule—see section 135)

          (1A)  If a director of a proprietary company has an interest in a contract or proposed contract with the company (other than as a member) and the director discloses the nature and extent of the interest at a meeting of the directors:

                     (a)  the director may vote on whether the company enters into the contract; and

                     (b)  the contract may be entered into; and

                     (c)  the director may vote on matters involving the contract; and

                     (d)  if the disclosure is made before the contract is entered into:

                              (i)  the director may retain benefits under the contract even though the director has an interest in the contract; and

                             (ii)  the company cannot avoid the contract merely because of the existence of the interest.

83  Subsection 231(4)

Omit “articles”, substitute “constitution”.

84  Subsection 231(9)

Omit “articles”, substitute “constitution”.

85  After section 236

Insert:

236A   Remuneration of directors (replaceable rule—see section 135)

             (1)  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.

             (2)  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.

86  Subsection 238(1)

Omit “articles”(twice occurring), substitute “constitution”.

87  Subsection 238(2)

Omit “articles” (twice occurring), substitute “constitution”.

88  After subsection 240(4)

Insert:

Terms and conditions of office (replaceable rule—see section 135)

          (4A)  A secretary holds office on the terms and conditions (including as to remuneration) that the directors determine.

89  Subsection 240(5)

Omit “and accessible”.

90  Subsection 240(7)

Omit “memorandum or articles”, substitute “company’s constitution”.

91  Subsection 240(7A)

Omit “Subject to subsection (7B), subsection (7)”, substitute “Subsection (7)”.

92  Subsection 240(7B)

Repeal the subsection.

93  Subsection 241(1A)

Omit “memorandum, articles”, substitute “constitution”.

94  Section 242

Repeal the section, substitute:

242   Notice of name and address of directors and secretaries to ASC

New directors or secretaries

             (1)  A company must lodge with the ASC 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:          If a person becomes a director under subsection 120(1) there is no appointment and no notice is required under this subsection.

Personal details

             (2)  The personal details of a 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 242AA.

Changes in details

             (3)  The company must lodge with the ASC notice of any change in the personal details of a director or secretary within 14 days after the change. The notice must be in the prescribed form.

Notice required if person stops being a director or secretary

             (4)  If a person stops being a director or secretary of the company, the company must lodge with the ASC notice of the fact within 14 days. The notice must be in the prescribed form.

242AA   Address for officers

Address is normally residential address

             (1)  A person’s address for the purposes of a notice or application under subsection 143(2), 242(1) or 242(3) or section 117 or 601BC must be their usual residential address unless they are entitled to have an alternative address substituted for their usual residential address under subsection (2).

Entitlement to have alternative address

             (2)  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 the ASC 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.

             (3)  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 the ASC notice of the person’s usual residential address; and

                     (b)  lodge with the ASC 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.

             (4)  If a court gives a judgment for payment of a sum of money against a person who is taking advantage of subsection (2), the ASC may give details of the person’s usual residential address to an officer of the court for the purposes of enforcing the judgment debt.

95  Paragraph 260(5)(a)

Omit “, or a company limited both by shares and by guarantee”.

96  Paragraph 341(h)

Omit “a registration number distinct from the registration number”, substitute “an ARBN distinct from the ARBN or ACN”.

97  Paragraph 341(h)

Omit “under Part 2.2, this Part or a law corresponding to Part 2.2 or to this Part”, substitute “as a company or registered body under the Corporations Law of any jurisdiction”.

98  Paragraph 344(j)

Omit “a registration number distinct from the registration number”, substitute “an ARBN distinct from the ARBN or ACN”.

99  Paragraph 344(j)

Omit “under Part 2.2, this Part or a law corresponding to Part 2.2 or to this Part”, substitute “as a company or registered body under the Corporations Law of any jurisdiction”.

100  Section 358

Repeal the section.

101  Paragraph 359(1)(b)

Repeal the paragraph, substitute:

                     (b)  otherwise—each business day from at least 10 am to 12 noon and from at least 2 pm to 4 pm;

102  Paragraph 361(1)(a)

Repeal the paragraph.

103  Subsections 362(1A), (2), (3), (3A), (4), (4A), (5), (6), (7) and (8)

Repeal the subsections.

Note:       The heading to section 362 of the Corporations Law is replaced by the heading: “ Body’s name etc. must be displayed at office and place of business ”.

104  Subsection 411(10)

Omit “, notwithstanding subsection 171(8)”.

105  Subsection 411(11)

Omit “memorandum” (first occurring), substitute “constitution”.

106  Subsection 411(11)

Omit all the words after “been made”.

107  Subsection 418(4)

Repeal the subsection, substitute:

Note:          See section 1362CF for appointments made before the introduction of the Corporations Law.

108  Subsection 428(1)

Omit “eligible”.

109  Subsection 428(2)

Omit “eligible”.

110  Subsection 436A(1)

Omit “under its common seal”.

111  Subsection 442F(1)

Omit “164 and 166”, substitute “128 and 129”.

112  Paragraph 442F(1)(b)

Omit “subsection 164(3)”, substitute “section 129”.

113  Subsection 442F(2)

Omit “164 and 166” (twice occurring), substitute “128 and 129”.

114  Subsection 450E(1)

Omit “eligible”.

115  Subsection 450E(2)

Omit “eligible”.

116  Paragraph 461(d)

Repeal the paragraph, substitute:

                     (d)  the company has no members;

117  At the end of paragraphs 462(2)(a), (b), (c) and (d)

Add “or”.

118  After paragraph 462(2)(e)

Insert:

                      (f)  the Commission (in the circumstances set out in subsection (2A)); or

119  After subsection 462(2)

Insert:

          (2A)  The Commission may apply for an order to wind up a company under paragraph (2)(f) only if:

                     (a)  the company has no members; and

                     (b)  the Commission has given the company at least 1 month’s written notice of its intention to apply for the order.

120  Paragraph 477(2)(d)

Omit “the company’s common or official seal”, substitute “a seal of the company”.

121  At the end of section 477

Add:

             (7)  This section does not apply to calls on shares in a no liability company.

122  At the end of section 478

Add:

             (5)  Paragraph (1)(b) and subsections (1A), (1B), (3) and (4) do not apply to a no liability company.

123  After subsection 483(3)

Insert:

          (3A)  Subsection (3) does not apply to a no liability company.

124  Subsection 493(1)

Omit “articles”, substitute “constitution”.

125  Subsection 495(4)

Omit “articles”, substitute “company’s constitution”.

126  Section 501

Omit “articles”, substitute “company’s constitution”.

127  Section 501

Omit “provide”, substitute “provides”.

128  At the end of section 514

Add:

             (2)  This Division does not apply to the winding up of a no liability company.

129  Section 516

Omit “sections 518 and 519”, substitute “section 519”.

130  Section 517

Omit “sections 518 and 519”, substitute “section 519”.

131  Section 518

Repeal the section.

132  Section 519

Omit “, 517 and 518”, substitute “and 517”.

133  Section 519

Omit “under paragraph 167(1)(a)”.

134  Section 523

Omit all the words from and including “If the company” to and including “change of status is liable”, substitute “If an unlimited company changes to a limited company under section 164, a past member who was a member at the time of the change is liable”.

135  Section 524

Repeal the section, substitute:

524   Past member of former limited company

                   If a limited company changes to an unlimited company under section 164, a person who, at the time when the company applied for the change, was a past member and did not again become a member after that time need not contribute more than they would have been liable to contribute if the company had not changed type.

136  Section 530

Repeal the section.

137  Section 541

Omit “eligible”.

138  After subsection 544(1)

Insert:

          (1A)  If a liquidator has, or has control of, the money of a company that has no members, the liquidator must pay it to the ASC as soon as practicable for it to be dealt with under Part 9.7.

139  Subsection 544(3)

After “(1)” insert “or (1A)”.

140  Subsection 547(3)

Omit “articles”, substitute “company’s constitution”.

141  At the end of subsection 696(3)

Add “to the public”.

142  Subsection 1017A(1) (paragraph (d) of the definition of exempt recipient )

Repeal the paragraph.

143  Subsection 1047(4)

Omit “articles”, substitute “constitution”.

144  Paragraph 1051(1)(a)

Omit “articles”, substitute “company’s constitution”.

145  Subsection 1064(7)

Omit “under the common or official seal of the corporation”.

146  Paragraphs 1085(1)(b) and (c)

Omit “articles”, substitute “company’s constitution”.

147  Subsection 1087(1)

Repeal the subsection, substitute:

             (1)  A certificate issued after the commencement of Schedule 2 to the Company Law Review Act 1998 specifying shares held by a member of a company must state:

                     (a)  the name of the company and its jurisdiction of registration; and

                     (b)  the class of the shares; and

                     (c)  the nominal value of the shares and the extent to which the shares are paid up.

148  Section 1088

Repeal the section.

149  Subsection 1091(1)

Omit “articles”, substitute “constitution”.

150  Paragraph 1091(1A)(b)

Omit “incorporation”, substitute “registration”.

151  Subsection 1091(7)

Omit “articles”, substitute “constitution”.

152  Subsection 1110(4)

Omit “memorandum, articles”, substitute “constitution”.

153  Subsection 1111(3)

Omit “memorandum, articles”, substitute “constitution”.

154  At the end of subsection 1274(7)

Add:

             ; and (c)  a certificate by the Commission that, during a period specified in the certificate, a particular company was registered, or taken to be registered, under this Law is to be received as prima facie evidence that, during that period, that company was registered under this Law.

155  After subsection 1274(7)

Insert:

          (7A)  A certificate issued by the ASC stating that a company has been registered under the Corporations Law of any jurisdiction is conclusive evidence that:

                     (a)  all requirements of that Law for its registration have been complied with; and

                     (b)  the company was duly registered as a company under that Law on the date specified in the certificate.

156  At the end of subsections 1300(1) and (2)

Add “to the public”.

157  After subsection 1300(2)

Insert:

          (2A)  If a person asks a proprietary company in writing to inspect a particular book of the company that the person has a right to inspect, the company must make it available within 7 days, for inspection by the person at the place where it is required to be kept.

158  Section 1347

Repeal the section.

159  Schedule 1

Repeal the Schedule.

160  Schedule 3

Repeal the items relating to subsection 116(2), sections 170 and 216A, subsection 216C(3), sections 216E, 216F, 216G, 216J, 219, 260, 362 and 369, subsection 383C(8), section 408 and subsection 1308(3). Insert each of the following items in their appropriate place according to the order that the provision referred to in the item appears in the Corporations Law:

 

Subsection 113(1)

Penalty:       50 penalty units or imprisonment for 1 year, or both

Subsection 113(3)

Penalty:       5 penalty units.

Section 115

Penalty:       5 penalty units.

Subsection 117(5)

Penalty:       10 penalty units, or imprisonment for 3 months, or both.

Subsection 123(3)

Penalty:       10 penalty units, or imprisonment for 3 months, or both.

Subsection 136(5)

Penalty:       5 penalty units.

Section 139

Penalty:       5 penalty units.

Subsections 142(1) and (2)

Penalty:       5 penalty units.

Subsection 143(1)

Penalty:       5 penalty units.

Section 144

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Subsections 145(1) and (3)

Penalty:       5 penalty units.

Section 146

Penalty:       5 penalty units.

Subsections 148(2), (3) and (4)

Penalty: 10 penalty units or imprisonment for 3 months, or both.

Subsection 150(2)

Penalty:       5 penalty units.

Subsection 151(2)

Penalty:       5 penalty units.

Subsections 153(1) and (2)

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Section 156

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Subsection 157(2)

Penalty:       5 penalty units.

Subsection 158(2)

Penalty: 50 penalty units or imprisonment for 1 year, or both.

Subsection 162(3)

Penalty:       5 penalty units.

Subsection 163(5)

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Subsection 165(2)

Penalty:       50 penalty units or imprisonment for 1 year, or both.

Section 168

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Subsection 170(3)

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Section 172

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Section 173

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Section 174

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Section 177

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Subsections 242(1), (3) and (4)

Penalty:       5 penalty units.

Subsection 242AA(3)

Penalty:       5 penalty units.

Section 246AA

Penalty:       50 penalty units or imprisonment for 1 year, or both.

Subsection 246B(3)

Penalty:       5 penalty units.

Subsection 246D(6)

Penalty:       5 penalty units.

Subsections 246F(1) and (3)

Penalty:       5 penalty units.

Subsection 246G(1)

Penalty:       5 penalty units.

Section 247C

Penalty:       5 penalty units.

Subsection 601BC(5)

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Subsections 601BH(1) and (2)

Penalty:       5 penalty units.

Subsection 601BJ(3)

Penalty:       5 penalty units.

Subsection 601BK(1)

Penalty:       5 penalty units.

Subsection 601BP(1)

Penalty:       5 penalty units.

Section 601BR

Penalty:       5 penalty units.

Section 601CW

Penalty: 10 penalty units or imprisonment for 3 months, or both.

Section 601DD

Penalty:       5 penalty units.

Section 601DE

Penalty:       10 penalty units or imprisonment for 3 months, or both

Subsection 601DH(1)

Penalty:       5 penalty units.

Subsection 1300(2A)

Penalty: 10 penalty units or imprisonment for 3 months, or both.



 

Part 2 Meetings (new Chapter 2G)

161  Section 9

Insert:

AGM means an annual general meeting of a company that section 250N requires to be held.

162  Section 9 (definition of annual general meeting )

Repeal the definition.

163  Section 9

Insert:

ASX means Australian Stock Exchange Limited.

164  Section 9

Insert:

extraordinary resolution , in relation to a registered scheme, 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).

165  Section 9 (definition of resolution )

Repeal the definition, substitute:

resolution , in relation to creditors or contributories, means a resolution passed at a meeting of the creditors or contributories.

166  Section 9 (definition of special resolution )

Repeal the definition, substitute:

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.

167  Section 9 (definition of statutory meeting )

Repeal the definition.

168  Section 9 (definition of statutory report )

Repeal the definition.

169  After section 52

Insert:

52A   Signing

                   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.

170  Section 53

Omit “paragraph 461(e)”, substitute “paragraph 461(1)(e)”.

171  After section 225

Insert:

225A   Alternate directors (replaceable rule—see section 135)

             (1)  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.

             (2)  If the appointing director requests the company to give the alternate notice of directors’ meetings, the company must do so.

             (3)  When an alternate exercises the director’s powers, the exercise of the power is just as effective as if the powers were exercised by the director.

             (4)  The appointing director may terminate the alternate’s appointment at any time.

             (5)  An appointment or its termination must be in writing. A copy must be given to the company.

Note:          The ASC must be given notice of the appointment and termination of appointment of an alternate (see section 242).

172  After subsection 227(3)

Insert:

                   (3A)  Notice of the 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)).

173  Subsection 228(3A) (note)

Omit “annual general meetings (see subsection 245(2A))”, substitute “an AGM (see subsection 250N(1)”.

174  Subsection 228(7)

Omit “stating the age of that person, being a resolution”.

175  Paragraph 228(7)(a)

Repeal the paragraph, substitute:

                     (a)  stating that the person is a candidate for election who has attained the age of 72 years and stating the person’s age; and

176  At the end of subsection 228(7)

Add:

Note:          Short notice of the meeting cannot be given for this resolution (see subsection 249H(3)).

177  Subparagraph 228(8)(b)(i)

Repeal the subparagraph, substitute:

                      (i)  stating that the person is a candidate for election who has attained the age of 72 years and stating the person’s age; and

178  At the end of subsection 228(8)

Add:

Note:          Short notice of the meeting cannot be given for this resolution (see subsection 249H(3)).

179  After subsection 238(1)

Insert:

          (1A)  The company must lodge with the ASC a copy of the special resolution required under subsection (1) within 14 days after the resolution is passed.

180  Subsection 243ZB(4)

Omit “authorised under subsection 249(3)”, substitute “appointed under section 250D”.

181  After subsection 329(1)

Insert:

          (1A)  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(4)).

182  After subsection 439A(1)

Insert:

Note:          For body corporate representatives’ powers at a meeting of the company’s creditors, see section 250D.

183  Paragraph 461(b)

Repeal the paragraph.

184  At the end of section 461

Add:

             (2)  A company must lodge a copy of a special resolution referred to in paragraph (1)(a) with the ASC within 14 days after the resolution is passed.

185  Subsection 467(6)

Repeal the subsection.

186  After subsection 506(1A)

Insert:

          (1B)  The company must lodge a copy of a special resolution referred to in paragraph (1A)(b) with the ASC within 14 days after the resolution is passed.

187  At the end of section 507

Add:

           (11)  The company must lodge a copy of a special resolution referred to in subsection (2) or (5) with the ASC within 14 days after the resolution is passed.

188  After subsection 510(1)

Insert:

          (1A)  The company must lodge a copy of a special resolution referred to in paragraph (1)(a) with the ASC within 14 days after the resolution is passed.

189  Section 1038

Repeal the section.

190  Subparagraph 1322(1)(b)(i)

Omit “or at a joint meeting of creditors and members of a corporation”, substitute “, at a joint meeting of creditors and members of a corporation or at a meeting of members of a registered scheme”.

191  After subsection 1322(3)

Insert:

          (3A)  If a member does not have a reasonable opportunity to participate in a meeting of members, or part of a meeting of members, held at 2 or more venues, the meeting will only be invalid on that ground if:

                             (a)  the Court is of the opinion that:

                              (i)  a substantial injustice has been caused or may be caused; and

                             (ii)  the injustice cannot be remedied by any order of the Court; and

                             (b)  the Court declares the meeting or proceeding (or that part of it) invalid.

192  Schedule 3

Repeal the items relating to sections 245 and 258 and insert each of the following items in their appropriate place according to the order that the provision referred to in the item appears in the Corporations Law :

 

Subsections 249E(3) and (4)

Penalty:       5 penalty units.

Section 249K

Penalty:       5 penalty units.

Section 249Z

Penalty:       5 penalty units.

Subsection 250A(5)

Penalty:       5 penalty units.

Subsections 250N(1) and (2)

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Subsections 250P(3) and (4)

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Section 250S

Penalty:       5 penalty units.

Section 250T

Penalty:       5 penalty units.

Subsections 251A(1) to (5)

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Subsections 251B(1), (3) and (4)

Penalty:       5 penalty units.

Subsections 252C(3) and (4)

Penalty:       5 penalty units.

Section 252H

Penalty:       5 penalty units.

Section 252X

Penalty:       5 penalty units.

Subsection 252Y(5)

Penalty:       5 penalty units.

Subsections 253M(1), (2) and (3)

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Subsections 253N(1), (3) and (4)

Penalty:       5 penalty units.

Subsections 1423(1) and (2)

Penalty:       5 penalty units.



 

Part 3 Shares (new Chapter 2H)

Transactions affecting share capital (new Chapter 2J)

193  Section 9 (definition of approving holding company )

Repeal the definition.

194  Section 9

Insert:

domestic corporation means a corporation that is incorporated or formed in Australia or an external Territory.

195  Section 9

Insert:

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.

196  Section 9 (definition of employee share scheme

buy-back)

Repeal the definition, substitute:

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.

197  Section 9 (definition of equal access scheme )

Omit “206C”, substitute “257B”.

198  Section 9

Insert:

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

199  Section 9 (definition of marketable parcel )

Repeal the definition.

200  Section 9

Insert:

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.

201  Section 9 (definition of odd-lot buy-back )

Repeal the definition.

202  Section 9 (definition of on-market buy-back )

Repeal the definition, substitute:

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

203  Section 9 (definition of participating employee )

Repeal the definition.

204  Section 9

Insert:

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.

205  Section 9 (paragraph (a) of the definition of selective buy-back )

Omit “206C”, substitute “257B”.

206  Section 9 (paragraph (b) of the definition of selective buy-back )

Omit “an odd lot”, substitute “a minimum holding”.

207  Section 42A (note)

Omit “206I(3)”, substitute “257H(3)”.

208  Paragraph 216B(3)(f)

Repeal the paragraph, substitute:

                      (f)  the amount unpaid on the shares (if any).

209  Subsection 216B(3) (note 1)

Omit “213”, substitute “1091C”.

210  Subsection 216B(4)

Repeal the subsection, substitute:

             (4)  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.

211  Subsection 216B(5)

Omit “or stock”.

212  Subsection 216B(5) (note)

Omit “208”, substitute “1096A”.

213  Subsection 216B(5) (note)

Omit “208(9)”, substitute “1096A(9)”.

214  Subsection 216B(6)

Omit “208”, substitute “1096A”.

215  Paragraph 239(b)

Repeal the paragraph, substitute:

                     (b)  members who hold shares carrying at least 5% of the votes attached to voting shares in the company;

216  Paragraphs 262(1)(b) and (c)

Repeal the paragraphs, substitute:

                     (b)  a charge on uncalled share capital;

                     (c)  a charge on a call on shares made but not paid;

217  Subparagraph 411(4)(a)(ii)

Repeal the subparagraph, substitute:

                             (ii)  in the case of a compromise or arrangement between a body and its members or a class of members—a resolution in favour of the compromise or arrangement is:

                                        (A)  passed by a majority in number of the members, or members in that class, present and voting (either in person or by proxy); and

                                        (B)  if the body has a share capital—passed by 75% of the votes cast on the resolution; and

218  Subsection 414(2)

Omit “the holders of at least nine-tenths in nominal value of the shares included in that class of shares”, substitute “members holding shares in that class carrying at least 90% of the votes attached to shares in that class”.

219  Subsection 414(5)

Repeal the subsection, substitute:

             (5)  Despite subsections (3) and (4), if the number of votes attached to the excluded shares is more than 10% of the votes attached to the excluded shares and the shares (other than excluded shares) to be transferred under the scheme or contract, those subsections do not apply unless:

                     (a)  the transferee offers the same terms to all holders of the shares (other than excluded shares) to be transferred under the scheme or contract; and

                     (b)  the holders who approve the scheme or contract hold shares to which are attached at least 90% of the votes attached to the shares (other than excluded shares) to be transferred under the scheme or contract and are also at least 75% in number of the holders of those shares.

220  Subsection 414(9)

Omit “comprise or include nine-tenths in nominal value of the shares”, substitute “have attached to them at least 90% of the votes attached to the shares”.

221  Paragraph 420(2)(s)

Repeal the paragraph, substitute:

                      (s)  if the receiver was appointed under an instrument that created a charge on uncalled share capital of the corporation:

                              (i)  to make a call in the name of the corporation for the payment of money unpaid on the corporation’s shares; or

                             (ii)  on giving a proper indemnity to a liquidator of the corporation—to make a call in the liquidator’s name for the payment of money unpaid on the corporation’s shares;

222  Subsection 588G(1A)

Repeal the subsection, substitute:

          (1A)  For the purposes of this section, if a company takes action set out in column 2 of the following table, it incurs a debt at the time set out in column 3.

 

When debts are incurred

 

[operative table]

 

Action of company

When debt is incurred

1

paying a dividend

when the dividend is paid or, if the company has a constitution that provides for the declaration of dividends, when the dividend is declared

2

making a reduction of share capital to which Division 1 of Part 2J.1 applies (other than a reduction that consists only of the cancellation of a share or shares for no consideration)

when the reduction takes effect

3

buying back shares (even if the consideration is not a sum certain in money)

when the buy-back agreement is entered into

4

redeeming redeemable preference shares that are redeemable at its option

when the company exercises the option

5

issuing redeemable preference shares that are redeemable otherwise than at its option

when the shares are issued

6

financially assisting a person to acquire shares (or units of shares) in itself or a holding company

when the agreement to provide the assistance is entered into or, if there is no agreement, when the assistance is provided

223  Section 603 (paragraph (a) of the definition of prescribed occurrence )

Repeal the paragraph, substitute:

                     (a)  the company converting all or any of its shares into a larger or smaller number of shares (see section 254H);

224  Paragraph 636(1)(b)

Omit “(whether by way of capital or premium)”.

225  Paragraph 636(1)(b)

Omit “paid up”, substitute “unpaid”.

226  At the end of subsection 732(1)

Add:

                ; or (f)  a company reduces its share capital, or proposes to reduce its share capital, in a way that is unreasonable having regard to its effect on the control of that company or another company; or

                     (g)  a company acquires, or proposes to acquire, a relevant interest in at least 5% of its voting shares and the acquisition is unreasonable having regard to its effect on the control of that company or another company.

227  Subparagraph 740(5)(b)(iii)

Repeal the subparagraph, substitute:

                            (iii)  members who together hold shares carrying at least 10% of the votes attached to voting shares in the body corporate or in a related body corporate;

228  Subsection 954A(1) (subparagraph (b)(ii) of the definition of security benefit )

Omit “reduction of share capital”, substitute “reduction in share capital”.

229  Subsection 1024E(7)

Omit “If the securities are shares, their cancellation is not a reduction of share capital within the meaning of this Law.”.

230  Subsections 1035(3)

Repeal the subsection, substitute:

                     (3)  In working out for the purposes of subsection (1) whether the minimum subscription has been subscribed for an allotment of shares, ignore any amounts payable otherwise than in cash.

231  Subsection 1035(4)

Repeal the subsection

232  Subsection 1037(1)

Omit “allotment”, substitute “issue”.

Note:       The heading to section 1037 of the Corporations Law is altered by omitting “ Allotment ” and substituting “ Issue ”.

233  Subsection 1037(2)

Repeal the subsection, substitute:

                     (2)  An option referred to in subsection (1)—is exercisable by written notice given to the company within 1 month after the date of the issue.

234  After section 1091

Insert:

1091AA   Transmission of shares on death (replaceable rule—see section 135)

If shares not held jointly

             (1)  If a shareholder who does not own shares jointly dies, the company will recognise only the personal representative of the deceased shareholder as being entitled to the deceased shareholder’s interest in the shares.

             (2)  If the personal representative gives the directors the information they reasonably require to establish the representative’s entitlement to be registered as holder of the shares:

                     (a)  the personal representative may:

                              (i)  by giving a written and signed notice to the company, elect to be registered as the holder of the shares; or

                             (ii)  by giving a completed transfer form to the company, transfer the shares to another person; and

                     (b)  the personal representative is entitled, whether or not registered as the holder of the shares, to the same rights as the deceased shareholder.

             (3)  On receiving an election under subparagraph (2)(a)(i), the company must register the personal representative as the holder of the shares.

             (4)  A transfer under subparagraph (2)(a)(ii) is subject to the same rules (for example, about entitlement to transfer and registration of transfers) as apply to transfers generally.

If shares held jointly

             (5)  If a shareholder who owns shares jointly dies, the company will recognise only the survivor as being entitled to the deceased shareholder’s interest in the shares. The estate of the deceased shareholder is not released from any liability in respect of the shares.

1091AB   Transmission of shares on bankruptcy (replaceable rule—see section 135)

             (1)  If a person entitled to shares because of the bankruptcy of a shareholder gives the directors the information they reasonably require to establish the person’s entitlement to be registered as holder of the shares, the person may:

                     (a)  by giving a written and signed notice to the company, elect to be registered as the holder of the shares; or

                     (b)  by giving a completed transfer form to the company, transfer the shares to another person.

             (2)  On receiving an election under paragraph (1)(a), the company must register the person as the holder of the shares.

             (3)  A transfer under paragraph (1)(b) is subject to the same rules (for example, about entitlement to transfer and registration of transfers) as apply to transfers generally.

             (4)  This section has effect subject to the Bankruptcy Act 1966.

235  After section 1091A

Insert:

1091B   Transmission of shares on mental incapacity ( replaceable rule—see section 135 )

             (1)  If a person entitled to shares because of the mental incapacity of a shareholder gives the directors the information they reasonably require to establish the person’s entitlement to be registered as the holder of the shares:

                     (a)  the person may:

                              (i)  by giving a written and signed notice to the company, elect to be registered as the holder of the shares; or

                             (ii)  by giving a completed transfer form to the company, transfer the shares to another person; and

                     (b)  the person is entitled, whether or not registered as the holder of the shares, to the same rights as the shareholder.

             (2)  On receiving an election under subparagraph (1)(a)(i), the company must register the person as the holder of the shares.

             (3)  A transfer under subparagraph (1)(a)(ii) is subject to the same rules (for example, about entitlement to transfer and registration of transfers) as apply to transfers generally.

236  After section 1091C

Insert:

1091D   Registration of transfers ( replaceable rule—see section 135 )

             (1)  A person transferring shares remains the holder of the shares until the transfer is registered and the name of the person to whom they are being transferred is entered in the register of members in respect of the shares.

             (2)  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.

             (3)  The directors may refuse to register a transfer of shares in the company if:

                     (a)  the shares are not fully-paid; or

                     (b)  the company has a lien on the shares.

             (4)  The directors may suspend registration of transfers of shares in the company at the times and for the periods they determine. The periods of suspension must not exceed 30 days in any 1 calendar year.

1091E   Additional general discretion for directors of proprietary companies to refuse to register transfers ( replaceable rule—see section 135 )

                   The directors of a proprietary company may refuse to register a transfer of shares in the company for any reason.

237  Subsection 1308(1)

Repeal the subsection, substitute:

             (1)  A corporation must not advertise or publish:

                     (a)  a statement of the amount of its capital that is misleading; or

                     (b)  a statement in which the total of all amounts paid and unpaid on shares in the company is stated but the amount of paid up capital or the amount of any charge on uncalled capital is not stated.

238  Section 1317DA

Before “Section 588G”, insert:

 

Subsection 254L(2);

Subsection 256F(3);

Subsection 259F(2);

Subsection 260D(2);

239  Before subsection 1322(4)

Insert:

          (3B)  If voting rights are exercised in contravention of subsection 259D(3) (company controlling entity that holds shares in it), the meeting or the resolution on which the voting rights were exercised will only be invalid on that ground if:

                     (a)  the court is of the opinion that:

                              (i)  a substantial injustice has been caused or may be caused; and

                             (ii)  the injustice cannot be remedied by any order of the court; and

                     (b)  the court declares the meeting or resolution invalid.

240  Subsection 1324(1A)

Repeal the subsection, substitute:

          (1A)  For the purposes of subsection (1):

                     (a)  a contravention of this Law affects the interests of a creditor or member of a company if the insolvency of the company is an element of the contravention; and

                     (b)  a company’s contravention of:

                              (i)  paragraph 257A(1)(a) (share buy-back not to prejudice ability to pay creditors); or

                             (ii)  paragraph 260A(1)(a) (financial assistance for share acquisition not to prejudice company or shareholders or ability to pay creditors);

                            affects the interests of a creditor or member of the company.

This subsection does not limit subsection (1) in any way.

          (1B)  If the ground relied on in an application for an injunction is conduct or proposed conduct of a company or other person that it is alleged constitutes, or would constitute:

                     (a)  a contravention of section 257A or paragraph 260A(1)(a); or

                     (b)  a contravention of a provision of this Law involving the insolvency of the company because of:

                              (i)  the company making a reduction of its share capital to which Division 1 of Part 2J.1 applies; or

                             (ii)  the company buying back its shares; or

                            (iii)  the company giving financial assistance to which Part 2J.3 applies;

the Court must assume that the conduct constitutes, or would constitute, a contravention of that paragraph, section or provision unless the company or person proves otherwise.

241  Schedule 3

Repeal the items relating to sections 190, 195, 201, 203, 205, 206 and 208 and insert each of the following items in their appropriate place according to the order that the provision referred to in the item appears in the Corporations Law :

 

Subsection 254H(4)

Penalty:       5 penalty units.

Subsection 254Q(13)

Penalty:       5 penalty units.

Subsection 254N(2)

Penalty:       5 penalty units.

Section 254T

Penalty:       100 penalty units or imprisonment for 2 years, or both.

Subsections 254X(1) and (2)

Penalty:       5 penalty units.

Section 254Y

Penalty:       5 penalty units.

Subsection 256C(7)

Penalty:       100 penalty units or imprisonment for 2 years, or both.

Subsection 259B(6)

Penalty:       5 penalty units.

Subsection 259D(4)

Penalty:       5 penalty units.

Subsection 308(1)

Penalty:       50 penalty units or imprisonment for 1 year, or both.

Subsections 1096A(1), (3), (4), (5) and (6)

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Subsection 1431(6)

Penalty:       5 penalty units.

Section 1432

Penalty:       5 penalty units.



 

Part 4 Financial reports and audit (new Chapter 2M)

242  Section 9

Insert:

AASB means the Australian Accounting Standards Board.

243  Section 9 (definition of accounting period )

Repeal the definition.

244  Section 9 (definition of accounting records )

Repeal the definition.

245  Section 9 (definition of accounting standard )

Omit “except in section 288,”.

246  Section 9 (paragraph (a) of the definition of accounting standard )

Omit all the words from and including “section 32” to and including “jurisdiction”, substitute “section 334”.

247  Section 9 (definition of accounts )

Repeal the definition.

248  Section 9 (definition of administration )

Omit “, or an entity within the meaning of Parts 3.6 and 3.7”.

249  Section 9 (definition of administrator )

Omit “, or an entity within the meaning of Parts 3.6 and 3.7,”.

250  Section 9 (definition of administrator )

Omit “or entity”.

251  Section 9 (definition of applicable accounting standard)

Repeal the definition.

252  Section 9 (definition of audited or reviewed in accordance with this Law )

Repeal the definition.

253  Section 9 (paragraph (a) of the definition of Board )

Repeal the paragraph.

254  Section 9 (paragraph (c) of the definition of books )

Omit “accounts or accounting records”, substitute “financial reports or financial records”.

255  Section 9 (definition of chief entity )

Repeal the definition.

256  Section 9 (subparagraph (b)(ii) of the definition of commencement )

Omit “Parts 3.6 and 3.7”, substitute “Chapter 2M”.

257  Section 9 (definition of commodity )

Omit “, except in Part 4.4,”.

258  Section 9 (definition of consolidated accounts )

Repeal the definition.

259  Section 9

Insert:

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.

260  Section 9 (definition of control )

Repeal the definition, substitute:

control of an entity:

                     (a)  when used in Chapter 2E—has the meaning given by section 243E; and

                     (b)  when used in Chapter 2M—means control of the entity within the meaning of the accounting standards made for the purposes of paragraph 295(2)(d).

261  Section 9 (definition of deadline )

Repeal the definition.

262  Section 9 (definition of dormant )

Repeal the definition.

263  Section 9 (definition of economic entity )

Repeal the definition.

264  Section 9 (paragraph (b) of the definition of entity )

Repeal the paragraph.

265  Section 9 (definition of executive officer )

Repeal the definition, substitute:

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).

266  Section 9

Insert:

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.

267  Section 9

Insert:

financial statements means annual financial statements under section 295 or half-year statements under section 303.

268  Section 9 (definition of financial year )

Omit “70A”, substitute “323D”.

269  Section 9 (definition of half-year )

Omit “50A(5)”, substitute “323D(5)”.

270  Section 9 (definition of holding company )

Repeal the definition, substitute:

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

271  Section 9 (definition of parent entity )

Repeal the definition, substitute:

parent entity has the meaning given by subsection 243D(1).

272  Section 9 (definition of profit and loss account )

Repeal the definition.

273  Section 9 (definition of profit or loss )

Repeal the definition.

274  Section 9 (definition of reporting entity )

Repeal the definition.

275  Subsection 45A(2) (note)

Omit “section 283C”, substitute “subsection 292(2)”.

276  Subsection 45A(4)

Repeal the subsection, substitute:

When a company controls an entity

             (4)  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).

277  Section 50A

Repeal the section.

278  Sections 53AAA, 58C and 62

Repeal the sections.

279  Section 64A

Omit “Parts 3.2A, 3.6 and 3.7”, substitute “Chapter 2E”.

280  Section 70A

Repeal the section.

281  Paragraph 82A(1)(b) and subsection 82A(2)

Omit “within the meaning of Parts 3.6 and 3.7”.

282  Paragraph 83(2)(c)

Omit “subsection 317A(1)”, substitute “section 319”.

283  Section 111AO

Repeal the section, substitute:

111AO   Accounting requirements

                   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.

284  Paragraphs 111AR(1)(a), (b) and (c)

Repeal the paragraphs, substitute:

                     (a)  Chapter 2M as it applies to disclosing entities;

285  Section 111AX

Omit “313”, substitute “340, 341”.

286  Subsections 111AZA(1) and 111AZD(1)

Omit “, or an entity within the meaning of Part 3.6,”, substitute “or entity”.

287  Paragraph 243E(a)

Omit “statements”, substitute “reports”.

288  Subsection 324(3)

Repeal the subsection, substitute:

             (3)  For the purposes of paragraphs (1)(e) and (2)(f), disregard a debt owed by a natural person to a body corporate or entity if:

                     (a)  the body corporate or entity is:

                              (i)  an Australian bank; or

                             (ii)  a body corporate registered under the Life Insurance Act 1995 ; and

                     (b)  the debt arose because of a loan that the body corporate or entity made to the person in the ordinary course of its ordinary business; and

                     (c)  the person used the amount of the loan to pay the whole or part of the purchase price of premises that the person uses as their principal place of residence.

289  Subsection 324(12)

Omit “accounts”, substitute “financial reports”.

290  Subsection 324(13)

Omit “accounts and consolidated accounts”, substitute “financial reports”.

291  Section 325

Repeal the section, substitute:

325   Appointment of auditor by proprietary company

                   The directors of a proprietary company may appoint an auditor for the company if an auditor has not been appointed by the company in general meeting.

292  Before subsection 327(1)

Insert:

          (1A)  Only subsections (6) to (10) of this section apply to a proprietary company.

293  Paragraph 327(5)(a)

Omit “or” (last occurring).

294  Paragraph 327(5)(b)

Repeal the paragraph.

295  Paragraph 327(12)(b)

Repeal the paragraph.

296  Subsection 349(1)

After “up to the end of its last financial year,”, insert “a copy of its cash flow statement for its last financial year”.

297  Subsection 349(1)

Omit “account”, substitute “statement”.

298  Subsection 349(2)

Omit “account”, substitute “statement, cash flow statement”.

299  Subsection 349(3)

After “balance sheet,”, insert “cash flow statement,”.

300  Subsection 349(3)

Omit “account” (wherever occurring), substitute “statement”.

301  After paragraph 349(3)(b)

Insert:

                    (ba)  require the company to lodge a cash flow statement;

                    (bb)  require the company to lodge an audited cash flow statement;

302  After subsection 349(5)

Insert:

          (5A)  If a registered foreign company is not required by the law of the place of its incorporation or formation to prepare a cash flow statement, the company must prepare and lodge a cash flow statement, or, if the Commission so requires, an audited cash flow statement, within the period, in the form, containing the particulars and including the documents that the company would have been required to prepare if the company were a public company registered under this Law.

303  Subsection 349(6)

Omit “account” (wherever occurring), substitute “statement”.

304  Paragraph 421(1)(d)

Omit “accounting”, substitute “financial”.

Note:       The heading to section 421 of the Corporations Law is altered by omitting “ accounting ” and substituting “ financial ”.

305  Subsection 448C(2)

Repeal the subsection, substitute:

             (2)  For the purposes of paragraph (1)(a), disregard a debt owed by a natural person to a body corporate if:

                     (a)  the body corporate is:

                              (i)  an Australian bank; or

                             (ii)  a body corporate registered under the Life Insurance Act 1995 ; and

                     (b)  the debt arose because of a loan that the body corporate or entity made to the person in the ordinary course of its ordinary business; and

                     (c)  the person used the amount of the loan to pay the whole or part of the purchase price of premises that the person uses as their principal place of residence.

306  Subsection 532(3)

Repeal the subsection, substitute:

             (3)  For the purposes of paragraph (2)(a), disregard a debt owed by a natural person to a body corporate if:

                     (a)  the body corporate is:

                              (i)  an Australian bank; or

                             (ii)  a body corporate registered under the Life Insurance Act 1995 ; and

                     (b)  the debt arose because of a loan that the body corporate or entity made to the person in the ordinary course of its ordinary business; and

                     (c)  the person used the amount of the loan to pay the whole or part of the purchase price of premises that the person uses as their principal place of residence.

307  Paragraph 556(1)(dc)

Omit “Part 3.7”, substitute “Part 2M.4”.

308  Subsection 588E(4)

Repeal the subsection, substitute:

             (4)  Subject to subsections (5) to (7), if it is proved that the company:

                     (a)  has failed to keep financial records in relation to a period as required by subsection 286(1); or

                     (b)  has failed to retain financial records in relation to a period for the 7 years required by subsection 286(2);

the company is to be presumed to have been insolvent throughout the period.

309  Subsection 588E(5)

Omit “289(1)”, substitute “286(1)”.

310  Subsection 588E(6)

Omit “289(2)”, substitute “286(2)”.

311  Subsection 588E(6)

Omit “accounting” (wherever occurring), substitute “financial”.

312  Section 591

Repeal the section.

313  Subsection 702(10)

Omit “accounting”, substitute “financial”.

314  Section 750 (clause 12 of Part B)

Omit “the company in general meeting or sent to shareholders in accordance with section 315”, substitute “the AGM of the company under section 317 or sent to members under section 314”.

315  Section 750 (clause 11 of Part D)

Omit “the company in general meeting or sent to shareholders in accordance with section 315”, substitute “the AGM of the company under section 317 or sent to members under section 314”.

316  Paragraph 792(1)(a)

Omit “account”, substitute “statement”.

317  Heading to Part 7.5

Repeal the heading, substitute:

Part 7.5 Dealers’ financial statements and audit

318  Subsection 855(2)

Omit “Parts 3.6 and 3.7”, substitute “Chapter 2M”.

319  Paragraph 856(2)(a)

Omit “accounting”, substitute “financial”.

Note:       The heading to section 856 of the Corporations Law is altered by omitting “ accounting ” and substituting “ financial ”.

320  Subsections 856(3) and (4)

Omit “accounts”, substitute “statements”.

321  Subsection 856(12)

Omit “accounting”, substitute “financial”.

322  Paragraph 856(14)(a)

Omit “accounts”, substitute “statements”.

323  Subsection 857(1)

Omit “accounts”, substitute “financial statements”.

324  Subsection 857(4)

Repeal the subsection, substitute:

             (4)  For the purposes of paragraphs (2)(b) and (3)(c), disregard a debt owed by a natural person to a body corporate if:

                     (a)  the body corporate is:

                              (i)  an Australian bank; or

                             (ii)  a body corporate registered under the Life Insurance Act 1995 ; and

                     (b)  the debt arose because of a loan that the body corporate or entity made to the person in the ordinary course of its ordinary business; and

                     (c)  the person used the amount of the loan to pay the whole or part of the purchase price of premises that the person uses as their principal place of residence.

325  Subsection 860(2)

Omit “account”, substitute “statement”.

326  Paragraph 1022AA(4)(a)

Omit “statements”, substitute “report”.

327  Paragraph 1022AA(4)(b)

Omit “statements” (wherever occurring), substitute “report”.

328  Subparagraph 1022AA(1)(c)(ii)

Add at the end “; and”.

329  Subparagraph 1022AA(1)(c)(iii)

Repeal the subparagraph.

330  Paragraphs 1022AA(8)(a) and (b)

Repeal the paragraphs, substitute:

                     (a)  the provisions of Chapter 2M;

331  Paragraph 1054(3)(b)

Omit “accounting” (wherever occurring), substitute “financial”.

332  Subparagraph 1054(3)(c)(i)

Omit “accounts and balance sheet”, substitute “financial statements”.

333  Paragraph 1054(4)(b)

Omit “accounting” (wherever occurring), substitute “financial”.

334  Subsection 1058(5)

Omit “account” (wherever occurring), substitute “statement”.

335  Subsection 1058(6)

Omit “accounts”, (wherever occurring), substitute “financial statements”.

336  Subsections 1058(14) and (15)

Repeal the subsections, substitute:

           (14)  The provisions of Chapter 2M (other than subsections 300(4) to (13)) apply, with any necessary modifications, to every profit and loss statement and balance sheet made out and lodged under subsection (6) of this section by directors of the borrowing corporation as if:

                     (a)  the profit and loss statement and balance sheet were a profit and loss statement and balance sheet referred to in those provisions; and

                     (b)  references in those provisions to consolidated financial statements were references to the consolidated financial statements referred to in subsection (6) of this section.

           (15)  The provisions of Chapter 2M (other than subsections 300(4) to (13) and except so far as they relate to consolidated financial statements) apply, with any necessary modifications, to every profit and loss statement and balance sheet made out and lodged under subsection (5) of this section by the directors of a relevant guarantor body as if the profit and loss statement and balance sheet were a profit and loss statement and balance sheet referred to in those provisions.

337  Subsection 1058(16)

Omit “account” (wherever occurring), substitute “statement”.

338  Paragraph 1058(17)(b)

Omit “317A(2)”, substitute “318(1) or (4)”.

339  Subsection 1058(20)

Omit “accounts”, substitute “statements”.

340  Subsection 1058(20)

Omit “account”, substitute “statement”.

341  Subsection 1058(21)

Omit “account” (wherever occurring), substitute “statement”.

342  Subsection 1116(1)

Omit “accounting”, substitute “financial record”.

343  Paragraph 1116(2)(a)

Omit “an accounting”, substitute “a financial”.

344  Paragraph 1116(2)(b)

Repeal the paragraph, substitute:

                     (b)  in relation to a financial record, the 7 years after the transactions covered by the record are completed.

345  Subparagraphs 1126(2)(c)(viii) and 1132(2)(d)(viii)

Omit “accounting”, substitute “financial”.

346  Paragraph 1158(1)(a)

Omit “account”, substitute “statement”.

347  Subsections 1209(11) and (13)

Omit “accounting” (wherever occurring), substitute “financial”.

348  Heading to Part 8.5

Repeal the heading, substitute:

Part 8.5 Financial statements and audit

349  Subsection 1212(2)

Omit “Parts 3.6 and 3.7”, substitute “Chapter 2M”.

350  Subsection 1213(1)

Omit “accounting” (wherever occurring), substitute “financial”.

351  Subsection 1213(1)

Omit “accounts” (wherever occurring), substitute “statements”.

352  Subsection 1213(5)

Omit “accounting”, substitute “financial”.

353  Subsection 1213(8)

Omit “accounting”, substitute “financial records”.

354  Subsection 1213(8)

Omit “accounts”, substitute “statements”.

355  Subsection 1213(9)

Omit “accounting”, substitute “financial”.

356  Subsection 1215(1)

Omit “accounts”, substitute “financial statements”.

357  Subsection 1215(4)

Repeal the subsection, substitute:

             (4)  For the purposes of paragraphs (2)(e) and (3)(f), disregard a debt owed by a natural person to a body corporate if:

                     (a)  the body corporate is:

                              (i)  an Australian bank; or

                             (ii)  a body corporate registered under the Life Insurance Act 1995 ; and

                     (b)  the debt arose because of a loan that the body corporate or entity made to the person in the ordinary course of its ordinary business; and

                     (c)  the person used the amount of the loan to pay the whole or part of the purchase price of premises that the person uses as their principal place of residence.

358  Subsection 1218(2)

Omit “account”, substitute “statement”.

359  Subsections 1219(1) and (2)

Omit “accounting”, substitute “financial”.

360  Paragraph 1223(a)

Omit “accounts” (wherever occurring), substitute “financial statements”.

361  Subsection 1270(1)

Omit “any accounting”, substitute “a financial”.

362  Paragraph 1270(2)(a)

Omit “an accounting”, substitute “a financial”.

363  Paragraph 1270(2)(b)

Repeal the paragraph, substitute:

                     (b)  in relation to a financial record, the 7 years after the transactions covered by the record are completed.

364  Paragraph 1289(1)(b)

Omit “report of the directors under section 304”, substitute “directors’ report under section 298 or 306”.

365  Paragraph 1289(1)(c)

Repeal the paragraph, substitute:

                     (c)  notifying the ASC of a matter under section 311.

366  Paragraph 1308(7)(c)

Omit “315”, substitute “314”.

367  Paragraphs 1309(1)(b) and (2)(b)

Omit “Parts 3.6 and 3.7”, substitute “Chapter 2M”.

368  Section 1317DA

Omit “318”, substitute “344”.

369  Paragraph 1381(d)

Omit “within the meaning of Parts 3.6 and 3.7”.

370  Schedule 3

Repeal the items relating to sections 289, 315, 317, 333, 408 and 591 and insert each of the following items in their appropriate place according to the order that the provision referred to in the item appears in the Corporations Law:

 

Section 286

Penalty:       25 penalty units or imprisonment for 6 months, or both.

Section 287

Penalty:       25 penalty units or imprisonment for 6 months, or both.

Section 288

Penalty:       25 penalty units or imprisonment for 6 months, or both.

Subsection 289(2)

Penalty:       25 penalty units or imprisonment for 6 months, or both.

Section 294

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Section 311

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Section 312

Penalty:       25 penalty units or imprisonment for 6 months, or both.

Section 313

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Subsection 314(1)

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Section 316

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Section 317

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Subsections 318(1), (3) and (4)

Penalty:       25 penalty units or imprisonment for 6 months, or both.

Subsections 319(1) and (5)

Penalty:       25 penalty units or imprisonment for 6 months, or both.

Section 320

Penalty:       25 penalty units or imprisonment for 6 months, or both.

Section 321

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Section 322

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Section 323

Penalty:       25 penalty units or imprisonment for 6 months, or both.

Section 323B

Penalty:       25 penalty units or imprisonment for 6 months, or both.

Subsection 323D(3)

Penalty:       10 penalty units or imprisonment for 3 months, or both.

Subsection 1436(2)

Penalty:       5 penalty units.

 



 

Part 5 Annual returns and ASC lodgments (new Chapter 2N)

371  Section 9 (definition of annual return )

Repeal the section, substitute:

annual return :

                     (a)  of a company—means the return that subsection 345(1) requires the company to lodge with the ASC; 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 the ASC.

372  Paragraph 83(2)(b)

Omit “335”, substitute “345”.

373  Section 102

Add at the end:

Note:          For electronic lodgment of documents with the ASC, see section 352.

374  Section 1071

Repeal the section.

375  Section 1353

Repeal the section.

376  Section 1355

Repeal the section, substitute:

1355  Doing act without payment of fee

If a fee is payable under section 1351 for a matter involving the doing of an act by the Minister or ASIC, the Minister or ASIC may refuse to do that act until:

                     (a)  the fee is paid; or

                     (b)  if a deposit on account of the fee is required under section 1357—the deposit is paid.

377  Schedule 3

Insert each of the following items in their appropriate place according to the order that the provision referred to in the item appears in the Corporations Law :

 

Subsections 345(1), (2) and (3)

Penalty:       5 penalty units.

Subsection 346(1)

Penalty:       5 penalty units.



 

Part 6 Deregistration of companies (new Chapter 5A)

378  Section 9

Insert:

ASC database means so much of the national companies database kept by the ASC as consists of:

                     (a)  some or all of a register kept by the ASC under this Law; or

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

but does not include the ASC’s document imaging system.

379  Section 9 (definition of body corporate )

After “dissolved”, insert “or deregistered”.

380  Section 9

Insert:

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.

381  Section 9 (definition of outstanding property )

After “dissolved” (wherever occurring), insert “or deregistered”.

382  Section 9 (subparagraph (a)(iii) of the definition of relevant body )

After “dissolved”, insert “or deregistered”.

383  Subsections 342(13), 350(2) and 350(14)

After “dissolved”, insert “or deregistered”.

384  Paragraph 413(1)(d)

Omit “the dissolution”, substitute “the deregistration by the ASC”.

385  Paragraph 480(d)

Omit “the company be dissolved”, substitute “the ASC deregister the company”.

Note:       The heading to section 480 is altered by omitting “ dissolution ” and substituting “ deregistration ”.

386  Subsection 481(5)

Omit “the company be dissolved”, substitute “the ASC deregister the company”.

Note:       The heading to section 481 is altered by omitting “ dissolution ” and substituting “ deregistration ”.

387  Subsection 481(6)

Repeal the subsection.

388  Subsection 493(1)

Omit “dissolved”, substitute “deregistered”.

389  Section 504

Omit “dissolution”, substitute “deregistration”.

390  Subsection 507(5)

Omit “dissolved”, substitute “deregistered”.

391  Subsections 509(5) and (6)

Repeal the subsections, substitute:

ASC must deregister at the end of 3 month period

             (5)  The ASC must deregister the company at the end of the 3 month period after the return was lodged.

ASC must deregister on a day specified by the Court

             (6)  On application by the liquidator or any other interested party, the Court may make an order that the ASC deregister the company on a specified day. The Court must make the order before the end of the 3 month period after the return was lodged.

Note:       The heading to section 509 is altered by omitting “ dissolution ” and substituting “ deregistration ”.

392  Subsections 542(2) and (3)

Omit “dissolution”, substitute “deregistration”.

393  Division 8 of Part 5.6

Repeal the Division.

394  Subsection 582(3)

After “dissolved”, insert “, deregistered”.

395  Subparagraph 583(c)(i)

After “dissolved”, insert “or deregistered”.

396  Paragraph 586(1)(b)

After “dissolved”, insert “or deregistered”.

397  Paragraph 586(1)(b)

After “dissolution”, insert “or deregistration”.

398  Subsection 588(1)

After “dissolution”, insert “or deregistration”.

399  Subsections 588(4) and (5)

Repeal the subsections, substitute:

             (4)  Section 601AE applies to property that vests in the ASC under this section as if the property were vested in the ASC under subsection 601AD(2).

400  Section 588C

After “dissolution” (wherever occurring), insert “or deregistration”.

401  Subsection 589(3)

Repeal the subsection, substitute:

             (3)  For the purposes of this Part, a company is taken to have ceased to carry on business only if:

                     (a)  the ASC has published in the Gazette a notice of the proposed deregistration of the company under subsection 601AA(4) or 601AB(3); and

                     (b)  if the notice was published under subsection 601AA(4) or under subsection 601AB(3) because of a decision under subsection 601AB(1)—2 months have passed since the notice was published and the ASC has not been informed that the company is carrying on business.

402  Subsection 589(5) (paragraph (f) of the definition of

relevant day
)

Repeal the paragraph, substitute:

                      (f)  in relation to a company that has ceased to carry on business—a notice was first published in relation to the company under subsection 601AA(4) or 601AB(3);

403  Paragraphs 744(9)(b) and (c)

Repeal the paragraphs, substitute:

             ; and (b)  section 601AE (other than paragraph 601AE(2)(a)) applies in relation to the share or interest as if:

                              (i)  the share or interest were vested in the ASC under subsection 601AD(2); and

                             (ii)  a sale, disposal or dealing with the share or interest under paragraph (a) of this subsection were a disposal or dealing under paragraph 601AE(2)(a).

404  Subparagraph 1062(2)(b)(ii)

After “dissolution”, insert “or deregistration”.

405  Paragraph 1274(10)(b)

Repeal the paragraph, substitute:

                     (b)  in relation to a body corporate that has been dissolved or deregistered for 15 years or more—any document lodged or registered; or

406  Subsection 1274B(1) (definition of national database )

Repeal the definition.

407  Paragraph 1282(9)(c)

Repeal the paragraph, substitute:

                     (c)  the body corporate is dissolved or deregistered.

408  Paragraphs 1317C(d) and (e)

Omit “Division 8 of Part 5.6”, substitute “Chapter 5A”.

409  Schedule 3

Insert the following item in its appropriate place according to the order that the provision referred to in the item appears in the Corporations Law:

 

Subsection 601AD(5)

Penalty:       5 penalty units.



 

Schedule 3 Amendment of the Corporations Law to relocate provisions and make other structural changes

   

1  Subsection 6(4)

Omit “9.11”, substitute “11.2”.

2  Paragraph 8(5)(c)

Repeal the paragraph, substitute:

                     (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 243L(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

                             (x)  Division 2 of Part 7.3; or

                            (xi)  section 1039; or

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

                           (xiii)  Division 5 of Part 7.12; or

                          (xiv)  Division 2 of Part 8.3; or

                           (xv)  Part 9.10 or 11.1.

3  Section 9 (definition of Australian register )

Omit “351”, substitute “601CM”.

4  Section 9 (definition of child entity )

Omit “Part 3.2A”, substitute “Chapter 2E”.

5  Section 9 (paragraph (b) of the definition of company )

Omit “Part 3.5”, substitute “Chapter 2K”.

6  Section 9 (paragraph (b) of the definition of company )

Omit “Part 4.1”, substitute “Part 5B.2”.

7  Section 9 (paragraph (a) of the definition of entity )

Omit “Part 3.2A”, substitute “Chapter 2E”.

8  Section 9 (definition of exempt foreign company )

Omit “349(8)”, substitute “601CK(8)”.

9  Section 9 (definition of exempt foreign company )

Omit “Division 2 of Part 4.1”, substitute “Division 2 of Part 5B.2”.

10  Section 9 (definition of financial benefit )

Omit “Part 3.2A”, substitute “Chapter 2E”.

11  Section 9 (definition of local agent )

Omit “346(5)”, substitute “601CG(5)”.

12  Section 9 (paragraph (b) of the definition of Part 5.1 body )

Omit “4.1”, substitute “5B.2”.

13  Section 9 (subparagraph (a)(i) of the definition of Part 5.7 body )

Omit “Part 4.1”, substitute “Part 5B.2”.

14  Section 9 (paragraph (b) of the definition of public company )

Omit “Part 3.2A”, substitute “Chapter 2E”.

15  Section 9 (paragraph (a) of the definition of registered Australian body )

Omit “Division 1 of Part 4.1”, substitute “Division 1 of Part 5B.2”.

16  Section 9 (paragraph (b) of the definition of registered Australian body )

Omit “Division 1 of Part 4.1”, substitute “Division 1 of Part 5B.2”.

17  Section 9 (paragraph (a) of the definition of registered body )

Omit “, subsection 358(2) or section 363 or 364”, substitute “or section 601CX or 601CY”.

18  Section 9 (paragraph (b) of the definition of registered body )

Omit “Part 4.1”, substitute “Part 5B.2”.

19  Section 9 (paragraph (a) of the definition of registered foreign company )

Omit “363”, substitute “601CX”.

20  Section 9 (paragraph (a) of the definition of registered foreign company )

Omit “Part 4.1”, substitute “Part 5B.2”.

21  Section 9 (paragraph (b) of the definition of registered foreign company )

Omit “Part 4.1”, substitute “Part 5B.2”.

22  Section 9 (definition of registered office )

Omit “217 or 359”, substitute “142 or 601CT”.

23  Section 9 (definition of related party )

Omit “Part 3.2A”, substitute “Chapter 2E”.

24  Section 9 (definition of sibling entity )

Omit “Part 3.2A”, substitute “Chapter 2E”.

25  Section 53

Omit “260”, substitute “246AA”.

26  Paragraph 83(2)(a)

Omit “section 217”, substitute “subsection 142(1), 145(1) or 145(2)”.

27  Subsection 102A(3)

Omit “341 or 344, subsection 383C(1) or section”, substitute “601CB, 601CE,”.

28  Paragraph 111AH(1)(a)

Omit “216B, 216C, 216D”, substitute “169, 170, 171”.

29  Section 208

Move to Division 2 of Part 7.13 immediately after section 1096 and renumber as section 1096A.

30  Section 213

Move to immediately after section 1091A and renumber as section 1091C.

31  Part 2.5 (heading)

Repeal the heading, substitute:

Chapter 2C Registers

32  Sections 216A to 216K

Renumber as sections 168 to 178.

The following table sets out how the renumbering affects individual section numbers:

 

Old

216A

216B

216C

216D

216E

216F

216G

216H

216I

New

168

169

170

171

172

173

174

175

176

Old

216J

216K

 

 

 

 

 

 

 

New

177

178

 

 

 

 

 

 

 

 

33  Paragraph 216A(1)(a)

Omit “216B”, substitute “169”.

34  Paragraph 216A(1)(b)

Omit “216C”, substitute “170”.

35  Paragraph 216A(1)(c)

Omit “216D”, substitute “171”.

36  Subsection 216A(2)

Omit “Part”, substitute “Chapter”.

37  Subsection 216D(1) (note)

Omit “216A(2)”, substitute “168(2)”.

38  Subsection 216F(1)

Omit “Part”, substitute “Chapter”.

39  Subsection 216F(2)

Omit “Part”, substitute “Chapter”.

40  Subsection 216F(4)

Omit “216C(3)”, substitute “170(3)”.

41  Section 216G

Omit “Part” (wherever occurring), substitute “Chapter”.

42  Subsection 216H(1)

Omit “Part”, substitute “Chapter”.

43  Section 216I

Omit “Part” (twice occurring), substitute “Chapter”.

44  Paragraph 216J(1)(a)

Omit “Part”, substitute “Chapter”.

45  Paragraph 216K(2)(a)

Omit “216B”, substitute “169”.

46  Chapter 3 (heading)

Repeal the heading.

47  Part 3.2 (heading)

Repeal the heading, substitute:

Chapter 2D Officers

48  Part 3.2A (heading)

Repeal the heading, substitute:

Chapter 2E Financial benefits to related parties

49  Division 1 of Part 3.2A (heading)

Repeal the heading, substitute:

Part 2E.1 Object and outline of Part

50  Section 243A

Omit “Part”, substitute “Chapter”.

51  Subsection 243B(1)

Omit “Division 2”, substitute “Part 2E.2”.

52  Subsection 243B(1)

Omit “Part”, substitute “Chapter”.

53  Subsection 243B(2)

Omit “Division 3”, substitute “Part 2E.3”.

54  Subsection 243B(2)

Omit “Part”, substitute “Chapter”.

55  Subsection 243B(3)

Omit “Division 4”, substitute “Part 2E.4”.

56  Subsection 243B(3)

Omit “Part”, substitute “Chapter”.

57  Subsection 243B(4)

Omit “Division 5”, substitute “Part 2E.5”.

58  Subsection 243B(5)

Omit “Division 6”, substitute “Part 2E.6”.

59  Subsection 243B(5)

Omit “Part”, substitute “Chapter”.

60  Division 2 of Part 3.2A (heading)

Repeal the heading, substitute:

Part 2E.2 The meaning of expressions

61  Division 3 of Part 3.2A (heading)

Repeal the heading, substitute:

Part 2E.3 The prohibitions

62  Subsection 243H(1)

Omit “Division 4 or 5”, substitute “Part 2E.4 or 2E.5”.

63  Subsection 243H(2)

Omit “Division 4 or 5”, substitute “Part 2E.4 or 2E.5”.

64  Division 4 of Part 3.2A (heading)

Repeal the heading, substitute:

Part 2E.4 General exceptions

65  Subsection 243L(2)

Omit “this Division”, substitute “this Part”.

66  Subsection 243L(2)

Omit “Division 5”, substitute “Part 2E.5”.

67  Division 5 of Part 3.2A (heading)

Repeal the heading, substitute:

Part 2E.5 Financial benefits approved by general meeting of public company

68  Subdivision A of Division 5 of Part 3.2A (heading)

Repeal the heading, substitute:

Division 1 Exceptions from the prohibitions

69  Paragraph 243Q(c)

Omit “Subdivision B”, substitute “Division 2”.

70  Paragraph 243R(1)(c)

Omit “Subdivision B”, substitute “Division 2”.

71  Subsection 243R(2)

Omit “Division”, substitute “Part”.

72  Section 243S

Omit “Division”, substitute “Part”.

73  Subsection 243T(1)

Omit “Division”, substitute “Part”.

74  Subsection 243T(2)

Omit “this Division” (wherever occurring), substitute “this Part”.

75  Section 243T (example)

Omit “Division 4”, substitute “Part 2E.4”.

76  Subdivision B of Division 5 of Part 3.2A (heading)

Repeal the heading, substitute:

Division 2 Conditions to be satisfied

77  Subsection 243ZD(1)

Omit “Subdivision”, substitute “Division”.

78  Division 6 of Part 3.2A (heading)

Repeal the heading, substitute:

Part 2E.6 Enforcement

79  Subsection 243ZF(1)

Omit “Division 5”, substitute “Part 2E.5”.

Note:       The heading to section 243ZF of the Corporations Law is altered by omitting “ Division 5 ” and substituting “ Part 2E.5 ”.

80  Section 243ZH

Omit “Division 5”, substitute “Part 2E.5”.

81  Paragraph 243ZI(2)(a)

Omit “Part”, substitute “Chapter”.

Note:       The heading to section 243ZI of the Corporations Law is altered by omitting “ Part ” and substituting “ Chapter ”.

82  Subsection 243ZI(3)

Omit “Part”, substitute “Chapter”.

83  Subsection 243ZI(4)

Omit “Part” (twice occurring), substitute “Chapter”.

84  Part 3.4 (heading)

Repeal the heading.

85  Section 260

Move to Part 2F.1 and renumber as section 246AA.

86  Part 3.5 (heading)

Repeal the heading, substitute:

Chapter 2K Charges

87  Division 1 of Part 3.5 (heading)

Repeal the heading, substitute:

Part 2K.1 Preliminary

88  Subsection 261(1)

Omit “In this Part”, substitute “In this Chapter”.

89  Subsection 261(1) (definition of registrable charge )

Omit “Part”, substitute “Chapter”.

90  Subsection 261(2)

Omit “Part”, substitute “Chapter”.

91  Subsection 261(4)

Omit “Part”, substitute “Chapter”.

92  Division 2 of Part 3.5 (heading)

Repeal the heading, substitute:

Part 2K.2 Registration

93  Subsection 262(1)

Omit “Part”, substitute “Chapter”.

94  Subsection 262(2)

Omit “Part”, substitute “Chapter”.

95  Subsection 262(8)

Omit “Part”, substitute “Chapter”.

96  Subsection 262(9)

Omit “Part”, substitute “Chapter”.

97  Subsection 262(10)

Omit “Part”, substitute “Chapter”.

98  Subsection 262(11)

Omit “Division”, substitute “Part”.

99  Subsection 263(3)

Omit “Division 3 of Part 2.2”, substitute “Part 5B.1”.

100  Subsection 263(3)

Omit “Part 4.1”, substitute “Part 5B.2”.

101  Subsection 263(3)

Omit “this Division if the body were a Division 3 company, or a body”, substitute “this Part if the body were already registered under Part 5B.1, or Part 5B.2”.

102  Subsection 265(11)

Omit “Division”, substitute “Part”.

103  Subsection 265(12)

Omit “Division”, substitute “Part”.

104  Subsection 265(13)

Omit “Division”, substitute “Part”.

105  Paragraph 266(1)(e)

Omit “Division 3 of Part 2.2”, substitute “Part 5B.1”.

106  Paragraph 266(1)(e)

Omit “Part 4.1”, substitute “Part 5B.2”.

107  Paragraph 266(2)(b)

Omit “Division 3 of Part 2.2”, substitute “Part 5B.1”.

108  Paragraph 266(2)(b)

Omit “Part 4.1”, substitute “Part 5B.2”.

109  Subsection 266(4)

Omit “Division”, substitute “Part”.

110  Subsection 266(5)

Omit “Division”, substitute “Part”.

111  Subsection 269(1)

Omit “Division”, substitute “Part”.

112  Subsection 270(4)

Omit “Division”, substitute “Part”.

113  Subsection 271(1)

Omit “Division” (twice occurring), substitute “Part”.

114  Subsection 272(1)

Omit “Division”, substitute “Part”.

115  Subsection 272(3)

Omit “Division” (twice occurring), substitute “Part”.

116  Subsection 272(4)

Omit “Division 2 of Part 3.5 of that Law”, substitute “Part 2K.2 of that Law”.

117  Subsection 273(1)

Omit “Division”, substitute “Part”.

118  Paragraph 273(2)(b)

Omit “Division”, substitute “Part”.

119  Paragraph 273(2)(c)

Omit “Division”, substitute “Part”.

120  Paragraph 273(3)(b)

Omit “Division”, substitute “Part”.

121  Paragraph 273(3)(c)

Omit “Division”, substitute “Part”.

122  Subsection 273(4)

Omit “Part”, substitute “Chapter”.

123  Subsection 273(4)

Omit “Division”, substitute “Part”.

124  Subsection 275(1)

Omit “under Division 2 of Part 2.2”, substitute “according to section 1362CB”.

Note:       The heading to section 275 of the Corporations Law is altered by omitting “ Division 2 company ” and substituting “ company existing before 1 January 1991 ”.

125  Subsection 275(2)

Omit “the company’s registration day, this Part”, substitute “1 January 1991, this Chapter”.

126  Paragraph 275(2)(c)

Omit “Part”, substitute “Chapter”.

127  Paragraph 275(2)(d)

Omit “Part”, substitute “Chapter”.

128  Subsection 275(4)

Omit “the company’s registration day”, substitute “1 January 1991”.

129  Subsection 275(4)

Omit “Division”, substitute “Part”.

130  Subsection 275(5)

Omit “At the commencement of the company’s registration day”, substitute “At the beginning of 1 January 1991”.

131  Subsection 275A(1)

Repeal the subsection, substitute:

                     (1)  This section applies if a registrable body is taken to have been registered according to section 1362CJ.

Note:       The heading to section 275A of the Corporations Law is altered by omitting “ 365B ” and substituting “ 1362CJ ”.

132  Subsection 275A(2)

Omit “This Part”, substitute “This Chapter”.

133  Paragraph 275A(2)(c)

Omit “Part”, substitute “Chapter”.

134  Paragraph 275A(2)(d)

Omit “Part”, substitute “Chapter”.

135  Subsection 275A(4)

Omit “Division”, substitute “Part”.

136  Section 276

Omit “Where, immediately before a Division 3 company’s registration day”, substitute “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”.

Note:       The heading to section 276 of the Corporations Law is altered by omitting “ Division 3 company ” and substituting “ body corporate registered as a company ”.

137  Section 276

Omit “this Division”, (twice occurring), substitute “this Part”.

138  Section 276AA

Omit “Where, immediately before a Division 4 company’s registration day:”, substitute “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:”.

139  Paragraph 276AA(b)

Omit “Division 2 of Part 3.5 of that Law and was not also registered under this Division”, substitute “Part 2K.2 of that Law and was not also registered under this Part”.

140  Section 276AA

Omit “the charge under Division 2 of Part 3.5”, substitute “the charge under Part 2K.2”.

Note:       The heading to section 276AA of the Corporations Law is altered by omitting “ Division 4 company ” and substituting “ company transferring jurisdiction ”.

141  Section 276A

Omit “Part 3.5”, substitute “Chapter 2K”.

142  Section 276A

Omit “purposes of that Part”, substitute “purposes of that Chapter”.

143  Paragraph 276A(a)

Omit “Part”, substitute “Chapter”.

144  Paragraph 276A(b)

Omit “Division 2 of Part 4.1”, substitute “Division 2 of Part 5B.2”.

145  Division 3 of Part 3.5 (heading)

Repeal the heading, substitute:

Part 2K.3 Order of priority

146  Subsection 278(1)

Omit “this Division”, substitute “this Part”.

147  Subsection 278(1)

Omit “Division 2” (wherever occurring), substitute “Part 2K.2”.

148  Subsection 278(2)

Omit “Division”, substitute “Part”.

149  Subsection 278(3)

Omit “Division”, substitute “Part”.

150  Subsection 282(1)

Omit “Division”, substitute “Part”.

151  Subsection 282(2)

Omit “Division”, substitute “Part”.

152  Subsection 282(3)

Omit “Division”, substitute “Part”.

153  Paragraph 282(4)(c)

Omit “Division”, substitute “Part”.

154  Paragraph 282(4)(d)

Omit “Division”, substitute “Part”.

155  Part 3.7 (heading)

Repeal the heading.

156  Division 1 of Part 3.7 (heading)

Repeal the heading, substitute:

Part 2M.4 Auditor

157  Chapter 4 (heading)

Repeal the heading.

158  Part 4.1

(1)        Move to after Part 5B.1.

(2)        Renumber the sections of the Part as sections 601CA-601CY.

The following table shows how the renumbering affects individual section numbers:

 

Old

340

341

342

343

344

345

346

New

601CA

601CB

601CC

601CD

601CE

601CF

601CG

Old

347

348

349

350

351

353

354

New

601CH

601CJ

601CK

601CL

601CM

601CN

601CP

Old

355

356

357

359

360

361

362

New

601CQ

601CR

601CS

601CT

601CU

601CV

601CW

Old

363

364

 

 

 

 

 

New

601CX

601CY

 

 

 

 

 

(3)        Repeal the Part heading, substitute:

Part 5B.2 Registrable bodies

159  Paragraph 341(c)

Omit “242(3)”, substitute “242(2)”.

160  Paragraph 341(d)

Omit “Part 3.5”, substitute “Chapter 2K”.

161  Paragraph 341(f)

Omit “359”, substitute “601CT”.

162  Paragraph 344(e)

Omit “Part 3.5”, substitute “Chapter 2K”.

163  Paragraph 344(g)

Omit “359”, substitute “601CT”.

164  Subsection 345(2)

Omit “346”, substitute “601CG”.

165  Paragraph 346(5)(a)

Omit “347”, substitute “601CH”.

166  Subsection 353(1)

Omit “351”, substitute “601CM”.

Note:       The heading to section 353 of the Corporations Law is altered by omitting “ 351 ” and substituting “ 601CM ”.

167  Paragraph 354(a)

Omit “351”, substitute “601CM”.

Note:       The heading to section 354 of the Corporations Law is altered by omitting “ 351 ” and substituting “ 601CM ”.

168  Paragraph 354(c)

Omit “351”, substitute “601CM”.

169  Paragraph 355(b)

Omit “351”, substitute “601CM”.

170  Section 355

Omit “351, 353 and 354”, substitute “601CM, 601CN and 601CP”.

171  Section 356

Omit “Subsection 216B(2) and sections 216F, 216G and 216J”, substitute “Subsection 169(2) and sections 173, 174 and 177”.

172  Section 356

Omit “351”, substitute “601CM”.

173  Section 357

Omit “351”, substitute “601CM”.

174  Subsection 360(1)

Omit “subsection 358(3)”, substitute “section 601DH or 601DJ”.

175  Subparagraph 363(1)(b)(i)

Omit “346(1)”, substitute “601CG(1)”.

176  Subparagraph 363(1)(b)(ii)

Omit “subsection 361(1)”, substitute “subsection 601CV(1)”.

177  Paragraph 363(2)(a)

Omit “341(e) or 344(g)”, substitute “601CB(e) or 601CE(g)”.

178  Paragraph 363(2)(b)

Omit “359(3)”, substitute “601CT(3)”.

179  Paragraph 363(2)(c)

Omit “359(3)”, substitute “601CT(3)”.

180  Subsection 363(2)

Omit “notice under subsection 359(3)”, substitute “notice under subsection 601CT(3)”.

181  Section 417

Omit “9.11”, substitute “11.2”.

182  Section 459B

Omit “260”, substitute “246AA”.

Note:       The heading to section 459B of the Corporations Law is altered by omitting “ 260 ” and substituting “ 246AA ”.

183  Paragraph 459C(1)(a)

Omit “260”, substitute “246AA”.

184  Section 467B

Omit “260”, substitute “246AA”.

185  Section 513A

Omit “260”, substitute “246AA”.

186  Paragraph 513D(a)

Omit “260”, substitute “246AA”.

187  Subsection 582(1)

Omit “342 and 350”, substitute “601CC and 601CL”.

Note 1:    The heading to section 600B is replaced by the heading “ Review by Court of resolution of creditors passed on casting vote of person presiding at meeting ”.

Note 2:    The heading to section 600C is replaced by the heading “ Court’s powers where proposed resolution of creditors lost as casting vote of person presiding at meeting ”.

188  Subsection 766D (note)

Omit “216B”, substitute “169”.

189  Paragraph 1056(1)(c)

Omit “Part 3.5”, substitute “Chapter 2K”.

190  Subsection 1070(2)

Omit “The provisions of Part 2.5 (other than sections 216E and 216K)”, substitute “The provisions of Chapter 2C (other than sections 172 and 178)”.

191  Subsection 1083(2) (definition of prescribed provision )

Omit “216A(1)(c)”, substitute “168(1)(c)”.

192  Paragraph 1085(3)(a)

Omit “216B”, substitute “169”.

193  Paragraph 1085(3)(b)

Omit “216K”, substitute “178”.

194  Subparagraph 1274(2)(a)(iaa)

Omit “242(6)”, substitute “242AA(3)”.

195  After subsection 1311(1)

Insert:

          (1A)  Paragraphs (1)(a), (b) and (c) only apply to a provision in the following list if a penalty, pecuniary or otherwise, is set out in Schedule 3 immediately under a heading referring to that provision, or to a provision or provisions in which that provision is included:

                     (a)  Chapters 2A, 2B and 2C

                     (b)  Parts 2F.2 and 2F.3

                     (c)  Chapters 2G, 2H, 2J, 2M (other than Part 2M.4), 2N and 5A

                     (d)  Parts 5B.1 and 5B.3

                     (e)  Chapter 10

                      (f)  Part 11.1.

196  Subsection 1311(3A)

Omit “9.11”, substitute “11.2”.

197  Paragraphs 1317C(d) and (e)

Omit “342 or 350” (wherever occurring), substitute “601CC or 601CL”.

198  Heading to Part 9.11

Repeal the heading, substitute:

Part 11.2 Commencement and application of certain changes to this Law

199  Section 1362A

Renumber as section 1362D.



 

Schedule 4 Consequential amendment of other legislation

   

Australian Securities Commission Act 1989

1  Subsection 5(1) (definition of affairs )

Omit “260”, substitute “246AA”.

2  Subsection 5(1) (paragraph (b) of the definition of books )

Omit “accounts or accounting records”, substitute “financial reports or financial records”.

3  Paragraph 81(a)

Omit “paragraph 461(h)”, substitute “paragraph 461(1)(h)”.

4  Section 86

Omit “subparagraph 1(a)(ii) or subsection (3)”, substitute “subsection (2) or paragraph (3)(b)”.

5  Subsection 226(5) (definition of national scheme law )

Repeal the definition.

Corporations Act 1989

6  Paragraph 22(q)

Omit “accounts”, substitute “statements”.

7  Part 6

Repeal.

8  Subsection 68(1)

Omit “161”, substitute “124”.

9  Subsection 68(2)

Omit “162”, substitute “125”.

Foreign Acquisitions and Takeovers Act 1975

10  Subsection 5(1) (definition of constituent document )

Omit “memorandum and articles of association”, substitute “constitution”.

Insurance Act 1973

11  Paragraph 22(3)(a)

Omit “, memorandum of association”.

12  Paragraph 22(3)(b)

Omit “articles of association”, substitute “constitution”.

Life Insurance Act 1995

13  Paragraph 60(1)(a)

Omit “articles of association”, substitute “constitution”.

14  Paragraph 60(1)(c)

Omit “articles of association”, substitute “constitution”.

15  Paragraph 60(1)(d)

Omit “articles of association of the company require”, substitute “constitution of the company requires”.

16  Paragraph 60(2)(a)

Omit “articles of association”, substitute “constitution”.

17  Paragraph 60(2)(c)

Omit “articles of association”, substitute “constitution”.

18  Paragraph 60(2)(d)

Omit “articles of association of the company require”, substitute “constitution of the company requires”.

19  Subsection 84(4)

Omit “articles of association”, substitute “constitution”.

20  Paragraph 176(3)(b)

Omit “articles of association of the company”, substitute “constitution”.

21  Paragraph 195(b)

Omit “articles of association”, substitute “constitution”.

22  Subsection 200(4)

Omit “articles of association of the company”, substitute “company’s constitution”.

23  Subparagraph 242(2)(a)(ii)

Omit “articles of association”, substitute “constitution”.

24  Schedule (definition of articles of association )

Repeal the definition.

25  Schedule

Insert:

constitution , in relation to a company, includes:

                     (a)  the documents under which the company is constituted; and

                     (b)  any other document governing activities or conduct of the company or its members.

Pooled Development Funds Act 1992

26  Subsection 4(1) (definition of PDF articles requirements )

Repeal the definition, substitute:

PDF constitution requirements has the meaning given by subsection (3).

27  Subsection 4(1) (paragraph (b) of the definition of relevant officer )

Repeal the paragraph.

28  Subsection 4(3)

Omit “articles of association satisfy the PDF articles requirements if, and only if, they”, substitute “constitution satisfies the PDF constitution requirements if, and only if, it”.

29  Paragraphs 4(3)(a), (b) and (c)

Omit “prohibit” (wherever occurring), substitute “prohibits”.

30  Paragraph 4(3)(c)

Omit “issue; and”, substitute “issue.”

31  Paragraphs 4(3)(d) and (e)

Repeal the paragraphs.

32  Subsection 11(4)

Omit “memorandum and articles of association”, substitute “constitution”.

33  Paragraph 14(1)(h)

Repeal the paragraph, substitute:

                     (h)  the applicant’s constitution satisfies the PDF constitution requirements; and

34  Paragraph 18(b)

Repeal the paragraph, substitute:

                     (b)  a condition that the PDF’s constitution:

                              (i)  satisfies the PDF constitution requirements; and

                             (ii)  be complied with in so far as it prohibits as mentioned in subsection 4(3);

35  Paragraph 41(1)(g)

Repeal the paragraph, substitute:

                     (g)  the PDF’s issued share capital and paid-up share capital;

36  Paragraph 42(2)(j)

Repeal the paragraph, substitute:

                      (j)  a change in the PDF’s issued or paid-up share capital;

37  Paragraph 42(2)(l)

Repeal the paragraph, substitute:

                      (l)  a change in the PDF’s constitution so that it no longer satisfied the PDF constitution requirement.

38  Paragraphs 47(1)(b) and (c)

Repeal the paragraphs, substitute:

                     (b)  the Board is no longer satisfied that the PDF’s constitution satisfies the PDF constitution requirements; or

                     (c)  the Board is satisfied that a provision of the PDF’s constitution that prohibits as mentioned in subsection 4(3) has been contravened; or

Service and Execution of Process Act 1992

39  Subsection 3(1) (definition of company )

Repeal the definition, substitute:

company means a company incorporated, or taken to be incorporated, under the Corporations Law.

40  Subsection 3(1) (definition of registered body )

Omit “363”, substitute “601CX”.

41  Subsection 9(2)

Omit “each of 2 directors of the company who reside in Australia”, substitute “a director of the company who resides in Australia”.

42  Subsection 9(3)

Omit “the last address of the office of the liquidator notice of which has been lodged under the Corporations Law”, substitute “the address of the liquidator’s office in the most recent notice of that address lodged under the Corporations Law”.

43  After subsection 9(4)

Insert:

          (4A)  If an administrator of a company has been appointed, a process, order or document may be served on the company by leaving it at, or by sending it by post to, the address of the administrator in the most recent notice of that address lodged under the Corporations Law.

44  Subsection 9(9)

Omit “Sections 220 and 363”, substitute “Subsections 109X(1) and (2) and section 601CX”.

45  Paragraph 9(10)(a)

Omit “in the way provided in subsection 220(2)”, substitute “according to Part 2B.5”.

46  Paragraph 9(10)(b)

Omit “in the way provided in subsection 363(2)”, substitute “according to subsection 601CX(2)”.

47  Subsection 9(11) (definition of registered foreign company )

Omit “363”, substitute “601CX”.

48  Paragraph 10(3)(a)

Omit “body corporate’s principal office or principal place of business”, substitute “head office, a registered office or the principal place of business of the body corporate”.

49  Paragraph 10(3)(b)

Omit “principal” (twice occurring).



 

Schedule 5 Amendments in relation to nominal value and share capital reductions

   

Corporations Law

1  Paragraph 117(2)(k)

Repeal the paragraph, substitute:

                     (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

2  Subsection 120(2)

Omit “The shares have the nominal value specified for them in the application.”.

3  Table in section 141

Omit item 41.

4  Subsection 162(4)

Repeal the subsection, substitute:

             (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 an externally-administered body corporate.

5  Paragraphs 163(3)(a), (b) and (c)

Repeal the paragraphs, substitute:

                     (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

6  After subsection 169(4)

Add:

             (5)  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.

7  Section 254AA

Repeal the section.

8  At the end of subsection 254A(1)

Add:

Note 3:       On the issue of a bonus share there need not be any increase in the company’s share capital.

9  At the end of subsection 254B(1)

Add:

Note 4:       The company cannot issue par value shares (see section 254C) or bearer shares (see section 254F).

10  Sections 254CA, 254CB and 254CC

Repeal the sections, substitute:

254C   No par value shares

                   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).

11  Section 254H

Repeal the section, substitute:

254H   Resolution to convert shares into larger or smaller number

             (1)  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.

             (2)  The conversion takes effect on:

                     (a)  the day the resolution is passed; or

                     (b)  a later date specified in the resolution.

             (3)  Any amount unpaid on shares being converted is to be divided equally among the replacement shares.

             (4)  The company must lodge a copy of the resolution with the ASC within 1 month after it is passed.

12  Section 254K

Repeal the section, substitute:

254K   Other requirements about redemption

                   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.

13  Section 254S

Repeal the section, substitute:

254S   Capitalisation of profits

                   A company may capitalise profits. The capitalisation need not be accompanied by the issue of shares.

14  Section 254T

Repeal the section, substitute:

254T   Dividends to be paid out of profits

                   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.

15  Paragraphs 254X(1)(c) and (d)

Repeal the paragraphs, substitute:

                     (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

16  Paragraph 254Y(a)

Omit “, and nominal value,”.

17  After the heading to Part 2J.1 and before Division 1 of that Part

Insert:

256A   Purpose

                   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.

18  Sections 256A to 256F (inclusive)

Repeal the sections, substitute:

256B   Company may make reduction not otherwise authorised

             (1)  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.

             (2)  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 .

             (3)  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.

256C   Shareholder approval

Ordinary resolution required for equal reduction

             (1)  If the reduction is an equal reduction, it must be approved by a resolution passed at a general meeting of the company.

Special shareholder approval for selective reduction

             (2)  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.

             (3)  The company must lodge with the ASC 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.

Information to accompany the notice of meeting

             (4)  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.

Documents to be lodged with the ASC

             (5)  Before the notice of the meeting is sent to shareholders, the company must lodge with the ASC 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.

256D   Consequences of failing to comply with section 256B

             (1)  The company must not make the reduction unless it complies with subsection 256B(1).

             (2)  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.

             (3)  Any person who is involved in a company’s contravention of subsection (1) contravenes this subsection.

Note:          Subsection (3) is a civil penalty provision (see section 1317DA).

256E   Signposts to other relevant provisions

                   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

section 1317HA

liability of directors on insolvency

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

section 733

ASC intervention (application to the Panel)

Under this section the ASC may apply to the Corporations and Securities Panel for a declaration if it appears to the ASC that unacceptable circumstances have, or may have, occurred in relation to a reduction in share capital. If the Panel makes a declaration it may exercise a range of powers under section 734.

4

sections

1001A-1001D

continuous disclosure provisions

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 members of a public company, or diminish or endanger its resources, 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 246B-246G

variation of class rights

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.

19  Section 257AA

Repeal the section.

20  Section 257A

Omit “(other than redeemable preference shares)”.

21  Items 6 and 7 in table in section 257J

Omit “256F”, substitute “256D”.

22  Sections 258E and 258F

Repeal the sections, substitute:

258E   Other share cancellations

                   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; or

                     (c)  the cancellation of a share under subsection 667(3) or 1024E(7);

is authorised by this section.

258F   Reductions because of lost capital

                   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.

23  Item 6 in the table in section 348

Repeal the item, substitute:

6

issued shares

The classes into which the shares are divided and for each class of share issued:

• the number of shares in the class

• the total amount paid up for the class

• the total amount unpaid for the class.

24  Paragraph 601BC(8)(c)

Repeal the paragraph.

25  After section 601BP

Insert:

601BQ   References in pre-registration contracts and other documents to par value in existing contracts and documents

             (1)  This section applies in relation to a company registered under this Part for the purpose of interpreting and applying after registration:

                     (a)  a contract entered into before the registration; or

                     (b)  a trust deed or other document executed before the registration.

             (2)  A reference to the par value of a share is taken to be a reference to the par value of the share immediately before the registration, or the par value that the share would have had if it had been issued then.

             (3)  A reference to a right to a return of capital on a share is taken to be a reference to a right to a return of capital of a value equal to the amount paid before the registration in respect of the share’s par value, or the par value that the share would have had if it had been issued then.

             (4)  A reference to the aggregate par value of the company’s issued share capital is taken to be a reference to that aggregate as it existed immediately before the registration.

26  Subsection 1087(1)

Repeal the subsection, substitute:

             (1)  A certificate issued after the commencement of Schedule 5 to the Company Law Review Act 1998 specifying shares held by a member of a company must state:

                     (a)  the name of the company and its jurisdiction of registration; and

                     (b)  the class of the shares; and

                     (c)  the unpaid on the shares.

27  Section 1317DA

Omit “Subsection 256F(3)”, substitute “Subsection 256D(3)”.

28  After paragraph 1324(1A)(b)

Insert:

             ; and (c)  a company’s contravention of paragraph 256B(1)(a) (fair and reasonable test for share capital reduction) affects the interests of a member of the company.

29  Before subparagraph 1324(1A)(b)(i)

Insert:

                            (ia)  para graph 256B(1)(b) (share capital reduction not to prejudice ability to pay creditors); or

30  Paragraph 1324(1B)(a)

After “contravention of”, insert “paragraph 256B(1)(a) or (b),”.

31  After Division 10 of Part 11.2

Insert:

Division 11 Changes resulting from Schedule 5 to the Company Law Review Act 1998

1443   Meaning of commencement , new Law and old Law

                   In this Division:

commencement means the commencement of Schedule 5 to the Company Law Review Act 1998 .

new Law means this Law as in force after commencement.

old Law means this Law as in force immediately before commencement.

1444   Share capital—application of new no par value rule to shares issued before commencement

                   Section 254C of the new Law applies to shares issued before commencement as well as shares issued after commencement.

1445   Share capital—references to amount paid on shares issued before commencement

                   For the purposes of the operation of this Law after commencement in relation to a share issued before commencement:

                     (a)  the amount paid on the share is the sum of all amounts paid to the company at any time for the share (but not including any premium); and

                     (b)  the amount unpaid on the share is the difference between the issue price of the share (but not including any premium) and the amount paid on the share (see paragraph (a)).

1446   Share capital—transfer of money in share premium account and capital redemption reserve into the share capital account

                   Immediately after commencement, any amount standing to the credit of the company’s share premium account and capital redemption reserve becomes part of the company’s share capital.

1447   Share capital—use of amount standing to credit of share premium account

                   A company may use the amount standing to the credit of its share premium account immediately before commencement to:

                     (a)  provide for the premium payable on redemption of debentures or redeemable preference shares issued before commencement; or

                     (b)  write off:

                              (i)  the preliminary expenses of the company incurred before commencement; or

                             (ii)  expenses incurred, payments made, or discounts allowed, on or before commencement, in respect of any issue of shares in, or debentures of, the company.

Note:          After commencement, a company will be able to issue bonus shares without transferring an amount to the share capital account (see section 254A).

1448   Share capital—calls on partly-paid shares

                   The liability of a shareholder for calls in respect of money unpaid on shares issued before commencement (whether on account of the par value of the shares or by way of premium) is not affected by the share ceasing to have a par value.

1449   Share capital—references in pre-commencement contracts and other documents to par value

             (1)  This section applies for the purpose of interpreting and applying after commencement:

                     (a)  a contract entered into before commencement (including a company’s constitution); or

                     (b)  a trust deed or other document executed before commencement.

             (2)  A reference to the par value of a share is taken to be a reference to:

                     (a)  if the share is issued before commencement—the par value of the share immediately before commencement; or

                     (b)  if the share is issued after commencement but shares of the same class were on issue immediately before commencement—the par value that the share would have had if it had been issued then; or

                     (c)  if the share is issued after commencement and shares of the same class were not on issue immediately before commencement—the par value determined by the directors.

A reference to share premium is taken to be a reference to any residual share capital in relation to the share.

             (3)  A reference to a right to a return of capital on a share is taken to be a reference to a right to a return of capital of a value equal to the amount paid in respect of the share’s par value.

             (4)  A reference to the aggregate par value of the company’s issued share capital is taken to be a reference to that aggregate as it existed immediately before commencement and:

                     (a)  increased to take account of the par value of any shares issued after commencement; and

                     (b)  reduced to take account of the par value of any shares cancelled after commencement.

1450   Share capital—previous Law continues to apply to capital reductions initiated before commencement

                   If a company has called a meeting before commencement for the purpose of section 256A of the old Law to consider a special resolution for a reduction of its share capital, the old Law continues to apply to the reduction of capital.

32  Schedule 3

Repeal the item relating to subsection 256C(7).

Insurance Act 1973

33  Paragraph 22(2)(j)

Repeal, substitute:

                      (j)  if the body corporate has a share capital—the body’s issued share capital and paid-up share capital;

Life Insurance Act 1995

34  Subsection 23(2)

Repeal the subsection, substitute:

             (2)  The reference in subsection (1) to the adjusted paid-up share capital of a life company is a reference to the amount of the company’s paid-up share capital represented by ordinary shares and irredeemable preference shares.

35  After section 233

Insert:

233A   Transfer by life insurance company to statutory fund

                   This section authorises any share capital reduction that occurs because a life company appropriates or transfers an amount to a statutory fund established and maintained under this Act.

Note:          Section 256B of the Corporations Law permits share capital reductions authorised by law to be carried out without shareholder approval.

36  Schedule (definition of share premium account )

Repeal the definition.

Pooled Development Funds Act 1992

37  Subsection 4(1) (paragraphs (a), (b) and (c) of the definition of shareholders’ funds )

Repeal the paragraphs, substitute:

                     (a)  the amount of the company’s share capital; and

38  Paragraph 11(2)(c)

Repeal, substitute:

                     (c)  the applicant’s issued share capital and paid-up share capital;

 

 

[ Minister's second reading speech made in

House of Representatives on 3 December 1997

Senate on 5 March 1998 ]

 

 

 

 

 

 

 

(246/97)