Corporations Legislation Amendment Bill 1998
INFORMATION AND RESEARCH SERVICES
Bill s Digest No. 3 1998- 99
Corporations Legislation Amendment Bill 1998
ISSN 1328-8091
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Published by the Department of the Parliamentary Library, 1998
INFORMATION AND RESEARCH SERVICES
Corporations Legislation Amendment Bill 1998
Lee Jones Law and Bills Digest Group 6 July 1998
Bills Digest No.3 1998-99
Contents
Purpose ...................................... ... .. ............. ................... ......... ....................... ..... .............. ...... .. . 1
Background ...................... ........ ... ... .. .............. .... ..... .. .. ............ ........... .. .............................. ........ 1
Main Provisions .......... ... .. ..... ... ....... ... ........ ............ ..... ............... .............. ... .. ..... ............ ............ 2
Concluding Comments .. ......... .. ............... .. .... .. ..... ........................................... .......... ..... ... ......... 2
Corporations Legislation Amendment Bill 1998
Date Introduced: 29 June 1998
House: Senate
Portfolio: Treasury
Commencement: The amendment contained in the Bill commences immediately after the commencement of the Company Law Review Act 1998 (which commenced on 1 July 1998).
Purpose
To insert a transitional provision into the Corporations Law in respect of two amendments made to the Company Law Review Bill 1997, by the Senate. The amendments relate to:
• the giving of 28 days notice of meetings of members of li sted companies; and
• the inclusion in notices of meetings of listed companies of a fax number for the purpose of receipt of proxy appointments.
Background
The Company Law Review Bill 1997 (now the Company Law Review Act 1998) was enacted to rewrite and simplify the provisions of the Corporations Law which deal with the creation of companies, the conduct of company meetings, share capital , financial reports and audits, the deregistration of companies, and company names.
Numerous amendments were proposed to the Bill by the Government, the Australian Labor Party (ALP) and the Australian Democrats in the Senate. Two of the ALP amendments passed by the Senate and subsequently agreed to by the House of Representatives were:
• new section 249HA - requires listed Australian companies to give at least 28 days notice of meetings of members.
The ordinary notice period for meetings of members of companies which are not listed companies is 21 days. Prior to the Company Law Review Act 1998, the Corporations
Warning:
This Digest was prepared for debate. It reflects the legislation as introduced and does 1101 canvass subsequent amendmellls.
This Digest does 1101 have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
2 Corporations legislation Amendment Bill 1998
Law required 14 days notice of general meetings and 21 days notice if a special resolution was proposed to be considered at the meeting
• new section 250BA - requires notices of meetings of members of listed Australian companies to specify a fax number for the purpose of the receipt of proxy appointments.
The Company Law Review Act 1998 (including these amendments) commenced on 1 July 1998.
There are listed companies that have before 1 July 1998 given notice of a meeting of their members without having given the 28 days notice required by section 249H. Additionally, the notice of the meeting may not have specified a fax number for the purpose of the receipt of proxy appointments as required by section 250BA.
To prevent uncertainty in relation to the validity of these meetings, this Bill proposes transitional provisions which will clarify that sections 249HA and 250BA do not apply to a meeting of the members of a listed company if the notice of the meeting was given before those sections commence (i.e. 1 July 1998).
Circumstances can still be foreseen in which inconvenience or expense will be incurred because of these amendments. For example, a listed company which has not yet sent its notices to members but which has had the notices printed ready for distribution, may be required to reschedule its general meeting and amend its notices.
Main Provisions
Item 1 of Schedule 1 inserts proposed new section 1424A into the Corporations Law. That section provides that the two amendments referred to above do not apply to a meeting of a company's members if the notice of the meeting was given before the commencement of the amendments (i .e. 1 July 1998).
Concluding Comments
A further issue which should be mentioned relates to an apparent problem with the interaction of the 28 day notice period and the Australian Stock Exchange Listing Rules. ASX Listing Rule 14.3 requires companies to accept nominations for directorships up to 30 days before the general meeting. Those nominations must be incorporated into the notice of meeting.
The combination of the 28 day notice rule and the ASX Listing Rule will mean that a listed company will have only 2 days in which to print and distribute its notices of meeting. From an administrative perspective, this seems very onerous.
Waming:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments.
This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.