There have been fundamental changes
to the Corporations Law effective 1 July 1998, including, amongst
other things, registration (ie incorporation) requirements, deregistration,
the common seal becoming optional and the replacement of a Memorandum
and Articles of Association with a Constitution. A brief summary
follows.
Companies registered from 1 July 1998 no longer have a Memorandum
and Articles of Association but have a single set of rules to
be known as the Constitution. Alternatively, a company may opt
to have no constitution at all but rely on basic rules of internal
management set out in the Corporations Law and known as "replaceable
rules". Replaceable rules may be amended by legislation
from time to time so if a company does adopt the replaceable
rules as its constitution the amended rule will automatically
apply to that company. It will be an interesting exercise for
small business to keep abreast of these changes over time.
The alternative to the adoption of the replaceable rules is registering
a company with its own set of rules – ie its own constitution.
This constitution may be altered from time to time by the members
if deemed appropriate.
The Corporations Law no longer requires companies to have a common
seal (unless required by the company’s constitution), it being
assumed a document is correctly executed by the company if it
is signed by two directors, or a director and secretary, or by
a single director where that person is the sole director and
secretary.
The Corporations Law no longer requires a company to have an
authorised share capital. The concept of shares having a par
value has been abolished, including for shares already issued.
The Australian Securities Commission is now known as the Australian
Securities and Investment Commission.
Paul Bailey
paulb@gells.com.au
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