THE CORPORATIONS LAW

CHAPTER 1 - INTRODUCTORY

PART 1.5 - SMALL BUSINESS GUIDE

This guide summarises the main rules in the Corporations Law that apply to proprietary companies limited by shares - the most common type of company used by small business. The guide gives a general overview of the Corporations Law as it applies to those companies and directs readers to the operative provisions in the Law.

The notes in square brackets at the end of paragraphs in the guide indicate the main provisions of the Corporations Law, the regulations made under the Law, and Australian Securities and Investments Commission Practice Notes that are relevant to the information in the paragraphs.

Other Commonwealth, State and Territory laws also impose obligations on proprietary companies and their operators.

4   Continuing obligations after the company is set up  

The Corporations Law and other laws impose obligations on companies themselves and on their directors and company secretaries. Some of the more important obligations imposed under the Corporations Law are discussed below.

4.1  Use of company name and ACN  

The name of a company must be shown at all the company's business premises (including its registered office) that are open to the public. The company's name and its ACN must appear:

•  on some of its public documents; and

•  on its cheques and negotiable instruments; and

•  on all documents lodged with ASIC; and

•  if it has one, on its common seal.

[sections 123, 144, 147- 156, Australian Securities and Investments Commission Practice Note 4715-186]

4.2  Annual return  

A company must lodge with ASIC an annual return which contains such information as:

•  names and addresses of each director and company secretary; and

•  issued shares and options granted; and

•  details of its shareholders; and

•  address of its registered office; and

•  address of its principal place of business; and

•  a statement that the directors have resolved in the last month that, in the directors' opinion, there are reasonable grounds to believe the company will be able to pay its debts as and when they become payable (but if the company has lodged an annual financial report with ASIC within the last 12 months, it does not need to include this statement).

An annual return may be lodged with ASIC on a printed form or, if an agreement is in place to lodge electronically, in accordance with the agreement.

ASIC may send a partially completed annual return to a company that wants to lodge its annual return on a printed form for the company to check, amend if necessary, verify and send back to ASIC. However, a company must lodge an annual return with ASIC even if ASIC does not send a partially completed annual return to the company.

[sections 345- 348, 352]

4.3  Annual fee  

A company must pay an annual fee to ASIC on lodgment of the annual return.

[Corporations (Fees) Regulations]

4.4  Notification to ASIC of changes  

The company must notify ASIC if certain basic changes to the company occur. The following table sets out these notification requirements.

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Notification requirements                              
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   If ...        the company     using      see        
                 must notify     Form       section ...
                 ASIC of      No. ...               
                 the change ...                        
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1. a company     within 1        207        254X       
   issues        month after                           
   shares        the issue                             
                                                       
2. a company     within 7        909        172, 1302  
   changes       days after                            
   the           the change                            
   location                                            
   of a register                                       
                                                       
3. a company     within 14      203         142, 146   
   changes       days after                            
   the address   the change                            
   of its                                              
   registered                                          
   office or                                           
   principal                                           
   place of                                            
   business                                            
                                                       
4. a company     within 14      304         242        
   changes its   days after                            
   directors     the change                            
   or company                                          
   secretary                                           
                                                       
5. there is a    within 14      304         242        
   change in     days after                            
   the name      the change                            
   or address                                          
   of the company's                                    
   directors or                                        
   secretary                                           
                                                       
6. a company     within 45      309         263        
   creates       days after                            
   certain       the charge                            
   kinds of      is created                            
   charges                                             
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