Company Law Review Act 1998 (61 of 1998)

Schedule 5  

Corporations Law

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.