Corporations Act 2001

CHAPTER 2F - MEMBERS' RIGHTS AND REMEDIES  

SECTION 231  

231   MEMBERSHIP OF A COMPANY  
A person is a member of a company if they:

(a) are a member of the company on its registration; or

(b) agree to become a member of the company after its registration and their name is entered on the register of members; or

(c) become a member of the company under section 167 (membership arising from conversion of a company from one limited by guarantee to one limited by shares).

PART 2F.2 - CLASS RIGHTS  

Note: This Part does not apply to the adoption or amendment of benefit fund rules or to consequential amendments to the rest of the company's constitution made under the Life Insurance Act 1995 , see Subdivision 2 of Division 4 of Part 2A of that Act.

SECTION 246B   VARYING AND CANCELLING CLASS RIGHTS  
If constitution sets out procedure

246B(1)    
If a company has a constitution that sets out the procedure for varying or cancelling:

(a)    for a company with a share capital - rights attached to shares in a class of shares; or

(b)    for a company without a share capital - rights of members in a class of members;

those rights may be varied or cancelled only in accordance with the procedure. The procedure may be changed only if the procedure itself is complied with.

Note: A CCIV must have a minimum of 1 class of shares per sub-fund: see section 1230A .

If constitution does not set out procedure

246B(2)    
If a company does not have a constitution, or has a constitution that does not set out the procedure for varying or cancelling:

(a)    for a company with a share capital - rights attached to shares in a class of shares; or

(b)    for a company without a share capital - rights of members in a class of members;

those rights may be varied or cancelled only by special resolution of the company and:

(c)    by special resolution passed at a meeting:

(i) for a company with a share capital of the class of members holding shares in the class; or

(ii) for a company without a share capital of the class of members whose rights are being varied or cancelled; or

(d)    with the written consent of members with at least 75% of the votes in the class.

Note: This subsection applies to a CCIV in a modified form: see section 1227J .

246B(3)    
The company must give written notice of the variation or cancellation to the members of the class within 7 days after the variation or cancellation is made.

246B(4)    

An offence based on subsection (3) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

SECTION 246C   CERTAIN ACTIONS TAKEN TO VARY RIGHTS ETC.  
Company with share capital

246C(1)    
If the shares in a class of shares in a company are divided into further classes, and after the division the rights attached to all of those shares are not the same:

(a)    the division is taken to vary the rights attached to every share that was in the class existing before the division; and

(b)    members who hold shares to which the same rights are attached after the division form a separate class.

246C(2)    
If the rights attached to some of the shares in a class of shares in a company are varied:

(a)    the variation is taken to vary the rights attached to every other share that was in the class existing before the variation; and

(b)    members who hold shares to which the same rights are attached after the variation form a separate class.

Company without share capital

246C(3)    
If the members in a class of members in a company without share capital are divided into further classes of members, and after the division the rights of all of those members are not the same:

(a)    the division is taken to vary the rights of every member who was in the class existing before the division; and

(b)    members who have the same rights after the division form a separate class.

246C(4)    
If the rights of some of the members in a class of members in a company without a share capital are varied:

(a)    the variation is taken to vary the rights of every other member who was in the class existing before the variation; and

(b)    members who have the same rights after the variation form a separate class.

Company with 1 class of shares issuing new class of shares

246C(5)    
If a company with 1 class of shares issues new shares, the issue is taken to vary the rights attached to shares already issued if:

(a)    the rights attaching to the new shares are not the same as the rights attached to shares already issued; and

(b)    those rights are not provided for in:

(i) the company ' s constitution (if any); or

(ii) a notice, document or resolution that is lodged with ASIC.

246C(6)    
If a company issues new preference shares that rank equally with existing preference shares, the issue is taken to vary the rights attached to the existing preference shares unless the issue is authorised by:

(a)    the terms of issue of the existing preference shares; or

(b)    the company ' s constitution (if any) as in force when the existing preference shares were issued.

SECTION 246D   VARIATION, CANCELLATION OR MODIFICATION WITHOUT UNANIMOUS SUPPORT OF CLASS  

246D(1)    
If members in a class do not all agree (whether by resolution or written consent) to:

(a)    a variation or cancellation of their rights; or

(b)    a modification of the company ' s constitution (if any) to allow their rights to be varied or cancelled;

members with at least 10% of the votes in the class may apply to the Court to have the variation, cancellation or modification set aside.

246D(2)    
An application may only be made within 1 month after the variation, cancellation or modification is made.

246D(3)    
The variation, cancellation or modification takes effect:

(a)    if no application is made to the Court to have it set aside - 1 month after the variation, cancellation or modification is made; or

(b)    if an application is made to the Court to have it set aside - when the application is withdrawn or finally determined.

246D(4)    
The members of the class who want to have the variation, cancellation or modification set aside may appoint 1 or more of themselves to make the application on their behalf. The appointment must be in writing.

246D(5)    
The Court may set aside the variation, cancellation or modification if it is satisfied that it would unfairly prejudice the applicants. However, the Court must confirm the variation, cancellation or modification if the Court is not satisfied of unfair prejudice.

246D(6)    
Within 14 days after the Court makes an order, the company must lodge a copy of it with ASIC.

246D(7)    

An offence based on subsection (6) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

SECTION 246E  

246E   VARIATION, CANCELLATION OR MODIFICATION WITH UNANIMOUS SUPPORT OF CLASS  
If the members in a class all agree (whether by resolution or written consent) to the variation, cancellation or modification, it takes effect:

(a) if no later date is specified in the resolution or consent - on the date of the resolution or consent; or

(b) on a later date specified in the resolution or consent.

SECTION 246F   COMPANY MUST LODGE DOCUMENTS AND RESOLUTIONS WITH ASIC  

246F(1)    
A company must lodge with ASIC a notice in the prescribed form setting out particulars of any of the following:

(a)    a division of shares in the company into classes if the shares were not previously so divided;

(b)    a conversion of shares in a class of shares in the company into shares in another class.

Note: A proprietary company may also have to notify certain particulars under Part 2C.2 .

246F(2)    
The notice must be lodged within 14 days after the division or conversion.

246F(3)    
A public company must lodge with ASIC a copy of each document (including an agreement or consent) or resolution that:

(a)    does any of the following:

(i) attaches rights to issued or unissued shares;

(ii) varies or cancels rights attaching to issued or unissued shares;

(iii) varies or cancels rights of members in a class of members of a company that does not have a share capital;

(iv) binds a class of members; and

(b)    is not already lodged with ASIC.

This also applies to a proprietary company that has applied under Part 2B.7 to change to a public company, while its application has not yet been determined.

Note: This subsection also applies to a CCIV: see section 1227L .

246F(3A)    

An offence based on subsection (1) or (3) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

246F(4)    
The document must be lodged within 14 days after it is made. The resolution must be lodged within 14 days after it is passed.

SECTION 246G   MEMBER'S COPIES OF DOCUMENTS AND RESOLUTIONS  

246G(1)   [ Copy]  

A member of a company may ask the company in writing for a copy of a document or resolution referred to in section 246F . The company must send the copy to the member.

246G(1A)   [ Strict liability offence]  

An offence based on subsection (1) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

246G(2)   [ Payment]  

If the company requires the member to pay for the copy, the company must send it:

(a) within 7 days after the company receives the payment; or

(b) within any longer period approved by ASIC.

246G(3)   [ Prescribed amount]  

The amount of any payment the company requires cannot exceed the prescribed amount.

246G(4)   [ Payment not required]  

If the company does not require payment for the copy, the company must send it:

(a) within 7 days after the member asks for it; or

(b) within any longer period approved by ASIC.

SECTION 246H  

246H   APPLICATION OF THIS PART TO MCI MUTUAL ENTITIES THAT ARE COMPANIES LIMITED BY GUARANTEE  

For the purposes of applying this Part to an MCI mutual entity that is a company limited by guarantee, treat the entity:

(a) in relation to a person who holds MCIs in the entity - as a company with a share capital; and

(b) in relation to a non-shareholder mutual member - as a company without a share capital.