Explanatory Statement

Issued by authority of the Parliamentary Secretary to the Treasurer

EXPLANATORY STATEMENT

Corporations Act 2001

Select Legislative Instrument 2006 No. 362

Subsection 1364(1) of the Corporations Act 2001 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed by regulations, or necessary or convenient to be prescribed by such regulations for carrying out or giving effect to the Act.

The Corporations Regulations 2001 (the Principal Regulations) regulate the registration of body corporate names. In particular, subregulations 2B.6.01(2) and 5B.3.01(2) of the Principal Regulations provide that, for paragraphs 147(1)(c) and 601DC(1)(c) respectively of the Act, a name is unacceptable for registration if it is unacceptable under the rules set out in Part 2 of Schedule 6 to the Principal Regulations. In addition to the general rules, paragraph 6203(b) of Part 2 provides that a name is unacceptable for registration if the name contains a restricted word or phrase specified in Part 3 of Schedule 6, an abbreviation of that word or phrase, or a word or phrase or an abbreviation having the same or a similar meaning.

The Regulations add the words 'police' and 'policing' to Part 3 of Schedule 6 of the Principal Regulations. The intended effect of this amendment is to prevent the use of these words in body corporate names without the Minister's prior consent. This ensures that the registration of body corporate names including these words is allowed only for entities that can demonstrate that the use of these words is not unacceptable. The amendment is to have prospective effect, and as such will not affect body corporate names that have previously been registered.

Under the Corporations Agreement 2002, the State and Territory Governments referred their constitutional powers with respect to corporate regulation to the Commonwealth. Under subclauses 506(1) and 507(2) of the Corporations Agreement, the Commonwealth is required to consult with and receive the approval of at least 3 State and Territory Ministers of the Ministerial Council for Corporations (the Council) before making a regulation under the national law. The Commonwealth has received approval of the Council for the Regulations. In addition, under subclause 511(3), the Commonwealth is required to consult with the Council as to whether the Regulations should be exposed for public comment for between one and three months. The Commonwealth has received the approval of the Council to waive the public disclosure period for the Regulations.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Regulations commenced on the day after they were registered.