Company Law Review Act 1998 (61 of 1998)

Schedule 1   Main amendments of the Corporations Law

9   After Chapter 5

Insert:

Chapter 5A - Deregistration of companies

601AA Deregistration - voluntary

Who may apply for deregistration

(1) An application to deregister a company may be lodged with the ASC by:

(a) the company; or

(b) a director or member of the company; or

(c) a liquidator of the company.

If the company lodges the application, it must nominate a person to be given notice of the deregistration.

Circumstances in which application can be made

(2) A person may apply only if:

(a) all the members of the company agree to the deregistration; and

(b) the company is not carrying on business; and

(c) the company's assets are worth less than $1,000; and

(d) the company has paid all fees and penalties payable under this Law; and

(e) the company has no outstanding liabilities; and

(f) the company is not a party to any legal proceedings.

ASC may ask for information about officers

(3) The applicant must give the ASC any information that the ASC requests about the current and former officers of the company.

Deregistration procedure

(4) If the ASC is not aware of any failure to comply with subsections (1) to (3), it must give notice of the proposed deregistration:

(a) on the ASC database; and

(b) in the Gazette.

When 2 months have passed since the Gazette notice, the ASC may deregister the company.

(5) The ASC must give notice of the deregistration to:

(a) the applicant; or

(b) the person nominated in the application to be given the notice.

601AB Deregistration - ASC initiated

Circumstances in which the ASC may deregister

(1) The ASC may decide to deregister a company if:

(a) the company's annual return is at least 6 months late; and

(b) the company has not lodged any other documents under this Law in the last 18 months; and

(c) the ASC has no reason to believe that the company is carrying on business.

(2) The ASC may also decide to deregister a company if the company is being wound up and the ASC has reason to believe that:

(a) the liquidator is no longer acting; or

(b) the company's affairs have been fully wound up and a return that the liquidator should have lodged is at least 6 months late; or

(c) the company's affairs have been fully wound up under Part 5.4 and the company has no property or not enough property to cover the costs of obtaining a Court order for the company's deregistration.

Deregistration procedure

(3) If the ASC decides to deregister a company under this section, it must give notice of the proposed deregistration:

(a) to the company; and

(b) to the company's liquidator (if any); and

(c) to the company's directors; and

(d) on the ASC database; and

(e) in the Gazette.

When 2 months have passed since the Gazette notice, the ASC may deregister the company.

(4) The ASC does not have to give a person notice under subsection (3) if the ASC does not have the necessary information about the person's identity or address.

(5) The ASC must give notice of the deregistration to everyone who was notified of the proposed deregistration under paragraph (3)(b) or (c).

601AC Deregistration - following amalgamation or winding up

(1) The ASC must deregister a company if the Court orders the deregistration of the company under:

(a) paragraph 413(1)(d) (reconstruction and amalgamation of Part 5.1 bodies); or

(b) paragraph 481(5)(b) (release of liquidator); or

(c) subsection 509(6) (liquidator's return following winding up).

(2) The ASC must deregister a company if:

(a) 3 months have passed since the company's liquidator lodged a return under section 509; and

(b) no order under subsection 509(6) has been made during that period.

601AD Effect of deregistration

Company ceases to exist

(1) A company ceases to exist on deregistration.

Note: Despite the deregistration, officers of the company may still be liable for things done before the company was deregistered.

Company's property vests in ASC

(2) On deregistration, all the company's property vests in the ASC. If company property is vested in a liquidator immediately before deregistration, that property vests in the ASC. This subsection extends to property situated outside this jurisdiction.

(3) Under subsection (2), the ASC takes only the same property rights that the company itself held. If the company held particular property subject to a security or other interest or claim, the ASC takes the property subject to that interest or claim.

Note: See also subsection 601AE(3) - which deals with liabilities that a law imposes on the property (particularly liabilities such as rates, taxes and other charges).

(4) The ASC has all the powers of an owner over property vested in it under subsection (2).

Note: Section 601AF confers additional powers on the ASC to fulfil outstanding obligations of the deregistered company.

Company books to be kept by former directors

(5) The directors of the company immediately before deregistration must keep the company's books for 3 years after the deregistration. This does not apply to books that a liquidator has to keep under subsection 542(2).

601AE What the ASC does with the property

(1) If property vested in the ASC under subsection 601AD(2) was held by the company on trust, the ASC may:

(a) continue to act as trustee; or

(b) apply to a court for the appointment of a new trustee.

Note: Under paragraph (a), the ASC may be able to transfer the property to a new trustee chosen in accordance with the trust instrument.

(2) If the company did not hold the property on trust, the ASC may:

(a) dispose of or deal with the property as it sees fit; and

(b) apply any money it receives to:

(i) defray expenses incurred by the ASC in exercising its powers in relation to the company under this Chapter; and

(ii) make payments authorised by subsection (3).

The ASC must deal with the rest (if any) under Part 9.7.

Obligations attaching to property

(3) The property remains subject to all liabilities imposed on the property under a law and does not have the benefit of any exemption that the property might otherwise have because it is vested in the ASC. These liabilities include a liability that:

(a) is a charge or claim on the property; and

(b) arises under a law that imposes rates, taxes or other charges.

(4) The ASC's obligation under subsection (3) is limited to satisfying the liabilities out of the company's property to the extent that the property is properly available to satisfy those liabilities.

Accounts

(5) The ASC must keep:

(a) a record of property that it knows is vested in it under this Chapter; and

(b) a record of its dealings with that property; and

(c) accounts of all money received from those dealings; and

(d) all accounts, vouchers, receipts and papers relating to the property and that money.

601AF ASC's power to fulfil outstanding obligations of deregistered company

The ASC may do an act on behalf of the company or its liquidator if the ASC is satisfied that the company or liquidator would be bound to do the act if the company still existed.

Note: This power is a general one and is not limited to acts in relation to property vested in the ASC under subsection 601AD(2). The ASC has all the powers that automatically flow from the vesting of property in the ASC under that subsection (see subsection 601AD(4)) and may exercise those powers whether or not the company was bound to do so.

601AG Claims against insurers of deregistered company

A person may recover from the insurer of a company that is deregistered an amount that was payable to the company under the insurance contract if:

(a) the company had a liability to the person; and

(b) the insurance contract covered that liability immediately before deregistration.

601AH Reinstatement

Reinstatement by ASC

(1) The ASC may reinstate the registration of a company if the ASC is satisfied that the company should not have been deregistered.

Reinstatement by Court

(2) The Court may make an order that the ASC reinstate the registration of a company if:

(a) an application for reinstatement is made to the Court by:

(i) a person aggrieved by the deregistration; or

(ii) a former liquidator of the company; and

(b) the Court is satisfied that it is just that the company's registration be reinstated.

(3) If the Court makes an order under subsection (2), it may:

(a) validate anything done between the deregistration of the company and its reinstatement; and

(b) make any other order it considers appropriate.

Note: For example, the Court may direct the ASC to transfer to another person property vested in the ASC under subsection 601AD(2).

ASC to give notice of reinstatement

(4) The ASC must give notice of a reinstatement in the Gazette. If the ASC exercises its power under subsection (1) in response to an application by a person, the ASC must also give notice of the reinstatement to the applicant.

Effect of reinstatement

(5) If a company is reinstated, the company is taken to have continued in existence as if it had not been deregistered. A person who was a director of the company immediately before deregistration becomes a director again as from the time when the ASC or the Court reinstates the company. Any property of the company that is still vested in the ASC revests in the company. If the company held particular property subject to a security or other interest or claim, the company takes the property subject to that interest or claim.

Chapter 5B - Bodies corporate registered as companies, and registrable bodies

Part 5B.1 - Registering a body corporate as a company

Division 1 - Registration

601BA Bodies corporate may be registered as certain types of companies

(1) A body corporate that is not a company, recognised company or corporation sole may be registered under this Law as a company of one of the following types:

(a) a proprietary company limited by shares

(b) an unlimited proprietary company with share capital

(c) a public company limited by shares

(d) a company limited by guarantee

(e) an unlimited public company with share capital

(f) a no liability company.

(2) A body corporate may be registered as a no liability company only if:

(a) the body has a share capital; and

(b) the body's constitution states that its sole objects are mining purposes; and

(c) under the constitution the body has no contractual right to recover calls made on its shares from a member who fails to pay them.

Note: Section 9 defines mining purposes and minerals .

601BB Bodies registered as proprietary companies

(1) The body must have no more than 50 non-employee shareholders if it is to be registered as a proprietary company under this Part.

(2) In applying subsection (1):

(a) count joint holders of a particular parcel of shares as
1 person; and

(b) an employee shareholder is:

(i) a shareholder who is an employee of the body or of a subsidiary of the body; or

(ii) a shareholder who was an employee of the body, or of a subsidiary of the body, when they became a shareholder.

601BC Applying for registration under this Part

(1) To register the body as a company under this Part, a person must lodge an application with the ASC.

Note 1: For the types of companies that can be registered under this Part, see section 601BA.

Note 2: A name may be reserved for a company to be registered under this Part before the application is lodged (see Part 2B.6).

(2) The application must state the following:

(a) the type of company that the body is proposed to be registered as under the Corporations Law of this jurisdiction

(b) the name of the body

(c) if the body is a registered body under the Corporations Law of any jurisdiction - its ARBN

(d) the proposed name under which the body is to be registered (unless the ACN is to be used)

(e) the name and address of each member of the body

(f) the present given and family name, all former given and family names and the date and place of birth of each person who consents in writing to become a director

(g) the present given and family name, all former given and family names and the date and place of birth of each person who consents in writing to become a company secretary

(h) the address of each person who consents in writing to become a director or company secretary

(i) the address of the body's proposed registered office

(j) for a body proposed to be registered as a public company - the proposed opening hours of its registered office (if they are not the standard opening hours)

(k) the address of the body's proposed principal place of business (if it is not the address of the proposed registered office)

(l) for a body proposed to be registered as a company limited by shares or an unlimited company - the following:

(i) the number and class of shares each member already holds or has agreed, in writing, to take up

(ii) the amount each member has already paid or agreed, in writing, to pay for each share

(iii) the amount unpaid on each share

(m) for a body proposed to be registered as a public company, if shares have been issued for non-cash consideration - the prescribed particulars about the issue of the shares, unless the shares were issued under a written contract and a copy of the contract is lodged with the application

(n) for a body proposed to be registered as a company limited by guarantee - the amount of the guarantee that each member has agreed to in writing.

Note 1: Paragraph (h) - the address that must be stated is usually the residential address, although an alternative address can sometimes be stated instead (see section 242AA).

Note 2: Paragraph (i) - if the body when it is registered under this Part is not to be the occupier of premises at the address of its registered office, the application must state that the occupier has consented to the address being specified in the application and has not withdrawn that consent (see section 100).

(3) If the body is proposed to be registered as a public company, the application must be accompanied by a copy of each document (including an agreement or consent) or resolution that is necessary to ascertain the rights attached to issued or unissued shares of the body.

(4) The application must be in the prescribed form.

(5) An applicant must have the consents and agreements referred to in subsection (2) when the application is lodged. After the body is registered as a company, the applicant must give the consents and agreements to the company. The company must keep the consents and agreements.

(6) The following documents must be lodged with the application:

(a) a certified copy of a current certificate of the body's incorporation in its place of origin, or of a document that has a similar effect

(b) a certified printed copy of the body's constitution (if any)

(c) for a body that is not a registered body under the Corporations Law of any jurisdiction - the documents required by subsection 263(3) - in relation to existing charges on the property of the body

(d) any other documents that are prescribed

(e) any other documents that the ASC requires by written notice given to the body.

A document need not be lodged if the ASC already has the document and agrees not to require its lodgment.

Note: Subsection 263(3) requires documents relating to charges on the property of the body to be lodged with the application.

(7) The application must be accompanied by evidence that:

(a) the body is not an externally-administered body corporate; and

(b) no application to wind up the body has been made to a court (in Australia or elsewhere) that has not been dealt with; and

(c) no application to approve a compromise or arrangement between the body and another person has been made to a court (in Australia or elsewhere) that has not been dealt with.

(8) The application must be accompanied by evidence that under the law of the body's place of origin:

(a) the body's type is the same or substantially the same as the proposed type specified in the application; and

(b) if the members of the body have limited liability - the body's constitution defines how and to what extent that liability is limited; and

(c) if the body has a share capital and the members of the body have limited liability - its capital is of a fixed amount and it is divided into shares of a fixed amount; and

(d) the transfer of the body's incorporation is authorised; and

(e) the body has complied with the requirements (if any) of that law for the transfer of its incorporation; and

(f) if those requirements do not include consent to the transfer by the members of the body - the members:

(i) have consented to the transfer by a resolution that has been passed at a meeting by at least 75% of the votes cast by members entitled to vote on the resolution; and

(ii) were given at least 21 days notice of the meeting and the proposed resolution.

(9) The evidence lodged in accordance with subsections (7) and (8) must be satisfactory proof to the ASC of the matters referred to in those subsections.

Note: Section 1304 requires documents that are not in English to be translated into English.

601BD ASC gives body ACN, registers as company and issues certificate

Registration

(1) If an application is lodged under section 601BC, the ASC may:

(a) give the body an ACN; and

(b) register the body as a company of the proposed type specified in the application; and

(c) issue a certificate that states:

(i) the company's name; and

(ii) the company's ACN; and

(iii) the company's type; and

(iv) that the company is registered as a company under the Corporations Law of this jurisdiction; and

(v) the date of registration.

Note: For the evidentiary value of a certificate of registration, see subsection 1274(7A).

ASC must keep record of registration

(2) The ASC must keep a record of the registration. Subsections 1274(2) and (5) apply to the record as if it were a document lodged with the ASC.

601BE Registered office

The address specified in the application as the body's proposed registered office becomes the address of its registered office as a company on registration.

601BF Name

A company registered under this Part has a name on registration that is:

(a) an available name; or

(b) the expression “Australian Company Number” followed by the company's ACN.

The name must also include the words required by subsection 148(2) or 148(3).

601BG Constitution

(1) The constitution on registration (if any) of a company registered under this Part is the constitution lodged with the application.

(2) If any text in a constitution lodged with the application is not in English, the English translation of that text lodged with the application for registration is taken to be the relevant text in the constitution on registration.

601BH Modifications of constitution

(1) A company registered under this Part must modify its constitution within 3 months after registration to give effect to this Part.

(2) If the constitution specifies amounts of money expressed in foreign currency, the company must:

(a) fix a single rate of conversion by resolution; and

(b) modify its constitution by special resolution to convert those amounts into Australian currency using that rate.

The modification must be made within 3 months after registration.

(3) An amendment of a company's constitution under this section does not affect the number and class of shares held by each member.

601BJ ASC may direct company to apply for Court approval for modifications of constitution

(1) The ASC may give the company a written direction to apply to the Court within a specified period for an order approving the modified constitution.

(2) The Court may make an order:

(a) declaring that the company has complied with section 601BH; or

(b) declaring that the company will comply with section 601BH if it makes further modifications of its constitution as specified in the order.

(3) The company must lodge a copy of the order with the ASC within 14 days after the order is made.

601BK Establishing registers and minute books

(1) A company registered under this Part must, within 14 days after registration:

(a) set up the registers required by sections 168 and 271; and

(b) include in those registers the information that is required to be included in those registers and that is available to the company on registration; and

(c) set up the minute books required by section 251A.

(2) During the 14 days the company need not comply with a person's request to inspect or obtain a copy of:

(a) information in a register; or

(b) a minute of a general meeting.

However, the period within which the company must comply with the request begins at the end of the 14 days.

601BL Registration of registered bodies

(1) If a registered body becomes registered as a company under this Part or a corresponding law, it ceases to be a registered body. The ASC must remove the body's name from the appropriate register kept for the purposes of Division 1 or 2 of Part 5B.2.

(2) The ASC may keep any of the documents relating to the company that were lodged because the company used to be a registered body.

Division 2 - Operation of the Corporations Law

601BM Effect of registration under this Part

(1) Registration under this Part does not:

(a) create a new legal entity; or

(b) affect the body's existing property, rights or obligations (except as against the members of the body in their capacity as members); or

(c) render defective any legal proceedings by or against the body or its members.

(2) This Part and sections 263, 266 and 276 set out special provisions for companies registered under this Part.

601BN Liability of members on winding up

A person who stopped being a member of the body before it was registered as a company under this Part is to be treated as a past member of the company in applying Division 2 of Part 5.6 to a winding up of the company. However, the person's liability to contribute to the company's property is further limited by this section to an amount sufficient for the following:

(a) payment of debts and liabilities contracted by the company before the day on which the company was registered under this Part

(b) payment of the costs, charges and expenses of winding up the company, so far as those costs, charges and expenses relate to those debts and liabilities

(c) the adjustment of the rights between the contributories, so far as the adjustment relates to those debts and liabilities.

601BP Bearer shares

(1) A bearer of a bearer share in a company registered under this Part may surrender the share to the company. The company must:

(a) cancel the share; and

(b) include the bearer's name in the company's register of members.

(2) The company is liable to compensate anyone who suffers a loss because the company includes the bearer's name in the company's register of members despite the fact that:

(a) the share was not surrendered to the company; or

(b) the company failed to cancel the share.

(3) Subject to this section, the constitution of a company registered under this Part may provide that the bearer of a bearer share in the company is taken to be a member of the company for all purposes or for specified purposes.

Note: A body must not issue bearer shares after it is registered as a company under this Part (see paragraph 254F(a)).

601BR First AGM

Despite subsection 250N(1), a public company registered under this Part must hold its first AGM after registration in the calendar year of its registration.

601BS Modification by regulations

The regulations may modify the operation of this Part in relation to a company registered under this Part.

Part 5B.3 - Names of registrable Australian bodies and foreign companies

601DA Reserving a name

(1) A person may lodge an application in the prescribed form with the ASC to reserve a name for a registrable Australian body or a foreign company. If the name is available, the ASC must reserve it.

Note: For available names, see section 601DC.

(2) The reservation lasts for 2 months from the date when the application was lodged. An applicant may ask the ASC in writing for an extension of the reservation during a period that the name is reserved, and the ASC may extend the reservation for 2 months.

(3) The ASC must cancel a reservation if the applicant asks the ASC in writing to do so.

601DB Acceptable abbreviations

(1) The abbreviations set out in the following table may be used:

(a) instead of words that this Law requires to be part of a registrable Australian body's or foreign company's name or to be included in a document; and

(b) instead of words that are part of a registrable Australian body's or foreign company's name; and

(c) with or without full stops.

(2) If a registrable Australian body's or foreign company's name includes any of these abbreviations, the word corresponding to the abbreviation may be used instead.

601DC When a name is available

Name is available unless identical or unacceptable

(1) A name is available to a registrable Australian body or a foreign company unless the name is:

(a) identical (under rules set out in the regulations) to a name that is reserved or registered under the Law for another body; or

(b) identical (under rules set out in the regulations) to a name that is included on the national business names register in respect of another individual or body who is not the person applying to have the name; or

(c) unacceptable for registration under the regulations.

Minister may consent to a name being available

(2) The Minister may consent in writing to a name being available to a registrable Australian body or foreign company even if the name is:

(a) identical to a name that is reserved or registered under this Law for another body; or

(b) unacceptable for registration under the regulations.

(3) The Minister's consent may be given subject to conditions.

Note: If the body or company breaches a condition, the ASC may direct it to change its name under section 601DJ.

601DD Registered Australian bodies and registered foreign companies can carry on business with some names only

A registered Australian body or registered foreign company must not carry on business under a name in this jurisdiction unless:

(a) it is registered under that name under Part 5B.2 or a corresponding law; or

(b) the name is registered for it under the law of this jurisdiction dealing with business names.

601DE Using a name and ARBN

Requirements for bodies that are not Australian banks

(1) Subject to sections 601DF and 601DG, a registered Australian body or registered foreign company must set out the following on all its public documents and negotiable instruments published or signed in this jurisdiction:

(a) its name

(b) the expression “Australian Registered Body Number” followed by its ARBN

(c) its place of origin

(d) if the liability of its members is limited and this is not apparent from its name - notice of the limited liability of its members.

Paragraphs (c) and (d) do not apply to an Australian bank.

Where information to be set out

(2) Subject to sections 601DF and 601DG, the information required by paragraph (1)(b) must be set out with the company's or body's name, or 1 of the references to its name in the document or instrument. If the name appears on 2 or more pages of the document or instrument, this must be done on the first of those pages.

601DF Exception to requirement to have ARBN on receipts

A registered Australian body or a registered foreign company does not have to set out the expression “Australian Registered Body Number” followed by its ARBN on a receipt (for example, a cash register receipt) that sets out information recorded in the machine that produced the receipt.

601DG Regulations may exempt from requirement to set out information on documents

The regulations may exempt a specified registered Australian body or registered foreign company, or a class of those bodies or companies, from the requirement in paragraphs 601DE(1)(b), (c) and (d) to set out information on its public documents and negotiable instruments. The exemption may relate to specified documents or instruments, or a class of documents or instruments.

601DH Notice of name change must be given to the ASC

(1) A registered Australian body or a registered foreign company must give the ASC written notice of a change to its name within 14 days after the date the change occurred.

(2) If the proposed name is available, the ASC must alter the details of the body's or foreign company's registration to reflect the change. For the purposes of this Law (other than subsection (1)), the change of name takes effect when the ASC alters the details of the body's or foreign company's registration.

Note 1: For the reservation of names, see section 601DA.

Note 2: For available names, see section 601DC.

Note 3: The ASC must issue a new certificate reflecting the name change (see section 601CU).

601DJ ASC's power to direct a registered name be changed

(1) The ASC may direct a registered Australian body or registered foreign company in writing to change the name under which the body or company is registered within 2 months if:

(a) the name should not have been registered; or

(b) the body or company has breached a condition under subsection 601DC(3) on the availability of the name.

(2) The body or company must comply with the direction within 2 months after being given it by doing everything necessary to change its name for the purposes of this Law under section 601DH.

(3) If the body or company does not comply with subsection (2), the ASC may change the body's or company's name to a name that includes its ARBN by altering the details of the body's or company's registration to reflect the change.

(4) For the purposes of this Law, a change of name under subsection (3) takes effect when the ASC alters the details of the body's or foreign company's registration.

Note: The ASC must issue a new certificate reflecting the name change (see section 601CU).