Corporations Act 2001

CHAPTER 2B - BASIC FEATURES OF A COMPANY  

PART 2B.1 - COMPANY POWERS AND HOW THEY ARE EXERCISED  

SECTION 124   LEGAL CAPACITY AND POWERS OF A COMPANY  

124(1)    
A company has the legal capacity and powers of an individual both in and outside this jurisdiction. A company also has all the powers of a body corporate, including the power to:

(a)    issue and cancel shares in the company;

(b)    issue debentures (despite any rule of law or equity to the contrary, this power includes a power to issue debentures that are irredeemable, redeemable only if a contingency, however remote, occurs, or redeemable only at the end of a period, however long);

(c)    grant options over unissued shares in the company;

(d)    distribute any of the company ' s property among the members, in kind or otherwise;

(e)    

grant a security interest in uncalled capital;

(f)    

grant a circulating security interest over the company ' s property;

(g)    arrange for the company to be registered or recognised as a body corporate in any place outside this jurisdiction;

(h)    do anything that it is authorised to do by any other law (including a law of a foreign country).

A company limited by guarantee does not have the power to issue shares.

Note 1: For a company ' s power to issue bonus, partly-paid, preference and redeemable preference shares, see section 254A .

Note 2: A CCIV ' s power to issue shares is affected by sections 1230 and 1230B .

124(2)    
A company ' s legal capacity to do something is not affected by the fact that the company ' s interests are not, or would not be, served by doing it.

124(3)    
For the avoidance of doubt, this section does not:

(a)    authorise a company to do an act that is prohibited by a law of a State or Territory; or

(b)    give a company a right that a law of a State or Territory denies to the company.

124(4)    

Subsection (1) does not prevent a mutual entity that is a company limited by guarantee issuing MCIs.