A company’s constitution sets out the rights of shareholders and deals with many aspects of the how company will be operated. It inter‑reacts closely with the complex provisions of the Corporations Act.
Often companies have pre‑printed constitutions generated from when the company was first formed and which are no longer adequate. There are complex rules and procedures involved in changing a constitution. In many cases, the shareholders also enter into a shareholders agreement which is completely separate to the constitution and covers operational matters outside the scope of the constitution and the Corporations Act. These can be complicated documents and their inter‑reaction with the Corporations Act and a company’s constitution can be confusing. People need to clearly understand which takes precedence since to get things wrong may be an offence.
You should contact our Corporate Law specialists for advice and guidance.
The Australian Securities and Investments Commission (“ASIC”) supervises and polices companies to ensure their compliance with the Corporations Act. Many activities of a company have to be notified to the ASIC and, in many cases, it is a criminal offence to not notify the ASIC or not to comply with requirements of the Corporations Act.
For advice on matters regarding company constitutions – call us today.