Close Corporations Act 1989 (Cth)
PART 1—PRELIMINARY
Section
1. Short title
2. Commencement
3. Application to the Crown
4. Extension to external Territories
5. Administration
6. General dictionary
7. Dormant close corporations
8. New close corporations
9. What is a holding company
10. What is a subsidiary
11. Control of a body corporate’s board
12. Matters to be disregarded
13. Involvement in contraventions
14. Receivers and managers
TABLE OF PROVISIONS—
Section
15. How certain provisions of Corporations Act apply to close corporations
PART 2—REGISTRATION
16. Formation
17. Share capital
18. Registration
19. Requirements as to founding statement
20. Changes in particulars in founding statement or membership register
21. Certificate of registration
22. Effect of certificate
23. Incorporation
24. Conversion of company into close corporation
25. Lodgment of activities statement
26. Further activities statement where control of corporation is to change
27. Commission to take action
28. Presumptions about loss of trading corporation status
29. Close corporation to take action
PART 3—NAMES
30. Names available for registration
31. Words or abbreviations to be included in names
32. Close corporation may have number as its name
33. Reservation of name not required in certain circumstances
34. Registration of name without reservation
35. Reservation and registration of name of a proposed close corporation
36. Reservation and registration of proposed new name of close corporation
37. Extension of reservation
38. Cancellation of registration where close corporation is dissolved or converted into a company
39. Change of name
40. Restriction on use of name “close corporation”
41. Publication of close corporation’s name
PART 4—LEGAL CAPACITY AND POWERS
42. Interpretation
43. Object of section 44
44. Legal capacity
45. Application of certain State and Territory laws
46. Close corporation not to act as trustee
47. Persons having dealings with close corporations
48. Lodgment of documents etc. not to constitute constructive notice
49. Effect of fraud
50. Close corporation not to be a holding company
51. Close corporation not to make or issue offers or invitations to the public in respect of its shares
PART 5—MEMBERSHIP
52. Capacity of shareholding or membership
53. Membership register
54. Subscribers to become members
55. Persons becoming members after registration
TABLE OF PROVISIONS—
continued
Section
56. Change in shareholding
57. Members holding shares otherwise than beneficially
58. Members holding shares in different capacities
59. Unregistered members
60. Maximum number of members
61. Only natural persons to be members
62. Majority of members to be residents
63. Disqualification
64. Effect of death of sole member
PART 6—TITLE TO AND TRANSFER OF SECURITIES
65. Transfer of shares
66. Application of Part 7.13 of Corporations Act
PART 7—INTERNAL ADMINISTRATION
67. Association agreement
68. Model association agreement
69. This Division subject to contrary agreement
70. Indemnity
71. Loans by members
72. Participation in management
73. Allotment of shares
74. Members not to be remunerated
75. Resolution of differences
76. Convening of meeting of members
77. Members to render accounts
78. Accountability of members for benefits
79. Members not to compete with corporation
80. Member to compensate corporation for loss resulting from conduct of member
81. Application of Part 3.4 of Corporations Act
PART 8—ACCOUNTS AND CERTIFICATES OF COMPLIANCE
82. Duty to keep accounts
83. Annual certificate of compliance
84. Annual activities statement
PART 9—TRANSACTIONS ON BEHALF OF CLOSE CORPORATION
85. Members to be agents of corporation
86. Ratification of contracts made before formation of corporation
PART 10—PROVISIONS RELATING TO SHARES
87. Restriction on acquisition by corporation of its shares or units of its shares
88. Corporation may acquire shares in accordance with this Division
89. Consent and declaration of solvency by members
90. Withdrawal from participation in declaration of solvency
91. Publication of notice of proposed acquisition of shares
92. Corporation to cancel shares acquired
TABLE OF PROVISIONS—
continued
Section
93. Interpretation
94. Prohibition
95. Order for compensation
96. Power to grant relief
97. Exceptions
98. Authorisation
99. Powers of Court
100. Members’ duties not affected
101. Consequences of corporation financing dealings in its shares etc.
PART 11—CHARGES
102. Application of Part 3.5 of Corporations Act
PART 12—ARRANGEMENTS AND RECONSTRUCTIONS
103. Application of Part 5.1 of Corporations Act
PART 13—RECEIVERS AND MANAGERS
104. Application of Part 5.2 of Corporations Act
PART 14—OFFICIAL MANAGEMENT
105. Application of Part 5.3 of Corporations Act
PART 15—LIABILITY OF MEMBERS FOR CORPORATION’S DEBTS AND LIABILITIES
106. Members generally not liable
107. Liability if number of members exceeds 10
108. Liability where proper accounting records not kept
109. Liability if corporation becomes a holding company
110. Liability for unreasonable delay in taking action where corporation insolvent
111. Liability of signatories to declaration of solvency if corporation insolvent
112. Liability where insolvency resulted from unlawful acquisition of shares
113. Corporation not liable to member who pays debt of corporation
PART 16—WINDING UP
114. Application of Parts 5.4, 5.5 and 5.6 of Corporations Act
115. Replacement of sections 459, 460, 461 and 462
116. Voluntary winding up
117. Decision or notice to constitute special resolution
118. Priority of Commission’s costs
119. Ranking of claims
120. Provisional liquidator
121. Financial assistance to liquidator from recovery trust fund
PART 17—LIQUIDATORS’ RECOVERY TRUST FUND
122. Definition
123. Establishment of fund
124. Money constituting fund
125. Investment of fund
126. Fund to be kept in separate bank account
127. Registration of corporation subject to corporation contributing to fund
128. Additional contributions to fund
129. Payments out of the fund
130. Contributions not payable unless imposed by another Act
TABLE OF PROVISIONS—
Section
PART 18—GENERAL
130a. Interpretation
130b. Applications for review
130c. Excluded decisions
131. Power to grant relief
132. Injunctions
133. Other orders
134. Power to prohibit payment or transfer of money or property
135. Power to punish for contempts
136. Power to give directions with respect to meetings
138. Appeals from decisions of receivers, liquidators etc.
139. Irregularities
140. Power to compel compliance
141. Power of Commission to intervene in proceedings
142. Proceedings, how taken
143. Time for instituting criminal proceedings
145. Standard of proof
146. Evidence of convictions
147. Costs
148. Civil proceedings not to be stayed
149. Form and evidentiary value of books
150. Admissibility of books in evidence
151. Admissions and representations by members
152. Interpretation
153. Offences relating to property, books etc.
154. Offence where proper accounts not kept
155. Incurring of debts or fraudulent conduct
156. Court may impose personal liability
157. Certain rights not affected
158. Inducement to be appointed liquidator or official manager
159. Falsification of books
160. Frauds by officers
161. False or misleading statements
162. False information etc.
163. General penalty provisions
164. Penalty notices
165. Continuing offences
166. Dividends
167. Service of documents
168. Vesting of property
169. Rules
170. Regulations
SCHEDULE
PENALTIES FOR OFFENCES COMMITTED BY NATURAL PERSONS
[
BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:
“accounting records” includes:
(a) invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes, vouchers and other documents of prime entry; and
(b) such working papers and other documents as are necessary to explain the methods and calculations by which accounts are made up;
“association agreement” means an agreement entered into in accordance with subsection 67 (1) that is in force or, if such an agreement has been varied by a supplementary association agreement, the agreement as varied and in force;
“Australia” includes the external Territories to which this Act extends;
“books” includes:
(a) a register;
(b) any other record of information;
(c) accounts or accounting records, however compiled, recorded or stored; and
(d) a document;
“certificate of compliance” means a certificate referred to in section 83;
“close corporation” means a close corporation registered under this Act;
“Commission” means the Australian Securities Commission;
“Commission Act” means the
Australian Securities Commission Act 1989 ;“Commission delegate” has the same meaning as in the Commission Act;
“company” means a company incorporated under Division 1 of Part 2.2 of the Corporations Act;
“contributory”, in relation to a close corporation, means:
(a) a person liable as a member or past member to contribute to the property of the corporation if it is wound up;
(b) a member of the corporation; and
(c) before the final determination of the persons who are contributories by virtue of paragraphs (a) and (b)—a person alleged to be such a contributory;
“Corporations Act” means the
Corporations Act 1989 ;“Court” means the Federal Court of Australia or the Supreme Court of a State or Territory;
“decisive number of members”, in relation to a close corporation, means:
(a) where there is only one member—that member;
(b) where there are 2 members—both of those members; or
(c) where there are more than 2 members—not fewer than:
(i) if there are 3 members—2 members;
(ii) if there are 4 members—3 members;
(iii) if there are 5 members—4 members;
(iv) if there are 6 members—5 members;
(v) if there are 7 or 8 members—6 members;
(vi) if there are 9 members—7 members; or
(vii) if there are 10 members—8 members;
“declaration of solvency” means a declaration, referred to in paragraph 89 (1) (b);
“dormant”, in relation to a close corporation, has the meaning given by section 7;
“eligible negotiable instrument”, in relation to a close corporation, means:
(a) a bill of exchange, promissory note, cheque or other negotiable instrument;
(b) an indorsement on, or order in, a bill of exchange, promissory note, cheque or other negotiable instrument; or
(c) a letter of credit;
of, or purporting to be issued or signed by or on behalf of, the corporation;
“financial year”, in relation to a close corporation, means either of the following, whether ending before, at or after the commencement of this section:
(a) a period of 12 months, or such other period (whether longer or shorter than 12 months) of not more than 18 months as a majority of the members decide, beginning:
(i) if there has been no previous financial year of the corporation—on the day of the corporation’s incorporation; or
(ii) otherwise—at the end of the previous financial year of the corporation;
(b) if the close corporation was a company immediately before it became a close corporation—a period that was a financial year in relation to the company for the purposes of the Corporations Act;
“founding statement”, in relation to a close corporation or proposed close corporation, means a statement relating to the corporation or proposed corporation that is referred to in paragraph 18 (1) (a);
“holder”, in relation to shares in a close corporation, means the person who is the legal owner of the shares, whether or not the person’s name and the number of shares are entered in the corporation’s membership register;
“holding company” has the meaning given by section 9;
“information” includes complaint;
“involved”, in relation to a contravention, has the meaning given by section 13;
“issue” includes circulate, distribute and disseminate;
“lodge” means lodge with the Commission;
“majority of the members”, in relation to a close corporation that has only 1 member or 2 members, means that member or both of those members, as the case may be;
“member”, in relation to a close corporation, means a person who is a member of the corporation as provided by Part 5;
“new close corporation” has the meaning given by section 8;
“officer”, in relation to a close corporation, includes:
(a) a member or employee of the corporation;
(b) a receiver and manager, appointed under a power contained in an instrument, of property of the corporation;
(c) an official manager, or deputy official manager, of the corporation;
(d) a liquidator of the corporation appointed in a voluntary winding up of the corporation; and
(e) a trustee or other person administering a compromise or arrangement made between the corporation and any other person or persons;
but does not include:
(f) a receiver who is not also a manager;
(g) a receiver and manager appointed by a court; or
(h) a liquidator appointed by a court;
“prescribed” means prescribed by this Act, by the regulations or by the rules;
“prove” includes establish in any way;
“receiver and manager” has a meaning affected by section 14;
“registered office” means the premises the address of which is specified in the founding statement in accordance with paragraph 19 (b) or, if an address of other premises has been specified in a notice lodged under section 20, the premises the address of which is specified in that notice or the last such notice;
“registration number” in relation to a close corporation, means the number allotted to it under subsection 18 (1);
“rules” means rules of the Court;
“securities”, in relation to a close corporation, means shares in, or debentures of, the corporation;
“share”, in relation to a close corporation, means a share in the share capital of the corporation;
“staff member”, in relation to the Commission, means a person who is a staff member for the purposes of the Commission Act;
“State” includes the Northern Territory;
“substantial part”, in relation to activities, includes the whole of those activities;
“supplementary association agreement” has the meaning given by subsection 67 (4);
“Territory” means:
(a) the Australian Capital Territory and the Jervis Bay Territory treated as a single Territory; or
(b) an external Territory to which this Act extends;
“this Act” includes:
(a) any provision of the Corporations Act as applying in relation to close corporations by virtue of this Act; and
(b) the regulations;
“trading activities”, in relation to an existing or proposed close corporation, includes financial activities but does not include activities that the corporation engages in, or will engage in, in the course of carrying on, as its sole or principal business, the business of banking or insurance;
“trading corporation” means a trading corporation, or a financial corporation, within the meaning of paragraph 51 (xx) of the Constitution;.
“unit”, in relation to a share, means a right or interest, whether legal or equitable, in the share, by whatever term called, and includes an option to acquire such a right or interest in the share;
“value”, in relation to an asset, includes amount.
(a) did not receive or become entitled to any income or incur or become liable for any expenditure;
(b) did not purchase, sell or supply any goods or other property, or any services, or enter into any agreement in relation to the purchase, sale or supply of goods or other property, or services;
(c) did not issue, sell, purchase or make available any securities, or enter into any agreement in relation to the issue, sale, purchase or making available of securities;
(d) did not issue a prospectus or statement, or enter into any agreement in relation to the issue of a prospectus or statement, in connection with the issue, sale, purchase or making available, or the proposed issue, sale, purchase or making available, of any securities;
(e) did not take part in any research, development or exploration activities, or enter into any agreement in relation to taking part in research, development or exploration activities;
(f) was not, and did not become, a party to any lease, franchise, joint venture or partnership arrangement, and did not take part in any lease, franchise, joint venture or partnership arrangement, or enter into any agreement in relation to becoming a party to, or taking part in, any lease, franchise, joint venture or partnership arrangement;
(g) did not make, receive or guarantee any loan, or enter into any agreement in relation to making, receiving or guaranteeing a loan;
(h) was not, and did not become, a party to any underwriting agreement and did not enter into any agreement in relation to becoming a party to any underwriting agreement;
(j) did not obtain or receive a grant of any licence or other authority, or make any application in relation to obtaining a licence or other authority; and
(k) was not, and did not become, a party to any litigation or negotiations with any other person or body.
(a) issues shares to a subscriber to the corporation’s founding statement;
(b) holds shares in a body corporate that is dormant for the purposes of the Corporations Act throughout that period;
(c) receives or becomes entitled to income by way of a payment of a charge imposed by the corporation:
(i) in connection with its performance of an obligation imposed by this Act; and
(ii) in accordance with this Act; or
(d) incurs or becomes liable to a necessary expense in connection with doing an act or thing mentioned in paragraph (a) or (b) or performing an obligation imposed on the corporation, or an officer of the corporation, by this Act.
(a) is dormant throughout a period beginning at that time; and
(b) was dormant throughout no period ending at that time.
(a) was dormant throughout a period ending at that time; and
(b) is dormant throughout no period beginning at that time.
(a) if the statement that was lodged for the purposes of section 25 and relates to the corporation states as mentioned in subsection 25 (3)— 3 months beginning on the day:
(i) if the statement also states as mentioned in subsection 25 (2) and the corporation becomes dormant at its incorporation— when the corporation first ceases to be dormant; or
(ii) otherwise—of the corporation’s incorporation;
(b) if the statement states as mentioned in subsection 25 (4) and the corporation lodges a statement in accordance with section 26:
(i) if the last-mentioned statement states to the effect that the corporation intends as mentioned in subsection 26 (3)— 3 months beginning on the day specified under paragraph 26 (2) (c); or
(ii) otherwise—the day on which the last-mentioned statement is lodged; or
(c) otherwise—the day of the corporation’s incorporation.
(a) controls the composition of the body’s board;
(b) is in a position to cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a general meeting of the body; or
(c) holds more than one-half of the issued share capital of the body (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital).
(a) a person cannot be appointed as a director of the body without the exercise by the corporation of such a power in the person’s favour; or
(b) a person’s appointment as a director of the body follows necessarily from the person being an officer of the corporation.
(a) the ordinary business of the corporation includes lending money; and
(b) the shares are held, or the power is exercisable, only by way of security given for the purposes of a transaction entered into in the ordinary course of business in connection with lending money, not being a transaction entered into with an associate of the corporation.
(a) has aided, abetted, counselled or procured the contravention;
(b) has induced, whether by threats or promises or otherwise, the contravention;
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention; or
(d) has conspired with others to effect the contravention.
(a) subject to this Act;
(b) so far as the provisions concerned are capable of application and
mutatis mutandis ; and(c) as if the corporation were a company limited by shares.
(a) a reference to a company or to a corporation is a reference to the close corporation;
(b) a reference to the memorandum or articles of a company or to the constitution of a company or corporation is a reference to the founding statement of the close corporation as affected by any notice lodged under section 20;
(c) a reference to the common seal of a company or of a corporation is a reference to the official seal of the close corporation;
(d) a reference to a director of a company or of a corporation is a reference to a member of the close corporation;
(e) a reference to a resolution passed by a company or corporation is a reference to a decision made by a majority of the members of the close corporation and recorded in writing that sets out the time and date when the decision was made, and a reference to the time of the passing of such a resolution is a reference to the time so recorded;
(f) a reference to a special resolution passed by a company or corporation is a reference to a decision made by a decisive number of members of the close corporation and recorded in writing that sets out the time and date when the decision was made, and a reference to the time of passing of such a special resolution is a reference to the time so recorded; and
(g) a reference to an expression that is given by this Act a different meaning from the meaning given by the Corporations Act is a reference to that expression with the meaning given by this Act.
(a) a statement relating to the proposed corporation that is in a form made available by the Commission and complies with section 19; and
(b) the other documents required to be lodged by or under this Act;
and, subject to this Act, the Commission shall register the corporation by registering the founding statement and allotting a number to the corporation.
(a) subject to section 33, the name under which the corporation is proposed to be registered is reserved under section 35 in respect of the corporation; and
(b) the Commission is satisfied that, upon the registration of the corporation, any relevant requirements of sections 60 to 63, inclusive, would be complied with in relation to the corporation.
(a) the name of the corporation;
(b) an address of premises to which all communications to the corporation may be sent and which will be open and accessible to the public;
(c) the amount of share capital with which the corporation proposes to be registered and the division of that share capital into shares of a fixed amount, being the same amount in respect of each share;
(d) the full name, residential address and date and place of birth of the subscriber or each subscriber to the statement;
(e) the number of shares (being at least one) that the subscriber or each subscriber agrees to take; and
(f) that the subscriber or subscribers desires or desire to be formed into a close corporation pursuant to the statement and proposes or propose to take the number of shares in the capital of the corporation set out opposite his or her name or their respective names.
(a) a change takes place in any of the matters set out in a close corporation’s founding statement;
(b) an entry is required by this Act to be made to a close corporation’s membership register (whether or not the entry is made); or
(c) an entry in a close corporation’s membership register is required by this Act to be altered (whether or not the alteration is made);
the corporation shall lodge a notice setting out particulars of the change, of the entry that is required to be made, or of the alteration that is required
to be made to an entry, as the case may be, within 14 days after the day on which the change took place or the requirement arose.
(a) is registered as a close corporation under this Act; and
(b) because of that registration is a body corporate;
and shall specify the day of commencement of the registration.
(a) all requirements of this Act (other than section 26) in respect of:
(i) registration of the corporation as a close corporation under this Act; and
(ii) matters preceding or incidental to the registration; have been complied with;
(b) the corporation is duly registered under this Act; and
(c) the day of commencement of the registration is the day specified as such in the certificate.
(a) is capable of performing all the functions of a body corporate;
(b) is capable of suing and being sued;
(c) has perpetual succession;
(d) shall have an official seal; and
(e) has power to acquire, hold and dispose of property.
(a) the subscribers to the founding statement of a proposed close corporation constitute all the members of a company;
(b) the company has a share capital;
(c) all the shares are fully paid up, are of the same value and have the same rights;
(d) the company is not a holding company of another body corporate;
(e) the company is not in default in respect of any of its obligations under the Corporations Act; and
(f) the founding statement states as mentioned in subsection 19 (2);
the certificate issued under section 21 shall state that the close corporation is the same body corporate as the company.
(a) affect the property, or the rights or obligations, of the body; or
(b) render defective any legal proceedings by or against the body;
and any legal proceedings that could have been continued or begun by or against the company may be continued or begun by or against the corporation.
(a) a written statement in a form made available by the Commission has been lodged;
(b) the statement is signed by the subscriber or subscribers to the proposed corporation’s founding statement;
(c) the statement specifies the day on which it was so signed, or the first day on which it was signed by any of the subscribers, as the case requires;
(d) the day specified is not more than 7 days before the founding statement was lodged for registration and not more than 28 days before the corporation is so registered; and
(e) the statement, whether or not it also states as mentioned in subsection (2), states as mentioned in subsection (3) or (4).
(a) the day of the proposed corporation’s incorporation; or
(b) the period referred to in subsection (2);
as the case requires, trading activities within the meaning of this Act will be the whole or a substantial part of the corporation’s activities.
(a) 21 days after the day of the proposed corporation’s incorporation; or
(b) the period referred to in subsection (2);
as the case requires, a person or persons other than the subscriber or subscribers will be a member or members and have interests in the corporation that together constitute a controlling interest in it.
(a) a close corporation is registered under Division 1; and
(b) the statement that was lodged for the purposes of section 25 and relates to the corporation states as mentioned in subsection 25 (4);
the corporation shall:
(c) if the statement states as mentioned in subsection 25 (2) and the corporation becomes dormant at its incorporation—within 14 days after the corporation first ceases to be dormant; or
(d) otherwise—within 35 days after the corporation’s incorporation;
lodge a statement that complies with this section.
(a) be in writing in a form made available by the Commission;
(b) be signed by a member; and
(c) specify the day on which it was so signed, being a day not more than 7 days before the statement is lodged.
(a) make such an application;
(b) take action in relation to the corporation under section 572 of the Corporations Act.
(a) the corporation:
(i) has contravened section 26; and
(ii) has lodged no certificate of compliance; or
(b) the corporation has lodged a notice under subsection 29 (2).
(a) the corporation has contravened section 83 in relation to a particular financial year;
(b) the Commission has given to the corporation a written notice requiring the corporation to lodge its certificate of compliance for that financial year within a specified period of at least 28 days after the notice is so given; and
(c) that period has ended and the corporation has not lodged a certificate of compliance for that financial year that includes a statement complying with section 84.
(a) as at that time, the corporation:
(i) has lodged for the purposes of section 26 a statement stating to the effect that the company does not intend as mentioned in subsection 26 (3); and
(ii) has lodged no certificate of compliance; or
(b) a statement included under section 84 in the last certificate of compliance lodged by the corporation before that time states to the effect that:
(i) as at a particular day, trading activities were not a substantial part of the corporation’s activities;
(ii) the corporation does not intend as mentioned in paragraph 84 (5) (b);
(iii) the corporation became dormant on a particular day that is not less than 3 months before that time;
(iv) trading activities were not a substantial part of the activities in which the corporation engaged during a particular period; or
(v) the corporation does not intend as mentioned in paragraph 84 (6) (c).
(a) is reserved or registered under this Part; or
(b) is a name, or a name of a kind, that is declared by the regulations to be unacceptable for registration under this Part.
(a) any use of the definite article as the first word in either name;
(b) any word, abbreviation or symbol included in either name that is required or permitted by section 31 to be so included; or
(c) the type, the size and case of letters, the size of any numbers or other characters, and any accents, spaces between letters, numbers or characters, and punctuation marks, used in either name.
(a) the abbreviation “C.C.” instead of the words “Close Corporation” in the name of the corporation;
(b) the symbol “&” instead of the word “and” in the name of the corporation; or
(c) any of those words instead of the corresponding abbreviation or symbol in the name of the corporation.
(a) that name consists only of the corporation’s registration number; or
(b) that name is available for registration under this Part in relation to that proposed close corporation by virtue of subsection 30 (3).
(a) a name is reserved under this section in respect of a proposed close corporation; and
(b) the Commission incorporates the close corporation by that name under this Act;
the Commission shall register the name of the corporation and, where the Commission does so, the name is no longer reserved.
(a) a name is reserved under this section in respect of a proposed close corporation; and
(b) the person who applied for the reservation of the name informs the Commission in writing that the person no longer wishes the name to be reserved;
the Commission shall cancel the reservation of the name.
(a) a name is reserved under this section in respect of a close corporation; and
(b) the corporation changes its name to that reserved name under section 39;
the Commission shall register the new name of the corporation and, where the Commission does so:
(c) the new name is no longer reserved; and
(d) the Commission shall cancel the registration of the name by which the corporation was registered before it changed its name.
(a) a name is reserved under this section in respect of a close corporation; and
(b) the corporation informs the Commission in writing that it no longer wishes the name to be reserved;
the Commission shall cancel the reservation of the name.
(a) the corporation may change its name to a name that is reserved in respect of that corporation under section 36; and
(b) if the Commission so directs, the corporation shall so change its name within 6 weeks after the date of the direction or within such longer period as the Commission allows, unless the Minister, by writing, annuls the direction.
(a) create a new legal entity;
(b) prejudice or affect the identity of the body corporate constituted by the corporation or its continuity as a close corporation;
(c) affect the property, or the rights or obligations, of the corporation; or
(d) render defective any legal proceedings by or against the corporation;
and any legal proceedings that could have been continued or begun by or against the corporation by its former name may be continued or begun by or against it by its new name.
(a) every public document of the corporation that is signed, issued or published; and
(b) every eligible negotiable instrument of the corporation that is signed or issued.
(a) every public document of a close corporation that is signed, issued or published; and
(b) every eligible negotiable instrument of a close corporation that is signed or issued;
the corporation shall, unless its registration number is part of its name, set out, in legible characters, after the corporation’s name where it first appears, the corporation’s registration number.
(a) use, or authorise the use of, a seal that purports to be the official seal of the corporation but contravenes subsection (1); or
(b) issue, sign or publish a public document of the corporation that contravenes subsection (2) or (3).
(a) its name; and
(b) in the case of its registered office—the expression “Registered Office”.
(a) a reference to the doing of an act by a close corporation includes a reference to the making of an agreement by the corporation and a reference to a transfer of property to or by the corporation; and
(b) a reference to legal capacity includes a reference to powers.
(a) to allot and issue fully paid shares in the corporation;
(b) to issue debentures of the corporation;
(c) to distribute any of the property of the corporation among the members, in kind or otherwise;
(d) to grant a floating charge on property of the corporation;
(e) to procure the corporation to be registered or recognised as a body corporate in any place outside Australia; and
(f) to do any other act that it is authorised to do by any other law (including a law of a foreign country).
“foreign companies law”, in relation to a State or Territory, means the law of that State or Territory relating to foreign companies within the meaning of that law.
(a) that, at all relevant times, any association agreement has been complied with;
(b) that a person who appears, from the founding statement of the corporation, as affected by any notice lodged under section 20, to be a member is such a member;
(c) that a person who is held out by the corporation or by a member to be an agent of the corporation has been duly appointed and has authority to exercise the powers and perform the duties customarily exercised or performed by an agent of the kind concerned;
(d) that an agent of the corporation who has authority to issue a document on behalf of the corporation has authority to warrant that the document is genuine and that an agent of the corporation who has authority to issue a certified copy of a document on behalf of the corporation has authority to warrant that the copy is a true copy;
(e) that a document has been duly sealed by the corporation if:
(i) it bears what appears to be an impression of the official seal of the corporation; and
(ii) the sealing of the document appears to be attested by a person, being a person who, by virtue of paragraph (b), may be assumed to be a member; and
(f) that the agents of the corporation properly perform their duties to the corporation.
(a) the person has actual knowledge that the matter that, but for this subsection, the person would be entitled to assume is not correct; or
(b) the person’s connection or relationship with the corporation is such that the person ought to know that the matter that, but for this subsection, the person would be entitled to assume is not correct;
and where, by virtue of this subsection, a person is not entitled to make a particular assumption in relation to dealings with a corporation, subsection
(1) has no effect in relation to any assertion by the corporation in relation to the assumption.
(a) the person has actual knowledge that the matter that, but for this subsection, the person would be entitled to assume is not correct; or
(b) the person’s connection or relationship with the corporation is such that the person ought to know that the matter that, but for this subsection, the person would be entitled to assume is not correct;
and where, by virtue of this subsection, a person is not entitled to make a particular assumption in relation to dealings with a corporation, subsection (2) has no effect in relation to any assertion by the corporation or by any other person in relation to the assumption.
(a) a close corporation’s founding statement or any of the contents of a close corporation’s founding statement;
(b) a document or the contents of a document; or
(c) any particulars;
merely because of either or both of the following:
(d) the founding statement, the document or the particulars has or have been lodged;
(e) the founding statement, the document or the particulars is or are referred to in any other document that has been lodged.
(a) to entitle a person to make the assumptions referred to in subsection (3) of that section in relation to dealings with a close corporation; or
(b) to entitle a person to make the assumptions referred to in subsection (3) of that section in relation to an acquisition or purported acquisition (whether direct or indirect) of title to property from a close corporation;
even if a person referred to in paragraph 47 (3) (b), (c) or (e) or an agent of the corporation referred to in paragraph 47 (3) (d) or (f):
(c) has acted or is acting fraudulently in relation to the dealings, or in relation to the acquisition or purported acquisition of title to property from the corporation, as the case may be; or
(d) has forged a document that appears to have been sealed on behalf of the corporation;
unless the person referred to in paragraph (a) or (b) of this section has actual knowledge that the person referred to in paragraph 47 (3) (b), (c) or (e), or the agent of the corporation referred to in paragraph 47 (3) (d) or (f), has acted or is acting fraudulently, or has forged a document, as is mentioned in paragraph (c) or (d) of this section.
(a) becomes a holding company of another body corporate; and
(b) does not within one month after so becoming a holding company:
(i) commence to be wound up; or
(ii) convert into a company;
the corporation contravenes this subsection.
(a) the shares being held by the person beneficially;
(b) the shares being held by the person as the executor of the will or administrator of the estate of a particular dead person; or
(c) the shares being held by the person as trustee or nominee for a particular person or persons.
(a) that subscriber becomes a member of the corporation; and
(b) that subscriber’s name and the number of shares held by that subscriber shall be entered in the corporation’s membership register.
(a) each becomes such a member; and
(b) the name of each of them and the number of shares held by each of them shall be entered in the corporation’s membership register.
(a) the person becomes a member of the corporation; and
(b) the person’s name and the number of shares concerned held by the person shall be entered in the corporation’s membership register.
(a) if they hold the shares otherwise than beneficially but in the same capacity—they shall be treated as one member in respect of their holding the shares;
(b) if they hold the shares otherwise than beneficially but in different capacities—each of them shall be treated as a separate member in respect of the capacity in which the person concerned holds the shares or, if the person holds the shares in 2 or more capacities, as a separate member in respect of each of those capacities; or
(c) if they hold the shares beneficially—they shall be treated as separate members.
(a) the transferor ceases to be a member of the corporation in that capacity; and
(b) the transferor’s name shall be removed from the corporation’s membership register in that capacity.
(a) make an order permitting the transfer; or
(b) make such other order as it thinks just and reasonable, which may include an order providing for the purchase of the shares by a specified member or by the corporation.
(a) an association agreement may adopt all or any of those provisions; and
(b) if there is no association agreement between members of a close corporation, those provisions constitute an association agreement between those members.
(a) any association agreement between the members; and
(b) any oral or written agreement between all the persons who are members for the time being that is not inconsistent with an association agreement referred to in paragraph (a).
(a) in the ordinary and proper conduct of the affairs of the corporation; and
(b) in or about anything necessarily done for the preservation of the business or property of the corporation.
(a) a member of a close corporation fails, by act or omission, to exercise a reasonable degree of care and diligence in acting on behalf of the corporation for the purposes of any business of the corporation; and
(b) as a result of the failure the corporation incurs any loss;
the member is liable to compensate the corporation for the loss.
(a) a member of a close corporation fails to act honestly in connection with any business of the corporation; and
(b) as a result of the failure the corporation incurs any loss;
the member is liable to compensate the corporation for the loss.
(a) a member or former member of a close corporation makes improper use of information acquired by virtue of being or having been a member; and
(b) as a result of the improper use:
(i) the member or former member or any other person receives any profit, gain or other benefit; or
(ii) the corporation suffers loss;
the member or former member is liable to account to the corporation for the profit, gain or other benefit or to compensate the corporation for the loss, as the case may be.
(a) keep such accounting records as correctly record and explain the transactions of the corporation and its financial position; and
(b) keep its accounting records in such a manner as will enable the preparation from time to time of true and fair accounts of the corporation.
“following period”, in relation to a statement that is included under this section in a close corporation’s certificate of compliance, means the period beginning on the day specified under paragraph (3) (b) in the statement and ending on the day specified under that paragraph in the certificate included under this section in the next certificate of compliance of the corporation to be lodged.
(a) be signed by a member of the corporation; and
(b) specify the day on which it was so signed, being a day that is not more than 28 days before the certificate is lodged.
(a) intends trading activities within the meaning of this Act to be the whole or a substantial part of the activities in which the corporation will engage during the whole or a specified part of the following period; or
(b) does not intend such trading activities to be the whole or a substantial part of the activities in which the corporation will engage during the whole or any part of the following period;
as the case requires.
(a) state to the effect that the corporation was so dormant and specify the day (in this section called the “dormancy day”) on which the corporation last became dormant;
(b) if the dormancy day is more than 3 months after the corporation was incorporated—state whether or not trading activities within the meaning of this Act were the whole or a substantial part of the activities in which the corporation engaged during the 3 months ending on the dormancy day; and
(c) if the dormancy day is less than 3 months before the day specified under paragraph (3) (b)—state whether or not the corporation intends that, within 3 months after the dormancy day:
(i) the corporation will cease to be dormant; and
(ii) trading activities within the meaning of this Act will be the whole or a substantial part of the corporation’s activities.
(a) was not false or misleading in a material particular; and
(b) did not have omitted from it a matter or thing the omission of which would render the information misleading in a material respect;
shall, for the purposes of subsection (4), be deemed to have made or authorised the making of a statement without having taken reasonable steps to ensure that the statement was not false or misleading.
(a) a person approves, at a meeting or otherwise, a document required by or for the purposes of this Act or required to be lodged; and
(b) the document contains a statement that, to the person’s knowledge, is false or misleading in a material particular, or omits any matter or thing without which the document is, to the person’s knowledge, misleading in a material respect;
the person shall be deemed to have authorised the making of the statement or the omission of the matter or thing.
of the corporation, being information, whether in documentary or any other form, that relates to the affairs of the corporation and that, to the knowledge of the officer:
(a) is false or misleading in a material particular; or
(b) has omitted from it a matter or thing the omission of which renders the information misleading in a material respect;
contravenes this subsection.
(a) is false or misleading in a material particular; or
(b) has omitted from it a matter or thing the omission of which renders the information misleading in a material respect;
without having taken reasonable steps to ensure that the information:
(c) was not false or misleading in a material particular; and
(d) did not have omitted from it a matter or thing the omission of which rendered the information misleading in a material respect;
contravenes this subsection.
(a) does an act or thing that the person is forbidden to do by or under a provision of this Act;
(b) does not do an act or thing that the person is required or directed to do by or under a provision of this Act; or
(c) otherwise contravenes a provision of this Act;
is, unless that provision or another provision of this Act provides that the person is guilty of an offence or provides that a contravention of the provision, or a contravention of the provision by the person, is not an offence, guilty of an offence by virtue of this subsection.
(a) subsection (1) operates in relation to a provision of this Act so as to make a person guilty of an offence; or
(b) a provision of this Act (other than this section) provides that a person is, in circumstances referred to in the provision, guilty of an offence;
and a penalty, pecuniary or otherwise, is set out in column 2 of the Schedule opposite to a reference to that provision, or to a provision in which that provision is included, in column 1 of the Schedule, the penalty applicable to the offence is:
(c) in the case of a natural person—the penalty so set out; or
(d) in the case of a body corporate—five times the pecuniary penalty so set out.
(a) in the case of a natural person—$500; or
(b) in the case of a body corporate—$2,500.
(a) alleging that the person has committed the prescribed offence and giving the prescribed particulars in relation to the prescribed offence;
(b) setting out the prescribed penalty in respect of the prescribed offence; and
(c) stating:
(i) in the case of a prescribed offence constituted by a failure to do a particular act or thing:
(a) that the obligation to do the act or thing continues despite the giving of the notice or the payment of the prescribed penalty;
(b) that if, within the period specified in the notice (being a period of at least 21 days), the person pays the prescribed penalty to the authority specified in the notice and does the act or thing, no further action will be taken against the person in relation to the prescribed offence; and
(c) that if, at the end of the period specified in the notice, the person has not paid the prescribed penalty to the authority specified in the notice or has not done the act or thing, proceedings may be instituted against the person; or
(ii) in the case of a prescribed offence, not being an offence constituted by a failure to do a particular act or thing:
(a) that if, within the period specified in the notice (being a period of at least 21 days), the person pays the prescribed penalty to the authority specified in the notice, no further action will be taken against the person in relation to the prescribed offence; and
(b) that if, at the end of the period specified in the notice, the person has not paid the prescribed penalty to the authority specified in the notice, proceedings may be instituted against the person.
(a) to give to a person more than one notice under that subsection in relation to an alleged commission by that person of a particular prescribed offence; or
(b) to give to a person a notice under that subsection in relation to a prescribed offence unless proceedings could be instituted against that person for that offence.
(a) if, within the period specified in the notice, the person pays the prescribed penalty to the authority specified in the notice, and does the act or thing—no proceedings may be instituted against the person in respect of the prescribed offence;
(b) if, at the end of the period specified in the notice, the person has paid the prescribed penalty to the authority specified in the notice but has not done the act or thing—no proceedings may be instituted against the person in respect of the prescribed offence, but the
obligation to do that act or thing continues, and section 165 applies in relation to the continued failure to that act or thing as if, on the day on which the person so paid the prescribed penalty, the person had been convicted of an offence constituted by a failure to do that act or thing;
(c) if, at the end of the period specified in the notice, the person has not paid the prescribed penalty to the authority specified in the notice but has done the act or thing—proceedings may be instituted against the person in respect of the prescribed offence; or
(d) if, at the end of the period specified in the notice, the person has not paid the prescribed penalty to the authority specified in the notice but has done the act or thing—the obligation to do that act or thing continues, and proceedings may be instituted against the person in respect of the prescribed offence.
(a) if, within the period specified in the notice, the person pays the prescribed penalty to the authority specified in the notice—no proceedings may be instituted against the person in respect of the prescribed offence; or
(b) if, at the end of the period specified in the notice, the person has not paid the prescribed penalty to the authority specified in the notice—proceedings may be instituted against the person in respect of the prescribed offence.
“authority” includes a person.
(a) by or under a provision, an act is required to be done within a particular period or before a particular time;
(b) failure to do the act within that period or before that time constitutes an offence; and
(c) the act is not done within that period or before that time;
then:
(d) the obligation to do the act continues, after that period has ended or that time has passed, and whether or not a person is convicted of a primary substantive offence in relation to failure to do the act, until the act is done; and
(e) subsections (3) and (4) apply.
(a) by or under a provision, an act is required to be done but neither a period within which, nor a time before which, the act is to be done is specified;
(b) failure to do the act constitutes an offence; and
(c) a person is convicted of a primary substantive offence in relation to failure to do the act;
then:
(d) the obligation to do the act continues, despite the conviction, until the act is done; and
(e) subsections (3) and (4) apply.
(a) at a particular time, a person is first convicted of a substantive offence, or is convicted of a second or subsequent substantive offence, in relation to failure to do the act; and
(b) the failure to do the act continues after that time;
then:
(c) the person is, in relation to failure to do the act, guilty of a further offence in respect of so much of the period throughout which the failure to do the act continues as elapses after that time and before the relevant day in relation to the further offence; and
(d) for the purposes of this Act and of the
Crimes Act 1914 , the further offence shall be deemed to be constituted by failure to do the act during so much of the period as so elapses.
(a) a person is guilty of an offence because of being involved in a contravention of a provision referred to in paragraph (1) (a) or (2) (a), being a contravention constituted by the failure to do an act; and
(b) throughout a particular period (in this subsection called the “relevant period”):
(i) the failure to do the act continues; and
(ii) a person (in this subsection called the “derivative offender”) is involved in the contravention constituted by the failure to do the act;
then:
(c) in a case where either or both of the following events occurs or occur:
(i) a person is convicted, before or during the relevant period, of a primary substantive offence in relation to failure to do the act;
(ii) the derivative offender is convicted, before or during the relevant period, of a primary derivative offence in relation to failure to do the act;
the derivative offender is, in relation to failure to do the act, guilty of an offence (in this paragraph called the “relevant offence”) in respect of so much (if any) of the relevant period as elapses:
(iii) after the conviction referred to in subparagraph (i) or (ii), or after the earlier of the convictions referred to in subparagraphs (i) and (ii), as the case may be; and
(iv) before the relevant day in relation to the relevant offence; and
(d) in a case where, at a particular time during the relevant period, the derivative offender is first convicted of a secondary derivative offence, or is convicted of a second or subsequent secondary derivative offence, in relation to failure to do the act:
(i) the derivative offender is, in relation to failure to do the act, guilty of a further offence in respect of so much of the relevant period as elapses after that time and before the relevant day in relation to the further offence; and
(ii) for the purposes of this Act and of the
Crimes Act 1914 , the further offence shall be deemed to be constituted by the derivative offender being involved in the failure to do the act during so much of the relevant period as so elapses.
“act” includes thing;
“primary derivative offence”, in relation to failure to do an act, means an offence (other than an offence of which a person is guilty by virtue of this section) of which a person is guilty by virtue of being involved in the contravention constituted by failure to do the act;
“primary substantive offence”, in relation to failure to do an act, means an offence (other than an offence of which a person is guilty by virtue of this section) constituted by failure to do the act, or by failure to do the act within a particular period or before a particular time;
“provision” means a section, or a subsection of a section, of this Act;
“relevant day”, in relation to an offence of which a person is guilty by virtue of this section, means:
(a) in a case where the information relating to the offence specifies a day in relation to the offence for the purposes of this section, being a day not later than the day on which the information is laid—the day the information so specifies; or
(b) otherwise—the day on which the information relating to the offence is laid;
“required” includes directed;
“secondary derivative offence”, in relation to failure to do an act, means an offence or further offence of which a person is, in relation to failure to do the act, guilty by virtue of paragraph (4) (c) or (d);
“substantive offence”, in relation to failure to do an act, means:
(a) a primary substantive offence in relation to failure to do the fact; or
(b) a further offence of which a person is, in relation to failure to do the act, guilty by virtue of subsection (3).
(a) the value of all the assets of the corporation exceeds, and would after payment of the dividend continue to exceed, the total liabilities of the corporation; and
(b) there are reasonable grounds to believe that the corporation is able, and would after payment of the dividend continue to be able, to pay its debts as and when they became due.
(a) by delivering the document to any member; or
(b) by leaving the document at, or sending the document by post to, the corporation’s registered office.
(a) the power of the Court to authorise a document to be served on a close corporation in a manner not provided for by this section; or
(b) the operation of any provision of a law in force in Australia, or of the rules, authorising a document to be served on a close corporation in a manner not provided for by this section.
(a) subject to subsection (2), the property immediately vests in the person named in the order without any conveyance, transfer or assignment; and
(b) the person who applied for the order shall, within 7 days after the passing and entering of the order, lodge an office copy of the order with such person (if any) as is specified for the purpose in the order.
(a) the property to which an order referred to in subsection (1) relates is property the transfer or transmission of which may be registered under a law of the Commonwealth, of a State or of a Territory; and
(b) that law enables the registration of such an order;
the property, even if it vests in equity in the person named in the order, does not vest in that person at law until the requirements of the law referred to in paragraph (a) have been complied with.
(a) a property vests in a person by force of this Act;
(b) the property is property the transfer or transmission of which may be registered under a law of the Commonwealth, of a State or of a Territory; and
(c) that law enables the person to be registered as the owner of that property;
that property, even if it vests in equity in that person by force of this Act, does not vest in that person at law until the requirements of the law referred to in paragraph (b) have been complied with.
(a) with respect to proceedings, and the practice and procedure, of the Federal Court of Australia under this Act;
(b) with respect to any matter or thing that is required or permitted by this Act to be prescribed by rules or is necessary or convenient to be prescribed by rules for carrying out or giving effect to this Act; and
(c) without limiting the generality of the foregoing, with respect to costs and with respect to rules as to meetings ordered by the Court.
(a) required or permitted by this Act to be prescribed by regulations; or
(b) necessary or convenient to be prescribed by regulations for carrying out or giving effect to this Act;
and, in particular, prescribing penalties not exceeding $500 for contraventions of the regulations.
——————
SCHEDULE Section 163
PENALTIES FOR OFFENCES COMMITTED BY NATURAL PERSONS
Column 1 | Column 2 |
Provision | Penalty |
Section 40 | $1,000 or imprisonment for 3 months, or both |
Section 41 | $1,000 or imprisonment for 3 months, or both |
Subsection 50 (2) | $1,000 or imprisonment for 3 months, or both |
Section 51 | $2,500 or imprisonment for 6 months, or both |
Subsection 87 (3) | $10,000 or imprisonment for 2 years, or both |
Subsection 89 (2) | $5,000 or imprisonment for 1 year, or both |
Subsection 94 (2) | $10,000 or imprisonment for 2 years, or both |
Subsection 101 (11) | $2,500 or imprisonment for 6 months, or both |
Subsection 134 (8) | $2,500 or imprisonment for 6 months, or both |
Subsection 153 (1) | $10,000 or imprisonment for 2 years, or both |
Subsection 153 (5) | $5,000 or imprisonment for 1 year, or both |
Subsection 154 (1) | $5,000 or imprisonment for 1 year, or both |
Subsection 155 (1) | $5,000 or imprisonment for 1 year, or both |
Subsection 155 (7) | $10,000 or imprisonment for 2 years, or both |
Section 158 | $1,000 or imprisonment for 3 months, or both |
Section 159 | $10,000 or imprisonment for 2 years, or both |
Section 160 | $10,000 or imprisonment for 2 years, or both |
Subsection 161 (2) | $10,000 or imprisonment for 2 years, or both |
Subsection 161 (4) | $5,000 or imprisonment for 1 year, or both |
Subsection 162 (1) | $10,000 or imprisonment for 2 years, or both |
Subsection 162 (2) | $5,000 or imprisonment for 1 year, or both |
[
House of Representatives on 25 May 1988
Senate on 14 October 1988
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