Companies Act Amendment Act 1972 (Qld)

382 Q ueflts1ztktr ANNO VICESIMO PRIMO ELIZABETHAE SECUNDAE REGINAE No. 37 of 1972 An Act to Amend the Companies Act 1961-1971 in certain particulars , for purposes incidental thereto and for other purposes [ASSENTED TO 21ST DECEMBER, 1972] BE IT ENACTED by the Queen's Most Excellent Majesty, by and with the advice and consent of the Legislative Assembly of Queensland in Parliament assembled, and by the authority of the same, as follows:- PART I-PRELIMINARY 1. Short title. This Act may be cited as the Companies Act Amendment Act 1972. 2. Parts of Act. This Act is divided into Parts as follows:- PART I-PRELIMINARY; PART 11-AMENDMENTS TO THE COMPANIES ACT 1961-1971 AND ANOTHER ACT; PART III-REGULATION OF VOTING RIGHTS IN PUBLIC COMPANIES.

Companies Act Amendment Act 1972, No. 37 383 PART II-AMENDMENTS TO THE COMPANIES ACT 1961-1971 AND ANOTHER ACT 3. Citation . (1) The Companies Act 1961-1971 is in this Part referred to as the Principal Act. (2) The Principal Act as amended by this Part may be cited as the Companies Act 1961-1972. 4. Amendment of s. 9. Company auditors and liquidators . Section 9 of the Principal Act is amended by inserting in subsection (7), after the words " his general conduct and character ", the words " and is satisfied that he has acquired such practical experience in accounting and auditing as the Board deems sufficient ". 5. New ss. 10 and 11 . The following sections are inserted after section 9 of the Principal Act:- " 10. Corporate Affairs Advisory Committee . (1) The Governor in Council may constitute a committee (called the Corporate Affairs Advisory Committee) consisting of not less than four and not more than nine members. (2) The Commissioner for Corporate Affairs, or in his absence the nominee of the Commissioner, shall, ex officio, be a member of the Committee. (3) The Committee shall be deemed to be established on and from the date of the first appointment of members thereof. (4) The members of the Committee other than the ex officio member shall be appointed upon the recommendation of the Minister after consultation with such organizations and persons as the Minister thinks appropriate, by the Governor in Council by notification published in the Gazette. (5) Two persons named as such in the notification of their appointment shall be respectively the chairman and deputy chairman of the committee. (6) In the event of a vacancy occurring in the office of chairman or deputy chairman the Governor in Council may designate a member of the committee to be chairman or, as the case may be, deputy chairman. (7) The members of the Committee other than the ex officio member shall, subject to this Act, hold their respective offices for such period as may be prescribed. (8) The Committee shall meet at such times and places and conduct its business in such manner as may be prescribed or, in so far as not prescribed, as it deems fit. (9) A majority of members of the Committee for the time being shall form a quorum at any meeting of the Committee. (10) The chairman, or in his absence the deputy chairman, shall preside at all meetings of the Committee at which he is present. If both the chairman and deputy chairman are absent from any duly convened meeting of the Committee, the members present shall appoint one of their number to preside at the meeting. (11) Each member shall receive such fees and allowances, if any, as the Governor in Council may determine.

384 Companies Act Amendment Act 1972, No. 37 11. Functions of Committee . (1) The principal function of the Corporate Affairs Advisory Committee is to establish a working relationship between the Commissioner and the principal organizations concerned with the operation of the laws relating to companies and the securities industry. (2) The Committee may initiate and refer to the Minister- (a) recommendations relating to the administration of laws relating to companies and the securities industry; (b) recommendations relating to the operation of the laws relating to companies and the securities industry. (3) It shall be the duty of the Committee to consider and advise the Minister upon such matters and questions as the Minister may refer to it relating to the administration or operation of the laws relating to companies and the securities industry." 6. Amendment of s. 14 . Formation of companies . Section 14 of the Principal Act is amended by omitting from paragraph (a) of subsection (3) the word " fifty " and inserting in its stead the words " one hundred ". 7. Amendment of s. 159A. Auditor's statement . Section 159A of the Principal Act is amended by omitting from subsection (2) the phrase " is an unlimited company that, pursuant to section 165A " and inserting in its stead the phrase ", pursuant to section 165A or 165B ". 8. Repeal of s. 165A and new ss . 165A , 165B and 1650 . Section 165A of the Principal Act is repealed and the following sections are inserted in its stead:- " 165A. Appointment of auditor in relation to exempt proprietary company. (1) The directors of an exempt proprietary company that is an unlimited company are not required to appoint an auditor under subsection (1) of section 165c or subsection (1) of section 166 if- (a) between the date of the commencement of the Companies Act Amendment Act 1972, or of incorporation of the company, and the date referred to in paragraph (b) no member of the company is a person other than a natural person or an exempt proprietary company that is an unlimited company or a corporation that, under the law of another State or of a Territory of the Commonwealth, is an exempt proprietary company that is an unlimited company; and (b) all members of the company have agreed on a date not more than one month after the date of commencement of the Companies Act Amendment Act 1972 or of the incorporation of the company that it is not necessary for the company to appoint an auditor. (2) An exempt proprietary company that is an unlimited company is not required to appoint an auditor under subsection (3) of section 166 at an annual general meeting, whether that

Companies Act Amendment Act 1972, No. 37 385 meeting is the first annual general meeting held after the company is incorporated as, or converts to, such a company or is a subsequent annual general meeting, if- (a) at the date of the annual general meeting no member of the company is a person other than a natural person or an exempt proprietary company that is an unlimited company or a corporation that, under the law of another State or of a Territory of the Commonwealth, is an exempt proprietary company that is an unlimited company; and (b) not more than one month before the annual general meeting all members of the company have agreed that it is not necessary for the company to appoint an auditor. (3) Where a company, by reason of the circumstances referred to in subsection (1) or (2), does not have an auditor the secretary of the company shall record a minute to that effect in the book containing the minutes of proceedings of general meetings of the company. (4) An exempt proprietary company that at an annual general meeting did not appoint an auditor shall at the next annual general meeting of the company appoint an auditor unless the conditions referred to in subsection (2) are satisfied. (5) Within one month after- (a) a company that by reason of the circumstances referred to in subsection (1) or (2) does not have an auditor ceases to be an exempt proprietary company or ceases to be an unlimited company; or (b) a body corporate other than- (i) an exempt proprietary company that is an unlimited company; or (ii) a corporation that under the law of another State or of a Territory of the Commonwealth is an exempt proprietary company that is an unlimited company, becomes a member of an exempt proprietary company that by reason of the circumstances referred to in subsection (1) or (2) does not have an auditor, the directors of the company shall appoint (unless the company at a general meeting has appointed) a person or persons or a firm as auditor or auditors of the company. (6) A person or firm appointed as auditor of a company under subsection (5) shall, subject to this Division, hold office until the next annual general meeting of the company. 165B. Exempt proprietary company need not appoint an auditor in certain circumstances . (1) Notwithstanding the provisions of this Part, an exempt proprietary company that is not an unlimited company is not required to appoint an auditor at an annual general meeting, whether that meeting is the first annual general meeting held after the company is incorporated 13

386 Companies Act Amendment Act 1972, No. 37 as, or becomes, such a company or is a subsequent annual general meeting, if not more than one month before the annual general meeting all members of the company have agreed that it is not.necessary for the company to appoint an auditor (2) The directors of an exempt proprietary company that is not an unlimited. company are not required to comply with subsection (1) of section 165c or subsection (1) of section 166 if all members of the company have agreed on a date not more than one month after the date of commencement of the Companies Act Amendment Act 1972 or of the incorporation of the company that it is not necessary for the company to appoint an auditor. (3) Where a company, by reason of the circumstances referred to in subsection (1) or (2), does not have an auditor the secretary of the company shall record a minute to that effect in the book containing the minutes of proceedings of general meetings of the company. (4) An exempt proprietary company that is not an unlimited company and that at an annual general meeting did not appoint an auditor shall at the next annual general meeting of the company appoint an auditor unless the conditions referred to in subsection (1) are satisfied. (5) The directors of a company that by reason of the circumstances referred to in subsection (1) or (2) does not have an auditor shall lodge with the Commissioner with each annual return under section 158 or 159 a copy of all accounts and group accounts (if any) laid before the company at the annual general meeting held on the date to which the return is made up, or if an annual general meeting is not held on that date the annual general meeting last preceding that date and shall include in or attach to each annual return a certificate signed by not less than two directors of the company stating whether- (a) the company has, in respect of the financial year to which the return relates- (i) kept such accounting records as correctly record and explain the transactions and financial position of the company; (ii) kept its accounting records in such a manner as would enable true and fair accounts of the company to be prepared from time to time; and (iii) kept its accounting records in such a manner as would enable the accounts of the company to be conveniently and properly audited in accordance with-this Act; and (b) the accounts have been properly prepared by a competent person. (6) Where- (a) directors of a company state in a certificate in respect of a financial year of a company that- (i) the company did not keep such accounting records as are required by this Act to be kept;

Companies Act Amendment Act 1972, No. 37 387 (ii) the accounting records of the company were not kept in the manner required by this Act; or (iii) the accounts of the company have not been properly prepared by a competent person; (b) a - director of a company has been convicted under subsection (2) of section 375 of an offence in relation to a certificate under subsection (5); or (c) a statement made and signed in compliance with subsection (10) of section 162 is not attached to the copy of the account:, lodged with the Commissioner in compliance with subsection (5), the directors of the company shall within one month after the date of the annual return or the conviction (as the case requires) appoint (unless the company at a general meeting has appointed) a person or persons or a firm as auditor or auditors of the company. (7) Within one month after a company that by reason of the circumstances referred to in subsection (1) or (2) does not have an auditor ceases to be an exempt proprietary company the directors of the company shall appoint (unless the company at a general meeting has appointed) a person or persons or a firm as auditor or auditors of the company. (8) A person or firm appointed as auditor of a company under subsection (6) or (7) shall, subject to this Division, hold office until the next annual general meeting of the company and subsection (1) shall not apply to or in relation to that company. 1650. Obligation to appoint auditor upon company incorporated prior to commencement of this Part. (1) The directors of an exempt proprietary company incorporated before the date of commencement of this Part that does not have an auditor, shall within one month after the date of commencement of the Companies Act Amendment Act 1972 or such later date as the Commissioner in the special circumstances may allow, appoint (unless the company at a general meeting has appointed) a person or persons or a firm as auditor or auditors of the company. (2) If a director of a company fails to take all reasonable steps to comply with, or to secure compliance with, subsection (1) he shall be guilty of an offence. Penalty: $100. Default penalty: $10. (3) A person or firm appointed as auditor of a company under subsection (1) shall, subject to this Division, hold office until the next annual general meeting of the company.". 9. Amendment of No. 8 of 1971. (1) The Companies Act Amendment Act 1971 is amended- (a) by omitting subsections (4) to (8) (both inclusive) of section 47; (b) by omitting paragraph (a) of section 173. (2) The. Companies Act Amendment Act1971 as amended by this section may be cited as the Companies Act Amendmnen Act 1971-1972.

388 Companies Act Amendment Act 1972, No. 37 PART III-REGULATION OF VOTING RIGHTS IN PUBLIC COMPANIES 10. Regulatory declaration upon transfer of shares . Where, by reason of a transfer or transfers of shares in a public company- (a) the aggregate of the voting rights that attach to the shares in the hands of the holders is increased over and above the voting rights that attached to the shares in the hands of the transferor; or (b) the aggregate of the voting rights that attach to the shares in the hands of the holders and to the shares remaining in the hands of the transferor is increased over and above the voting rights that attached to all of those shares in the hands of the transferor. and the Governor in Council is of opinion that in relation to those shares or any of them there exists an agreement, arrangement, understanding or scheme whereby the voting rights that attach to the shares shall be exercised at any general meeting of the company in accordance with the wishes or directions of any person other than the holder thereof, the Governor in Council may, in his discretion, by Order in Council declare that the voting rights that attach to the shares in the hands of the holders or, as the case may be, in the hands of the holders and in the hands of the transferor (being shares that in his opinion are affected by the agreement, arrangement, understanding or scheme) shall not exceed the voting rights that would attach to all of those shares in the hands of the transferor. 11. Regulatory declaration where no transfer of shares. Where the Governor in Council is of opinion that there exists in relation to shares in a public company an agreement, arrangement, understanding or scheme whereby the voting rights that attach to those shares shall be exercised, in whole or in part, in collusive combination with the voting rights that attach to any other voting shares in the company the Governor in Council may, in his discretion by Order in Council declare that for the purpose of voting at any general meeting of the company the voting rights that attach to all the shares to which the declaration relates shall be calculated upon the aggregate of those shares as if they were held by one only shareholder and shall be exercisable by one only of the registered holders of those shares. 12. Injunction and regulatory declaration where vote taken . (1) Where a vote has been taken at any general meeting of a public company and the Minister is of opinion that in respect of that vote there existed an agreement, arrangement, understanding or scheme between two or more holders of shares in the company as to the manner in which the votes were cast for the purposes of the taking of that vote, the Minister may issue an interim injunction directed to the directors and officers of the company restraining them and each one of them from- (a), disposing of the assets of the company otherwise than in the bona fide ordinary course of business of the company; and (b) removing, destroying or concealing the share registers and records of the company. The Minister shall cause a copy of the interim injunction to be furnished to the secretary of the company.

Companies Act Amendment Act 1972, No. 37 389 (2) Where the Governor in Council is of opinion that there existed in respect of a vote taken at any general meeting of a public company an agreement, arrangement, understanding or scheme such as is referred to in subsection (1), the Governor in Council may, in his discretion by Order in Council, declare the meeting and all the resolutions thereat to be and to have been of no effect, whereupon the situation in respect of the company shall thereby be restored to the position obtaining immediately before the meeting and, if he does so, shall in like manner make in relation to the shares that in his opinion were affected by the agreement, arrangement, understanding or scheme the declaration provided for in section 11. 13. Incidents of Minister ' s injunction . (1) An interim injunction issued pursuant to section 12- (a) shall operate on and from the date of its issue until the expiration of a period of six months from that date or until it is withdrawn by the Minister, whichever event first occurs; (b) upon its being filed in the Supreme Court shall have effect, and all remedies may be pursued and granted for a breach thereof as if it had been made and issued by the Supreme Court and duly served in accordance with the Rules of that court; (c) may be withdrawn by the Minister by writing given to the secretary of the company concerned if the Minister is satisfied that the reason for its issue no longer exists. (2) Where an interim injunction issued pursuant to section 12 has been filed in the Supreme Court a withdrawal thereof by the Minister shall be filed in that court. 14. Matters relevant to making declarations . In determining whether to make a declaration pursuant to this Part the Governor in Council shall have regard to- (a) the interests of the holders of shares in the company other than the shares alleged to be affected by the agreement, arrangement, understanding or scheme in question; (b) the interests of holders of debentures of the company; (c) the interests of employees of the company; (d) the interests of consumers of the company's products or services (e) the interests of the State's economy. 15. Duration of declaration . (1) A declaration made by the Governor in Council pursuant to this Part shall remain in force until the Order in Council whereby it was made is revoked and, until such revocation, shall operate in respect of the general meeting of the company in relation to which it was made (if any) and in respect of every general meeting held after the date of making of the Order in Council whereby it was made. (2) The cessation of a declaration referred to in subsection (1) shall not invalidate or otherwise prejudice any general meeting held during the subsistence of the declaration or of any proceedings at such a meeting.

390 Companies Act Amendment Act 1972, No. 37 16. Identification of shares to which declaration relates. (1) The Governor in Council shall, in a declaration made pursuant to this Part, identify the shares whose voting rights are affected by the declaration in such manner as he thinks fit. (2) Where the Governor in Council has made a declaration pursuant to this Part the Minister shall cause a copy of the Order in Council to be furnished to the secretary of the company to the shares wherein the declaration relates. 17. Revocation and modification of declaration . Where the Governor in Council is satisfied that the reason for making a declaration pursuant to this Part no longer exists in respect of all or any of the shares to which the declaration relates he may, as the case requires, revoke the declaration in the manner prescribed or modify the declaration, by means of a further Order in Council, so as to exclude from its application the shares identified by him in the instrument of modification and, if he does so, the Minister shall cause a copy of the instrument of revocation or of modification to be furnished to the secretary of the company to the shares wherein the declaration relates. 18. Effect of declaration affecting voting rights. (1) For as long as a declaration made by the Governor in Council pursuant to this Part that affects the voting rights attaching to any shares remains in force it shall be incompetent to the holder or holders of the shares to which the declaration relates at the material time to exercise or authorize the exercise of voting rights that attach to those shares so as to constitute a failure to comply with the declaration or otherwise than in accordance with the declaration. (2) A declaration referred to in subsection (1) shall affect as prescribed the voting rights attaching to the shares to which it relates notwithstanding that the shares or any of them have been the subject of a further transfer or transfers. (3) A vote of any person in relation to the affairs of a public company shall be disregarded to the extent that it is incompetent by reason of subsection (1) or in so far as it is cast pursuant to a purported authority that is incompetent by reason of that subsection. A director, servant or agent of a company who fails to comply with this subsection commits an offence against this Act. 19. Powers material to making of declarations . (1) The Governor in Council may make a declaration pursuant to this Part on his own motion or upon application made to the Minister by- (a) the company concerned; (b) any holder of shares in the company; (c) any holder of debentures of the company; or (d) any industrial union or association representing employees of the company, and may make such declaration ex pate or after such notice as he deems appropriate has been given to the company concerned and otherwise as he directs.

Companies Act Amendment Act 1972, No. 37 391 (2) To facilitate the making of a determination by the Governor in Council as to whether a declaration should be made pursuant to this Part, revoked or modified the Minister may in writing direct that a general meeting of a company be postponed or further postponed pending the determination and may direct the company to advertise the date, time and place of such postponed or further postponed meeting in such manner as the Minister directs. Any general meeting held on a date to which it is postponed or further postponed by direction of the Minister and every proceeding at such a meeting shall be as valid as if the same had taken place on the date and at the time and place where, but for the direction, it would have been duly held. 20. Minister may require information and production of documents. (1) Where the Minister has reason to believe that a person is capable of giving information or producing documents relating to matters that are relevant to the exercise by the Governor in Council or by the Minister of his powers under this Part the Minister may, by notice in writing given to that person require that person- (a) to furnish to him, by writing signed by that person or, in the case of a body corporate, by a competent officer of the body corporate, within the time and in the manner specified in the notice, any such information; (b) to produce to him, or to a person specified in the notice, in accordance with the notice, any such documents. (2) Without limiting the generality of the power conferred by subsection (1) the power of the Minister under that subsection to require a person to furnish information includes the power- (a) to require a public company to furnish to the Minister the names and addresses of persons who are registered holders of shares in the company; and (b) to require a person who is a registered holder of shares in a public company to furnish to the Minister such information in that person's possession as the Minister requires in relation to the beneficial ownership of the shares or in relation to any trusts, agreements, arrangements, understandings, schemes and practices affecting the shares or any rights carried by the shares. 3) A person shall not- (a) fail to comply with a notice under this section to the extent that he is capable of complying with it; or (b) furnish information that. he knows to be false or misleading (4) A person is not excused from furnishing information or producing a document in response to a requisition directed to him under this section on the ground that the information or document might tend to incriminate him, but his answer to any question asked in the requisition, or his furnishing of information pursuant to the requisition is not admissible in evidence against him in any criminal proceedings other than proceedings for an offence against this Part. 21. General penalty. (1) A person who contravenes or fails to comply with any provision of this Part or a direction given under this Part and applicable to him commits an offence against this Part.

392 Companies Act Amendment Act 1972, No. 37 (2) A person who commits an offence against this Part is liable on summary conviction to a penalty of $1,000. Where the person who commits an offence is a body corporate, that body corporate and every officer who is in default (within the meaning of that expression in the Companies Act 1961-1972) shall be taken to have committed the offence and to be liable to the penalty prescribed. 22. Prosecutions to be authorized . Proceedings for an offence against this Part shall be taken only with the authority of the Minister. In any proceedings for an offence judicial notice shall be taken of the Minister's signature to any document or writing relevant to the proceedings. 23. To be read as one with CompaniesAct. This Part shall be read as one with the Companies Act 1961-1972.