Corporate Law Economic Reform Program Act 1999

Administered by Department of the Treasury

Legislation au C2004A00547 In force Act

Legislation content

Corporate Law Economic Reform Program Act 1999

Act No. 156 of 1999 as amended

This compilation was prepared on 22 May 2003

[This Act was amended by Act No. 146 of 1999
(as amended by Act No. 63 of 2002)]

Amendments from Act No. 146 of 1999
(as amended by Act No. 63 of 2002)

[Schedule 1 (item 339) amended Schedule 5 (item 11)
Schedule 2 (item 22) of Act No. 63 of 2002 further amended
Schedule 1 (item 339)
The amendments commenced on 5 December 1999]

Prepared by the Office of Legislative Drafting,
Attorney‑General’s Department, Canberra

 

 

 

Contents

1 Short title...................................

2 Commencement...............................

3 Schedule(s)..................................

Schedule 1—Main amendments of the Corporations Law

Schedule 2—Main amendments of the Australian Securities and Investments Commission Act 1989

Schedule 3—Consequential amendments of the Corporations Law

Part 1—Amendments relating to new Chapter 6D (Fundraising)

Part 2—Amendments relating to new Chapter 2L (Debentures)

Part 3—Amendments relating to new Chapter 2D (Officers)

Part 4—Amendments relating to new Chapter 2E (Related Parties)

Part 5—Amendments relating to new Part 2F.1 (Oppressive conduct of affairs)

Part 6—Amendments relating to new Part 2F.1A (Proceedings on behalf of a company by members and others)

Part 7—Amendments relating to new Part 9.4B (Civil penalty provisions)

Part 8—Amendments relating to new Part 12 of the ASIC Act (Accounting standards)

Part 9—Amendments relating to new Chapters 6 to 6C (Takeovers)

Schedule 4—Consequential amendments of Australian Securities and Investments Commission Act 1989

Part 1—Amendments relating to new Chapter 6D (Fundraising)

Part 2—Amendments relating to new Chapter 2F.1 (Oppression)

Part 3—Amendments relating to new accounting standards provisions in ASIC Act

Part 4—Amendments relating to new Chapter 6 (Takeovers)

Schedule 5—Consequential amendment of other Acts

Air Navigation Act 1920

Commonwealth Authorities and Companies Act 1997

Commonwealth Serum Laboratories Act 1961

Corporations Act 1989

Income Tax Assessment Act 1997

Life Insurance Act 1995

Qantas Sale Act 1992

Schedule 6—Miscellaneous amendments of the Corporations Law

Schedule 7—Miscellaneous amendments of other Acts

Australian Securities and Investments Commission Act 1989

Financial Sector Reform (Consequential Amendments) Act 1998

Schedule 8—Further amendment of the Corporations Law

Schedule 9—Further amendment of other legislation

Company Law Review Act 1998

Managed Investments Act 1998

Schedule 10—Amendments consequential on amendment of the Commonwealth Authorities and Companies Act 1997

Aboriginal and Torres Strait Islander Commission Act 1989

Agricultural and Veterinary Chemicals (Administration) Act 1992

Australia Council Act 1975

Australia New Zealand Food Authority Act 1991

Australian Broadcasting Corporation Act 1983

Australian Communications Authority Act 1997

Australian Film Commission Act 1975

Australian Film, Television and Radio School Act 1973

Australian Heritage Commission Act 1975

Australian Horticultural Corporation Act 1987

Australian Institute of Aboriginal and Torres Strait Islander Studies Act 1989

Australian Institute of Health and Welfare Act 1987

Australian Institute of Marine Science Act 1972

Australian Law Reform Commission Act 1996

Australian Maritime Safety Authority Act 1990

Australian National Maritime Museum Act 1990

Australian National University Act 1991

Australian Nuclear Science and Technology Organisation Act 1987

Australian Postal Corporation Act 1989

Australian Prudential Regulation Authority…

Overview

The Corporate Law Economic Reform Program Act 1999 was enacted to address issues and gaps in the Corporations Law and the Australian Securities and Investments Commission Act 1989. This Act, introduced by the Parliament of Australia, aimed to streamline and modernise the corporate law framework, enhancing regulatory oversight and ensuring more effective corporate governance. The Act sought to establish clearer duties and responsibilities for directors, officers, and employees of corporations, alongside provisions for civil and criminal penalties for non-compliance. It also aimed to improve the processes around company fundraising, debentures, and takeovers, ensuring that these activities are conducted in a transparent and fair manner. Furthermore, the Act introduced new mechanisms for the oversight and regulation of accounting standards, ensuring they align with international best practices and enhance the quality of financial reporting. The overall policy objective was to foster a more efficient and transparent corporate sector, which would contribute to economic stability and growth by increasing investor confidence and protecting stakeholders' interests.

Scope and Application

The Corporate Law Economic Reform Program Act 1999 applies to various entities and individuals within the Australian corporate and financial sectors. This Act primarily amends the Corporations Law and the Australian Securities and Investments Commission Act 1989 to introduce new provisions and modify existing ones, thereby regulating corporate governance, officer duties, fundraising, debentures, takeovers, and accounting standards. It applies to directors, officers, and employees of corporations, as well as to corporations and other entities conducting business within Australia. The Act's provisions can be extended or restricted through subordinate instruments, which provide flexibility in implementation and application. Certain exclusions apply, such as the Act not applying to acts or omissions of directors, officers, or employees of foreign companies unless those acts or omissions occur in connection with business carried out in Australia. Additionally, the Act includes transitional provisions to ensure a smooth implementation of the new laws, with specific dates for commencement of different sections to allow for phased application and adequate preparation by affected entities.

Key Provisions

  • The Corporate Law Economic Reform Program Act 1999 primarily introduces amendments to the Corporations Law and the Australian Securities and Investments Commission Act 1989, including the introduction of new chapters and sections. The Act establishes significant duties for directors, officers, and employees of corporations, requiring them to exercise their powers and discharge their duties with care and diligence, in good faith, and for the proper purpose of the corporation (sections 180-184). Additionally, it prohibits the improper use of position and information by these individuals, ensuring they do not gain personal benefits or cause detriment to the corporation (sections 182-183). Furthermore, the Act imposes obligations on companies to maintain proper records of directors' and officers' interests in transactions and to disclose these interests to the corporation (sections 186-188).
  • The Act also places various obligations on corporations and their officers, including the requirement for directors and officers to exercise their powers and duties with a degree of care and diligence appropriate to the circumstances of the corporation (section 180). It mandates that these individuals act in good faith and for a proper purpose, refraining from using their position or information to gain personal benefits or cause harm to the corporation (sections 181-184). Companies must ensure that their directors and officers do not have material personal interests in transactions with the corporation without proper disclosure and, if necessary, obtain approval from the Australian Securities and Investments Commission (ASIC) or other relevant authority (sections 186-188). Moreover, the Act imposes specific duties on company secretaries, including the responsibility to ensure compliance with certain statutory requirements and to notify ASIC of significant matters (section 188).
  • Breaches of the Act's provisions can lead to severe consequences. Civil penalty provisions are introduced for certain offences, with the court having the authority to declare contraventions and impose pecuniary penalties up to $200,000 or imprisonment for up to 5 years (section 1317E). The Act also outlines specific offences related to oppressive conduct, fundraising, debentures, and related-party transactions, each carrying penalties of up to 2000 penalty units or imprisonment for 5 years (sections 232, 233, 601LA, 601LB, 601LC, 601LD, 601LE). In addition, there are provisions for ASIC to take enforcement action, including the ability to seek declarations of contravention, pecuniary penalty orders, and compensation orders for damage suffered by the corporation (sections 1317G, 1317H). Criminal penalties apply for serious breaches, including imprisonment for up to 5 years for offences related to the misuse of position or information by officers and employees (sections 25, 26). The Act provides for both civil and criminal enforcement mechanisms, ensuring accountability and deterrence for non-compliance with its provisions.

Legal classification tags

Area of Law
Corporate Law & Governance
Securities Law
Competition Law
Instrument
Act
Concepts
Definitions & Interpretation
Commencement
Repeal & Amendment
Civil Penalty Provisions
Licensing & Registration
Enforcement Powers
Prohibited Conduct
Savings & Transitional Provisions
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.