Corporations Act 2001 - AbsoluteAstronomy.com

The Corporations Act 2001 (Cth), sometimes referred to just as the Corporations Act (or informally as the 'Corps' Act), is an act of the Commonwealth of Australia

Australia

Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...

that sets out the laws dealing with business entities in Australia

Australia

at federal and interstate level. It focuses primarily on companies, although it also covers some laws relating to other entities such as partnership

Partnership

A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...

s and managed investment schemes.

It is presently the largest corporations statute in the world . The CLERP reforms simplified the statute. At several thousand pages long, the statute dwarfs those of other nations such as Sweden, whose corporations statute, comparatively, is less than 200 pages long.

The Corporations Act is the principal legislation regulating companies in Australia. It regulates matters such as the formation and operation of companies (in conjunction with a constitution that may be adopted by a company), duties of officers, takeovers and fundraising.

Constitutional basis for the Act

The Commonwealth corporations law was the subject of a successful High Court of Australia

High Court of Australia

The High Court of Australia is the supreme court in the Australian court hierarchy and the final court of appeal in Australia. It has both original and appellate jurisdiction, has the power of judicial review over laws passed by the Parliament of Australia and the parliaments of the States, and...

challenge in New South Wales v Commonwealth
New South Wales v Commonwealth (1990)
New South Wales v The Commonwealth [1990] HCA 2; 169 CLR 482; 90 ALR 355, also known as the Incorporation Case, was a decision handed down in the High Court of Australia on 8 February 1990 concerning the corporations power in s51 of the Commonwealth Constitution...

(1990) 169 CLR 482 ('The Corporations Act Case'). In that case the Commonwealth was found to have insufficient power to legislate in relation to the formation of companies. Section 51(xx)

Section 51(xx) of the Australian Constitution

Section 51 of the Australian Constitution, is a subsection of Section 51 of the Australian Constitution that gives the Commonwealth Parliament the right to legislate with respect to "foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth"...

of the Australian Constitution was found to provide sufficient power for legislation applicable only to foreign corporations and corporations already formed within the Commonwealth. This decision led to the creation of a co-operative scheme, involving a referral of power

Section 51(xxxvii) of the Australian Constitution

Section 51 of the Australian Constitution permits the Commonwealth to legislate on matters referred to the Commonwealth by any state. As Australia is a federation, both states and the Commonwealth have legislative power, and the Australian constitution limits Commonwealth power...

from the Australian States. All Australian States have adopted the Corporations Act 2001 (Cth).

Under the Corporations Agreement between the States and the Commonwealth, all changes to the Act must be referred to the Ministerial Council for Corporations (MINCO) for approval. The co-operative scheme has come under pressure in recent times as the Commonwealth Government has sought to rely on the corporations power

Section 51(xx) of the Australian Constitution

to legislate for its Industrial Relations reform agenda. This has led to some Labor

Australian Labor Party

The Australian Labor Party is an Australian political party. It has been the governing party of the Commonwealth of Australia since the 2007 federal election. Julia Gillard is the party's federal parliamentary leader and Prime Minister of Australia...

States threatening to withdraw from the Corporations Agreement.

Outline of the Act

The Act is published in five volumes covering a total of ten chapters. The chapters have multiple parts, and within each part there may be multiple divisions. Each chapter contains a collection of sections.

Chapters 1–2K (ss. 1 – 282)

Chapter 1—Introductory
Chapter 2A—Registering a company
Chapter 2B—Basic features of a company
Chapter 2C—Registers
Chapter 2D—Officers and employees
Chapter 2E—Related party transactions
Chapter 2F—Members’ rights and remedies
Chapter 2G—Meetings
Chapter 2H—Shares
Chapter 2J—Transactions affecting share capital
Chapter 2K—Charges

Chapters 2L–5B (ss. 283AA – 601DJ)

Chapter 2L—Debentures
Chapter 2M—Financial reports and audit
Chapter 2N—Updating ASIC information about companies and registered schemes
Chapter 2P—Lodgments with ASIC
Chapter 5—External administration
Chapter 5A—Deregistration, and transfer of registration, of companies
Chapter 5B—Bodies corporate registered as companies, and registrable bodies

Chapters 5C–6D (ss. 601EA – 742)

Chapter 5C—Managed investment schemes
Chapter 6—Takeovers
Chapter 6A—Compulsory acquisitions and buy‑outs
Chapter 6B—Rights and liabilities in relation to Chapter 6 and 6A matters
Chapter 6C—Information about ownership of listed companies and managed investment schemes
Chapter 6CA—Continuous disclosure
Chapter 6D—Fundraising

Chapter 7 (ss. 760A – 1101J)

Chapter 7—Financial services and markets
- Part 7.10—Market misconduct and other prohibited conduct relating to financial products and financial services
  - 1041A Market manipulation
    Market manipulation
    Market manipulation describes a deliberate attempt to interfere with the free and fair operation of the market and create artificial, false or misleading appearances with respect to the price of, or market for, a security, commodity or currency...

Chapters 9 and 10 (ss. 1274 – 1471)

Chapter 9—Miscellaneous
Chapter 10—Transitional provisions

Schedules 3 and 4

Schedule 3—Penalties
Schedule 4—Transfer of financial institutions and friendly societies