Corporations Act 2001

Australia

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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 that sets out the laws dealing with business entities in Australia at federal and interstate level. It focuses primarily on companies, although it also covers some laws relating to other entities such as partnerships and managed investment schemes.

It is presently the largest corporations statute in the world^{[citation needed]}. 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 challenge in New South Wales v Commonwealth (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) 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 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 to legislate for its Industrial Relations reform agenda. This has led to some Labor 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.

Volume 1

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

Volume 2

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

Volume 3

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

Volume 4

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

Volume 5

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

Note 1

• Table of Acts

Act Notes

• Table of Amendments
• Note 2
• Table A

See also

• Partnerships Act 1891
• Income Tax Assessment Act 1936
• Income Tax Assessment Act 1997
• Australian Takeovers Panel

Links

• Corporations Act 2001, at ComLaw
• Corporations Regulations 2001, at ComLaw
• A speech by Justice Kirby mentioning the complexity of the Corporations Act: COMPANY LAW IN AUSTRALIA: PRINCIPLES AND APPLICATIONS, March 2005, High Court of Australia