Constitution and Replaceable Rules

Better Essays

Constitution and replaceable rules
A company’s internal management may be governed by: provisions of the Corporations Act 2001 (the Corporations Act) that apply to the company - known as replaceable rules; a Constitution; or a combination of both (s135 and 136).
(Replaceable rules outlined contains a detailed listing of the text of the rules). Replaceable rules do not apply to proprietary companies where the one person is the sole director and sole member, although a constitution may be adopted.
The following companies must be governed by a constitution: public companies 'Limited by Guarantee ' who are applying to omit the word Limited from their name under section 150; 'No Liability ' public companies under s112; …show more content…

must not engage in any activity that would require disclosure to investors under Chapter 6, except for an offer of its shares to existing shareholders of the company or employees of the company or of a subsidiary of the company.
A no liability company cannot be a proprietary company.
Note 1: If a proprietary company contravenes s113, one consequence is that ASIC may require it to convert to a public company (s165).
Assumptions that a person can make when dealing with a company under s128 and s129:
S128(1)(2) entitlement to make assumptions 1. s129(1) that constitution and replaceable rules have been compliance with. Royal British Bank v Turquand (1865) 6 E&B 327 Royal British Bank v Turquand (1856) 6 E&B 327, and the "Rule in Turquand 's Case" refer to the rule of English law that a third party dealing with a company is entitled to presume that a person held out by the company has the necessary authority to act on behalf of the company; Oris Fund Management Ltd v National Austrlia Bank Ltd (2003) VSC 315 2. s129(2) Director or secretary named in ASIC doc’s are duly appointed and have customary authority. ANZ Banking Group Ltd v Aust Glass & Mirror (1991) 9 ACLC 702 3. s129(3) Officer or agent are duly appointed and have customary authority: Freeman & Lockyer v Buckhurst Park Properties (mangal) Ltd (1964) 2 QB 480; Re Madi Pty Ltd (1987) 5 ACLR 4. s129(4) Officers and agents proper

Get Access