Company Law - Constitution and Replaceable Rules

For the list of replaceable rules go to section

• 120

• 124

• 135

• 141

A constitution is mandatory for

• A publicly listed company

• A No liability company

• A public company limited by guarantee wishing to remove LTD from their name

• All of these are correct

A company has a choice to adopt a constitution

• Yes - all companies can choose if it suits them

• No - some companies must have a constitution

A propriety limited company with two equal shareholders

• Requires a constitution

• Might choose to adopt a constitution

• Can not rely on replaceable rules

A constitution can be

• adopted post registration

• decided prior to incorporation

• ordered by the court

• provided to members upon request

Section 136(5) requires that a public company lodge the following documents with ASIC if they adopt, modify or repeal a constitution

• A copy of the special resolution only within 14 days

                      

• A copy of the special resolution and the constitution within 14 days

• The constitution only within 28 days

• A copy of the special resolution only within 28 days

Section 140(1) provides that the replaceable rules and the constitution acts as statutory contract between

• (1)(a) the company and each director and secretary (1)(b) a member and each member (1)(c) the company and creditors

• (1)(a) the company and each director and secretary (1)(b) a member and each member (1)(c) the company and the members

• (1)(a) the company and each member (1)(b) the company and each director and secretary (1)(c) a member and each other member

• (1)(a) a member and each other member (1)(b) the company and each director and secretary (1)(c) the company and each member

What is the consequence of a breach of the replaceable rules applicable to members?

• Nothing - there are no consequences for a company

• The company has contravened the Corporations Act and liable for a civil penalty

• The company has contravened the Corporations Act but is not liable for a civil penalty under s135(3)

• Members may have a contractual right against the company

The statutory contract is applicable . . .

• when a provision relates directly to the rights and obligations as a member or an officer

• when a member also is an employee of the company

• when there is company constitution in place

• to every replaceable rule or the company constitution

Remedies for a breach of statutory contract does not include . . .

• Injunction

• Declaration

• Rectification

• Damages