Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

Mercantile credit co v garrod

15/11/2021 Client: muhammad11 Deadline: 2 Day

CORPORATIONS LAW: IN PRINCIPLE

..................

Thomson Reuters (Professional) Australia Limited 19 Harris Street Pyrmont NSW 2009

Tel: (02) 8587 7000 Fax: (02) 8587 7100 LTA.Service@thomsonreuters.com

http://legal.thomsonreuters.com.au For all customer inquiries please ring 1300 304 195

(for calls within Australia only)

INTERNATIONAL AGENTS & DISTRIBUTORS

NORTH AMERICA ASIA PACIFIC Thomson Reuters Thomson Reuters

Eagan Sydney United States of America Australia

LATIN AMERICA EUROPE Thomson Reuters Thomson Reuters

São Paulo London Brazil United Kingdom

CORPORATIONS LAW:

IN PRINCIPLE

.....................................

TENTH EDITION

Jeswynn Yogaratnam

LLB (Hons) (University of London),

LLM (Tax) (University of Queensland)

Lecturer in Law, Charles Darwin University

Lidia Xynas

BEc (Monash), LLB (Hon)(Deakin), LLM (Monash),

GDLP (Monash), GCHE (Deakin), FGIA, TIA

Associate Professor, Victoria University Director Teaching & Learning, College of Law & Justice, Victoria University Australian Lawyer of the Supreme Court of Victoria

LAWBOOK CO. 2017

Published in Sydney by

Thomson Reuters (Professional) Australia Limited ABN 64 058 914 668

19 Harris Street, Pyrmont, NSW

First edition (L Griffiths & R Rouse) 1992

Second edition (L Griffiths) 1994

Third edition (L Griffiths & S Woodward) 1996

Fourth edition (S Woodward & H Bird) 1999

Fifth edition (S Woodward, H Bird & S Sievers) 2001

Sixth edition 2003

Seventh edition 2005

Eighth edition (T Ciro & C Symes) 2009

Ninth edition (T Ciro & C Symes) 2013

National Library of Australia Cataloguing-in-Publication entry Creator: Yogaratnam, Jeswynn, author. Corporations law : in principle / Jeswynn Yogaratnam, Lidia Xynas 10th ed. ISBN 9780455237961 (pbk) Includes index. Previous edition: 2013 Corporation law—Australia. Corporation law—Australia—Problems, exercises, etc. Other Creators/Contributors: Xynas, Lidia, author. 346.94066

© 2017 Thomson Reuters (Professional) Australia Limited

This publication is copyright. Other than for the purposes of and subject to the

conditions prescribed under the Copyright Act 1968, no part of it may in any form or by

any means (electronic, mechanical, microcopying, photocopying, recording or

otherwise) be reproduced, stored in a retrieval system or transmitted without prior

written permission. Inquiries should be addressed to the publishers.

Copyright of Cth legislative material: All Commonwealth legislative material is

reproduced by permission but does not purport to be the official or authorised

version. It is subject to Commonwealth of Australia copyright. For reproduction or

publication beyond that permitted by the Copyright Act 1968 (Cth), permission should

be sought in writing from the current Commonwealth Government agency with the

relevant policy responsibility.

Editor: Lalitha Vyamajala Product Developer: Elizabeth Gandy

Publisher: Robert Wilson

Printed by Ligare Pty Ltd, Riverwood, NSW

This book has been printed on paper certified by the

Programme for the Endorsement of Forest Certification

(PEFC). PEFC is committed to sustainable forest

management through third party forest certification of

responsibly managed forests. For more info: http://

www.pefc.org

Preface How up to date?

The tenth edition of Corporations Law: In Principle has been based on corporations legislation in force as at June 2016. This has meant revision of several Topics to re�ect changes to the Corporations Act 2001 (Cth), the publication of recent government and industry reports and discussion papers, and new case law. Another key feature in this edition is an attempt to include material from the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (CATSI Act) and the Office of the Registrar Indigenous Corporations, in particular corresponding provisions with the Corporations Act 2001 (Cth).

Recent amendments to corporations legislation:

• Corporations Legislation Amendment (Audit Enhancement) Act 2012 (Cth)

• Corporations Amendment (Proxy Voting) Act 2012 (Cth)

• Corporations Legislation Amendment (Financial Reporting Panel) Act 2012 (Cth)

• Commonwealth Government Securities Legislation Amendment (Retail Trading) Act 2012 (Cth)

• Corporations Legislation Amendment (Derivative Transactions) Act 2012 (Cth)

• Personal Liability for Corporate Fault Reform Act 2012 (Cth)

• Corporations and Financial Sector Legislation Amendment Act 2013 (Cth)

• Corporations Amendment (Simple Corporate Bonds and Other Measures) Act 2014 (Cth)

• Corporations Legislation Amendment (Deregulatory and Other Measures) Act 2015 (Cth)

• Corporations Amendment (Financial Advice Measures) Act 2016 (Cth)

• Insolvency Law Reform Act 2016 (Cth)

Recent government department and industry reports, discussion papers, guidance notes, inquiries and reviews:

• ASIC “Consultation Paper 256: Remaking and repealing ASIC class orders on trustee company common funds” (March 2016)

• ASIC “Consultation Paper 255: Remaking ASIC class orders on financial services disclosure requirements” (March 2016)

• ASIC “Consultation Paper 254: Regulating digital financial product advice” (March 2016)

• ASIC “Consultation Paper 253: Remaking and repealing ASIC class orders on dollar disclosure” (February 2016)

• ASIC “Consultation Paper 252: Remaking ASIC class order on share and interest sale facilities” (February 2016)

• ASIC “Consultation Paper 154: Infrastructure Entities: Improving Disclosure to Retail Investors” (April 2011)

• ASIC “Consultation Paper 150: Disclosing Financial Information Other Than in Accordance with Accounting Standards” (March 2011)

• CAMAC “Managed Investment Schemes Discussion Paper” (June 2011)

• CAMAC “Derivatives Report” (December 2011)

• Council of Financial Regulators “OTC Derivatives Market Reform Considerations: A Report by the Council of Financial Regulators” (March 2012)

• Council of Financial Regulators “Review of Financial Market Infrastructure Regulation” (October 2011)

Significant cases in this edition, particularly in relation to directors’ duty of care, include: Agricultural Land Management Ltd v Jackson (No 2) (2014); and ASIC v Marinier Corp Ltd (2015).

Acknowledgments

We would like to thank all staff from Thomson Reuters who were involved in the production of the tenth edition of this publication. In particular, our sincere thanks goes to Janet Armstrong for conveying our ideas to the publishers, Natasha Naude for bringing the team together, Elizabeth Gandy for her expedient product development coordination and Lalitha Vyamajala for her attention to detail as the Editor.

We also acknowledge all the previous authors for their contributions to earlier editions, which have built a solid basis for this continuing work. Many thanks are also due to Ann O’Connell for revising and updating the topics she has contributed since the 4th edition (Chapters 21, 22 and 23). As for research assistance, we acknowledge Genna Churches for her excellent research skills, shared enthusiasm in the area of law and expedient delivery to meet tight timelines. Both authors also thank their academic institutions at Charles Darwin University and Victoria University, respectively for supporting their research and work in this edition. We would also like to thank the Office of the Registrar of Indigenous Corporations (ORIC) for granting us the permission to use their materials in this edition.

Most importantly, Jeswynn Yogaratnam expresses gratitude to his family especially mum Chandra Muthu and her husband Thomas Kley for their continued emotional nourishment, support and motivation which allowed for the timely completion of this edition. Similarly, Lidia Xynas expresses her gratitude to her husband Arthur Xynas and her children Alexander and Billy, for their love, support and understanding over the many months it has taken to finalise this edition.

We would welcome any comments or suggestions you have.

JESWYNN YOGARATNAM Jeswynn.Yogaratnam@cdu.edu.au

LIDIA XYNAS Lidia.Xynas@vu.edu.au

Darwin and Melbourne September 2016

VI CORPORATIONS LAW: IN PRINCIPLE

Acknowledgments Extracts from the material below have been reproduced in this book:

The Age (by Fairfax Media Publications Pty Ltd): http://www.theage.com.au

• Michael Maiden, “Hardie Case Puts Boards on Notice”, 4 May 2012.

• Leonie Wood, “ASIC Wins Case against Centro Directors”, 27 June 2011.

The Australian: http://www.theaustralian.com.au/

• Damon Kitney, “ASIC Pushes For More Powers As it Wants to Impose Listing Rules on ASX”, Tuesday 27 December 2011

• Blair Speedy, “ASIC Confirms Investigation into EB Bid for David Jones”, Tuesday 3 July 2012

The Australian Financial Review (by Fairfax Media Publications Pty Ltd): http:// www.afr.com

• Brett Clegg & Patrick Durkin, “Directors Urge Overhaul of Corporate Law”, 10 March 2008

ASIC (Australian Securities and Investments Commission): http://www.asic.gov.au

• ASIC Regulatory Guide 6, “Takeovers: Exceptions to the General Prohibition”.

• ASIC Regulatory Guide 25, “Takeovers: False and Misleading Statements”.

• Media Release 11-150, “Opes Prime Directors Jailed”, Wednesday 27 July 2011.

• Media Release 11-188, “Centro Civil Penalty Proceedings”, Wednesday 31 August 2011.

• Media Release 12-191, “Former AWB Managing Director Found to Have Breached His Duties”, Thursday 9 August 2012.

• Media Release 12-192, “Former AWB Chief Financial Officer Found to Have Breached Duties”, Friday 10 August 2012.

• Media Release 15-007, “ASIC acts against Pluton Resources for disclosure and reporting failures”, Wednesday 21 January 2015.

• Media Release 16-010, “Margin lenders improve lending standards following ASIC review”, Thursday 21 January 2016.

• ASIC “Report 469: ASIC Regulation of Corporate Finance: July to December 2015”, Friday 26 February 2016.

ASX Limited (Australian Securities Exchange): http://www.asx.com.au

• ASX Listing Rule 3.1 (partially reproduced).

ORIC (Office of the Registrar of Indigenous Corporations): http://www.oric.gov.au/

• Media Release 1213–16, “Landmark decision against former CEO of Kempsey Medical Service”, Wednesday 31 October 2012.

• Media Release 1314–08, “Women lead the way in Aboriginal and Torres Strait Islander corporations”, Monday 16 September 2013.

• Media Release 1415–08, “Former Darwin CEO committed to stand trial in NT Supreme Court”, Wednesday 17 September 2014.

• Media Release 1415–27, “Registrar takes action against former directors of Canberra housing corporation”, Monday 30 March 2015.

• Media Release 1415–29, “Federal Court bans former Bunurong directors”, Thursday 16 April 2015.

• Media Release 1415–35, “Former Darwin CEO sentenced”, Tuesday 12 May 2015.

• Media Release 1415–36, “School is back in for Minimbah”, Thursday 28 May 2015.

• Media Release 1516–17, “Registrar calls general meeting for Yindjibarndi”, Wednesday 23 March 2016.

• Media Release 1516–21, “Restructure breaks deadlock at GSNT”, Monday 30 May 2016.

• Media Release 1516–23, “Registrar assists Larrakia Nation”, Monday 06 June 2016.

• Media Release 1516–25, “Registrar lays charges against former native title director”, Thursday 30 June 2016.

• Image of “The Rule Book Condensed”.

• Image of “Corporation Reporting Guide”.

Takeovers Panel: http://www.takeovers.gov.au

• Guidance Note 4: Remedies General.

• Guidance Note 5: Speci�c Remedies — Information De�ciencies.

• Guidance Note 20: Equity Derivatives.

VIII CORPORATIONS LAW: IN PRINCIPLE

Table of Contents

Preface ........................................................................................ v

Acknowledgments .................................................................... vii

Abbreviations ............................................................................. xi

Tips on Studying ....................................................................... xv

1 History, Administration and Reform ........................................ 1

2 Business Organisations ........................................................ 31

3 Registration .......................................................................... 83

4 Consequences of Registration ............................................... 97

5 Internal Rules ...................................................................... 119

6 Management of Companies ................................................ 147

7 Corporate Liability: Contract, Tort and Crime ....................... 183

8 Promoters and Pre-registration Contracts ........................... 221

9 Membership ....................................................................... 235

10 Meetings .......................................................................... 257

11 Directors’ Duties – Part 1 Duty of Care, Skill and Diligence ............................................................. 291

12 Directors’ Duties – Part 2 Good Faith and Proper Purpose ............................................................... 367

13 Directors’ Duties – Part 3 Conflict of Interest and Disclosure ........................................................... 387

14 Members’ Rights and Remedies ........................................ 423

15 Financial Reports and Audit .............................................. 467

16 Share Capital – General Nature .......................................... 499

17 Classes of Shares .............................................................. 517

18 Transactions Affecting Share Capital ................................. 545

19 Dividends .......................................................................... 575

20 Loan Capital ...................................................................... 587

21 Fundraising ....................................................................... 611

22 Financial Services, Products and Markets ......................... 643

23 Takeovers .......................................................................... 687

24 External Administration ..................................................... 723

Glossary .................................................................................. 757

Table of cases ....................................................................... 785

Table of statutes ................................................................... 801

Index ..................................................................................... 819

X CORPORATIONS LAW: IN PRINCIPLE

Abbreviations

AASB Australian Accounting Standards Board

ABLR Australian Business Law Review

ABN Australian Business Number

ACN Australian Company Number

AC Appeal Cases (England)

ACCC Australian Competition and Consumer Commission

ACLC Australian Company Law Cases

ACLR Australian Company Law Reports

ACSR Australian Corporations and Securities Reports

AGM Annual General Meeting

ALJ Australian Law Journal

ALJR Australian Law Journal Reports

All ER All England Law Reports

ALR Australian Law Reports (after 1973);Argus Law Reports (until 1973)

APRA Australian Prudential Regulatory Authority

ARBN Australian Registered Body Number

ABA Australian Bankers Association

ASA Australian Shareholders Association

ASIC Australian Securities and Investments Commission (formerly ASC — Australian Securities Commission)

ASIC Law Australian Securities and Investments Commission Act 1989 (Cth) (as amended)

ASIC Act Australian Securities and Investments Commission Act 2001 (Cth) (as amended)

ASX Australian Securities Exchange Ltd

ATR Australian Tax Review

Aust Jnl of Corp Law

Australian Journal of Corporate Law

CALDB Companies Auditors and Liquidators Disciplinary Board

CAMAC Corporations and Markets Advisory Committee (2001–2014)

CASAC Companies and Securities Advisory Committee (1990–2001)

CATSI Act Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth)

Ch Chancery (England)

Ch App Chancery Appeals (England)

Corporations Act

Corporations Act 2001 (Cth) (as amended)

Corporations Law

Corporations Act 1989 (Cth) (as amended) (for the Australian Cap- ital Territory) and Corporations ([State/Territory]) Act 1990 (as amended) of each State and the Northern Territory

CLR Commonwealth Law Reports

CLERP Corporate Law Economic Reform Program

CLERP Act 1999 Corporate Law Economic Law Reform Program Act 1999 (Cth)

CLERP 7 Corporations Legislation Amendment Act 2003 (Cth)

CLERP 8 Cross-Border Insolvency Act 2008 (Cth)

CLERP 9 Corporate Law Reform (Audit Reform and Corporate Disclosure) Act 2004 (Cth)

XII CORPORATIONS LAW: IN PRINCIPLE

C&SLJ Company and Securities Law Journal

COAG Council of Australian Governments

CSLRC Companies and Securities Law Review Committee (1984–1990)

Cth Commonwealth

EGM Extraordinary General Meeting

FCA Federal Court of Australia

FCR Federal Court Reports

FLR Federal Law Reports

FSR Act Financial Services Reform Act 2001 (Cth)

GST Goods and Services Tax

KB King’s Bench (England)

IASB International Accounting Standards Board

ILJ Insolvency Law Journal

JIBLR Journal of International Banking Law and Regulation

LIJ Law Institute of Victoria Journal

Listing Rules Australian Securities Exchange Ltd Listing Rules

MonLR Monash Law Review

MLR Modern Law Review

MULR Melbourne University Law Review

NSWLR New South Wales Law Reports

NSWR New South Wales Reports

NSWSC New South Wales Supreme Court

ABBREVIATIONS XIII

NZLR New Zealand Law Reports

ORIC Office of the Registrar of Indigenous Corporations

QB Queen’s Bench (England)

QLR Queensland Law Reports

QSC Queensland Supreme Court

SASC South Australian Supreme Court

SASR South Australian State Reports

SR (NSW) State Reports (New South Wales)

TLR Tasmanian Law Reports

TSC Tasmanian Supreme Court

UNSWLJ University of New South Wales Law Journal

VLR Victorian Law Reports

VR Victorian Reports

VSC Victorian Supreme Court

WAR Western Australian Reports

WASC Western Australian Supreme Court

WLR Weekly Law Reports (England)

WN (NSW) Weekly Notes (New South Wales)

XIV CORPORATIONS LAW: IN PRINCIPLE

Tips on Studying The aim of this book is to make understanding company law easier. The material covered in this subject is vitally important for people who are going out into the business world. The Corporations Act is a very complex piece of legislation and some of the general law principles which underpin it are difficult to comprehend. This book is an attempt to re-state the law in understandable terms and to provide a clear structure. Wider reading is further encouraged once basic principles are understood.

The reason many students struggle with their understanding of corporations law is that they fail to identify the relevant issues in problems.

It is therefore important that students adopt a workable study technique. Corporations Law as a subject should be divided into manageable topics and a framework developed to aid understanding for each topic. The framework should be related to the issues likely to arise under each topic. This book contains a number of aids to assist students in this task.

Workbook Study Aids Aid Purpose of Aid Student Use

Guide to Problem Solving — at the end of each Chapter

Set out in a step-by-step for- mat the points to be consid- ered when answering prob- lem questions

Preparation for essays and exams involving issue-based problems

Flowcharts, timelines and tables — throughout each Chapter

Set out in a summary form the issues which are likely to arise on problem-based questions on a particular topic

Preparation for essays and exams — in particular, struc- turing the answer to ensure that all issues are discussed in a logical order

The Guide to Problem Solving at the end of each Chapter gives examples of some of the different methods that can be used. Students should use a method of summarising issues that best suits their way of learning and develop their own checklists or tests.

Exam preparation

There are numerous excellent texts on examination technique and students should avail themselves of them. 1 Time management is one area which must not be overlooked. Most marks are usually awarded early in an answer, so it is a poor strategy to spend time improving an answer instead of starting the next one. For revision, this book provides a good starting point with the Guides to Problem Solving. However, it is vital that students obtain a sound knowledge of the major points of each Chapter during the semester in order to be able to identify the relevant issues.

1 For example, Frazer S, How to Study Law, 2nd ed, LBC, 1997, Keyzer P, Legal

Problem Solving, Butterworths, 1994 and Krever R, Mastering Law Studies and Law

Exam Techniques, 9th ed, LexisNexis, 2016.

Once a basic understanding of the subject has been achieved, the next thing to do is to look closely at past examination papers and make a list of the most likely issues to

be covered. At least 10 to 12 should be identi�ed. These issues should be concentrated upon and the guidelines (in this book or self-prepared) annotated.

Finally, past questions should be attempted in point form with most effort directed to selecting the right issue(s).

The standard technique for answering legal problems is:

(a) the issue is stated;

(b) the relevant legal principle (for example, section of the Corporations Act) is stated;

(c) the law is applied in precise detail to the facts of the problem; and

(d) a reasoned conclusion is drawn from the arguments presented.

Where more than one legal principle is mentioned, the whole procedure is repeated for each principle and an overall reasoned conclusion drawn.

Writing a formal answer

1. State the issue(s) involved in the question.

2. State the relevant law for the �rst issue (if there are more than one). If both statute and case law apply, deal with the statute �rst.

3. Apply the law to the facts. This means explaining why the law that you have just stated is relevant to the facts of the problem. As far as possible, use the actual words stated in the problem when explaining the law’s relevance. (a) If the relevant law is the statute, you must explain why the statute is

wide enough to cover the fact situation you are analysing. This may involve explaining how the words of the statute have been interpreted by courts and in turn, whether they cover or include the facts of the problem.

(b) If the relevant law is case law, you must explain why the case law is relevant to the facts of your problem. You should make use of the principles known as the doctrine of precedent to do this.

4. Provide argument. It is necessary to consider the law from both parties’ points of view. Sometimes the law can be interpreted in different ways for argument’s sake; sometimes the relevant cases differ in their interpretations of the law. One side might choose one interpretation, the other side, another. The best answers show an understanding of these differences.

5. Do the same for each issue.

6. Draw a reasoned conclusion from your preceding arguments. You should try to decide in favour of one of the parties.

EXAMPLE

Hacker and McIntosh owned a small computer company, Honeypot Pty Ltd, which produced specialised software programs.

Hacker acted as the managing director even though he had never actually been appointed. One contract he entered into on behalf of Honeypot was for $50,000 worth of hardware from BIM. At the time, the sales manager at BIM suspected

XVI CORPORATIONS LAW: IN PRINCIPLE

Honeypot was in trouble so he obtained guarantees from Hacker and McIntosh, to protect BIM’s position. When Honeypot failed, Hacker and McIntosh realised that as guarantors they would have to pay the $50,000 (as the company had no assets). They desperately sought a way out and were delighted when they remembered that Hacker had no real authority to enter into the contract on Honeypot’s behalf. Therefore, they thought the contract was unenforceable.

Assuming that the manner in which the contract has been executed is not in contention, will Hacker and McIntosh be liable for the $50,000 under their personal guarantees? Explain.

SUGGESTED ANSWER

The issue

The legal issue in the dispute concerning Honeypot Pty Ltd and BIM is: “When is a company bound in contract by a person who purported to represent the company, but who in fact has no authority to do so?”

Relevant law

The argument would centre on interpretation of ss 128–129 of the Corporations Act, and the cases of Freeman & Lockyer and Brick & Pipe.

Main legal principle

Section 129 lists certain assumptions that a person dealing with a company (in this case, BIM) is entitled to make. The relevant assumption in this problem is s 129(3)(c), which says:

that a person may assume that anyone who is held out by the company to be an officer ... of the company has been duly appointed and has authority to exercise the powers ... customarily exercised ... by that kind of officer — of a similar company.

Argument on the facts

It would seem that Hacker was held out by Honeypot to be managing director as the facts state that “Hacker acted as managing director”. It is likely that Hacker would have entered into other contracts on behalf of Honeypot before the contract between Honeypot and BIM was established. If this was the case, then it would appear to outside parties that Hacker did hold the position of managing director at Honeypot. As Hacker and McIntosh are equivalent to the company, being at such a senior level (owners) that their state of mind is regarded as that of the company’s, BIM has held out Hacker to be managing director. Therefore, BIM is entitled to make the assumption that Hacker is authorised to act on its behalf as it would normally be within a managing director’s powers to enter into a contract for $50,000.

Supporting cases

Cases which support this view are Freeman & Lockyer and Brick & Pipe. In both cases it was held that the company was bound to a contract entered into by a person who was not properly appointed as managing director. The court said that as the company had allowed the person to act as managing director, the company was estopped from denying that representation.

TIPS ON STUDYING XVII

Second principle and opposing argument

However, it is not always the case that an outsider can rely on the statutory assumptions in s 129. Section 128(4) contains a proviso that these assumptions cannot be made if at the time of the dealings they “knew or suspected” that the assumption in s 129(3) was incorrect.

Application of the second principle

If s 128(4) applies, then the assumption in s 129(3) cannot be relied upon and, therefore, the contract between Honeypot and BIM will be unenforceable because of the absence of (substantive) authority. It is mentioned that the sales manager of BIM “suspected” Honeypot was in financial trouble and so obtained guarantees from Hacker and McIntosh. However, there does not appear to be any evidence that he knew or suspected that the assumption in s 129(3) was incorrect — that is, that Hacker was not duly appointed as Honeypot’s managing director with authority to enter such a contract. It is therefore arguable that the exception in s 128(4) will not apply to BIM.

Conclusion

In conclusion, it would seem most likely that BIM will, by reliance on the assumption in s 129(3), be able to enforce its contract with Honeypot. On balance, it is unlikely that the knowledge of BIM’s sales manager would be sufficient to bring the exception into play. If Honeypot has insufficient assets to meet its obligations under the contract, then Hacker and McIntosh will be liable for any shortfall in the $50,000 under their personal guarantees.

NOTES

Be careful to read the question closely. The reference in the question to “Assuming that the manner in which the contract has been executed is not in contention”, tells you not to spend valuable time discussing the ways a company can execute a contract — that is, formal authority, ss 126–127. The lecturer has deliberately narrowed the scope of the question (possibly because of the amount of time there might be in the exam to spend on this question), to a consideration of the issue of authority (that is, substantive authority).

The question raises a very contentious point namely, how will the exceptions in s 128(4) be interpreted: see Chapter 7. There is no clear answer to this especially on the facts given. Remember, marks are awarded for:

• identifying that the law is unclear; and

• expressing a considered opinion, whether or not the lecturer would take the same view.

The length (and detail) of the answer should reflect the proportion of marks allocated to the question. If more time was allowed, the cases could be discussed in more detail. However, the basic structure should still be followed. Short headings are a helpful way to guide the marker (for example, “Issue”, “Relevant Law”, “Conclusions” etc).

XVIII CORPORATIONS LAW: IN PRINCIPLE

CHAPTER 1 .......................................................................................................

History, Administration and Reform

Useful Websites ......................................................................... 1

Recent Developments ................................................................ 1

Aim ............................................................................................. 2

Principles ................................................................................... 2

Pre-1991 ........................................................................................ 3

Corporations Law scheme – 1991-2001 ................................................. 4

Referral of powers to the Commonwealth July 2001 – Corporations Act 2001 (Cth) ...................................................................................... 6

Reform programs post-1991 ............................................................... 7

Australian Securities and Investments Commission (ASIC) ....................... 15

Office of the Registrar of Indigenous Corporations and the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) .............................. 27

Mentor: Test your Knowledge ................................................. 28

Practice Questions ................................................................... 29

Essay Questions ...................................................................... 29

Further Reading ....................................................................... 29

Useful Websites ......................................................................................................................................

(See http://legal.thomsonreuters.com.au/browse/mentor/corplawhub.asp for links to websites on the Topic of History, Administration and Reform.)

Recent Developments ......................................................................................................................................

Australian Securities and Investments Commission

Consultation Paper 256: Remaking and repealing ASIC class orders on trustee company common funds (March 2016)

Consultation Paper 255: Remaking ASIC class orders on financial services disclosure requirements (March 2016)

Consultation Paper 254: Regulating digital financial product advice (March 2016)

C h

ap te

r 1

Consultation Paper 253: Remaking and repealing ASIC class orders on dollar disclosure (February 2016)

Consultation Paper 252: Remaking ASIC class order on share and interest sale facilities (February 2016)

Corporations Act Amendments

Corporations Legislation Amendment (Audit Enhancement) Act 2012 (Cth) Corporations Amendment (Proxy Voting) Act 2012 (Cth) Corporations Legislation Amendment (Financial Reporting Panel) Act 2012 (Cth) Commonwealth Government Securities Legislation Amendment (Retail Trading)

Act 2012 (Cth) Corporations Legislation Amendment (Derivative Transactions) Act 2012 (Cth) Personal Liability for Corporate Fault Reform Act 2012 (Cth) Corporations and Financial Sector Legislation Amendment Act 2013 (Cth) Corporations Amendment (Simple Corporate Bonds and Other Measures) Act

2014 (Cth) Corporations Legislation Amendment (Deregulatory and Other Measures) Act

2015 (Cth) Corporations Amendment (Financial Advice Measures) Act 2016 (Cth)

Aim ......................................................................................................................................

At the end of this topic you should know:

• how the Corporations Law came into existence and how the scheme worked from 1991 until 2001;

• why it was replaced by a Commonwealth Corporations Act;

• the role and functions of the Australian Securities and Investments Commission (ASIC); and

• the major reform programs that have occurred and the process for future reforms.

PRINCIPLES [1.10] Companies are artificial creations. Characteristics of companies which we now take for granted were acquired gradually over a long period of time. Australia has adopted several different legislative approaches to the regulation of companies over the years. From 15 July 2001, a truly national regulatory scheme has finally been put in place. It is important for you to have some knowledge of the evolution of the legislation in order to be able to understand the cases and the reasons why it has been necessary for the States to pass legislation referring certain powers to the Commonwealth government

2 CORPORATIONS LAW: IN PRINCIPLE

allowing it to enact the Corporations Act 2001 (Cth) (Corporations Act) and the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).

[1.20]

Figure 1.1: Evolution of national regulatory scheme ....................................................................................................

Pre-1991

Constitutional difficulties .......................................................................................................................................................................

[1.30] In Australia, the administration of company law has been complicated by our political system. The States are sovereign; they can make their own laws except in relation to those matters which the Commonwealth Constitution states to be within the legislative powers of the Commonwealth government. Section 51(xx) of the Constitution gives the Commonwealth government a limited power to make laws with respect to “foreign corporations and trading or financial corporations formed within the limits of the Commonwealth”, but power to legislate for the registration (that is, the formation) of corporations belongs to the States: see New South Wales v Commonwealth (1990) 169 CLR 482. However, the States can “refer” their powers to the Commonwealth and did so in this case.

Originally, each State passed and administered its own Companies Act. However, it was realised over time that a national scheme was necessary. Companies wishing to raise funds or conduct business on a national basis were frustrated by the need to meet different requirements in each State. This lack

C h

ap te

r 1

CHAPTER 1 HISTORY, ADMINISTRATION AND REFORM 3

of legislative and administrative uniformity combined with multiple regulators was also hampering supervision of the share markets and, thus, prejudicing investor protection.

Co-operative scheme – 1979-1990 .......................................................................................................................................................................

[1.40] Moves to enact uniform companies legislation to overcome these difficulties began in the 1960s, but uniformity was not achieved until the introduction of the Co-operative Scheme in 1979. Under this scheme the Commonwealth Parliament passed a package of legislation regulating companies and securities that applied directly in the Australian Capital Territory. Each State then passed statutes applying the Commonwealth Acts as part of the laws of that State. The existing State bodies (Corporate Affairs Commissions) administered the routine aspects of the new scheme, while the National Companies and Securities Commission (NCSC) was responsible for policy decisions and the regulation of takeovers and securities. By the end of the 1980s, it was clear that there were serious defects in the Co-operative Scheme.

Despite increasing pressure for a national scheme, the Commonwealth had to struggle to assert supremacy. In 1989 the then Commonwealth (Labor) government attempted to enact legislation to cover the field of incorporation and regulation of companies. However, the validity of the Corporations Act 1989 (Cth) was successfully challenged in the High Court by the States of New South Wales, South Australia and Western Australia: New South Wales v Commonwealth (1990) 169 CLR 482.

Corporations Law scheme – 1991-2001

Evolution .......................................................................................................................................................................

[1.50] After this decision, it was recognised that a compromise was required. The compromise (known as the Alice Springs Agreement) resulted in the Commonwealth Parliament passing an amendment to the Corporations Act 1989 (Cth) to apply it in the Australian Capital Territory. Each State and the Northern Territory agreed to adopt the Commonwealth legislation by passing an Application Act. The amended legislation, once adopted, became known as the “Corporations Law”. Thus, in this respect, the Corporations Law scheme that applied until 15 July 2001 was similar to the Co-operative Scheme it replaced.

The Corporations Law scheme was distinguished from the earlier Co- operative Scheme because in 1991, for the first time, the Commonwealth government gained control of the administration, enforcement and (to a large

4 CORPORATIONS LAW: IN PRINCIPLE

extent) reform of corporate law. From 1991, administration and enforcement has been carried out by the Australian Securities and Investments Commission (ASIC) which is responsible to the Commonwealth Attorney-General.

Operation of the Corporations Law scheme .......................................................................................................................................................................

[1.60] Several provisions were enacted to ensure that the Corporations Law scheme would operate in a truly national way (as distinct from the Co-operative Scheme). For example, a national regulator (ASIC) was in sole charge of administration and enforcement of the legislation and it was not necessary for each jurisdiction to pass amending legislation each time the Corporations Law was amended (each State's Application Law applied the Corporations Law “as in force for the time being”). This “federalising” of the Corporations Law scheme was expressly embodied in s 26(a) of each State's Act. This section provided that the Corporations Law of each jurisdiction was to be:

administered and enforced on a national basis, in the same way as if those Laws constituted a single law of the Commonwealth.

As mentioned earlier, the Corporations Law scheme gave the Commonwealth Government the most important role to play in reform programs. Sole- responsibility for reforms to national markets (that is, securities, takeovers, futures and public fundraising) was given to the Commonwealth Government, although the advice of the Ministerial Council (which included the State Attorneys-General) was required to be tabled when such reforms were introduced in the Commonwealth Parliament. Although reforms in other areas required the approval of the Ministerial Council, the Commonwealth Government was not obliged to introduce any proposals with which it did not agree. Thus, the States could use the Ministerial Council to block reforms in certain areas, but they could not use it to force changes that the Commonwealth did not agree with.

Constitutional challenges .......................................................................................................................................................................

[1.70] Several cases, notably Re Wakim; ex parte McNally (1999) 198 CLR 511, Bond v R (2000) 201 CLR 213 and R v Hughes (2000) 202 CLR 535 indicated that the High Court doubted the constitutional validity of the Corporations Law scheme. In Re Wakim, the High Court held that the cross-vesting legislation, under which State jurisdiction to hear corporate law matters had been conferred on federal courts, was unconstitutional. Even though both the Commonwealth and the States had agreed to the scheme, under the Commonwealth Constitution the States had no power to pass this legislation. Following this decision, the States were forced to pass legislation

C h

ap te

r 1

CHAPTER 1 HISTORY, ADMINISTRATION AND REFORM 5

validating all earlier decisions of the Federal Court in Corporations Law matters: see, for example, Federal Courts (Consequential Amendments) Act 2000 (Vic), Pt 4. Cases in progress were transferred to State Supreme Courts. The decisions in Bond v R and R v Hughes raised issues about the constitutionality of aspects of the administration of the Corporations Law, the powers of ASIC and the Commonwealth Director of Public Prosecutions (DPP).

In 2007, the Takeovers Panel's ability to hear and determine applications for unacceptable circumstances made under s 657A(2)(b) of the Corporations Act 2001 (Cth) was challenged on grounds that the Takeovers Panel was exercising judicial powers of the Commonwealth. Under the Australian Constitution, a court can only exercise Commonwealth judicial powers. The Full Federal Court held by a 2:1 majority that applications dealing with unacceptable circumstances under s 657 amounted to an exercise of Commonwealth judicial power and under the Commonwealth Constitution only a court could determine the matter: Australian Pipeline Ltd v Alinta Ltd (2007) 159 FCR 301. On appeal, the High Court upheld the validity of s 657A(2)(b), including the Takeover's Panel jurisdiction to hear and determine such applications: Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542.

Referral of powers to the Commonwealth July 2001 – Corporations Act 2001 (Cth)

[1.80] The successful constitutional challenges in Re Wakim; ex parte McNally (1999) 198 CLR 511 and the other cases mentioned in [1.70] caused widespread uncertainty for the Australian and the international business community. Pressure from business led the Commonwealth and the States to reach an inter-governmental reference agreement on 21 December 2000 to resolve these constitutional difficulties by the States passing legislation referring the following powers to the Commonwealth Parliament:

• the power to make laws in respect of corporations; and

• the power to make amendments to those laws.

The wording of the referral has been carefully limited to ensure that it cannot be used by the Commonwealth except for the purposes of corporations law. A sunset clause provides that the referral will operate for five years and will then terminate unless extended by the States. At a meeting of the Ministerial Council on 5 November 2004, the States and the Northern Territory agreed

6 CORPORATIONS LAW: IN PRINCIPLE

unanimously to extend the referral of power until 2011. The legislation contains an additional safeguard specifically providing that the power given to the Commonwealth under this referral cannot be used for regulating industrial relations.

This legislation was passed by all the States and the new scheme commenced on 15 July 2001 when the Corporations Act 2001 (Cth) and Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) came into force. The substance of these statutes is largely the same as that of the former Corporations Law and ASIC Act.

The inter-governmental reference agreement was formalised in the Corporations Agreement 2002, entered into on 17 December 2002 between the Commonwealth, the States and the Northern Territory (replacing the Alice Springs Agreement). This Agreement sets out the political basis of the scheme regulating corporations and the financial services industry. The Commonwealth has agreed not to amend the Corporations Act without prior consultation with the Ministerial Council and, in most cases, obtaining the approval of the Ministers of at least three States. Similar amendments to the former Corporations Law required the approval of the Ministerial Council.

Reform programs post-1991

[1.90] As well as the constitutional reforms made to the Corporations Law Scheme itself in 2001 by the referral of powers to the Commonwealth, it is important to be aware of the extensive reform programs to the substance of the legislation implemented since 1991. From its introduction, the provisions of the Corporations Law underwent almost annual reform. Some of the reforms were substantive, while others were aimed at simplifying the legislation and making sure that it used plain English wherever possible. The following table summarises the major amending Acts between 1991 and 2016. The two major reform programs (the Corporations Law Simplification Program and the Corporate Law Economic Reform Program) are then discussed.

C h

ap te

r 1

CHAPTER 1 HISTORY, ADMINISTRATION AND REFORM 7

[1.100]

TABLE 1.1 Reforms to the Corporations Law 1991-2016

Legislation Main provisions affected Initiated by

Corporations Legislation Amendment (Financial Services Modernisation) Act 2009 (Cth)

the Amendment Act on financial services introduces new measures on margin lending, trustee companies and debenture regulation:

• margin loans to be included as financial products for the purposes of Ch 7

• new Ch 5D to be introduced to transfer regulation of trustee companies from the States and Territories to the Commonwealth

• introduces amendments designed to harmonise the regulation of debentures and promissory notes and create a debentures trustee

Council of Australian Governments (COAG) reached an in-principle agreement on 26 March 2008 to assume responsibility for regulating mortgage credit and advice, margin loans and trustee companies. Treasury issued the Green Paper Financial Services and Credit Reform (June 2008).

Corporations Amendment (Financial Market Supervision) Act 2010 (Cth)

the Amendment Act on financial market supervision transfers supervisory oversight of the listed Australian securities markets from the Australian Securities Exchange (ASX) to ASIC

Treasury and the Council of Financial Regulators released a consultation paper on proposals to enhance the supervision of Australia's financial markets and their related infrastructure. It was considered that reforms to the supervisory oversight of Australian listed companies were necessary to preserve the integrity of financial markets and to promote the ability of market regulators to maintain robust oversight in all market conditions.

Corporations Amendment (Improving Accountability on Termination Payments) Act 2010 (Cth)

introduces amendments to improve the regulatory framework for executive pay. The reforms address growing community concern on the payment of termination benefits that were considered to be excessive, especially in light of the onset of the Global Financial Crisis (GFC) the Amendment Act provides for a “two strikes and re-election” process when a company's remuneration report receives a 25% or more “no” vote in two consecutive years

Productivity Commission, Executive Remuneration in Australia (January 2010). Recommendations were made by the Productivity Commission which were designed to strengthen the corporate governance framework regulating the payment of termination benefits and executive remuneration for directors and company executives

8 CORPORATIONS LAW: IN PRINCIPLE

Legislation Main provisions affected Initiated by

Corporations Amendment (Corporate Reporting Reform) Act 2010 (Cth)

introduces amendments designed to improve Australia's corporate reporting framework by reducing regulatory burden and overlap on companies, improving disclosure requirements and implementing a number of changes designed to improve corporate reporting including:

• changes to the requirement for the payment of dividends from a profits-based test to a solvency test under a revised s 254T

• changes to the reporting of parent-entity financial statements so that were accounting standards require an entity to prepare financial statements in relation to a consolidated entity, separate financial statements do not have to be prepared in relation to the entity itself

• allow companies to change their annual reporting period provided it is in good faith and in the best interests of the company

• listed registered schemes will be required to provide financial reports to their members under s 299A of the Corporations Act

Australian Accounting Standards Board (AASB), The Relevance of Parent Entity Financial Report (2003) (investigated the relevance of existing financial reporting arrangements for a consolidated entity) In 2002, the Australian Accounting Research Foundation (AARF) released a discussion paper recommending that Australia move away from the current profits based test for the payment of dividends and move towards a solvency based requirement. This was to ensure that Australian companies were aligned with other comparative jurisdictions when assessing the payment of a dividend.

Corporations Amendment (Sons of Gwalia) Act 2010 (Cth)

introduces amendments to the rights of members bringing claims for damages in relation their shareholdings under the Corporations Act the amendments contained in the Corporations Amendment (Sons of Gwalia) Act 2010 (Cth) overturn the High Court's ruling in Sons of Gwalia Ltd v Margaretic (2007) 232 ALR 232

The High Court in Sons of Gwalia Ltd v Margaretic (2007) 232 ALR 232 held that shareholder claims in the form of monetary compensation for torts would not be postponed by s 563A of the and instead would rank equally with unsecured creditors. The High Court's decision generated considerable concern, especially for companies that were reliant on creditor support and funding for their day-to-day operations. The Corporations Amendment (Sons of Gwalia) Act 2010 (Cth) sought to overturn the High Court's ruling and was based on proposals announced by the Minister for Financial Services and Corporate Law in a media release dated 19 January 2010.

C h

ap te

r 1

CHAPTER 1 HISTORY, ADMINISTRATION AND REFORM 9

Legislation Main provisions affected Initiated by

Corporations Amendment (No 1) Act 2010 (Cth)

amends the ASIC Act to allow ASIC a number of procedural investigative powers including the ability to conduct a search of premises by applying for a search warrant also makes changes to s 1019G of the Corporations Act so that any unsolicited offer that is made to purchase financial products off-market must remain open for at least one month from the date of the offer also made changes to the magnitude of penalties that can be imposed for breaches of the insider trading and market misconduct provisions contained in Pt 7.10 of the Corporations Act

Full Federal Court decision in National Exchange Pty Ltd v ASIC [2005] FCAFC 226 which held that existing provisions (s 1091G) were ambiguous

Personal Property Securities Act 2009 (Cth) (PPS Act)

the PPS Act introduces amendments to the Corporations Act in relation to registrable charges, the vesting of security interests as well as the liability of voluntary administrators. The PPS legislation will harmonise the current Commonwealth, state and territory laws on securities in personal property. The PPS legislative regime creates one single national set of rules and a single national online register

Commonwealth Attorney General, Discussion Paper No 1 on Personal Property Securities (November 2006); Discussion Paper No 2 on Personal Property Securities (March 2007); Discussion Paper No 3 on Personal Property Securities (April 2007)

Personal Property Securities (Corporations and Other Amendments) Act 2010 (Cth)

Personal Property Securities (Corporations and Other Amendments) Act 2011 (Cth)

the Personal Property Securities (Corporations and Other Amendments) Act 2010 (Cth) and Personal Property Securities (Corporations and Other Amendments) Act 2011 (Cth) contain consequential amendments arising from the PPS Act following an inquiry by the Senate Standing Committees on Legal and Constitutional Affairs

Corporations and Other Legislation Amendment (Trustee Companies and Other Measures) Act 2011 (Cth)

amends the Corporations Act to create a new administrative process for the voluntary transfer of estate assets and liabilities from a transferring entity which generally involves a trustee company previously authorised under State or Territory legislation to be a trustee company prescribed by the Corporations Regulations 2001 (Cth)

Council of Australian Governments (COAG) initiative designed to improve regulation of trustee companies under a single national regulatory regime

Corporations (Fees) Amendment Act 2011 (Cth)

amends the Corporations Act to allow ASIC to impose fees on market licensees in relation to ASIC's market supervisory functions

proposals introduced by CLERP 7 reforms

10 CORPORATIONS LAW: IN PRINCIPLE

Legislation Main provisions affected Initiated by

Corporations Amendment (Future of Financial Advice Measures) Act 2012 (Cth)

introduces amendments to the Corporations Act to require financial advisers to act in the best interests of their clients, to avoid conflicts of interest and to prohibit the payment of commissions which have the potential to cause conflicts of interest

Parliamentary Joint Committee on Corporations and Financial Services, Inquiry into Financial Products and Services in Australia (2009). The Joint Committee considered a variety of issues associated with the recent corporate collapses involving financial advisers, Storm Financial and Opes Prime.

Corporations Amendment (Phoenixing and Other Measures) Act 2012 (Cth)

amends the Corporations Act to provide ASIC with the power and authority to undertake the winding up of a company that has been deemed abandoned in certain circumstances

ASIC Consultation Paper 180: ASIC's ability to wind up abandoned companies (July 2012)

Corporations Legislation Amendment (Audit Enhancement) Act 2012

an Act to amend the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001, and for related purposes. Amendments enable directors of a listed company or listed registered scheme to extend the auditor rotation period for up to two years in certain circumstances; and require auditors who audit 10 or more certain types of entities to publish a transparency report

Followed the 2010 strategic review of audit quality in Australia by Treasury.

Corporations Amendment (Proxy Voting) Act 2012

amends the Corporations Act 2001 to clarify that the chair of an annual general meeting, who is a member of the key management personnel or a closely related party of a key management personnel, is able to vote undirected proxies in the non-binding vote where the shareholder provides their express authorisation for the chair to exercise the proxy.

Followed reforms, which were introduced to strengthen Australia's remuneration framework via the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011.

Corporations Legislation Amendment (Financial Reporting Panel) Act 2012

amends the law relating to corporations to repeal provisions relating to the Financial Reporting Panel, and for related purposes

The Financial Reporting Panel operated between 2009-2012 with its function to resolve disputes between ASIC and companies concerning accounting treatments in their financial reports. The Corporations Legislation Amendment (Financial Reporting Panel) Act 2012 abolished this panel.

C h

ap te

r 1

CHAPTER 1 HISTORY, ADMINISTRATION AND REFORM 11

Legislation Main provisions affected Initiated by

Commonwealth Government Securities Legislation Amendment (Retail Trading) Act 2012

changes the law relating to securities issued by the Commonwealth and beneficial interests in such securities, and for related purposes. Amend- ments to the Corporations Act 2001 were made to ensure that the investor protection and market integrity provisions in the Corporations Act apply to the CGS retail market

As part of broader Government reforms to encourage the local and foreign investor market.

Corporations Legislation Amendment (Derivative Transactions) Act 2012

amends the law relating to transactions in derivatives, and for other purposes. The amendments to the Corporations Act 2001 allow the minister to prescribe certain types derivatives

Followed a commitment made by the Australian Government at the G-20 summit in Pittsburgh in 2009, to reform practices in over the counter (OTC) derivative markets.

Personal Liability for Corporate Fault Reform Act 2012

amends the law relating to personal liability for offences committed by corporations, and for related purposes

Followed the Council of Australian Governments' Director's Liability reform recommendations (COAG Reform). The changes to the Corporations Act 2001 replaced criminal liability for company secretaries and directors for offences under s 188 with a civil liability, together with relevant civil penalties.

Corporations and Financial Sector Legislation Amendment Act 2013

amends the law relating to corporations and the financial sector, and for other purposes

The implementation of this Act followed the framework established by the Corporations Legislation Amendment (Derivative Transactions) Act 2012 on over-the-counter derivatives market reform.

Corporations Amendment (Simple Corporate Bonds and Other Measures) Act 2014

amends the law relating to corporations, and for other purposes

Reforms introduced by Treasury in order to stimulate and grow a retail debt market in Australia. It aims to simplify regulation governing “simple corporate bonds” with respect to disclosure and removes the presumptive civil liability for directors of issuers of simple corporate bonds under a defective prospectus.

Corporations Legislation Amendment (Deregulatory and Other Measures) Act 2015

amends the law relating to corporations, and for related purposes

Initiated by Treasury as part of overall reforms, the Act effected changes to the Corporations Act 2001 with respect the holding of general meetings; remuneration reporting; auditor appointment for companies limited by guarantee and to changes in financial years.

Corporations Amendment (Financial Advice Measures) Act 2016

amends the law in relation to financial products and financial advice, and for related purposes

Part of the Future of Financial Advice (FoFA) reforms which are focused on improving the quality of advice and enhancing retail investor protection.

12 CORPORATIONS LAW: IN PRINCIPLE

Simplification Task Force .......................................................................................................................................................................

[1.110] From 1993-1997, the most important initiatives for reform came before the Commonwealth Parliament as a result of work undertaken by the Corporations Law Simplification Task Force. This Task Force was established in October 1993 by the then Commonwealth Attorney-General, Michael Lavarch. The central objective of the program was:

to simplify the Corporations Law and make it capable of being understood so that users can act on their rights and carry out their responsibilities.

For the first time, emphasis was placed on testing draft proposals with representatives of Corporations Law user groups.

The Task Force was responsible for the introduction of the First Corporate Law Simplification Act 1995 (Cth), drafting the Second Corporate Law Simplification Bill 1996 (Cth) and preparing a discussion paper on the Third Corporate Law Simplification Proposals. The Second Corporate Law Simplification Bill 1996 (Cth) was (with some modifications) implemented as the Company Law Review Act 1998 (Cth). The Third Corporate Law Simplification Proposals, together with other matters, were taken up in the draft Bills prepared by the Corporate Law Economic Reform Program (CLERP).

The Task Force not only redesigned the layout and improved the language of the Corporations Law, but also scrutinised many of the fundamental underlying concepts, such as the need for at least two shareholders and two directors, and concepts relating to share capital.

Corporate Law Economic Reform Program .......................................................................................................................................................................

[1.120] Following the change of government that took place in 1996 when Labor lost the federal election to the Coalition, responsibility for the Corporations Law was transferred from the Commonwealth Attorney-General's Department to the Commonwealth Treasury. The Simplification Task Force was subsequently disbanded and the Corporate Law Economic Reform Program initiated. The primary focus of CLERP has been to develop policy in a wider economic framework – giving greater consideration to the interaction between policies on corporate law, taxation, financial institutions and competition. The key principles which underpin CLERP proposals are:

• cost/benefit analysis of new legislative proposals as against existing law;

• the development of a regulatory, legislative framework that is consistent, flexible, adaptable and cost effective;

• the reduction of transaction costs for firms and market participants;

C h

ap te

r 1

CHAPTER 1 HISTORY, ADMINISTRATION AND REFORM 13

• the provision of an appropriate balance between government regulation and industry self-regulation;

• the removal of barriers to entry for service providers; and

• the improved harmonisation of Australia's regulations and laws applying in major world financial markets.

(CLERP Strategy Document, 4 March 1997.) As with the Simplification Program, the CLERP reforms have been

developed in consultation with business, industry and consumer bodies. In particular, there is input from the Business Regulation Advisory Group. This Group consists of representatives of peak business groups such as the Australian Institute of Company Directors, the Australian Securities Exchange (ASX) and the Business Council of Australia.

The reforms made by the Corporate Law Economic Reform Program Act 1999 (Cth) included important changes to directors' duties and to members' remedies, notably the introduction of the statutory business judgment rule, and the statutory derivative action, as well as changes to the rules governing accounting standards, fundraising and takeovers.

The CLERP 7 reforms that came into force on 1 July 2003 have simplified and reduced compliance and lodging requirements, especially for small companies, and have facilitated greater use of electronic lodgment procedures. The requirement for all companies to lodge an annual return has been abolished. Instead, each year ASIC sends each company an annual review statement with an extract of particulars (showing the company's details on the ASIC database) and an invoice for the annual review fee. If there have been no changes to the company's details as shown in the extract, it pays the annual review fee but does not have to lodge any paperwork.

CLERP 8 .......................................................................................................................................................................

[1.130] Cross-Border Insolvency: Promoting International Co-operation and Co-ordination (CLERP 8) sets out the Commonwealth's plans to adopt an international model law on cross-border insolvency. This model was developed by the United Nations Commission on International Law and is intended to improve the existing procedures allowing liquidators to trace assets of failed companies overseas and return them to Australia, thereby allowing faster and more efficient administration of cross-border insolvencies. CLERP 8 was open for public comment until the end of 2002. The Cross-Border Insolvency Act 2008 (Cth) was passed by Parliament in May 2008. The Act adopted the recommendations of CLERP 8. The central objectives of the CLERP 8 Act include:

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

Top Grade Tutor
Solution Provider
Financial Assignments
Best Coursework Help
Engineering Mentor
Finance Professor
Writer Writer Name Offer Chat
Top Grade Tutor

ONLINE

Top Grade Tutor

I have written research reports, assignments, thesis, research proposals, and dissertations for different level students and on different subjects.

$38 Chat With Writer
Solution Provider

ONLINE

Solution Provider

I have done dissertations, thesis, reports related to these topics, and I cover all the CHAPTERS accordingly and provide proper updates on the project.

$24 Chat With Writer
Financial Assignments

ONLINE

Financial Assignments

I have worked on wide variety of research papers including; Analytical research paper, Argumentative research paper, Interpretative research, experimental research etc.

$26 Chat With Writer
Best Coursework Help

ONLINE

Best Coursework Help

I reckon that I can perfectly carry this project for you! I am a research writer and have been writing academic papers, business reports, plans, literature review, reports and others for the past 1 decade.

$33 Chat With Writer
Engineering Mentor

ONLINE

Engineering Mentor

After reading your project details, I feel myself as the best option for you to fulfill this project with 100 percent perfection.

$47 Chat With Writer
Finance Professor

ONLINE

Finance Professor

I will be delighted to work on your project. As an experienced writer, I can provide you top quality, well researched, concise and error-free work within your provided deadline at very reasonable prices.

$43 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Payment for excel work - Autodesk point cloud to mesh - Olive tree custom reading plan - Test and tag training geelong - Globalization the essentials by george ritzer - Change impact analysis template - Www uwimona edu jm application form - Iso 9001 clause 4.2 3 - Unfortunately fortnite encountered an error indicating an incompatibility - Case in point sas institute invests in employees - Cakes by monica vermillion sd - Heat capacity of phosphoric acid solutions - Brad is testing whether school is more enjoyable - Cooper street clinic fax - Probability 9.1 ready set go answers - How to do a quantitative research critique - Blood normally flows from the capillaries directly into - Examples of poorly written instructions - Inter CASt ((%)+91-7023339183 LOVe marriage problems solution MOLviji - Supervalu case study - South carolina athlete agent registration - Mat 540 quiz 4 - NEED IN 12 HOURS or LESS - Mcgraw hill complimentary trial code - Gary walker ripped after 40 free pdf - Concur expense approval delegate - Sutton lures naples new york - Cta code of ethics - Pizza hut value chain analysis - 22 lakeview road wamberal - The farm life inside angola prison summary - Topend sports sit and reach - Reflection paper - Identify two social science issues related to war - Words that end in ate - Maximum probable yearly aggregate loss - Cons of continuous training - Least square curve fitting example - What is a biopsychosocial assessment in social work - Theme for english b poem - When was glass windows invented - Brisbane city council wages - Porter Five Forces Analysis Paper Draft - Using Technology-Based Resources within the English Language Arts Classroom - Heterarchy in business - Seated tricep extension with cambered bar - Chapter 7 bureaucracy and formal organizations - Evidence-based Practice - Change management simulation power and influence - Martin luther king presentation ideas - Ethical issue - White paper on homelessness - Babylon revisited modernism - Barriers caused by organizational culture encountered by nurse leaders - Cisco asa 5512 x configuration guide - Mary jo parker reviews - Maslow's hierarchy of needs project - A water pump increases the water pressure from 15 - Skills for accounting research 3rd edition pdf - Your wisdom is consumed in confidence - X ray fusion liqueur - Writing logically thinking critically 8th edition answer key - Research Paper - Justin costello credit suisse - Pigs on the wing strumming pattern - 4 3 submission summarizing me talk pretty one day - Wellesley college admissions office - OUTLINE - MS 2 - According to our textbook, the opening verses of genesis clearly refute - An Introduction to Multiculturalism. - 3.4 graphing functions homework answers - How to find fixed portion of sales representatives compensation - Stockman weekender 8 person tent - Escucha las oraciones e indica - 0.606 as a fraction - Change the zoom level for the worksheet to be 110 - Dramatic irony in oedipus rex - They say i say chapter 5 pdf - 5 8 full gas tank - Nurs561asignw3 - The following comparative information is available for rose company for 2017. - Stony dean school bucks - Australian tax tables weekly - The prince robbins partnership - Usa today vs wall street journal - Synthes plates and screws - Diffusion virtual lab worksheet - Mercantilism in a sentence example - Backpack literature 5th edition online - Fisher scientific msds sheets - History - Business Policy and Strategy IV - Boe shield arduino - Read the article "Other/Otherness" and summarize sections 3, 4, 5, and 6 - Refrigeration oil cross reference - Benchmark assignment spiritual needs assessment and reflection - 1230 boneo road cape schanck - Need help with this question - Signature assignment environmental scan paper