Question
What are the Replaceable Rules?
Answer
A company's internal management can be governed by either:
- sections of the Corporations Act 2001 (Cth) ('the Corporations Act') that apply to companies - i.e. "replaceable rules" (see s 141 for a list of the current replaceable rules and the sections in which they are located); or
- a Constitution; or
- a combination of the two above.
Replaceable rules are a set of basic rules, outlined within the Corporations Act, for managing a company - see here for a general overview of these rules. The replaceable rules will apply automatically if a company does not have a Constitution, except for a company with only a sole shareholder/director (because, in this scenario, there is no need for a formal set of rules governing the company's internal relationships - see also, s 351(1) of the Corporations Act). Further, if a company does not want to or is not required to adopt a Constitution, then it can use the replaceable rules instead.
A company can adopt a Constitution which replaces or modifies the replaceable rules. If only some of the replaceable rules are to be replaced, those rules that are being overridden must be specified.
Note that if a constitution is adopted after registering the company, the company must pass a special resolution to adopt the Constitution. If a company is changing or repealing its constitution, it must also pass a special resolution. A special resolution requires at least 75% of votes cast in its favour.
When creating a Proprietary Limited Company (Standard Company) on the NowInfinity platform, a Constitution forms part of the document pack.
As for creating a Public Company on the platform, NowInfinity does not provide a Constitution. If you require a Constitution, this will need to be sourced externally or our legal services provider may assist on a fee-for-service basis.
Although some types of companies (such as public companies limited by guarantee, "no liability" public companies or public companies that are super trustee companies) require a Constitution (and cannot rely solely on the replaceable rules), a standard public company does not need a Constitution.
Further Information
How To Register a Standard Company
How to Register a Public Company
ASIC: Constitution and Replaceable Rules
Disclaimer: The information provided above is to be considered as general legal information and NowInfinity bears no responsibility in relation to the above. Legal advice should be sought prior to applying the relevant provisions to your specific circumstances.