Finally whether a decision is made by passing a

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Finally whether a decision is made by passing a resolution at a meeting or by signing a document, minutes are required to be kept recording the proceedings and resolutions {s 251A(1)(a) Corporations Act} Minutes of listed companies must also record details of the proxy votes and how they were directed C. Company Constitution and Replaceable Rules Before the commencement of the Company Law Review Act 1998 (Cth), all companies had two constitutional documents: o Memorandum of association : was directed primarily at outsiders dealing with the company and contained information such as the company’s name, amount of share capital and company’s objectives o Articles of association: were concerned with internal matters such as the appointment, removal and powers of directors, the convening and conducting of meetings, the transfer of rights attached to shares and the declaration of dividends Now companies can retain their memorandum or association or move to replaceable rules or their own constitution C.1 Mandatory and Replaceable Rules A complete list of the provisions that apply as replaceable rule is contained in {s 141 Corporations Act} The fact that they are “replaceable” means that they can be modified by the company {s 135(2) Corporations Act} The replaceable rules can be replaceable for Pty Companies but mandatory for Public companies {s 249X Corporations Act} Mandatory Rules cannot be displaced or modified o Meaning of ‘mandatory’: “notwithstanding any provision in the constitution which would prevent such [action]” {Allied Mining & Processing v Boldbow per Roberts-Smith J} C.2 The Constitution For companies incorporated before 1 July 1998 the memorandum of articles comprises of the company’s constitution {s 1415 Corporations Law} The replaceable rules therefore do no apply to these companies unless the company repeal its entire constitution after 1 July 1998 {s 135(1)(a) (ii) Corporations Act} For other companies, whether to make its own internal rules by adopting a document known as a ‘constitution’ or to rely solely on the 6
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Corporate Structure replaceable rules or a combination or both is generally optional However there are some companies that must have a constitution: o ASX Listed companies {ASX LR 15.11 to 15.13B} o No liability companies o Companies limited by guarantee that want to remove the word ‘limited’ from their name Whether or not it is necessary for a company to have a constitution depends on a number of factors: o If the company wants to make provisions for something not covered by the replaceable rules, such as different classes of shares with different rights attached to those classes o If the company is happy with the content of the replaceable rules and wants to ensure that they are not subject to legislative amendments o If the company wants the convenience of a tangible document containing all its internal rules rather than having to refer to the Act AS WELL However it may be cumbersome to make a constitution that contains the mandatory rules as well
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