Australian corporate law

Australian corporations law has historically borrowed heavily from UK company law. Its legal structure now consists of a single, national statute, the Corporations Act 2001. The statute is administered by a single national regulatory authority, the Australian Securities and Investments Commission.

The two federal statutes are the Corporations Act 2001 and Australian Securities and Investments Commission Act 2001. The corporations legislation is administered by the Australian Securities and Investments Commission ("ASIC"), which reports to the Treasurer. Since provisions in the Act can frequently be traced back to some pioneer legislation in the United Kingdom, reference is frequently made to judgments of courts there.

On the settlement of Australia by British colonists in 1788 the power in relation to corporations was controlled by the United Kingdom. As colonies gained more independence, and their own parliaments, the power to control corporations passed to these parliaments. Each of the colonies passed laws in relation to the regulation of corporations. Upon Federation in 1901, the Commonwealth of Australia gained limited powers, through the constitution, in relation to corporations, most notably:

and

These powers did not extend to the formation of corporations, so the formation of corporations continued to be regulated by the states and territories, while the running of the companies was regulated by the Commonwealth. Laws between states and territories were inconsistent. A later attempt at complex cross-vesting arrangements by the states, territories and Commonwealth was ruled invalid by the High Court. It was after this, in 2001, that the current arrangement, where the states refer their power to the Commonwealth in respect of corporations was created.

A "corporation" is defined as a separate legal entity created by charter, prescription or legislation. Australian law, like English law, recognises a kind of corporation called the corporation sole. However, there are few cases of such corporations, the corporation sole is excluded from the Australian statutory definition of corporation.

A proprietary company, under CA 2001 s 45A is one which has the suffix "Pty Ltd", and is not allowed to raise capital on the public equity markets. This form of business entity has similar characteristics to the Limited Liability Company, or LLC, that is a commonly used term in multiple jurisdictions around the world. Some of the characteristics of an Australian Pty Ltd Company include: i) Full foreign ownership is permitted, ii) requires minimum of 1 shareholder and 1 director, iii) requires one director to be resident in Australia and office address to be in Australia, iv) profits can be repatriated, v) an annual audit is required and vi) shareholders have limited liability.

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