Corporations Act. Australia
a late sale is not invalid if it is held as soon as practicable after the discovery of the error or inadvertence.
Failure to comply an offence
(13) If there is failure to comply with subsection (2) or (3), the company is guilty of an offence.
Strict liability offences
(14) An offence by the company based on subsection (13) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
254R No liability companies — redemption of forfeited shares
(1) Despite section 254Q, if a person’s share has been forfeited, the person may redeem the share, at any time up to or on the last business day before the proposed sale, by paying the company:
(a) all calls due on the share; and
(b) if the company so requires:
(i) a portion, calculated on a pro rata basis, of all expenses incurred by the company in respect of the forfeiture; and
(ii) a portion, calculated on a pro rata basis, of all costs and expenses of any proceeding that has been taken in respect of the forfeiture.
On payment, the person is entitled to the share as if the forfeiture had not occurred.
(2) On the last business day before the proposed sale, the registered office of the company must be open during the hours for which it is by this Act required to be open and accessible to the public.
Part 2H.4 — Capitalisation of profits
254S Capitalisation of profits
A company may capitalise profits. The capitalisation need not be accompanied by the issue of shares.
Part 2H.5 — Dividends
254SA Companies limited by guarantee not to pay dividends
A company limited by guarantee must not pay a dividend to its members.
254T Circumstances in which a dividend may be paid
(1) A company must not pay a dividend unless:
(a) the company’s assets exceed its liabilities immediately before the dividend is declared and the excess is sufficient for the payment of the dividend; and
(b) the payment of the dividend is fair and reasonable to the company’s shareholders as a whole; and
(c) the payment of the dividend does not materially prejudice the company’s ability to pay its creditors.
Note: 1: As an example, the payment of a dividend would materially prejudice the company’s ability to pay its creditors if the company would become insolvent as a result of the payment.
Note: 2: For a director’s duty to prevent insolvent trading on payment of dividends, see section 588G.
(2) Assets and liabilities are to be calculated for the purposes of this section in accordance with accounting standards in force at the relevant time (even if the standard does not otherwise apply to the financial year of some or all of the companies concerned).
254U Other provisions about paying dividends (replaceable rule — see section 135)
(1) The directors may determine that a dividend is payable and fix:
(a) the amount; and
(b) the time for payment; and
(c) the method of payment.
The methods of payment may include the payment of cash, the issue of shares, the grant of options and the transfer of assets.
(2) Interest is not payable on a dividend.
254V When does the company incur a debt?
(1) A company does not incur a debt merely by fixing the amount or time for payment of a dividend. The debt arises only when the time fixed for payment arrives and the decision to pay the dividend may be revoked at any time before then.
(2) However, if the company has a constitution and it provides for the declaration of dividends, the company incurs a debt when the dividend is declared.
254W Dividend rights
Shares in public companies
(1) Each share in a class of shares in a public company has the same dividend rights unless:
(a) the company has a constitution and it provides for the shares to have different dividend rights; or
(b) different dividend rights are provided for by special resolution of the company.
Shares in proprietary companies (replaceable rule — see section 135)
(2) Subject to the terms on which shares in a proprietary company are on issue, the directors may pay dividends as they see fit.
No liability companies
(3) A person is not entitled to a dividend on a share in a no liability company if a call:
(a) has been made on the share; and
(b) is due and unpaid.
(4) Dividends are payable to the shareholders in a no liability company in proportion to the number of shares held by them, irrespective of the amount paid up, or credited as paid up, on the shares. This subsection has effect subject to any provisions in the company’s constitution relating to shares that are not ordinary shares.
Part 2H.6 — Notice requirements
254X Notice to ASIC of share issue
(1) Within 28 days after issuing shares, a company must lodge with ASIC a notice in the prescribed form that sets out:
(a) the number of shares that were issued; and
(b) if the company has different classes of shares — the class to which each of those shares belongs; and
(c) the amount (if any) paid, or agreed to be considered as paid, on each of those shares; and
(d) the amount unpaid (if any) on each of those shares; and
(e) if the company is a public company and the shares were issued for non‑cash consideration — the prescribed particulars about the issue of the shares, unless the shares were issued under a written contract and a copy of the contract is lodged with the notice.
Note: 1: The company must lodge information when rights attached to the shares change, or when the shares are divided or converted into new classes (see section 246F).
Note: 2: A proprietary company may also have to notify certain particulars under Part 2C.2.
(2) If the shares were issued for non‑cash consideration under a contract, the company must also lodge with ASIC a certificate stating that all stamp duty payable on the contract under any applicable law relating to stamp duty has been paid. This certificate must be lodged with the subsection (1) notice or at a later time permitted by the regulations or by ASIC.
(2A) An offence based on subsection (1) or (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) The company does not have to lodge a subsection (1) notice about the issue of shares to a person on the registration of the company or on the company changing its type from a company limited by guarantee to a company limited by shares.
Note: Information about shares issued in these situations will come to ASIC under subsections 5H(2), 117(2), 163(3) and 601BC(2).
254Y