Companies have to comply with Law



Records Required by Law
A corporation must keep the following documents at its registered office:

  • The corporation's constitution.
  • Meetings and resolutions of the shareholders.
  • Meetings and resolutions of directors.
  • Full details of the current directors.
  • Copies of Financial Statements required under the Act.
  • Full business and accounting records of the business for the last 7 years.
  • The share register.
  • Annual reports - The directors should prepare an annual report after the balance date of the corporation, which contains certain information, such as financial results, auditors report (if required), directors remuneration, statement of the corporation's affairs, etc.


Annual Return
A corporation is required to file an annual return yearly with the Sec of State. Each corporation has been allocated a particular month of the year in which to file the annual return. The last digit of the registered number (the corporation number), allocated by the corporations Office, determines the particular month applicable.


Changes
The corporation has to notify the Sec of State if it changes it name, its registered office, its directors, or issues further shares or grants, or satisfies any security over its assets. These are formal requirements that need to be complied with because amendments are made to the publicly held records. Other parties have to be notified of any changes with that corporation in case they are currently dealing with the corporation or are proposing to deal with the corporation.


Protection to Pre-emptive Rights
It's quite usual for the corporation's constitution to contain pre-emption rights for existing shareholders. These rights require any shareholder, who is looking to sell their shares, to first offer the shares to existing shareholders before offering them to others.

This is to ensure that existing shareholder's rights are protected at all times. The corporations Act provides for existing shareholders to have these pre-emptive rights, where there is an issuing of new shares by the corporation. Any new shares have to be offered to existing shareholders on a proportional basis so that their voting and distribution rights are maintained.

This offer has to be held open for a reasonable time and if not taken up, can be made to others.


Change of Name
A corporation may choose to change its name. It must first apply to the Sec of State to reserve the name it has chosen. For more information on corporation names, see "corporation Names" in this library. After the corporation has been notified that the new name has been reserved, it must pass a resolution to change the name and notify the Registrar of the change. There is a prescribed form for notice of the change.


Adoption, Alteration & Revocation of Constitution

The shareholders of a corporation without a constitution may adopt one by special resolution. Shareholders may also alter or revoke a constitution by special resolution. The board of a corporation must ensure that notice of an adoption, alteration or revocation is filed with the Registrar.


Issue of Shares

After registration, a corporation must issue to any person named in the application as a shareholder, the number of shares that the application says the shareholder will receive. After the first issue of shares, the board of a corporation may issue shares at any time, to any person, and in any quantity it sees fit. This power is subject to the provisions of the Act and any provisions in a corporation's constitution that may modify its right to issue shares.