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Company Constitution Templates
As from 1 July 1998 all new companies have a Company Constitution. The memorandum of association and articles of association of existing companies were on that date deemed by the Corporations Law to be their Company Constitutions unless and until those companies adopted a new constitution.
The Corporations Act 2001 (Cth) replaced the Corporations Law as the Commonwealth Act regulating companies. The Corporations Act 2001 (Cth) contains Replaceable Rules. These are included in a proprietary (Pty) company’s constitution unless expressly excluded. It is recommended that every company should replace its memorandum of association and articles of association with a new Company Constitution.
A private (Pty) company may simply rely on the replaceable rules as its constitution but this is not recommended.
Adopting a new Company Constitution:
There are two alternative procedures for adopting a new constitution.
Where there are two or more shareholders:
Alternative One:
- Call a general meeting. Usually a director has power to call a general meeting of shareholders.
- Give the shareholders at least twenty one (21) days prior written notice of the general meeting. The notice must set out the purpose of the general meeting and the proposed special resolution. If the constitution requires longer period of notice then longer notice must be given. See Section 249H of the Corporations Act 2001 (Cth). Every shareholder is entitled to written notice of the general meeting.
- The notice of general meeting must set out the proposed special resolution and state that it is a special resolution. Usually the draft proposed constitution will be sent to each shareholder with the draft.
- At that general meeting the special resolution must be passed adopting a new constitution as the new constitution of the company. Usually the proposed new constitution is tabled at the general meeting.
- A special resolution is one passed by 75% or more of the members of the company who are entitled to vote on the special resolution.
- A copy of the new constitution as adopted must be sent to each member.
Alternative Two:
- Prepare a Minute of Shareholders’ Special Resolution resolving to adopt the new constitution as the constitution of the company.
- The Minute of Shareholders’ Special Resolution must state that it is a special resolution.
- The Minute of Shareholders’ Resolution must be signed by all members of the company entitled to attend a general meetings and vote.
- A Minute of Special Resolution will only be effective if all shareholders agree unanimously to adopt the new constitution and sign the minutes of Special Resolution.
- At that general meeting the special resolution must be passed adopting a new constitution as the new constitution of the company.
- Copy of the new constitution must be sent to each member.
Where there is only is only one shareholder
A Minute of Special Resolution must be signed and dated by the by the sole shareholder.
ASIC Lodgement: Unless ASIC directs the company to lodge its constitution, only public companies are obliged to notify ASIC by lodging copies of new constitutions. See Section 136(5) and Section 138 Corporations Act 2001 (Cth).
