Commonwealth Consolidated Acts

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CORPORATIONS ACT 2001 - SECT 1.5.6

Shares and shareholders

    A proprietary company limited by shares must have a share capital and at least 1 shareholder. ASIC may apply to a Court to have a company wound up if it does not have any shareholders.

[sections   461--462]

6.1 Becoming a shareholder and ceasing to be a shareholder

    A person may become a shareholder of a company in several ways, including the following:

  the person being listed as a shareholder of the company in the application for registration of the company

  the company issuing shares to the person

  the person buying shares in the company from an existing shareholder and the company registering the transfer.

    Some of the ways in which a person ceases to be a shareholder are:

  the person sells all of their shares in the company and the company registers the transfer of the shares

  the company buys back all the person's shares

  ASIC cancels the company's registration.

[sections   117, 120, 601AA--601AD]

6.2 Classes of shares

    A company may have different classes of shares. The rights and restrictions attached to the shares in a class distinguish it from other classes of shares.

[sections   254A--254B]

6.3 Meetings of shareholders

    Directors have the power to call meetings of all shareholders or meetings of only those shareholders who hold a particular class of shares.

    Shareholders who hold at least 5% of the votes which may be cast at a general meeting of a company have the power to call and hold a meeting themselves or to require the directors to call and hold a meeting. Meetings may be held regularly or to resolve specific questions about the management or business of the company.

    The Corporations Act sets out rules dealing with shareholders' meetings.

    A shareholder of a company may ask the company for a copy of the record of a meeting or of a decision of shareholders taken without a meeting.

[sections   249A--251B]

6.4 Voting rights

    Different rights to vote at meetings of shareholders may attach to different classes of shares. It is a replaceable rule (see 1.6) that, subject to those different rights, each shareholder has 1 vote on a show of hands and, on a poll, 1 vote for each share held.

[sections   250E, 254A--254B]

6.5 Buying and selling shares

    A shareholder may sell their shares but only if the sale would not breach the company's constitution (if any). It is a replaceable rule (see 1.6) that the directors have a discretion to refuse to register a transfer of shares.

[sections   1091D--1091E]


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