Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 197

197. (1) This section applies to a company having a share capital that is
divided into classes of shares.

(2) Where:

   (a)  rights are attached to shares included in a class of shares;

   (b)  no provision is made by the memorandum or articles for the variation
        or abrogation of those rights; and

   (c)  neither the memorandum nor the articles declares or declare those
        rights to be unalterable; the company may, with the consent in writing
        of the holders of three-quarters of the issued shares included in that
        class or with the sanction of a special resolution passed at a meeting
        of the holders of those shares, vary or abrogate those rights or alter
        the memorandum or articles so as to authorise the variation or
        abrogation of those rights.

(3) Where:

   (a)  rights are attached to shares included in a class of shares; and

   (b)  provision is made by the memorandum or articles authorising the
        variation or abrogation of those rights with the consent of a
        specified proportion of the holders of the issued shares included in
        that class or with the sanction of a resolution of a kind specified in
        the memorandum or articles passed at a meeting of the holders of those
        shares; the memorandum or articles shall not be altered so as to vary
        or abrogate, or to authorise the variation or abrogation of, those
        rights, except with the consent of that proportion of the holders of
        those shares or with the sanction of such a resolution passed at a
        meeting of the holders of those shares.

(4) Where rights are attached to shares included in a class of shares and:

   (a)  those rights are at any time varied or abrogated; or

   (b)  the memorandum or articles is or are altered so as to authorise the
        variation or abrogation of those rights; the holders of not less in
        the aggregate than 10% of the issued shares included in that class may
        apply to the Court to have the variation or abrogation of the rights,
        or the alteration of the memorandum or articles, as the case may be,
        set aside and, if such an application is made, the variation or
        abrogation, or the alteration, does not have effect until confirmed by
        the Court.

(5) An application under subsection (4) shall be made within 28 days after the
variation, abrogation or alteration referred to in that subsection was made
and may be made, on behalf of the shareholders entitled to make the
application, by such one or more of their number as they appoint in writing.

(6) On the application, the Court may, after hearing the applicant and any
other persons who apply to the Court to be heard and appear to the Court to be
interested, if it is satisfied that the variation, abrogation or alteration
would unfairly prejudice the members of the class represented by the
applicant, set aside the variation, abrogation or alteration, as the case may
be, and shall, if not so satisfied, confirm it.

(7) A company shall, within 14 days after the making of an order by the Court
on an application under this section, lodge an office copy of the order with
the Commission and, if the company fails to comply with this provision, the
company and any officer of the company who is in default are each guilty of an
offence.

(8) For the purposes of this section, the allotment by a company of preference
shares ranking equally with existing preference shares shall be deemed to be a
variation of the rights attached to those existing preference shares unless
the allotment of the first-mentioned shares was authorised by the terms of
allotment of the existing preference shares or by the memorandum or articles
in force at the time when the existing preference shares were allotted.

(9) Nothing in section 172 or 176 affects the operation of this section.