A corporation is an association of individuals created by law, or under the authority of law, that has a legal existence and obligations independent of the existence of its individual members, and powers and liabilities distinct from those of its individual members.
There are broad obligations and regulations that apply to corporations generally. There are also specific obligations and regulations that apply to particular types of corporations or corporations that are engaged in particular activities
ASX Listing Rules
The ASX LISTING RULES sub module informs public companies of the Australian Securities Exchange (ASX) Listing Rules that they must comply with in order to achieve admission to the ASX Official List.
It also provides the public company with practical assistance and guidance intended to ensure compliance with these rules.
The module is relevant to public companies that are:
- Intending to achieve admission to the ASX Official List;
- Operating an entity intending to remain compliant with ASX rules ongoing; and
- Not complying with ASX Listing rules and require assistance, direction or advice to achieve compliance throughout the entity.
The ASX LISTING RULES sub module covers all obligations and regulations derived from the Australian Securities Exchange (ASX) Listing Rules that apply to all public companies intending to achieve admission to the ASX Official List. The module provides the practical assistance and guidance to ensure these obligations are complied with by establishing and maintaining best practice processes. The module also covers possible exemptions to the obligations, where applicable, and how they may or may not apply to the corporation. The specific topic areas comprehensively covered by the module are:
- The legislative and regulatory framework for compliance with the ASX Listing Rules;
- Australian Securities Exchange (ASX) Listing Rules Chapters 1-12 and Chapters 14-18;
- Australian Securities and Investments Commission Act 2001 (Cth);
- Foreign Acquisitions and Takeovers Act 1975 (Cth);
- Pooled Development Funds Act 1992 (Cth);
- Australian Securities Exchange (ASX) Settlement Operating Rules;
- Australian Securities Exchange (ASX) Operating Rules Procedures;
- Australian Securities Investments Commission (ASIC) Regulatory Guides;
- Australian Securities Investments Commission (ASIC) Class Orders;
- Australian Securities Exchange (ASX) Corporate Governance Principles and Recommendations (4th Ed);
- Pooled Development Funds Act 1992 (Cth).
- An entity intending to be listed as a public company on the Australian Security Exchange’s (ASX) official list must ensure that it complies with all requirements in the ASX Listing Rules and ensure that it complies with continuing obligations of the ASX Listing Rules once it has been admitted to the official list.
- The entity applying for admission to the ASX Official List must ensure that it complies with general ASX rules that are applicable to all applying entities as well as rules that are specific to different types of listings:
- ASX Listing;
- ASX Debt Listing; and
- ASX Foreign Exempt Listing.
- The entity must comply with all relevant obligations and regulations when it applies to ASX for quotation of its securities;
- On admission;
- Following admission; and
- Of partly paid shares.
- Continuous disclosure to ASX of all necessary information following admission to the official list within required timeframes is required.
- Periodic disclosure to ASX of all necessary information quarterly, half yearly and annually.
- Required additional reporting on mining and oil and gas production and exploration activities:
- Quarterly reporting;
- Reporting mining activities;
- Reporting oil and gas activities; and
- Reporting the terms of mining tenements and petroleum tenement joint ventures.
- An ASX listed entity has duties to comply with the obligations attached to its securities including;
- To comply with required timetables;
- For ordinary securities;
- For preference securities;
- Rules that apply to all equity securities; and
- Rights and obligations that apply only to options.
- An entity has an obligation to discuss changes in capital and new issues as proposals with ASX before the changes or new issues are finalised, including;
- The rules that apply;
- Reorganisations of capital;
- Market buybacks;
- Buy-backs that don’t come under the Corporations Act;
- Forfeited shares; and
- Compliance with timetables.
- The entity must comply with ASX obligations and regulations when effecting transfers and registration of securities;
- Approved clearing and settlement (CS) facility subregister systems;
- Certificates and holding statements; and
- Registers and time limits
- The treatment of restricted securities in a takeover bid or mergers;
- Requirements for all restricted securities;
- Holdings of restricted securities; and
- Treatment of restricted securities in a takeover bid or mergers
- The entity must comply with certain obligations and regulations when a transaction is between an entity and a person(s) in a position to influence the entity;
- The acquisition and disposal of substantial assets;
- Acquiring securities in the entity;
- Participation by directors (and their associates) in employee incentive schemes;
- Underwriting dividend or distribution plans;
- Payments to directors; and
- Termination benefits.
- The entity must satisfy particular requirements when it proposes significant transactions involving changes to its activities or floating assets
- The entity must comply with ongoing requirements relating to the issuance of securities including;
- Level of operations, financial condition, and proportion of assets in cash;
- Level of spread and appropriate structure and operations;
- Appointment of a person responsible for communicating with ASX;
- Registration as a foreign company;
- The role of the audit committee and remuneration committee; and
- Trading policy and its content.
- The entity must comply with obligations and regulations relating to meetings including providing a notice of meetings to security holders that includes a voting exclusion statement.
- The entity is required to provide draft documents to ASX for review and examination, in the correct format. The entity must ensure that it does not finalise a document until ASX approval of the document is given. The documents to be provided for ASX approval include;
- An amended constitution;
- An amended document setting out the terms of debt or convertible securities; and
- A notice of meeting that contains a resolution for an issue of securities.
- The entity must comply with obligations and regulations relating to the payment of fees to ASX in accordance with ASX specifications and within required timeframes including;
- Admission and quotation of additional securities;
- Changes to activities;
- Calculation and payment of annual fees; and
- Calculation and payment of additional fees.
- The entity must comply with ASX obligations and regulations relating to trading holts, suspension of securities from quotation and removal from the official list.
- The entity must comply with the application of ASX Listing Rules including those relating to;
- Waivers;
- The variation and revocation of decisions;
- Transitional arrangements; and
- Changes to admission categories
- An entity can choose to adopt particular corporate governance, principles, and recommendations but this is not mandatory. If an entity considers that a particular recommendation is not appropriate to be adopted by their entity then it must explain why it has elected not to adopt it. If an entity does choose to adopt a particular recommendation, then this should be disclosed either in the annual report or on the website
- The entity must interpret the ASX Listing Rules in accordance with the purpose of the Rules, corporations legislation and other ASX instruments
In addition to expanding on these specific ASX Listing Rules the ASX LISTING RULES sub module also provides comprehensive practical guidance and directions for corporations to have policies, procedures, systems and processes in place to assist the company to maintain compliance with the ASX Listing Rules within all levels and operational systems of the organisation. Remedial advice and direction is also provided to the corporation that is not complying with the ASX Listing Rules to assist the organisation in solving any problems.
In the event of the corporation breaching their obligations to comply with the ASX Listing Rules and legislation such as the Corporations Act 2001 there are significant consequences which can apply, depending on the nature and extent of the breach. The ASX LISTING RULES sub module covers these consequences in detail which can include monetary penalties, deregistration and even terms of imprisonment for individuals committing serious offences
The coverage of ASX LISTING RULES sub module is limited to obligations and regulations that are derived from the ASX Listing Rules and are applicable to all corporations that are either listed or intending to be listed on the ASX Official List.
The sub-module does not cover the broad general obligations of corporations derived from outside of the ASX Listing Rules and it does not separately cover specific obligations of corporations that are Proprietary limited companies, public companies limited by shares and companies limited by guarantees. These topics can be found in a separate sub-module named ‘Company Formation and Operation’.
Company Formation and Operation
All Australian companies are governed by the provisions of the Corporations Act 2001 (Cth) and regulated by the Australian Securities and Investments Commission (ASIC). The COMPANY FORMATION AND OPERATION sub module inform the directors’ and officers’ of companies limited by guarantee, proprietary limited companies and public companies limited by shares of their legislative obligations and best practice processes to be implemented and maintained within all levels of the organisation and throughout the life cycle of the company.
This sub module is relevant to directors’ and officers’ of companies limited by guarantee, proprietary limited companies and public companies limited by shares that are:
- Ensuring compliance with the personal legal obligations of their role or position;
- Establishing a company structure and culture that is compliant with legal obligations;
- Operating a company that is compliant with legal obligations; and/ or
- Not complying with legislated obligations and require assistance, direction or advice to achieve compliance throughout the company.
The COMPANY FORMATION AND OPERATION sub module covers all legislated obligations from company formation and record keeping to winding up. The module provides the practical assistance and guidance to ensure these obligations are complied with by establishing and maintaining best practice processes. The module also covers possible exemptions to the obligations, where applicable, and how they may or may not apply to the corporation. The specific topic areas comprehensively covered by the module are:
- The legislative and regulatory framework for obligations of companies limited by guarantee, proprietary limited companies and public companies limited by shares
- Corporations Act 2001 (Cth);
- Corporations Regulations 2001 (Cth);
- Corporations (Review Fees) Act 2003 (Cth);
- Corporations (Review Fees) Regulations 2003 (Cth);
- Corporations (Fees) Act 2001 (Cth);
- Corporations (Fees) Regulations 2001 (Cth);
- Criminal Code Act 1995 (Cth);
- Crimes Act 1914 (Cth);
- Commonwealth Electoral Act 1918 (Cth);
- Electronic Transactions Act 1999 (Cth);
- Electronic Transactions Regulations 2000 (Cth); and
- Australian Securities and Investments Commission (ASIC)
- The obligations when forming a company with respect to the organisations’ company formation, registration and share capital;
- Formation methods and registration processes;
- Structural requirements for share capital;
- Structural requirements for members and directors;
- Obtaining consents;
- Formation of corporate collective investment vehicles; and
- ASIC’s requirements for ultimate holding companies
- The processes and procedures that a company must have in place to ensure compliance with ongoing operations and notification of changes obligations;
- Members’ register;
- Other registers;
- Access to registers;
- Company name;
- Registered office;
- Company officers;
- Annual review;
- Director identification numbers; and
- Dealing with unclaimed money
- The processes and procedures that a company must have in place to ensure that shares and shareholder dealings comply with legislative obligations;
- Share structure and share issues;
- Other share dealings; and
- Returns to shareholders.
- The obligation that a company must comply with requirements of either the replaceable rules under the Corporations Act 2001 or its constitution with regard to governance and meetings;
- Board management;
- Directors’ remuneration;
- Members’ meetings; and
- Establishment and storage of minute books
- The processes and procedures that a proprietary limited company must have in place to assist directors’ and officers’ to fulfil their role and duties including with respect to;
- Being cognizant of their duties and responsibilities;
- Their duty to act in good faith and not misuse their position or information;
- Conflicts of interest;
- Insolvent trading;
- Restrictions on indemnity;
- Related party transactions;
- Delegation of duties;
- Protection for whistleblowers
- The processes and procedures that a Commonwealth company must comply with:
- Developing a corporate plan;
- Annual reporting and auditing requirements;
- Specific requirements for Commonwealth companies that are government business enterprises; and
- Specific requirements for wholly-owned Commonwealth companies
- The processes and procedures that a company must have in place to create, manage and maintain financial records and financial reporting;
- Financial records;
- Access to records;
- Financial reporting-companies limited by guarantee;
- Financial reporting-proprietary companies;
- Financial reporting-public companies limited by shares;
- Consolidated financial reporting;
- Accounting standards and audit requirements;
- Reporting to ASIC; and
- Reporting to members
- The payment time reporting requirements a company must comply with:
- Payment times reports
- Payment times record-keeping and auditing requirements
- The cessation processes and procedures to be followed by a company;
- Voluntary and involuntary winding up;
- Obligations to ASIC, liquidators, creditors and members;
- Deregistration; and
- Directors’ liability following wind up and deregistration
- The processes and procedures that a company must have in place when entering into a debt restructuring process:
- Appointing a restructuring practitioner
- Developing and proposing a restructuring plan
- Directors and Officers’ conduct in assisting and providing required information and documentation to a restructuring practitioner during the restructuring period
- The obligation of a leviable entity to know how the calculation of ASIC supervisory cost recovery levy rules apply:
- Regulatory costs of ASIC;
- Application to different finance and insurance related sectors; and
- Obtaining annual dashboard report about ASIC’s regulatory costs.
- The obligation of a leviable entity to collect and facilitate payment of the ASIC costs recovery supervisory levy within the required timeframe in order to avoid the imposition of late penalties:
- Returns and default notices;
- Payment, waiver and recovery of levy and penalties;
- Substantiation notices;
- Review of decisions;
- Specific requirements applying to partnerships, unincorporated associations, Registrable Superannuation Entity (RSE) licenses and multiple trustees; and
- Deregistration and cancellation of licenses.
In addition to expanding to these specific obligations of companies and the legislative basis for their obligations the COMPANY FORMATION AND OPERATION sub module also provides comprehensive practical guidance and directions to have policies, procedures, systems and processes in place to assist the company to maintain compliance with all levels and operational systems of the organisation Remedial advice and direction is also provided to the company that is not meeting obligation requirements to assist in solving any problems.
In the event of the corporation breach their obligations there are significant consequences which can apply, depending on the nature and extent of the breach The COMPANY FORMATION AND OPERATION sub module covers these consequences in detail which can include monetary penalties, deregistration and even terms of imprisonment for individuals committing serious offences.
The coverage of the COMPANY FORMATION AND OPERATION sub module is limited to obligations and regulations specific to corporations that are public companies limited by shares, companies limited by guarantees and proprietary limited companies.