- The Corporations Act 2001 (Cth) (Act) requires a company to have a constitution. The following document is a basic precedent constitution.
There is no ‘one size fits all’ precedent constitution. This precedent should therefore be used as a guide only, and tailored to suit a company’s particular circumstances.
A constitution is not a stand-alone code that governs the powers, duties, rights and obligations of the company, its directors and officers and shareholders. Regard must always be had to the Act and the common law when considering any issue relating to a company.
Tailoring the company constitution
If the company and its shareholders enter into a shareholders’ agreement, the precedent constitution and the shareholder agreement should be reviewed together, to ensure that they do not conflict. (See LexisNexis precedent shareholder agreement.)
This precedent constitution excludes the replaceable rules in the Act. Practitioners should consider the replaceable rules to see if they are more suitable to the company’s particular circumstances than the relevant provisions of the precedent constitution.
This precedent constitution does not restrict or prohibit the company’s exercise of any of its powers. If such restrictions are required, a suitable amendment will need to be inserted.
This document has been reviewed and updated for LexisNexis by Stephen Newman, Executive Counsel, Ponte Earle.
This document is prepared with the assistance of Specialist Editor Stephen Newman, Executive Counsel, Ponte Earle.