AUSTRALIA Law and Practice Contributed by: Scott Colvin, Warren Scott and Lachlan Speirs, Archer Scott Lawyers
Section 39B of the Judiciary Act 1903 (Cth) and Sec - tion 75 (v) of the Constitution. Judicial review is confined to questions of legality, such as jurisdictional error, denial of procedural fair - ness or taking into account irrelevant considerations, and does not allow the court to substitute its own view of the merits. Applications are subject to time lim - its, and reasons may be requested under the judicial review legislation. In practice, formal challenges are uncommon; investors generally manage risk through early and co-operative engagement rather than litiga - tion. 3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity The principal vehicle is the company, incorporat - ed and regulated under the Corporations Act 2001 (Cth) and administered by the Australian Securities and Investments Commission (ASIC). The liability of shareholders is limited to any amount unpaid on their shares, and there is no general minimum share capital requirement. The most common forms are as follows. • Proprietary company (Pty Ltd): a private company limited by shares, with at least one shareholder and a maximum of 50 non-employee shareholders, at least one director ordinarily resident in Australia, and no ability to raise capital from the public. It is the usual vehicle for an inbound subsidiary, a hold - ing company or a joint venture. • Public company (Ltd): able to have unlimited shareholders and to list on the Australian Securi - ties Exchange, requiring at least three directors (two ordinarily resident in Australia) and a company secretary. It is used for public fundraising and listed groups. • Registered foreign company: a foreign company may register with the regulator and carry on busi - ness through a branch, which does not create a separate legal entity. • Trusts: discretionary and unit trusts, usually with a corporate trustee, are widely used for investment, holding and family or small-business structuring, and stapled structures are common in property and infrastructure. Partnerships and limited partner -
ships are available under state law, and incorporat - ed limited partnerships are used for venture capital. The choice of vehicle is driven mainly by tax treat - ment, asset protection and liability, and by the com - mercial purpose. In transactions, a proprietary com - pany is the standard acquisition or bid vehicle, while trusts frequently sit above operating entities as hold - ing vehicles. 3.2 Incorporation Process A company is registered with the corporate regula - tor, and is issued an Australian Company Number on registration. The company then obtains an Australian Business Number and registers for goods and servic - es tax and pay-as-you-go withholding where required, and each director must first obtain a director identifi - cation number. The company needs: • a registered office in Australia; • a principal place of business in Australia; • at least one Australian resident director; • at least one member; and • either a constitution or reliance on the replaceable rules in the legislation. Registration is inexpensive and is typically completed within one to two business days. A foreign company that prefers to operate through a branch instead reg - isters as a registered foreign company and receives an Australian Registered Body Number. 3.3 Ongoing Reporting and Disclosure Obligations All companies must keep their details current with the regulator, notifying ASIC of prescribed changes, including changes to officeholders, the registered office, the share structure and, where applicable, ulti - mate holding company details, within the prescribed periods, and confirming their details and paying an annual review fee each year. Public companies, and some companies in particular circumstances, must also lodge special resolutions or changes to their con - stitution. Financial reporting and audit obligations then depend on size and ownership.
58 CHAMBERS.COM
Powered by FlippingBook