Accounts

Replaceable rules /constitution of Company: The corporation act contains a set of rules called “replaceable rules” that governs the internal administration and management of a companies.The replaceable rules located through the corporation act, apply to companies formed after July 1998 and those companies formed before that date which have replaced their constitutions:135(1)(a)(i) and (ii).The replaceable rules do not apply to the company formed prior to 1998which retained its constitution. One person proprietory company: A proprietary company with a single shareholders who is also the sole director does not need formal governing its internal management .according to a s135(1)the replaceable do not apply to such companies. These companies also do not need a constitution. Instead of replaceable rule the corporation act has a number of basic rules that apply specifically to single shareholder or directors. These rules apply only when the company is single director/shareholder proprietary company. Company limited by guarantee: many replaceable rules, such as those that deals with dividends or transfer and transmission of shares are inappropriate for a company limited by guarantee. The internal management of these types of companies cannot be governed solely by replaceable rules and such companies should have a constitution. No Liabilities companies: The IM of a no liability company cannot be governed solely by replaceable rules. It need to have constitution under s112(2).Public companies : cannot adopt replaceable rules, prior to 1998 all companies were required to have constitution consisting of two document the memorandums of associates and article of association. Companies formed after July 1998 have a choice regarding the rules governing their internal governance. Effects of constitution and replaceable rules: s140(1) provides that a companies constitution and replaceable rules that apply to a company have affects as a contract between:1.the company and each...