What is the Corporations Act 2001?
The Corporations Act 2001, which may also be referred to simply as the Corporations Act, is an act of the Commonwealth of Australia that fundamentally defines the laws dealing with business entities in Australia at both the federal and interstate levels. The Corporations Act 2001 focuses most notably on companies, although the legislation also covers some laws, which specifically relate to other entities in the region, such as managed investment schemes and partnerships.
The Corporations Act 2001 is presently the largest and most comprehensive corporation’s statute in the world. The document itself is several thousand pages long—a figure that trumps similar corporation statutes. In addition to being vast, the Corporations Act 2001 also reforms any previous laws that regulated business formations in Australia.
The Corporations Act 2001 is the primary legislation regulating all companies in Australia. The Corporations Act 2001 regulates matters such as the operation and formation of companies, as well as its officers. The Corporation Act 2001, in conjunction with the nation’s constitution, also regulates all actions performed by the company, including any attempts at fundraising or mergers and acquisitions.
How was the Corporations Act 2001 Formulated?
The Corporations Act 2001 was the subject of a successful High Court of Australia challenge in the case of New South Wales v Commonwealth. In this particular case, the Commonwealth was found to have inadequate power to legislate in relation to the formation of companies. The Australian Constitution; however, found that adequate power for legislation applicable to foreign corporations already formed within the Commonwealth was just. This decision ultimately led to the creation of a co-operative legislation, involving a referral of power from all the Australian States. As a result of this ruling, the Australian States uniformly and unanimously adopted the Corporations Act 2001.
Based on the Corporations Agreement between the Commonwealth and the states, all reforms to the Act must be referred to the Ministerial Council for Corporations for sufficient approval. This co-operative scheme, since the passing, has come under pressure as the Commonwealth has sought to rely on the corporations to legislate for an Industrial Relation reform agenda. Such a maneuver has led to some Labor States threatening to succeed from the Corporations Agreement and more broadly, the Corporations Act 2001.
How is the Corporations Act 2001 Organized?
The Corporations Act 2001 is organized into five volumes—these volumes, in total, cover ten chapters. Each chapter of the Corporations Act 2001 has multiple parts and within each part there a number of divisions. The parts of the Corporations Act 2001 contain virtually every aspect and maneuver of a corporation; from laws on registering a company to the code of code of conduct of a managed investment scheme, the Corporations Act 2001, covers all aspects of an Australian business.