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| GUIDANCE
ABOUT CLASS OF SHARES Most members/shareholders simply opt to own 'ordinary shares'. Ordinary shares are by far the most common type of share. (For example, the vast majority of shares listed for sale on the Australian Stock Exchange are ordinary shares.) Ordinary shares have no unusual rights attached to them (for example, special preferential voting or dividend rights which a preference share might have, or a right to redeem the share which a redeemable preference share might have). Shareholders of ordinary shares have the normal or ordinary rights as set out in various sections of the Corporations Act 2001 and various rights as developed by the courts over the last few hundred years. If the company, on formation, is to have any class of shares, other than ordinary shares, Incorporator recommends that the company adopt a written constitution setting out any special rights attaching to those shares. However, Incorporator will not prepare a written constitution for you - if you want the company to have a written constitution, Incorporator suggests that you engage a solicitor to prepare that written constitution for you. In the meantime, however, you can still carry on using Incorporator to assist you with all other aspects of the incorporation. Further, if you are forming a proprietary company and you decide to have it adopt a written constitution, you need not, and should not, lodge a copy of the constitution with ASIC (the government companies' office). However, in the case of a public company adopting a constitution from the outset, a copy of its constitution must be lodged with ASIC along with the lodgment of the form 201 applying for the registration of the company (Incorporator will prepare the form 201 for you). In the case of an issue of preference shares, section 254A(2) of the Corporations Act 2001 requires that the rights with respect to the following matters must either be set out in a constitution or be approved by a special resolution: a) repayment of capital; b) participation in surplus assets and profits; c) cumulative and non-cumulative dividends; d) voting; and e) priority of payment of capital and dividends in relation to other shares or other classes of shares. |