Constitution and replaceable rules

A company may rely on the replaceable rules in the Corporations Act 2001 (Cth) to govern the relationship between itself, its members and its officers. Alternatively, a company may adopt a constitution as a separate document that sets out the rules that govern those relationships.

There are a number of reasons why relying on the replaceable rules may not be appropriate for a particular company, including where additional details on the governance rules are required, where certain replaceable rules are not appropriate, or where it is desired to displace or modify some or all of the replaceable rules. In those circumstances, it may be more appropriate to adopt a constitution instead.

A constitution may be adopted on or after registration. If a constitution is adopted on registration, then each of the members specified in the application for registration must consent to the constitution before the application is lodged. If a constitution is adopted on registration by a public company, then that constitution is required to be lodged with ASIC on registration. If a constitution is adopted after registration, the company may do so by passing a special resolution.

There may also be older companies with memorandum and articles of association, and companies that have displaced some but not all of the replaceable rules, or others that have adopted a constitution that simply restates the replaceable rules.

See Constitution and replaceable rules.