PATHWAYS – LEGISLATIVE FRAMEWORK
Lipton Herzberg & Welsh, Understanding Company Law Chapter 1
- History of Company Law
- Commonwealth or State law? – Constitutional position
- Corporations Act 2001
- Australian Securities & Investments Commission
- Australian Securities Exchange (ASX)
- Takeovers Panel
- Corporations & Markets Advisory Committee
- Companies Auditors & Liquidators Disciplinary Board
- Parliamentary Joint Committee on Corporations & Financial Services
- Reforming the Corporations Act scheme
J Armour, H Hansmann and R Kraakman “The Essential Elements of Corporate Law” (2009)
R McQueen “The Flowers of Progress: Corporations Law in the Colonies” (2009)
P Lipton, “A History of Company Law in Colonial Australia: Economic Development and Legal Evolution“ (2007) 31 Melbourne University Law Review 805 analyses the early history of Australian company law.
B Mees & I Ramsay, “Corporate Regulators in Australia (1961-2000): From Companies’ Registrars to the Australian Securities and Investments Commission” (2008) surveys the various factors that influenced the development of the present system of companies and securities regulation.
Traditionally, regulation of corporate law has been viewed as a matter for State legislation. However, in 1989 the Commonwealth government passed legislation that attempted to take over regulation of corporate law. As a result of the High Court’s decision in NSW v Commonwealth (1990) 169 CLR 482 it became clear that the Australian Constitution does not give the Commonwealth complete power to make laws about companies. In particular, the Commonwealth did not have constitutional powers to make laws dealing with forming companies. This is discussed in Understanding Company Law Chapter 1 [1.25]. These doubts led to a constitutional crisis and considerable uncertainty.
Corporations Act 2001
The constitutional crisis was resolved in 2001 when all the States referred their constitutional powers with respect to the Corporations Law Scheme to the Commonwealth.
As a result of the enactment of the referral legislation by the States, the Commonwealth passed the Corporations Act 2001 and the Australian Securities & Investment Commission Act 2001 to replace the various legislative components of the previous Corporations Law scheme. The Corporations Act 2001 and the ASIC Act 2001 came into effect on 1 July 2001.
The Commonwealth’s Corporations Bill 2001 explanatory memorandum describes the differences between the Corporations Bill 2001 and the previous Corporations Law scheme. It also provides a useful background to the constitutional crisis.
The Australian Securities & Investments Commission (ASIC) is one of the key legislative components of the current Corporations Act Scheme. ASIC’s roles and functions are summarised in Understanding Company Law Chapter 1, [1.65] – [1.115]and Chapter 21
The ASIC website sets out vast amounts of valuable information.
The ASX conducts the main stock market in Australia. The ASX website sets out a large amount of useful information about the ASX and listed companies.
- ASX homepage
- ASX Listing Rules
- ASX Corporate Governance Council Corporate Governance Principles and Recommendations 3rd Edition (2014)
- ASX CHESS explanatory brochure
The Takeovers Panel is the primary forum for resolving disputes about takeover bids. For a synopsis of the role and function of the Panel see Understanding Company Law chapt 1 [1.125], chapt 18, [18.240].
The Panel’s website contains the following information:
Ian Ramsay “The Takeovers Panel: A Review” (2010) reflects on the 20 year history of the Takeovers Panel.
The Australian Financial Reporting System controls the Australian accounting standards-setting process. This is discussed in Understanding Company Law chapt 1 [1.130], chapt 15 [15.70].
The ASIC Act established the Financial Reporting Council (FRC)
The Australian Accounting Standards Board. The AASB’s website contains the Australian Accounting Standards as well as information about the AASB, its media releases, newsletters and publications
The Corporations & Markets Advisory Committee (CAMAC) was the main law reform advisory body of the Corporations Act Scheme. The role and functions of CAMAC is discussed in Understanding Company Law Chapter 1, [1.160]. CAMAC produced a large number of reports, discussion and issues papers. Despite the importance and usefulness of the work of CAMAC, it was disbanded by the Coalition Government in 2014 supposedly as a cost cutting measure.
The main function of the Companies Auditors & Liquidators Disciplinary Board (CALDB) is to discipline company auditors and liquidators who fail to carry out their obligations properly by cancelling or suspending their registration. See Understanding Company Law Chapter 1, [1.155] for an overview of the Board’s role and functions.
The Parliamentary Joint Committee on Corporations & Financial Services is discussed in Understanding Company Law Chapter 1, [1.165]. It was established to add an additional level of parliamentary supervision over the Corporations Act Scheme. It duties are to inquire into and report into the operations of the corporations legislation as well as ASIC and the Takeovers Panel.
C Jordan, “Unlovely and Unloved: Corporate Law Reform’s Progeny” (2009) 33 Melbourne University Law Review 626 asserts that ‘despite massive efforts at law reform … and constant tweaking, the Corporations Act remains indigestible and incomprehensible.’