Directors and company officers must act within the parameters of the company’s constitution and company law. The ability to comply with a company’s constitution and to confidently determine its terms is, therefore, a fundamental and integral part of a director’s duties; yet we are frequently approached by companies who have lost their constitutions.
The implications of a lost constitution can be serious and prove costly. Without a constitution, every director action or decision can be called into question. This can result in litigation; actions being declared invalid and monetary orders being made against the company and/or individual directors.
A prudent director should seek advice on how to manage a company where there is any doubt regarding the terms of a constitution, especially when a constitution has been lost.
We can advise on options and assist with documents
We would be pleased to provide advice on the various options and assist with any written advice or documents. Note that the Corporations Act 2001 (Cth) provides a mechanism for adopting or modifying a constitution by way of a special resolution of shareholders. Simply adopting a new constitution via a special resolution may not, however, be legally effective because a constitution can include additional requirements (or hurdles) that must be satisfied before it can be varied.
To proceed with a sound legal position, we need to obtain appropriate background information and apply the most appropriate method to overcome the lost constitution and obtain your instructions on which method you would like to proceed with. For a brief overview of three key options that may be suitable, please review our article: What to do if a company’s constitution is lost?
Our lawyers are best placed to tailor a solution that best suits your instructions and risk appetite to achieve your preferred outcome.
|Company governance review and oral feedback in a conference||From $2,500|
- What to do if a company’s constitution is lost?
- Why is it important to have a good company constitution?
- Company constitutions and SMSFs
- You should have a sole purpose corporate SMSF trustee
- Preserve the intended control of a company using successor directors
- Not all companies are created equal
- SMSF Lost Deed Service
- Lost Trust Deed Service