Adopt a New Company Constitution

What is a company constitution?

The Constitution is a document typically drawn up prior to the registration of the company. A Company Constitution is a set of rules to guide directors and officers in the operation and internal management of the company. The Constitution essentially has the same legal effect of a contract between all the individuals within the company.

A constitution is a contract between:

• the company and each member
• the company and each director
• the company and the company secretary, and
• a member and each other member.

A company can adopt a constitution before or after registration. If it is adopted before registration, each member must agree (in writing) to the terms of the constitution. If a constitution is adopted after registration, the company must pass a special resolution to adopt the constitution.

Do I need a company constitution?

• 'No Liability' public companies
• 'special purpose companies' that want a reduced annual review fee.

A proprietary company (that is a special purpose company) must have a constitution. It doesn’t need to be lodged with ASIC, but a copy must be kept with the company's records. A company must provide a current copy of the constitution to any member who requests it within seven days. If a fee is charged, the constitution must be provided within seven days of payment.