Super Summaries Notes

In General

• Originally associated with churches who needed bodies to acquire rights/duties – the concept was initially divided into corporations aggregate (many united into one society kept up by perpetual succession) and corporations sole (one person and their successors to give legal benefits – e.g. land in perpetuity)

• 13-14^th century – Boroughs and guilds were then recognized as merchants struggled to be free of feudalism – they were granted incorporation by royal charter.

• 16^th century - These guilds eventually broke down as egalitarian values were compromised by the oligarchic governing values but a rapidly burgeoning culture of investment was to take over leading to the chartered corporation and joint stock company which were regional (East India Company)

• 17^th - The many benefits of the corporate form are realized (perpetual existence, bringing suit, authentication by company seal, continuity of management, share transfer, distinction of group/personal liability. During this period the South Sea Bubble bursts and the Bubble Act is passed

• 18^th century – Lawyers progressively realize that it wasn’t that much of a problem. But a new form of business association was needed – the deed of settlement company provided this (with a formal/insubstantial restriction to circumvent the transferable stock requirement of the Bubble Act)

• 19^th century – Three corporate forms (partnerships, unincorporated stock companies formed by deed of settlement and those incorporated by Parliamentary Acts) are present. A series of steps are taken to extend corporate privileges to joint stock companies under the Trading Companies Act 1834 (Crown can confer corporate privileges – was given as of right to any association with lawful purpose), the Joint Stock Companies Act (*established accountability mechanisms like company meetings and audits), the Limited Liability Act 1855 (to assist “humbler classes” to find avenues for savings). In 1856 a consolidated statute provided for incorporation on the application of 7 persons

• Throughout the 19^th century the partnership was favoured. But by the end of the 19^th century, law reform secured legitimacy by protective measures introduced by the 1844 legislation. The seminal disclosure principle by the Davey Committee required prospectuses satisfy a “high standard of good faith” and idealized the counsel of perfection to “disclose everything which could reasonably influence the mind of an investor of average prudence”

• Company law has since developed in the case law

In Australia

• The colony applied the English law with a mix of deed of settlement, chartered companies and companies incorporated by statute (e.g. Bank of NSW, Agriculture Company. The joint stock was the most popular company but not many companies were formed until the 1860s when the 1862 UK Act was adopted

• 1950s – Different company legislation across states lead to difficulties and the Poseidon NL speculative bubble bursts. A national securities exchange to act against price manipulation (The ASX – 1974)

• 1971 – The case of Strickland v Rocla Concrete overrules the earlier Huddart, Parker Co. which left open the prospect of the Corporations power being construed broader

• 1974 – Whitlam government introduces the Corporations and Securities Bill to establish a national regulatory commission for securities markets to impose reporting obligations – it lapses

• The Fraser Government between then and 87 – establishes a three tier system for a Formal Agreement between states (see [2.85]/8]. By 1987 it is declared to have outlived its usefulness and it was suggested to give CTH complete responsibility for company law

• 1989 – Hawke Labour government introduces a Corporations Bill that was assetnted to but in NSW v CTH it was held to be unconstitutional as the CTH did not have the power to enact laws to incorporate companies

• 1991 – The new national scheme under the Corporations Act emerges [2.85/8] and endures for 10 years. It appears a ‘national law’ and federalized company through uniform: citation to CTH law, criminal and administrative law regimes, cross-vesting between FCs and SCs. It also established ASIC to administer the corporations law

• Late 90s – Re Wakim; Ex parte McNally decides that CHIII states the manner of vesting jurisdiction is restricted to that chapter. The autocthonous expedient only works one way

• 2001 – The Corporations and ASIC Act effect a ‘referral of powers’ to the Commonwealth; the Corporations Agreement marking out the boundaries of the scheme ([2.95]/9) – amongst other things it requires the CTH not to introduce bills on certain subject matters or repeal bills without consulting the ‘Ministerial Council’ of representatives from each State – this scheme is only ensured up to this year but is likely to continue on. There are specific jurisdictional provisions ([2.100/10]

ASIC

• ASICs sole responsibility is to administer the Corporations Act and has historically had a great breadth of powers and discretions. It has power to regulate both standards of management and regulating the market for securities and the conduct of its participants

• It is accountable only to the CTH Minister who can direct ASIC as to polices which must be tabled before Parlaiment

• It once had a role in consumer protection – it’s powers identical to the ACCC. It runs in concert with APRA, the RBA and ACCC

• Other Satellite bodies that complement ASIC are the Takeover Panel, Companies Auditors, and Liquidators Disciplinary Board and the Corporate Markets Advisory Committee [2.120/11]

ASX

• ASX was created in 1985 when each of the Colony exchanges decided to merge to form it. In 2006 the ASX (AU Stock Exchange) merged with the Sydney Futures Exchange to form the Australian Securities Exchange (ASX)

• In 1998 it was demutualized and converted into a public company and self-listed itself – thus strengthening its oversight and market integrity...