Constitution of James & Janet Pty Ltd.

Question: Prepare a constitution; see section 134 and 135 so that your company's internal management is governed by a combination of replaceable rules and a constitution. The constitution should make a provision for a class of preference shares. Answer: Introduction The Corporations Act, 2001 under section 136 states that a company shall adopt a constitution and such constitution shall provide in details all the essential elements, the rules and regulations of the company, the special provisions of the company in accordance to the Corporations Act, 2001 (Bevan, 2007). The company also holds the rights to modify or repeal the constitution or any part of the constitution by a special resolution (Harris, 2009). Constitution of James Janet Pty. Ltd. Preliminary Nature The company is a proprietary company limited by shares. Replaceable rules The replaceable rules in the Corporations Act applies to the Company. The Companys internal management may be governed by: provisions of the Corporations Act 2001 (the Corporations Act) that apply to the company - known as replaceable rules; given under sec 135 of the Act; the Constitution Objects The Company is established with the object to operate as a clothing accessories business. Shares Subject to the Corporations Act any rights and restrictions attached to a class of Shares, the Company shall: allot and issue Shares; and grant options over unissued Shares, In accordance to the Corporations Act, 2001, the Company will have ordinary shares as well as preference shares. The Preference shares issued to the members will be in accordance to the rules given under the Corporations Act, 2001 in accordance with the Section 254 (A) (2) along with the four requirements. These four requirements state that the company has the right to issue preference shares only when the rights attached to the following matters have been approved by a special resolution of the company. These matters are: repayment of capital; participation in surplus assets and profits; cumulative and non-cumulative dividends; voting; priority of payment of capital and dividends in relation to other shares or classes of preference shares Registered holder is absolute owner Only as under the Corporations Act or this Constitution the Company shall not identify any interest relating to any share except as the rightful legal owner of the member who is a holder of the Share. Transfer of Shares Forms of transfer According to this Constitution and the existing law any member may transfer one or more shares that he holds by the instrument of transfer complying with the rules of this Constitution. Instrument of transfer The instrument of transfer of any Share must have the following: Must be in writing; Must be in the usual form or in any such form that has been approved by the Director and that the law allows; Executed on behalf of the transfer; Duly stamped; Delivered properly to the company; Suspension of transfers The registration of the transfer of shares may be suspended by the Directors at any time or for such period as they deem fit. However, such suspension shall not be more than 30 days in one calendar year. Meetings Who can call meetings of Members According to the Corporations Act, 2001, the Director may call for a meeting with the members at any such time and place as the Directors deem fit. The Directors may also call and arrange a general meeting on the request of the members according to the Corporations Act. The members may also call and arrange a general meeting according to the Corporations Act. How to call meetings of Members The Company must give a prescribed meeting notice before holding any meeting. This Notice must be given to each and every member, Director and auditor of the Company. Right to attend meetings Every member and auditor of the Company is entitled to attend meetings of the members. Each Director is entitled to attend and speak at the meetings. Quorum The Quorum for a meeting would be as follows: In case the company has one member, the presence of such member would form the quorum and in other cases the presence of two members would form the quorum, further instead of the members the proxy member or representative of a member may also be present. Number of votes In accordance to the Constitution and the Corporations Act and any restrictions related to the shares, every shareholder, every member will have one vote. A member who is present has one vote for each fully paid share that the member holds; A member also has a fraction of one vote for each of the partially paid share that the member holds. This fraction would be equal to the amount credited on that share that is paid up. Directors Number of Directors The Company will have two Directors and under no circumstances will the Company have less than two directors. In case the number of directors is less than two, an ad-hoc director would be appointed for the time being after a proper meeting and voting of the members till a permanent director is appointed in accordance with this Constitution. Appointment of Directors The first Directors are the individuals who are specified as directors in the application for the registration of the Company under the Corporations Act. According to the Corporations Act, the Director needs to give a written consent about his or her intention to become the Director. The Director also needs to mention about the every detail about him including his name, address, date of birth and other personal details. Vacation of office A Director may resign from his office after giving the company a notice in writing; The Company in a written resolution appoints any other person, which he deems fit as the Director. Remuneration of Directors The remuneration that is payable to Directors of the Company shall be: (i) limited to such amount which has been approved by Cabinet of the State Government and the Shareholding Ministers; or (ii) in any other case, nil. Powers of the Company and Directors General Powers The Company may exercise in any manner permitted by the Corporations Act any power which a proprietary company limited by shares may exercise under the Corporations Act. The business of the Company is managed by or under the direction of the Directors. The Directors may exercise all the powers of the Company except any powers that the Corporations Act or this Constitution requires the Company to exercise in general meeting. Shareholders The company may invite people to send their names to be shareholders in the company. Any person showing interest needs to give a written consent to be a shareholder of the company. All shareholders will have the right to participate in the surplus assets. All shareholders would be given the right to cast their vote. Winding up Distributions proportional to paid up capital In the case of winding up of the company the surplus must be divided among the members in the appropriate proportions which in dependent on the amount paid on the share o the members including the amount credited. Distributions of assets Subject to the restrictions related to the class of Shares the winding up of the company would be done with the with the sanctions of the members- Distribution of the property or part of the property among the members; Distribution between members and class of members Conclusion The constitution of James and Janet Ptd. Ltd is for a proprietary limited company James and Janet Ptd. Ltd. This constitution has been made in accordance to the Corporation Act, 2001. The above constitution reflects all the essential and standard rules (Tomasic, Bottomley and McQueen, 2002) that is required in a standard constitution for a proprietary limited company. References Bevan, C. (2007).Corporations law. Rozelle, N.S.W.: Lawbook Co. Harris, J. (2009).Corporations law. Chatswood, N.S.W.: LexisNexis Butterworths. Tomasic, R., Bottomley, S. and McQueen, R. (2002).Corporations law in Australia. Leichhardt, NSW: Federation Press.