Articles Of Association Constitution Template for Australia
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What is a Articles Of Association Constitution?
The Articles of Association Constitution is a fundamental legal document required for all companies registered in Australia under the Corporations Act 2001. This document serves as the company's foundational governance framework, establishing the rules and regulations that govern its internal operations and management. It defines the relationships between shareholders, directors, and other stakeholders, outlines corporate governance procedures, and sets forth the company's objectives and powers. The constitution becomes binding upon registration with ASIC and operates as a statutory contract between the company and its members, between the company and its directors and secretary, and between members. Companies may either adopt the replaceable rules from the Corporations Act, create their own constitution, or use a combination of both approaches.
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Frequently Asked Questions
Is "articles of association" still the right term in Australia?
Not since 1 July 1998. The Company Law Review Act 1998 replaced the memorandum and articles with a single document called the constitution, and for companies in existence at that date the old memorandum and articles are treated together as the constitution. You will still see the older term, particularly in documents drafted overseas and in the records of long established Australian companies that have never been restated. That is a labelling question rather than a validity one, since an older document continues to operate as the constitution. When amending one, check whether you are working from the original or from a later consolidated version, because the two often differ.
Does my company need a constitution at all?
A company may adopt a constitution, rely on the replaceable rules in the Corporations Act 2001, or use a combination of the two, so the real question is whether the default rules give you the governance you want. Companies wanting multiple share classes, transfer restrictions or tailored voting arrangements normally adopt one. Work out which replaceable rules you intend to displace before drafting, because a constitution silent on a point leaves the default in place on that point. Whichever route you take, keep the current version where the directors can find it, since notice, quorum and voting are checked against it rather than against recollection.
How do we change the constitution later?
By special resolution of the members, requiring at least 75 per cent of the votes cast, under section 136 of the Corporations Act 2001. A public company must lodge a copy of that resolution with ASIC within 14 days of it being passed. The order matters: notice of the meeting has to set out the proposed change, since members vote on the wording in front of them, and a resolution passed on different words is open to challenge. Circulate the amended constitution with the notice, record the votes cast rather than the members present, and keep the signed resolution with the company records.
Who is bound by the constitution?
It binds the company and its members, and it governs their dealings with each other and with the directors and company secretary. A shareholders' agreement sits alongside it and binds only those who sign, which is why the two should not contradict each other. Where they do, a shareholder can end up in breach of one by complying with the other, and a new shareholder who never signed the agreement takes their shares subject only to the constitution. So put anything that has to bind future members in the constitution, and keep the agreement for arrangements between the current signatories, such as how they will vote or fund the company.
Does the same apply to an incorporated association or club?
No. Incorporated associations are registered under state and territory legislation rather than under the Corporations Act 2001, and they have their own rules and model constitutions. Check the requirements in the state or territory of registration, because the terminology, the thresholds for changing the rules and the regulator you file with all differ from the company position. Some associations later transfer to a company limited by guarantee, which changes which regime applies to them. Using a company constitution for an association, or the reverse, tends to surface at the worst moment: when the rules are needed to settle a contested vote or a change of committee.
About the Articles Of Association Constitution
Your Articles of Association Constitution forms the backbone of your Australian company's legal structure, serving as the primary governance document that dictates how your business operates internally. Under the Corporations Act 2001, this constitution establishes the fundamental rules governing relationships between shareholders, directors, and the company itself, creating binding legal obligations for all parties involved.
When do you need this document?
You need an Articles of Association Constitution when incorporating any company in Australia, whether it's a proprietary limited company (Pty Ltd) or a public company limited by shares or guarantee. This document is essential during the initial ASIC registration process and becomes particularly crucial when you want to customise governance rules beyond the standard replaceable rules provided by the Corporations Act. You'll also need to review and potentially amend your constitution when changing your company structure, issuing different classes of shares, planning for ASX listing, or when shareholders require specific governance arrangements that aren't covered by default legislation.
Key legal considerations
Your constitution must clearly define share capital structures, including different classes of shares and their respective rights, voting procedures, and transfer restrictions. Director appointment, removal, and powers require careful consideration, particularly regarding decision-making authority and conflict of interest management. The document should address member meetings, including notice requirements, quorum thresholds, and voting mechanisms for both ordinary and special resolutions. Dividend distribution policies, company winding-up procedures, and dispute resolution mechanisms are critical clauses that protect all stakeholders. You must also consider whether to include provisions for employee share schemes, related party transactions, and restrictions on directors' personal interests that could conflict with company duties.
Legal requirements in Australia
Under the Corporations Act 2001, your constitution must comply with mandatory statutory requirements and cannot contradict fundamental corporate law principles. The document must be lodged with ASIC during company registration and any subsequent amendments require special resolution approval by shareholders. If your company plans ASX listing, additional compliance with ASX Listing Rules becomes mandatory, requiring specific provisions regarding continuous disclosure, related party transactions, and shareholder approval thresholds. State-based legislation may also apply depending on your business activities and structure. Your constitution must include provisions for ASIC's regulatory oversight powers and ensure compatibility with the Australian Securities and Investments Commission Act 2001. The document should also comply with Competition and Consumer Act 2010 requirements if your business operations involve market competition considerations.
GOVERNING LAW
Applicable law
This Articles Of Association Constitution is drafted to comply with Australia law. Key legislation includes:
ASX Listing Rules: If the company is or plans to be listed on the Australian Securities Exchange, these rules contain additional requirements that must be reflected in the constitution.
Australian Securities and Investments Commission Act 2001: Establishes ASIC's powers and responsibilities in regulating companies and corporate governance.
State Associations Incorporation Acts: Relevant if the organization is incorporating as an association rather than a company, varies by state/territory.
Competition and Consumer Act 2010: May affect provisions relating to dealings with customers, suppliers, and other businesses.
Australian Charities and Not-for-profits Commission Act 2012: Relevant if the organization is or plans to be a registered charity or non-profit entity.
Income Tax Assessment Act 1997: Contains provisions affecting company structure and distribution of profits that should be considered in the constitution.
Privacy Act 1988: Relevant for constitutional provisions regarding member records and information handling.
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