ALL YOU NEED TO KNOW ABOUT CORPORATIONS ACT AND ASIC IN AUSTRALIA

Posted by Australia Law Writers on April 13th, 2024

The Corporations Act, 2001 (‘Act’) is the primary legislation that governs the companies in Australia. The Act ensures that all the companies operate within the ambit of integrity and transparency with keeping the best interests of all the stakeholders in mind.

The regulatory authority responsible for the administration of Act is the Australian Securities and Investments Commission (‘ASIC’). This blog ‘Corporations Act and ASIC in Australia’ discusses about the Corporations Act and its significance in detail.

About Corporation Act and ASIC

ASIC is the primary authority responsible for regulating and implementing laws relating to the businesses, financial markets, and financial services. According to the, Australian Securities and Investments Commission Act, 2001, the authority is responsible for the fair and transparent financial markets. It is the primary body to deal with the company law in Australia.

Salient features of the Act are as follows:

Base of Corporate Law: The basic law dealing with corporate law in Australia is the Corporations Act, 2001. The Act lays down the rules and regulations for the business entities for the sound functioning of their business.

Rules relating to company formation: The Act lays down the procedure of how to register a company. It basically describes the steps that are to be followed while the formation of a company and the steps to be followed for its registration.

Corporate Governance: The Act lays down the duties and responsibilities of a company officers such as director, secretaries etc. Some of the duties prescribed includes duty to avoid insolvent trade, duty of care, fiduciary duty etc.

Reporting and Disclosure: The Act has listed various provisions related to financial reporting, auditors, disclosure etc. which are very essential for the public companies as these are a key step to ensure transparency and protect the investors.

Rules relating to Fundraising: The Act lays down the rules that a company needs to follow if they want to raise the money from the public. This implies the rules relating to prospectus, shareholder’s rights such as right to receive corporate information, right to attend general meetings etc.

Mergers and Acquisitions:  Mergers and Acquisition is the act when the bigger company takes over the management of another company. The Act also lays governs the procedure relating to the merger and acquisitions process.

Conclusion

Henceforth, it can be said that the Corporations Act in Australia is the key legislation dealing and regulating the corporate governance structure in the country. The Act is vital for the businesses because it promotes transparency and paves the pathway for the accountability.

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