Members
What is the role of a member (previously called a shareholder)?
The members of a company own the company, but the company has a separate legal existence and the company's assets belong to the company.
As a member you are not liable (in your capacity as a member) for the company's debts. Your only financial obligation is to pay the company any amount unpaid on your shares if you are called on to do so. In some circumstances members may have to contribute to the costs of, and incidental to, winding up the company if it is not a company limited by shares.
You can make decisions about the company by passing resolutions, usually at a meeting.
Becoming a member of a company
All companies must have one at least member. Proprietary companies must have no more than fifty members that aren't employees of the company. There is no limit on the number of members of a public company. ASIC may apply to a court to have a company wound up if it does not have any members.
A member of a company must be a person (e.g. John Citizen), a body corporate (e.g. Fictitious Example Company Pty Ltd), or a body politic (e.g. State of Queensland). A member is an entity that can own property, sue or be sued. A business name is not a legal entity and therefore cannot be a member. Estates and trusts cannot hold shares in their own right; they must nominate an executor or a trustee.
You can become a member of a company in a number of ways.
- You can be listed as a member at the time of registration of the company. You must have given your written consent to be a member before the application for registration is made. The names and addresses of all persons who have consented to be members form part of the application for registration as an Australian company.
- You can agree to become a member of a company, which is already registered with us. After you have given written consent and your name is entered on the register of members, the company is responsible for notifying us of changes to the register of members.
- You were a member of a company limited by guarantee and it has converted to a company limited by shares.
There is no age limit - even if you are under 18 you can become a member of a company.
Changes to member and share structure details
Proprietary companies
Proprietary companies must tell us of any changes to member details and share structure including the issue or cancellation of shares, share conversion or division.
Public companies
Public companies are only required to tell us of changes to shares structure - including the issue or cancellation of shares, share conversion or division. They are not required to tell us of changes to member details.
Access to company information
Share register
Anyone has a right to inspect or obtain a copy of a company's share register. The register is usually held at the company's registered office, and contains the name and address of each member, the number of shares held, share classes and the amount paid and unpaid on the shares. As a member you may inspect the register free of charge, however the company may charge other people to inspect the register.
A company must provide a copy of the register within seven days if a person asks for a copy. The fee for supplying of copies or inspecting the register by a non-member is prescribed by law.
Company constitution
A company must send a copy of its constitution to you within seven days of a written request. The company may charge the prescribed fee for this service.
Any changes to the constitution of a public company must be made by a special resolution by 75% of the company members. A copy of the resolution must be lodged with us within 14 days after the special resolution is passed.
Financial statements of the company
Most small proprietary companies are not required to lodge accounts with us. However if you have at least 5% of the votes you can write to the company asking for a copy of financial and director's reports.
Unless a member specifically requests not to receive the report, public companies must prepare and send a copy of their financial accounts to all members at least 21 days before the Annual General Meeting and within four months of the end of the financial year. Financial reports may be made available on a website and hard copies only supplied to members that request one. Alternatively, the company can continue to distribute hard copy reports to members.
Meetings
How is a meeting of members called?
Company directors have the power to call meetings of all members or meetings of only those members who hold a particular class of share. (A company may have different classes of shares to which different rights and restrictions are attached.)
Individual members who hold at least 5% of the votes that may be cast at a general meeting of the company, have the power to:
- call and hold a meeting themselves, or
- require the directors to call and hold a meeting.
Meetings may be held regularly or to resolve specific questions about the management or business of the company. The process to be followed in calling meetings, conducting meetings, and voting at meetings is in Part 2G.2 of the Corporations Act 2001.
A proprietary company can pass a resolution without a physical meeting being held, if all members entitled to vote on the resolution sign a document stating that they are in favour of the resolution. This does not apply to a resolution to remove a company auditor.
What is a quorum?
A quorum is the minimum number of members required to be present to legally transact business. For a meeting of company members, a quorum of at least two members must be present for the full meeting.
Voting
Different rights to vote at meetings of members may attach to different classes of shares. Unless specified by the company's constitution, each member has one vote on a show of hands and, on a poll, one vote for each share held.
The sole member of a company may pass a resolution by recording and signing their decision.
A company must keep a written record (minutes) of the members' resolutions and meetings. Members are entitled to inspect, free of charge, the minute books of a company at its registered office address or principal place of business. However, if a member requests a copy of minutes, the company may charge the prescribed amount.
A member of a company that is entitled to attend and cast a vote at a meeting of members may appoint a person as their proxy to attend and vote for them at the meeting. If you do something by proxy, you appoint someone else to do it on your behalf.
An ordinary resolution must be passed by a majority of the votes cast by members entitled to vote on the resolution and who vote at the meeting in person or by proxy (if proxies are allowed).
A special resolution must be passed by at least 75% of the votes cast by members entitled to vote on the resolution and who vote at the meeting in person or by proxy (if proxies are allowed).
More information about company obligations
See www.asic.gov.au/companies or our information sheets (www.asic.gov.au/infosheets):
For full details on sections of the Corporations Act 2001 go to www.comlaw.gov.au
Please note that this information sheet does not constitute legal advice. It is merely a guide for general information. You should seek appropriate professional advice as to your particular circumstances from your agent, accountant or lawyer.
| This is Information Sheet 47 (INFO 47). Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance. |
ASIC Website: Printed 11/24/2008
