Because of constitutional constraints on the powers of the Commonwealth, companies legislation was regard as a state matter. Each state had its own Companies Act in the early times. With the market development, Australia tried to uniform the companies legislation through different methods including the Co-operative Scheme in 1980s and the Corporation Act 1989. But the latter was held unconstitutional by the High Court.(1) However, a special solution was finally introduced, after a special agreement was made between the Attorneys-General of Commonwealth and six states, the Corporations Law became operative on 1 January 1991. In order to make it more logic, many of the older laws were restructured into it, so it “is unique in the world in that it contains in a single statute the laws relating to companies, accounts, securities markets, takeovers and insolvency”.(2) It became incredibly complex with 22 chapters, two schedules and 1,362 sections. In 1991, there were 892,749 companies, of which 10,402 were public companies and the number of the listed companies was only 1,096,(3) but the Corporations Law applied to all these 892,749 companies despite of Titanics or tiny sampans. It was absurd, as the former Chief Justice of the High Court of Australia, Sir Anthony Mason, said in 1992 that:
“Oscar Wilde?would have regarded our modern Corporations Law not only as uneatable, but also indigestible and incomprehensible”.(4)
It was really in need of reform. As the reaction, the Labor Attorney-General established in 1993 a Corporations Law Simplification Task Force to introduce the Corporate Law Simplification Program which was replaced in May 1997 by Liberal Federal Treasurer’s Corporate Law Economic Reform Program (CLERP). Both the two programs have made substantive changes to the Corporations Law. Is the Corporations Law still complex?
The objective of the Corporate Law Simplification Program was to render the Corporations Law “capable of being understood so that users can act on their rights and carry out their responsibilities”.(5) Accordingly, the Simplification Task Force targeted seven priority areas including small business, share buy-backs, capital rules, annual reporting, registers, company names and meetings, and three components for simplification, that was simplification of content, clarification of drafting and comprehensive consultation. As to simplification of content, the plan was to streamline the Corporations Law, procure consistency and coherence, strip away unnecessary complexities, maintain effective protection for investors and bring cost benefits both to and to relevant authorities. As to clarification of drafting, the program adopted principles of plain English to meet the needs of a variety of types of users. The program also called for extensive consultation particularly with those most closely associated with its operation and administration.
As the first stage achievement of the Simplification Task Force, the First Corporate Law Simplification Act 1995 (Cth) (The Simplification Act) came into force on 9 December 1995. It effected substantial changes in three areas: proprietary companies, share buy-backs and company registers.
The highlight of the Simplification Act is the introduction of a “Small Business Guide” as Part 1.5 CL and it is also available as a separate publication. In 11 sections it clearly outlines central rules including the rights, obligations and duties for most small business. The Simplification Act also made annual general meetings optional, reduced accounting and financial reporting requirements, and single director companies and single member companies are allowed.
Share buy-backs provisions is simplified both in content and in drafting through the replacement Part 2.4 Division 4B. The Simplification Act allows a company to buy back its own shares (other than redeemable preference shares) if it follows the procedures laid down, and makes same rules apply to all types of companies. It also replaces mandatory procedures involving auditors, experts, advertisements and declarations of solvency with new safeguards. All these provisions are included in 11 sections with about 3,000 words, compared to old provisions that were consisting of 89 sections using more than 20,000 words.(6)
The Simplification Act abolished several company registers. It worked out uniform rules in one place for registers of members, option holders and debenture holders.
Before the Simplification Act was finally passed, the Second Corporate Law Simplification Bill has been released for public consultation. As the Federal Government was changed, the Second Corporate Law Simplification Bill was replaced with the Company Law Review Bill 1997 and was finally passed in late June 1998 as the Company Law Review Act 1998 (Cth) (CLRA98) and commenced on 1 July 1998. The objective of the CLRA98 is stated as “to improve the efficiency of corporate regulation, and reduce regulatory burdens on business and other users of the Corporations Law.”(7)
The CLRA98 made significant changes to the Corporations Law. The need of drafting a constitution was abolished. Existing companies may choose to maintain their original memorandum and articles of association as their corporate constitution, or to adopt a new constitution or repeal the memorandum and apply to the replaceable rules. Companies registered after 1 July 1998 can choose whether or not adopt a corporate constitution. The replaceable rules apply to all new companies unless they are displaced or modified by the corporate constitution.
As to the share capital, the changes include that the par value for shares and the concept of authorised share capital are abolished, the need for court approval for capital reductions and the shareholders’ approval for financial assistance are also removed, and a number of changes are made with respect to the procedures for the issuing of shares.
Other features include that the procedures for establishing, running and de-registering a company were simplified, electronic commerce is to be encouraged for meetings and lodging documents with ASIC, the need to hold formal meetings for proprietary company is reduced, and the size of annual returns and the costs of annual reports are reduced.
While the contents are changed, the drafting was also clarified with plain English; as a result, there was a 43% reduction in words (from 95,000 words to 54,000 words).(8)
As mentioned above, the Corporate Law Simplification Program was replaces by the CLERP following the change of the Federal Government. The objective of the CLERP was “to ensure that business regulation is consistent with promoting a strong and vibrant economy and provides a framework which assists business in adapting to change”.(9)
Accordingly, the reforms of companies and securities regulation aimed to “facilitate a more efficient and competitive business environment”.(10) “As part of the Coalition Government’s drive to promote business and economic development”,(11) the CLERP adopted an economic approach to corporate regulation. The key principles include market freedom, investor protection, information transparency, cost effectiveness, regulatory neutrality and flexibility, and business ethics and compliance. The main features of the reform agenda are summarised as follows:
1.facilitating corporate fundraising, including improving disclosure and facilitating fundraising by small and medium sized enterprises;
2.improving corporate governance, including clarifying directors’ duties and greater accountability to shareholders;
3.making accounting standards more useful for business;
4.streamlining takeover rules, including mandatory bid, compulsory acquisitions, takeovers panel and listed managed investments;
5.fostering electronic commerce; and
6.streamlining regulation of financial markets and products.
After the CLERP has released seven Proposals, of which the first four were incorporated into the CLERP Bill, which was passed on 20 October 1999 as the CLERP Act, which commenced operation on 13 March 2000.
The CLERP Act made significant changes to the Corporations Law relating to directors’ duties and corporate governance, fundraising, takeovers and accounting standards.
The most significant change relating to directors’ duties and corporate governance is the introduction of a business judgement rule. There was uncertainty as to the personal liability of directors for decisions made in good faith before this change was made. Now directors will be assumed to have fulfilled their duty of care if they satisfied the pre-conditions. The ability of directors to delegate functions and to rely on the advice of others was also clarified. The rights of shareholders were also enhanced. Shareholders are allowed to bring proceedings on behalf of the company where the company is either unwilling or unable to do so.
As to takeover provisions, the CLERP Act makes the Corporations and Securities Panel the primary forum for the resolution of takeover disputes during the bid period and prohibits the parties from applying to the court. It allows all types of securities to be compulsorily acquired at any time. And it will be much easier for the holder of 90% or more of shares in a company to mop up the rest by compulsory acquisition. It is believed that changes will simplify takeovers, make them more certain and more commercial.
The most important amendment made to the fundraising provisions is the introduction of shorter prospectuses, which were traditionally long, complex and difficult to understand. The need to issue a prospectus for small business is also reduced. So, now it is simpler and cheaper for small business to raise corporate funds.
The changes of accounting standards are related to the Australian Securities and Investments Commission Act 1989.
From the overview of the main changes made to the Corporations Law during the last decade, we can conclude that the Corporate Law Simplification Program and the CLERP made different endeavour to change the Corporations Law, and accordingly they have the different impact to the Corporations Law.
The objective of the Corporate Law Simplification Program was to make the Corporations Law understandable, so it aimed to simplify both the content and the drafting. The Simplification Act was a good start of its planned endeavour. It made substantial changes to the law relating to proprietary companies, share buy-backs and company registers. The Second Corporate Law Simplification Bill was to continuously simplify the Corporations Law. Both of the two not only significantly simplified relevant requirements and procedures, but also dramatically reduced the words. In my opinion, the introduction of the “Small Business Guide” is one of the greatest achievements of the Corporate Law Simplification Program, and it is a wonderful model for simplifying the Corporations Law. Unfortunately, its endeavour to simplify the Corporations Law was suspended due to the change of Federal Government, although the Second Corporate Law Simplification Bill was mainly included in the CLRA 1998.
The CLERP has also made significant changes to the Corporations Law, but as it is “a major element of the Government’s overall economic program”,(12) all the modifications are aimed to promote efficiency in the Australian economy and increase the protection of investors. The simplification is one of the elements it concerned, but it is no longer its main objective. There is no doubt that CLERP Act has clarified directors’ duties, and simplified the provisions of takeovers and fundraising, but simplification is only a by-product of efficiency.
By now, after more than a dozen of alterations, it seems that the Corporations Law is still unreasonable complex, even more complex than ever to some extent, although some endeavours have made to simplify it. There are 1493 numbered sections plus many inserted sections, the actual total number of sections are over 1,800, some of which are meaningless. There are also too many cross-references that are too far from clarity. Perhaps it is a good suggestion to divide the Corporations Law into several different acts apply to different companies, and to make further more endeavours to simplify each part when it is divided.
Footnotes:
1.NSW, SA & WA v Commonwealth of Australia (1990) 169 CLR 482; 1 ACSR 137
2.Adams, M A; “Developments in Australian and UK Corporate Law and Governance” (1998) 4 Corporate Governance International 22.
3.Adams, M A; Corporations, Finance and Securities Law, Class Materials 3.
4.Mason, Sir Anthony; “Corporate Law: The Challenge of Complexity” (1992) 2 Australian Journal of Corporate Law 1.
5.Attorney-Generals Department, Corporations Law Simplifications Program,Task Force, Plan of Action, Barton, ACT, 1993, 1.
6.Jenny Wily, Corporations Law Update – Simplification, Corporations Law:paper presented for the Continuing Legal Education Department of the College of Law on Wednesday,27th March 1996
7.Company Law Review Bill 1997 Explanatory Memorandum.
8.Adams, M A; Corporations, Finance and Securities Law, Class Materials 1.
9.CLERP, Policy Framework
10.CLERP, Policy Framework
11.CLERP, Policy Reforms
12.CLERP, Policy Framework
Bibliography:
1.Attorney-Generals Department, Corporations Law Simplifications
2.Program, Task Force, Plan of Action, Barton, ACT, 1993, 1;
3.CLERP, Policy Framework;
4.CLERP, Policy Reforms;
5.Company Law Review Bill 1997 Explanatory Memorandum;
6.CLERP, Commentary on Draft Provisions;
7.Adams, M A; Corporations, Finance and Securities Law, Class Materials;
8.Adams, M A; “Developments in Australian and UK Corporate Law and Governance”,(1998) 4 Corporate Governance International 22;
9.Jennifer Hill; “CLERP: What it Means for Corporate Australia”,(2000) 1 Australian Company Secretary 18;
10.Jenny Wily, “Corporations Law Update – Simplification” – paper presented for the Continuing Legal Education Department of the College of Law on Wednesday,27th March 1996;
11.Jenny Wily; “Recent Developments in the Corporations Law”- paper presented for the Continuing Legal Education Department of The College of Law on Wednesday,19th March 1997;
12.H A J Ford and I M Ramsay; A Guide to the First Corporate Law Simplification Act 1995 (Cth),Butterworths 1996;
13.David Roberts, “Company Law Review Act 1998” – paper presented on 16th September 1998;
14.David Wishart; “The Politicization of Corporate Law Reform”- paper presented at Corporate Law Teachers’ Association Conference 1999 at Monash University;
15.Brian Burnett (Consultant author); 2000 Australian Corporations Law, CCH Australia Limited;
16.Latest CLERP changes good news for companies and fundraising, @ 2000, Freehill Hollingdale & Page, http://www.brw.com.au/specials/lawnotes/clerp.htm
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杨春宝一级律师简介
杨春宝一级律师，大成上海高级合伙人、资本市场部主任、国资基金研究中心主任，大成中国区私募基金专业带头人、科技与文化法律研究中心联合牵头人。执业30余年，长期从事私募基金、投融资、并购重组法律服务，尤其对对赌研究颇深且具有非常丰富的实战经验，并专注于金融机构股权投资业务。2004年起多次入选The Legal 500"私募基金"和"公司与商业"等境内外各类律师榜单，代理的中国法院首例适用外国法律审理外国公司的董事损害小股东权益纠纷案入选上海高院发布的《上海法院域外法查明典型案例》和威科先行"要案头条"。入选上海涉外法律人才库、上海市司法局鼎新法治人才库、上海国有企业改制法律顾问团，具有上市公司独立董事任职资格，系多家知名高校的兼职教授或兼职研究生导师及上海市商务委跨国经营人才培训班讲师。出版《私募股权投资基金风险防控操作实务》等16本投融资法律专著。了解更多常见法律问题
澳洲公司法简化计划主要改了什么？
澳洲公司法简化计划（CLSP）旨在让法律条文能够被普通使用者理解，以便其行使权利和履行义务。改革聚焦七个优先领域，包括小企业、股份回购、资本规则、年度报告、登记簿、公司名称和会议，并采取内容简化、草拟澄清和全面协商三大路径。内容简化方面，计划精简法律结构，删除不必要的复杂性，同时维持对投资者的有效保护并降低合规成本；草拟澄清方面则全面采用简明英语，使不同层次的用户都能读懂。第一阶段成果即1995年生效的《简化法》，该法在三个关键领域作出实质修改：第一，引入“小企业指南”，用11个条文清楚列明大多数小企业的核心权利义务和合规要求；第二，简化股份回购规则，允许公司依规定程序回购自身股份，统一适用规则，并取消了原来要求审计师、专家意见、公告和偿付能力声明等强制程序，改为新的保障措施，条文从89条约两万词压缩为11条约三千词；第三，统一并简化成员、期权持有人和债券持有人登记簿规则，废除若干重复性登记簿。这些修改显著降低了小企业的合规负担，体现了以实用为导向的立法思路。
1998年公司法审查法有哪些重要简化？
1998年《公司法审查法》的目标是提高公司监管效率并减轻商业主体及法律使用者的监管负担。该法最显著的变革是取消了起草章程的强制要求。在此之前的公司必须制定章程大纲和公司章程，而新法允许公司选择维持原有文件，或采用新章程，或直接适用“可替换规则”而不必另行制定内部治理文件。对于1998年7月1日后注册的新公司，除非被章程排除或修改，可替换规则自动适用。这一改动使公司治理更加灵活，特别有利于小型企业节省起草法律文件的成本。在股本制度上，新法废除了股票面值与授权股本概念，取消了资本减少需经法院批准的程序，也取消了财务资助需股东批准的要求，同时简化了股票发行程序。其他简化措施包括：简化公司设立、运营和注销流程；鼓励利用电子通讯召开会议和向监管机构提交文件；降低私人公司举行正式会议的频率；缩减年度申报表规模和年度报告成本。在起草质量上，新法坚持简明英语，相关规则从约95000词压缩至54000词，减少幅度达43%。这些改革既提高了法律可读性，也降低了企业合规成本，体现了从形式监管转向实质效率的理念。
公司法经济改革计划核心原则与内容？
公司法经济改革计划（CLERP）是澳大利亚联邦政府更替后接替简化计划的新一轮公司监管改革方案，其根本目标在于确保商业监管符合促进强劲和充满活力的经济的要求，并为企业适应变化提供支持。该计划采用经济分析视角，强调六个核心原则：市场自由、投资者保护、信息透明、成本效益、监管中立性与灵活性、商业道德与合规。这一原则框架意味着，任何监管规则都需要在促进市场效率与保护弱势利益相关者之间取得平衡，且不得对不同规模企业造成不公平负担。从具体内容看，CLERP的议程涵盖六大方向：第一，便利企业融资，尤其是改善信息披露制度，降低中小企业募资门槛；第二，改进公司治理，明确董事义务并强化对股东的责任机制；第三，使会计准则更加贴合商业实际需求；第四，精简收购规则，包括强制要约、强制收购、收购委员会及上市管理投资计划等方面；第五，促进电子商务在商业运营和监管沟通中的运用；第六，简化金融市场与金融产品的监管框架。CLERP先后发布了七个改革提案，其中前四个提案被整合进法案并获得通过。该计划与之前的简化计划一脉相承，但更加强调以经济效率作为衡量规则合理性的标准，对澳大利亚资本市场现代化产生了深远影响。实务中，企业需要特别关注监管动态，评估新规则对融资、治理和交易结构的影响，同时利用简化后的合规框架降低运营成本。
以上内容仅供参考，不构成法律意见。如需专业法律服务，请联系杨春宝一级律师：chambers.yang@dentons.cn
