Company Constitution

What is a company constitution?

A company constitution, sometimes referred to as a business company constitution, is a legal document that defines how a company is managed by its directors and members or shareholders. The document template covers key elements such as:

• process for appointing directors;
• director’s powers and duties;
• voting rights of shareholders;
• calling and voting at general meetings of shareholders;
• share transfer rules and limitations;
• decision-making procedures in a company.

An Australian company constitution template is flexible allowing the company’s members to change or modify the company’s management rules provided in the Corporations Act 2001.

Who should use this company constitution template?

Having a fully customisable and business-tailored company constitution template can be suitable for:

• startups launching as a Pty Ltd company;
• established businesses looking to update or amend their current company constitutions;
• company founders and shareholders seeking a solid template to adopt a constitution;
• companies looking for a customisable template to replace ASIC replaceable rules.

What should be included in an Australian company constitution template?

Company constitutions vary depending on the company’s number of shareholders, the company type, governance preferences, and other factors. At the same time, inclusion of certain elements is essential to make a complete and effective document.

Information about Company

This section of the constitution should outline the full legal name, date of incorporation, company’s ACN, and state or territory of incorporation.

If there is an existing shareholders agreement between all or some of the company’s members, information about the date of signing of this agreement should also be referenced.

Transfer of Shares

An Australian company constitution template should also set out the main rules related to the transfer of shares in the company. It is common to establish particular corporate limitations restricting a member’s right to make a sale, transfer or donation of their shares, including:

• lock-in period. This is the period of time after becoming a company’s member during which shares cannot be sold or transferred to third parties. Usually the duration of the lock-in period typically lasts from several months to several years.
• right of first refusal. This is a mandatory requirement for each member selling their shares to third parties to first offer these shares to the remaining members of the company.

General Meetings of Members

This chapter of a company constitution template deals with rules and requirements for calling special and shareholders’ meetings, including:

• minimum quorum required for adoption of decisions at the meeting;
• notice period required to call the meeting;
• meeting venue (for example, at the company’s office, fully remotely);
• appointment of proxies to attend on behalf of members;
• casting vote rights for a chairperson of the meeting.

Appointment and Removal of Directors

The text of a business constitution template should also outline how the company’s directors should be appointed and removed from their position, including:

• details the procedure regarding the appointment or removal of directors;
• maximum duration of a director’s office (for example, 5 years);
• retirement age for a director (for example, at 65);
• minimum required number of directors in a company;
• procedures for appointment of a managing director.

Defining these procedures is crucial to ensure the smooth daily operation of a company.

Liquidation of Company

This section is optional and can be omitted from the text of a company constitution template, provided the liquidation process is addressed in the shareholders’ agreement. If this is not the case, the document must define:

• minimum quorum for the decision of liquidation (for example, 3/4 of all members);
• rules of appointment of a liquidation officer;
• the process of distribution of remaining assets amongst a company’s members.

What are the key benefits of this company constitution template Australia?

It is important to have a solid and well-drafted company constitution. If drafted correctly, the document offers a significant degree of protection for shareholders, as well as clarifies main rules for the company’s internal management, transfer of shares, appointment of directors and more. The key benefits of this document template are the following:

• a document is fully compliant with the effective provisions of the Corporations Act 2001;
• a template is designed for private companies operating across Australia;
• a document is customisable for all Australian states and territories;
• a template is ready for instant download in both PDF and Word formats;
• a document written in professional language;
• a template with a clear structure;
• a document that addresses all aspects of the company’s management and internal corporate governance.

How to customise a company constitution template with FasterDraft?

To get a fully customisable document, follow a few easy steps below:

1. Click the “Create Document” button.
2. Answer simple questions in the form.
3. Select a template’s format – company constitution template Word or PDF.
4. Make a payment.

The document is ready for instant download immediately after the purchase.