Commonwealth Consolidated Acts

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CORPORATIONS ACT 2001 - SECT 124

Legal capacity and powers of a company

             (1)  A company has the legal capacity and powers of an individual both in and outside this jurisdiction. A company also has all the powers of a body corporate, including the power to:

                     (a)  issue and cancel shares in the company;

                     (b)  issue debentures (despite any rule of law or equity to the contrary, this power includes a power to issue debentures that are irredeemable, redeemable only if a contingency, however remote, occurs, or redeemable only at the end of a period, however long);

                     (c)  grant options over unissued shares in the company;

                     (d)  distribute any of the company's property among the members, in kind or otherwise;

                     (e)  grant a security interest in uncalled capital;

                      (f)  grant a circulating security interest over the company's property;

                     (g)  arrange for the company to be registered or recognised as a body corporate in any place outside this jurisdiction;

                     (h)  do anything that it is authorised to do by any other law (including a law of a foreign country).

A company limited by guarantee does not have the power to issue shares.

Note 1:       For a company's power to issue bonus, partly--paid, preference and redeemable preference shares, see section 254A.

Note 2:       A CCIV's power to issue shares is affected by sections 1230 and 1230B.

             (2)  A company's legal capacity to do something is not affected by the fact that the company's interests are not, or would not be, served by doing it.

             (3)  For the avoidance of doubt, this section does not:

                     (a)  authorise a company to do an act that is prohibited by a law of a State or Territory; or

                     (b)  give a company a right that a law of a State or Territory denies to the company.

             (4)  Subsection (1) does not prevent a mutual entity that is a company limited by guarantee issuing MCIs.



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