Commonwealth Numbered Acts
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CORPORATIONS ACT 2001 - SECT 254A
Power to issue bonus, partly-paid, preference and redeemable
(1) A company's power under section 124 to issue shares
includes the power to issue:
- bonus shares (shares for whose issue no
consideration is payable to the issuing company); and
- preference shares (including redeemable preference shares); and
- partly-paid shares (whether or not on the same terms for the amount of
calls to be paid or the time for paying calls).
- Note 1: Subsections 246C(5) and (6) provide that in certain circumstances the
issue of preference shares is taken to be a variation of class rights.
Note 2: Partly-paid shares are dealt with in sections 254M-254N.
Note 3: On the issue of a bonus share there need not be any increase in the
company's share capital.
(2) A company can issue preference shares only if the rights attached to the
preference shares with respect to the following matters are set out in the
company's constitution (if any) or have been otherwise approved by special
resolution of the company:
- repayment of capital;
- participation in surplus assets and profits;
- cumulative and non-cumulative dividends;
- priority of payment of capital and dividends in relation to other shares
or classes of preference shares.
(3) Redeemable preference shares are preference shares that are issued on the
terms that they are liable to be redeemed. They may be redeemable:
- at a
fixed time or on the happening of a particular event; or
- at the company's option; or
- at the shareholder's option.
- Note: Redeemable preference shares are dealt with in sections 254J-254L.
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