EXPLANATORY STATEMENT

 

Select Legislative Instrument 2006 No. 41

 

Issued by the authority of the Parliamentary Secretary to the Treasurer

 

Corporations Act 2001

 

                        Corporations Amendment Regulations 2006 (No. 1)

 

Subsection 1364(1) of the Corporations Act 2001 (the Act) provides that the Governor‑General may make regulations prescribing matters required or permitted by the Act to be prescribed by regulations, or necessary or convenient to be prescribed by such regulations for carrying out or giving effect to the Act.

 

Subsection 115(1) of the Act provides that a person must not participate in the formation of a partnership or association that has as an object gain for itself or for any of its members and has more than 20 members, unless the partnership or association is incorporated or formed under an Australian law.  Subsection 115(2) of the Act provides that regulations may specify a higher limit of members for a particular kind of partnership or association.

 

The Regulations would amend the Corporations Regulations 2001 (the Principal Regulations) to provide a limit of 50 members for partnerships or associations that have as their primary purpose collaborative scientific research and development involving at least one private sector participant and at least one university, and which may also include government agencies or publicly funded research bodies. 

 

The purpose of the Regulations is to facilitate scientific research and development collaborations, by raising the limit over which partnerships and associations in this sector would have to be incorporated.  There is evidence of better quality outcomes from larger collaborative scientific projects.  Larger consortia build a critical mass of expertise, infrastructure and resources, and are particularly beneficial in areas requiring expensive infrastructure or where a cross-disciplinary approach is desirable.

 

Under the Corporations Agreement 2002, the State and Territory Governments referred their constitutional powers with respect to corporate regulation to the Commonwealth.  Under subclauses 506(1) and 507(2) of the Corporations Agreement, the Commonwealth is required to consult with and receive the approval of at least 3 State and Territory Ministers of the Ministerial Council for Corporations (the Council) before making a regulation under the national law. The Commonwealth has received approval of the Council for the proposed regulation.  Under subclause 511(3), the Commonwealth is required to consult with the Council as to whether the regulation should be exposed for public comment for between one and three months. The Commonwealth has received the approval of the Council to waive the public disclosure period for the proposed regulation.

 

The Council approved the Regulations.  The Council also waived the requirement to expose the Regulations for public comment.

 

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.  The Regulations commence on the day after they are registered.

 

Details of the Regulations are set out in the Attachment.

 

ATTACHMENT

 

Details of the Corporations Amendment Regulations 2006 (No. 1)

 

Regulation 1 – Name of Regulations

 

This regulation provides that the title of the Regulations is the Corporations Amendment Regulations 2006 (No. 1).

 

Regulation 2 – Commencement

 

This regulation provides that the Regulations commence on the day after they are registered.

 

Regulation 3 – Amendment of Corporations Regulations 2001.

 

This regulation provides that the Corporations Regulations 2001 (the Principal Regulations) are amended as set out in Schedule 1.

 

Schedule 1 – Amendment

 

Item [1] – Regulation 2A.1.01

 

Regulation 2A.1.01 of the Corporations Regulations 2001 already provided a higher partnership or association size limit for actuaries, medical practitioners, patent attorneys, sharebrokers, stockbrokers, trademark attorneys, architects, pharmaceutical chemists, veterinary surgeons, legal practitioners and accountants. The existing regulation makes no special provision for partnerships that have as their primary purpose collaborative scientific research.  Such partnerships are limited to a maximum of 20 members under subsection 115(1) of the Corporations Act 2001.

 

This item amends regulation 2A.1.01 to provide a higher size limit of 50 members for partnerships or associations that have as their primary purpose collaborative scientific research and development involving at least one private sector participant and at least one university, and which may also include government agencies or publicly funded research bodies.

 

The term ‘private sector participant’ is defined in the amendment as an entity that obtains the majority of its revenue from sources other than Commonwealth, State or Territory appropriations.