Reading time: 4 minutes

Every company in Australia is governed by its own set of rules that lays out how the company will run. Many companies set these rules out in a company constitution. So, what happens when there’s a change to the company, its business activities or people, and you need to update the constitution? This article will explain how to change your constitution and the steps you need to follow to ensure the new constitution is valid.

How Does a Company Constitution Work?

In Australia, the rules that govern how a company is run can be contained in:

Private companies and ‘no liability’ public companies must have constitutions. The constitution can be adopted before or after the company is registered.

What Amendments Can You Make to a Company Constitution?

Common changes to a company constitution include:

  • implementing a new company structure;
  • allowing a sole director;
  • meeting requirements of a new licence or funding arrangement; or
  • responding to any changes to the law.

You may also need to amend the constitution if there is a court order that asks you to change specific aspects. However, not all amendments are allowed. There are some restrictions to amendments that:

  • affect certain voting rights of shareholders; or
  • change certain provisions of the constitution.

Steps to Change Your Constitution

To change the company constitution, company members must pass a special resolution at a general meeting to approve the changes. The procedure to change the constitution must follow certain steps for the updated constitution to be valid. These include:

  1. reviewing the constitution. The first step is to check whether the existing constitution contains any special requirements about how you should change it or any rules that you need to keep in the new constitution. Note that a company constitution cannot contain a clause that restricts the ability to change it;
  2. issue a notice. A company has to give notice of a special resolution and general meeting. A publicly listed company must give at least 28 days notice of the meeting. All other companies must give at least 21 days notice. The notice should include the time, date and place of the meeting, the general business that you will discuss and the intention to pass the resolution;
  3. general meeting. To adopt a new constitution, the company must pass a special resolution at a general meeting. At least 75% of the voting members of the company must vote in favour of the resolution for it to pass. However, you will also need to follow any other requirements for passing resolutions that are set out in the original constitution;
  4. proxy voting. Members who can’t attend the meeting can appoint another person to act as their ‘proxy’ and the proxy can then vote on the resolution on their behalf. The member will usually need to complete a form to appoint the proxy, and the form must be taken to the meeting.

What to Do After the Constitution is Changed

Once the company has passed the special resolution to change the constitution, certain steps must be taken. If you are a private company, there is no need to lodge the new constitution with ASIC (Australian Securities and Investment Commission), but you must keep a copy with the company’s records. Furthermore, you must provide a current copy within seven days to any member who requests it.

However, there are different rules if the amendment to the constitution is to change the company from a private company to a public company. If so, the company must lodge copies of the new constitution with ASIC and the special resolution adopting the new constitution within 14 days of the resolution being passed. The new constitution takes effect from the date the special resolution is signed.

Key Takeaways

Overall, if your company needs to change its constitution, it is important to be aware of what changes are allowed. It is also essential to follow the correct guidelines for formally updating the constitution. This will ensure that the new constitution is valid and enforceable. If you have any questions about company constitutions or need assistance with amendments to a constitution, you can contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.


Negative Online Reviews: What are the Legal Options?

Wednesday 22 September | 11:00 - 11:45am

Negative or false online reviews of your business can be disheartening and damaging. Understand your legal rights and options with this free webinar.
Register Now

Australia’s Global Talent Visa: How to Attract Top Talent

Thursday 7 October | 11:00 - 11:45am

Understand how to navigate Australia’s complex migration system to attract top overseas talent with our free webinar.
Register Now

5 Essential Contracts for your Online Business

Thursday 14 October | 11:00 - 11:45am

Learn which key contracts will best protect your online business with our free webinar.
Register Now

Key Considerations When Buying a Business

Thursday 11 November | 11:00 - 11:45am

Learn which questions to ask when buying a business to avoid legal and operational pitfalls, so you can hit the ground running. Join our free webinar.
Register Now

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

Our Awards

  • 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards
  • 2019 Most Innovative Firm - Australasian Lawyer