1. Background

The Corporations Amendment (No. 1) Act 2010 and Corporations Regulations 2010 (No. 10) commenced on Monday, 13 December 2010.

One of the reasons for the amendments is to restrict the use of company members' registers to make unsolicited offers to buy a member's shares off-market and under value.

The Corporations Act 2001 ("Act") and Corporations Regulations 2001 ("Regulations") have now been amended so that:

  • If a person requests to inspect the company's members' register, and the register is kept on computer, then the inspection must be of the computer records. Formerly, companies whose registers were kept on computer were still required to provide hard copies for members to inspect, which was expensive for companies with large registers.
  • Under new section 173(3A) of the Act, a person who requests copies of a company's members' register must provide an application to the company which:

    - states each purpose for which the person is accessing the copy;
    - is not for a "proscribed purpose"; and
    - is in the "prescribed form"1.

2. Prescribed purpose

A person cannot request a copy of the company's members' register if the purpose is for a "proscribed purpose". Under new Regulation 2C.1.03, the purpose of the request can't be for:

  • soliciting a donation from a member of the company;
  • soliciting a member of a company by a person who is authorised to assume or use the word stockbroker or sharebroker;
  • gathering information about the personal wealth of a member of the company; or
  • making an unsolicited offer to purchase financial products off-market2.

3. Prescribed form

A person must make their application for copies in the "prescribed form". As well as complying with section 173(3A) and stating each purpose for which the person is accessing the copy, the person must also provide their name and address in their application3.

A company that receives a complying application must provide the copy within 7 days. If the register is kept on computer the company must provide the copy of the register "as a delimited text file":

  • produced by a commercially available spreadsheet or database application; and
  • copied onto a CD-ROM or a USB portable memory device4.

4. Fees

Inspection of a company's members' register is without charge for members. However there is now a three-tiered prescribed fee payable by persons (whether members or any other person) requesting a copy of the company members' register, which must be paid before the company is obliged to provide copies of the company register. The fees5 are:

  • Up to 5,000 members - $250
  • Between 5,000 and 19,999 members - $250 plus $0.05 for each member in excess of 5,000; and
  • 20,000 or more members - $250 plus $0.01 for each of the 20,000 or more members.

5. Conclusion

Company secretaries should familiarise themselves with the new regulations, particularly where takeovers may be on the horizon for their company.

1 Section 173(3A) of the Act

2 Covered by Division 5A of Part 7.9 of the Act

3 Regulation 2C.1.04

4 Regulation 2C.1.02

5 Set out in Schedule 4, Item IAA Corporations Regulation (Regulation 1.1a)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.