Following its exposure draft in April 2014, the Corporations Legislation Amendment (Deregulatory and Other Measures) Act 2015 commenced on 19 March 2015. The Act contains a package of reforms to the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001 to reduce regulatory burden, clarify existing regulatory obligations, and enhance the efficient operation of certain Government bodies.
Two key amendments under the Act are:
- the removal of the ‘100 Member Rule’, that requires directors to call a general meeting at the request of 100 members; and
- improvements to remuneration reporting requirements - including not requiring unlisted disclosing entities to prepare a remuneration report, and removing the requirements to disclose the value of lapsed options and the percentage of the value of remuneration consisting of options.
The requirement that a general meeting be held on the request of members holding at least 5% of voting shares will remain in section 249D.
Further, the removal of the 100 member rule does not affect the right of 100 or more shareholders to add items onto the agenda of a general meeting, or the requirement that the company distribute a statement in advance of a general meeting about a resolution that is proposed to be moved at a general meeting or any other matter that may be properly considered at the meeting.
Interestingly, the Act does not remove the equivalent 100 member rule for registered managed investment schemes (section 252B).
The proposed reforms contained in the April 2014 exposure draft of the legislation relating to the dividend payment test in section 254T of the Corporations Act have been omitted from the final Act. The exposure draft had included amendments which would replace the current section 254T test used to determine whether a dividend can be paid (tests similar to the capital reduction tests, together with a positive net assets test) with a solvency test. However, these proposed reforms have not been included in the Act.