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Editors --- "Corporations (Aboriginal and Torres Strait Islander) Bill 2005 (Cth) - Digest" [2005] AUIndigLawRpr 51; (2005) 9(3) Australian Indigenous Law Reporter 78

CORPORATIONS (ABORIGINAL AND TORRES STRAIT ISLANDER) BILL 2005 (CTH)

Introduction

The Corporations (Aboriginal and Torres Strait Islander) Bill 2005 (Cth) is intended to replace the Aboriginal Councils and Associations Act 1976 (Cth) (‘ACA Act’). The Bill is set to commence on 1 July 2006, to coincide with the start of the 2006–07 financial year.

Over 2500 Aboriginal and Torres Strait Islander corporations are registered under the ACA Act. However, since the Act was introduced, substantial changes have affected Australia’s corporate regulation laws, most notably under the Corporations Act 2001 (Cth) (‘Corporations Act’).

The Bill is intended to reduce the administrative burden for Aboriginal corporations, for example by streamlining reporting requirements. As a result, annual reporting will be much simpler for small and medium sized corporations, while larger corporations will need to provide more information in their annual reports.

In order to be registered, corporations will be required to have at least five members, although the Registrar can exempt small corporations from this requirement under certain circumstances. Groups wishing to incorporate must demonstrate that they are prepared for corporation. For example, 75 per cent of the group must have agreed to apply for registration, and internal governance rules must be settled.

A corporation will be required to have the words ‘Aboriginal corporation’, ‘Torres Strait Islander corporation’, Indigenous corporation’, ‘Aboriginal and Torres Strait Islander corporation’ or ‘Torres Strait Islander and Aboriginal corporation’ as part of its name. A registered native title body corporate will have to use these words or the abbreviation ‘RNTBC’ as part of its name to signal to third parties that the corporation looks after native title rights and interests.

The new Bill also ensures that requirements imposed on a corporation or individual by native title legislation does not conflict with obligations under the Bill.

An approach to internal governance is built into the Bill, with room to tailor the rules of individual corporations to fit their circumstances. All corporations will be required to have a constitution which sets out the corporation’s aims, its name, a process for resolving disputes and any other matters the corporation wishes.

Like the Corporations Act, the Bill includes a set of replaceable rules that operate to give guidance on critical matters related to internal governance. These rules can be modified or replaced by the corporation in its constitution.

The Bill clarifies the duties of directors and includes duties for chief executive officers and other people who manage the corporation. Directors and these managers are called officers. These duties are in line with the Corporations Act and are designed to make sure that good corporate governance standards are applied to Aboriginal and Torres Strait Islander corporations. These duties clearly include a duty of care, a duty of honesty, duties of disclosure and to avoid conflicts of interest, and a duty not to trade while insolvent.

There Bill also provides for two kinds of corporate meetings – directors and general meetings. An annual general meeting must be held every year, although the Registrar can exempt corporations from this requirement if they have no need or capacity to hold them.

The Registrar has a power to call general meetings. Sometimes members are concerned if meetings are not called, so this power can be used to prevent or minimise disputes.

While there are more offences under the new Bill than previously existed under the ACA Act, most are based on those in the Corporations Act. The Bill also sets out a civil penalties scheme for serious contraventions of the Act and includes the option for a penalty notice scheme as an alternative to criminal prosecution.

While it is widely agreed that the ACA Act is out of date and needs to be revised, submissions received by the Senate Committee of Inquiry into the provisions of the Bill have been critical of its approach. In particular, it has been noted that the legislation may be overly prescriptive, and that it eliminates many of the features that distinguish Aboriginal corporations from those incorporated under the Corporations Act.

Corporations (Aboriginal and Torres Strait Islander Bill) 2005 (Cth)

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1-25 Objects of this Act

The objects of this Act are to:

(a) provide for the Registrar of Aboriginal and Torres Strait Islander Corporations; and

(b) provide for the Registrar’s functions and powers; and

(c) provide for the incorporation, operation and regulation of those bodies that it is appropriate for this Act to cover; and

(d) without limiting paragraph (c) – provide for the incorporation, operation and regulation of bodies that are incorporated for the purpose of becoming a registered native title body corporate; and

(e) provide for the duties of officers of Aboriginal and Torres Strait Islander corporations and regulate those officers in the performance of those duties.

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6-1 Overview of Act

(1) This Act primarily provides for the incorporation and regulation of Aboriginal and Torres Strait Islander corporations.

(2) It also provides for the Registrar and the Office of the Registrar of Aboriginal and Torres Strait Islander Corporations.

6-5 Aboriginal and Torres Strait Islander corporations

(1) Chapter 2 provides for an application to be made to the Registrar for registration of an Aboriginal and Torres Strait Islander corporation.

(2) There are a number of registration requirements that must be met before the Registrar may register an Aboriginal and Torres Strait Islander corporation.

(3) Chapter 2 also deals with the effects of registration of an Aboriginal and Torres Strait Islander corporation on the corporation’s members, officers, contact persons and registered office.

6-10 Basic features of an Aboriginal and Torres Strait Islander corporation

(1) Chapter 3 deals with the basic features of an Aboriginal and Torres Strait Islander corporation. It covers matters such as the corporation’s name, constitution and other rules applying to the corporation and the corporation’s registered office or address for document access.

(2) Chapter 3 also provides for the assumptions that people who deal with an Aboriginal and Torres Strait Islander corporation can make in those dealings.

6-15 Members and observers

(1) Chapter 4 sets out some rules for membership of an Aboriginal and Torres Strait Islander corporation and some rules about cancelling the membership of members of the corporation. Aboriginal and Torres Strait Islander corporations have members (as opposed to shareholders) and they may also have persons who observe the operation of the corporation’s meetings (observers).

(2) Chapter 4 also deals with the register of members that the corporation is required to keep, and with protection of the rights and interests of members of the corporation.

6-20 Meetings

(1) Chapter 5 sets out some rules for the calling and holding of general meetings and annual general meetings of an Aboriginal and Torres Strait Islander corporation.

(2) Chapter 5 also deals with rules concerning directors’ meetings.

6-25 Officers

(1) Chapter 6 deals with officers and contact persons of an Aboriginal and Torres Strait Islander corporation.

(2) Importantly, Chapter 6 also deals with the duties of officers and their disqualification for breaches of those duties.

6-30 Record keeping, reporting requirements and books

(1) Chapter 7 deals with the reporting requirements that are imposed on an Aboriginal and Torres Strait Islander corporation. An Aboriginal and Torres Strait Islander corporation may have to lodge a general report and may also have to lodge financial reports (depending on the corporation’s size etc.).

(2) Chapter 7 also deals with the books of an Aboriginal and Torres Strait Islander corporation.

6-35 Civil consequences of contravening civil penalty provisions

Chapter 8 deals with the civil consequences of an officer breaching a duty imposed by this Act.

6-40 Lodgments and registers

(1) Chapter 9 deals with the requirement to lodge certain documents with the Registrar.

(2) Chapter 9 also deals with the registers that the Registrar may, or is required to, keep. Information on these registers is available to the public.

6-45 Regulation and enforcement

(1) Chapter 10 deals with a number of regulatory powers that the Registrar may use in the regulation of Aboriginal and Torres Strait Islander corporations.

(2) Chapter 10 also deals with the Registrar’s powers of enforcement and the protection of whistleblowers.

6-50 External administration

(1) Chapter 11 deals with the administration of an Aboriginal and Torres Strait Islander corporation by persons outside the corporation (for example, in a winding up).

(2) Importantly, the Registrar may appoint a special administrator for an Aboriginal and Torres Strait Islander corporation in circumstances that are vital to the continued viability of the corporation. The special administrator differs from an ordinary administrator.

6-55 Deregistration and unclaimed property

Chapter 12 deals with the deregistration of an Aboriginal and Torres Strait Islander corporation and with unclaimed property.

6-60 Offences

Chapter 13 deals with general offences against this Act.

6-65 Courts and proceedings

Chapter 14 deals with the jurisdiction of courts to hear matters under this Act, injunctions and court proceedings.

6-70 Administration

Chapter 15 deals with a number of matters concerning the general administration of this Act (for example, the protection of information and review of decisions).

6-75 Registrar and Deputy Registrars of Aboriginal and Torres Strait Islander Corporations

(1) Chapter 16 deals with the appointment of the Registrar and Deputy Registrars. The Registrar is charged with the administration of this Act.

(2) Chapter 16 also deals with the powers and functions of the Registrar.

6-80 Interpreting this Act

Chapter 17 contains the interpretation provisions of this Act and the definitions.

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Further details about the Bill, including the full text, are available via the ORAC website at

<http://www.orac.gov.au/about_orac/legislation/reform_act.aspx> .

Details of the Senate Inquiry into the provisions of the Bill can be found online at <http://www.aph.gov.au/Senate/committee/legcon_ctte/corporations/index.htm> .