[ESTABLISHING A BUSINESS ENTITY IN AUSTRALIA]
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The percentage of shareholders who must approve a proposed capital alteration will depend on the nature of the proposed alteration, and in some circumstances, may require the passing of a special resolution. Right to Call Meetings of Shareholders: Shareholders who hold at least 5% of the shares with voting rights in a company may, by written notice to the directors, demand that the directors call a meeting of shareholders. Alternatively, shareholders who hold at least 5% of the shares with voting rights in a company may call a meeting of shareholders themselves by following the notice and timing requirements set out in the Corporations Act. Right to Notice of Meetings of Shareholders: Subject to any restrictions on the rights attaching to a shareholder’s shares , shareholders
The FATA requires “foreign persons” or foreign government investors who propose to acquire interests in Australian real property, or certain interests in Australian companies or businesses, to obtain FIRB approval prior to such acquisition taking place. Who is considered a Foreign Person? The concept of a “foreign person” as set out in the FATA is far reaching and includes not only individuals who are not ordinarily resident in Australia, but will also include:
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a corporation or the trustee of a trust in which an individual not ordinarily resident in Australia, a foreign corporation or a foreign government holds a substantial interest; and a corporation or the trustee of a trust in which 2 or more persons, who together hold an aggregate substantial interest , are: (a) not ordinarily resident in Australia; (b) a foreign corporation; or (c) a foreign government entity.
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generally have the right to receive written notice of, and attend and vote at, meetings of shareholders. The Corporations Act provides that, as a general rule, at least 21 days written notice of a shareholder’s meeting must be provided for private companies. FOREIGN INVESTMENT, THIN CAPITALIZATION, RESIDENCY AND MATERIAL VISA RESTRICTIONS Australia’s Foreign Investment Framework Relevant Legislation Australia’s foreign investment framework is set out within the Foreign Acquisitions and Takeovers Act 1975 (Cth) ( FATA ), the Foreign Acquisitions and Takeovers Regulations 2015 (Cth) ( Regulations ), and the Australian Federal Government’s specified Foreign Investment Policy from time to time.
A “substantial interest” for the purposes of the above means an interest of 20% or more in the relevant company or trust. Acquisitions of Residential and Commercial Property There are certain restrictions imposed on the purchase of residential and commercial property by foreign persons. Acquisitions of interests in Australian Companies and Businesses As a general rule, foreign persons are required to obtain FIRB approval prior to entering into an unconditional agreement to acquire substantial interests (i.e., interests of 20% or more) in Australian companies or businesses
ILN Corporate Group – Establishing a Business Entity Series
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