Law assignment
Question 1
The constitutional basis for the Corporations Act, 2001 is based on Ss 51 (xx) and 51 (xxxvii) of the commonwealth of Australia Constitution Act, 1900.
Ss 51 (xx) provide the Commonwealth Parliament the right to legislate with respect to "foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth". This power has become known as "the corporations power". In Huddart Parker & Co Pty Ltd v Moorehead (1909 ) 8 CLR 330, the High Court of Australia interpreted the word `formed` (past tense) in s51(xx), meaning the companies already exist.
The companies which are to be created or incorporated will therefore not be subjected to the Commonwealth law. This narrow interpretation by the High Court denied the Commonwealth the power to make laws over the incorporation and regulation of companies. Section 51 (xx) was also considered to be very restrictive, applying only to foreign trading or financial corporation, leaving doubt whether it would apply to shelf companies, investment companies, mining companies and charitable companies.
However, Section 51(xxxvii) of the Australian Constitution permits the Commonwealth to legislate on matters referred to it by any state. Section 51 (xxxvii) grants power regarding matters referred to the Parliament of the Commonwealth by the Parliament or Parliaments of any State or States, but so that the law shall extend only to States by whose Parliaments the matter is referred, or which afterwards adopt the law.
The uncertainty over the validity of the corporations legislation are concern with revocability which means whether a state can revoke a referral or if it has the status of quasi- amendment to Section 1 and exclusivity which means whether a referral grants exclusive commonwealth power or concurrent power. That is whether the states may continue to legislate on fields referred to the Commonwealth. For instance, with the use of Section 51 (xxxvii), the Commonwealth then
The constitutional basis for the Corporations Act, 2001 is based on Ss 51 (xx) and 51 (xxxvii) of the commonwealth of Australia Constitution Act, 1900.
Ss 51 (xx) provide the Commonwealth Parliament the right to legislate with respect to "foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth". This power has become known as "the corporations power". In Huddart Parker & Co Pty Ltd v Moorehead (1909 ) 8 CLR 330, the High Court of Australia interpreted the word `formed` (past tense) in s51(xx), meaning the companies already exist.
The companies which are to be created or incorporated will therefore not be subjected to the Commonwealth law. This narrow interpretation by the High Court denied the Commonwealth the power to make laws over the incorporation and regulation of companies. Section 51 (xx) was also considered to be very restrictive, applying only to foreign trading or financial corporation, leaving doubt whether it would apply to shelf companies, investment companies, mining companies and charitable companies.
However, Section 51(xxxvii) of the Australian Constitution permits the Commonwealth to legislate on matters referred to it by any state. Section 51 (xxxvii) grants power regarding matters referred to the Parliament of the Commonwealth by the Parliament or Parliaments of any State or States, but so that the law shall extend only to States by whose Parliaments the matter is referred, or which afterwards adopt the law.
The uncertainty over the validity of the corporations legislation are concern with revocability which means whether a state can revoke a referral or if it has the status of quasi- amendment to Section 1 and exclusivity which means whether a referral grants exclusive commonwealth power or concurrent power. That is whether the states may continue to legislate on fields referred to the Commonwealth. For instance, with the use of Section 51 (xxxvii), the Commonwealth then