Australia: Shareholders

Last year, we wrote an article about how scheme booklets are becoming increasingly lengthy and potentially difficult for many shareholders to easily digest.

Joint venture exit risk is no longer determined primarily by formal exit rights, but by whether the underlying confidentiality, information access and governance frameworks can operate effectively in a live sale process. Where they cannot, transaction outcomes – including price, timing and even viability – become materially exposed.

Dividends are a common way for companies to distribute value to shareholders, but whether to declare or pay a dividend is not simply a commercial decision. Directors must ensure that any dividend complies with the Corporations Act 2001 (Cth) (Corporations Act), the company’s constitution and relevant governance requirements, while considering their duties to the company and its creditors.

Two-tiered offers remain a legitimate and important tool for bidders, but must be structured to operate effectively in all circumstances, including where the relevant acceptance threshold is to be tested at the end of the offer period.

ASX Listing Rule 7.1 generally restricts an ASX-listed entity from issuing more than 15% of its issued capital in a 12 month period without shareholder approval, other than in accordance with exceptions set out in Listing Rule 7.2.

If you hold at least 90% of the shares in a company, you can compulsorily acquire the remaining shares. A process known as compulsory acquisition. This framework allows you to access the benefits of full ownership, including streamlined decision-making, elimination of minority shareholder disputes, and complete control over corporate strategy. It also serves an important commercial purpose by facilitating corporate consolidation and removing the complexities of fragmented ownership structures. This article outlines the different ways compulsory acquisition of shares may occur and how each works.

In this matter, the Court had regard to the specific circumstances of shareholdings being unable to be sold on the open market and the terms of the shareholders agreement.

In this case the Full Court of the Federal Circuit and Family Court of Australia has again affirmed the guiding principles set out in Rosati v Rosati [1998] FamCA 38 as to the treatment of potential capital gains tax in property settlement proceedings.

Exposure to class actions remains a reality for businesses operating in Australia, and several emerging trends are set to influence that risk.