If a proprietary company does not adopt a Constitution, they will be automatically governed by the Replaceable Rules as outlined in the Corporations Act 2001.
Most companies have a Constitution which is drawn up prior to the registration of the company. The Constitution has the effect of a contract between:
- the company and each shareholder;
- the company and each director;
- the company and the company’s secretary;
- a shareholder and each other shareholder.