Document ID: chunk:federal_register_of_legislation:C2025C00185:section:1:p2
Version: federal_register_of_legislation:C2025C00185
Segment Type: section
Provision Reference: s 1 (pt 2/3)
Character Range: 400572–403278

to give a mortgage over their house to secure the company's repayment of a loan. If the company does not repay the loan as agreed with the bank, the director may lose the house.

1.5 Continuous existence
  A company continues to exist even if 1 or more of its shareholders or directors sells their shares, dies or leaves the company. If a company has only 1 shareholder who is also the only director of the company and that person dies, their personal representative is able to ensure that the company continues to operate.
[sections 119, 224A]

1.6 Rules for the internal management of a company
  The Corporations Act contains a basic set of rules for the internal management of a company (appointments, meetings etc.).
  Some of these rules are mandatory for all companies. There are a few special rules for single shareholder/single director companies.
  Other internal management rules in the Corporations Act are replaceable rules. The replaceable rules do not apply to:
• a single shareholder/single director company; or
• a company that had a constitution before the introduction of the replaceable rules regime and has not repealed it.
  A company does not need to have a separate constitution of its own; it can simply take advantage of the rules in the Corporations Act. The company will need a constitution only if it wants to displace, modify or add to the replaceable rules.
[sections 134‑141 and 198E]

1.7 How a company acts
  A company does not have a physical existence. It must act through other people.
  Individual directors, the company secretary, company employees or agents may be authorised to enter into contracts that bind the company (see 7).
  In some circumstances, a company will be bound by something done by another person (see 1.8).

1.8 Directors
  The directors of a company are responsible for managing the company's business. It is a replaceable rule (see 1.6) that generally the directors may exercise all the powers of the company except a power that the Corporations Act, a replaceable rule or a provision of the company's constitution (if any) requires the company to exercise in general meeting.
  The only director of a company who is also the only shareholder is responsible for managing the company's business and may exercise all of the company's powers.
  The Corporations Act sets out rules dealing with the calling and conduct of directors' meetings. Directors must keep a written record (minutes) of their resolutions and meetings.
  There are 2 ways that directors may pass resolutions:
• at a meeting; or
• by having all of the directors record and sign their decision.
  If a company has only 1 director, the sole director may also pass a resolution by