26A. Power to entrench provisions of constitution of company

Question 1

26A. Power to entrench provisions of constitution of company

- if want to alter entrenched provisions, a majority larger than 75% is required

Answer 1

General overview
[26A.01] In addition to entrenching certain rights of members that are attached to the class of shares issued to these members (see reg 8(1) of the Companies (Model Constitutions) Regulations 2015 and s 74), s 26A was enacted in 2004 to allow for the entrenchment of specific articles or provisions in the constitution. An entrenchment means that a majority larger than 75% is required to alter the provision that was entrenched.

Question 2

Entrenching provision

Answer 2

[26A.02] Section 26A was amended in 2004 to provide for an entrenching provision to be provided in the constitution at the time the company was formed or at any time subject to the agreement of all of the members: s 26A(1).

Question 3

Purpose

Answer 3

[26A.03] The purpose of an entrenching provision is to entrench any provision in the constitution against an amendment by a special resolution. It may only be removed or altered if all the members agree.

Question 4

“entrenching provision”

Answer 4

[26A.04] An entrenching provision is a provision in the constitution that provides that specified provisions in the constitution: (a) cannot be altered by a special resolution; or (b) may not be altered except by a resolution that is passed by a majority greater than 75%, or where specified conditions are met.