Corporations Act 2001

A company’s power under section 124 to issue shares includes the power to issue:

bonus shares (shares for whose issue no consideration is payable to the issuing company); and

preference shares (including redeemable preference shares); and

partly‑paid shares (whether or not on the same terms for the amount of calls to be paid or the time for paying calls).

Subsections 246C(5) and (6) provide that in certain circumstances the issue of preference shares is taken to be a variation of class rights.

Partly‑paid shares are dealt with in sections 254M‑254N.

On the issue of a bonus share there need not be any increase in the company’s share capital.

A company can issue preference shares only if the rights attached to the preference shares with respect to the following matters are set out in the company’s constitution (if any) or have been otherwise approved by special resolution of the company:

repayment of capital;

participation in surplus assets and profits;

cumulative and non‑cumulative dividends;

voting;

priority of payment of capital and dividends in relation to other shares or classes of preference shares.

Redeemable preference shares are preference shares that are issued on the terms that they are liable to be redeemed. They may be redeemable:

at a fixed time or on the happening of a particular event; or

at the company’s option; or

at the shareholder’s option.

Redeemable preference shares are dealt with in sections 254J‑254L.