About the Company Constitution Update (incl Div 7A)

Removing your old company constitution and replacing it with a new company
constitution (includes Division 7A Agreements)

Your old company constitution or Articles of Association or Memorandum is completely replaced. (If you only want to update your old constitution you should use our kit called Company Constitution (Add Div 7A)

Your new company constitution contains everything required for the Division 7A Loan Agreement

Any loans made by your company to your shareholder are not deemed to be dividends
by Division 7A Income Tax Assessment Act 1936 ('Div 7A'). The Company's Constitution
sets out the terms on which your company provides the loan. It ensures that
the lender and the borrower document the loan in keeping with the requirements
of Div 7A Loans. You can record a Division 7A loan in your company's minutes. You don’t
need to prepare a separate Loan Agreement.


Why do I need a new company’s constitution?

Company Constitution is a legal document. You draft a Company Constitution when
you set up your company. Just like maintaining your car. You need to update
your constitution from time to time. By removing your old company constitution
with a new one you generated from Law Central, you can then take advantage of
any new provisions in the laws that apply to your company.

What if your company adopted the “Replacement Rules” when you
set up your company?

It is your choice to use the “Replacement Rules” in the past. It
does not allow you to take the advantage of the new provision in tax laws that
apply to a company. The good news is – you can change by removing the
“Replacement Rules” and replacing it with a new company constitution.