Contracts and company law essentials in Australia

Contract law and mandatory overlays

Australian contract law is common law with state and territory statutes; parties choose the law of a state (New South Wales and Victoria are common) or a foreign law for international deals. Two national statutes override the choice. The Australian Consumer Law applies mandatory guarantees and the unfair contract terms regime to consumer and small business standard-form contracts, with civil penalties since November 2023. The Personal Property Securities Act requires registration of security interests, including retention of title, to secure priority.

Electronic execution under the Corporations Act

The Electronic Transactions Act 1999 (Cth) and matching state Acts give an electronic signature effect where the method identifies the person and their intention, is as reliable as appropriate and the recipient consents. The change that mattered for companies came in 2022: the Corporations Amendment (Meetings and Documents) Act made permanent the ability of companies to sign documents, including deeds, electronically and in split counterparts under sections 110A and 127. A company executes under section 127 by two directors, a director and the company secretary, or a sole director who is also secretary (or a sole director with no secretary), and counterparties may rely on the assumptions in section 129. Some state documents, for example certain land dealings, affidavits and statutory declarations, retain their own formalities; check the relevant state authority.

Directors, approvals and ASIC

Sections 180 to 184 of the Corporations Act impose duties of care and diligence, good faith and proper purpose, and prohibit improper use of position or information; section 588G makes directors personally liable for insolvent trading, which shapes how boards approach distressed subsidiaries. A proprietary company needs at least one director ordinarily resident in Australia and every director needs a director identification number before appointment.

Ordinary resolutions pass by simple majority and special resolutions by 75 per cent; proprietary companies use circulating resolutions. The replaceable rules apply where the constitution is silent, so a shareholders' agreement should be matched with a constitution that displaces them where needed. Share transfers are approved by the board, entered in the register and notified to ASIC within 28 days; stamp duty on share transfers has been abolished in every state, though landholder duty can apply where the company holds significant land. A proprietary company may not have more than 50 non-employee shareholders or offer shares to the public. Australia has no public beneficial ownership register at the review date; reforms have been consulted on, so check the Treasury.

Fair Work: probation, notice and restraints

The Fair Work Act 2009 and the National Employment Standards apply nationally. Probation is contractual, but the minimum employment period before an unfair dismissal claim is six months (twelve for a small business with fewer than 15 employees), so probation periods are aligned to that. Minimum notice runs from one week for up to a year's service to four weeks for more than five years, plus a week where the employee is over 45 with at least two years' service; modern awards and contracts may add more. Check the Fair Work Ombudsman.

Post-employment restraints are enforceable only to the extent reasonably necessary to protect a legitimate interest, and New South Wales allows courts to read a restraint down. The direction of travel is restrictive: the federal government released an exposure draft bill in 2026 to ban non-competes for employees earning at or below the Fair Work high income threshold and to treat certain no-poach and wage-fixing arrangements as cartel conduct. Consultation closed in October 2026 and the bill had not been enacted at the review date. Contracts for staff below the threshold should assume a non-compete will not be enforceable.

Employee share schemes

Employee equity in Australia has two layers. Tax follows Division 83A of the Income Tax Assessment Act 1997, with a start-up concession where the company and the offer meet conditions. Corporate law requires compliance with the employee share scheme disclosure regime in Division 1A of Part 7.12 of the Corporations Act before offers are made, which replaced the earlier ASIC class order relief in 2022. A compliant plan consists of plan rules, offer letters, a board resolution and an ESS disclosure document, and the offer must stay within the regime's monetary caps. Check the ATO and ASIC.

Trade marks at IP Australia

Australia registers on a first-to-file basis but ownership turns on first use or first application, so an earlier user can defeat a later registration. Examination usually takes three to four months, accepted marks are advertised for a two-month opposition period, and because of the convention priority window a mark cannot be registered earlier than about seven and a half months from filing, so approximately eight to twelve months in total. Registration lasts ten years from filing and is renewable; a mark unused for three continuous years may be removed, subject to a waiting period. The standard application fee starts at AUD 250 per class and the TM Headstart service gives an examiner's preliminary view before formal filing. An address for service in Australia or New Zealand is required and trade marks attorneys are registered under the trans-Tasman regime. Australia is a Madrid Protocol member.

Checklist

• Sign company documents electronically under section 127; check state formalities for deeds affecting land.
• Appoint a resident director with a director ID before incorporation.
• Align probation to the six- or twelve-month minimum employment period.
• Assume non-competes will not bind staff below the high income threshold.
• Issue an ESS disclosure document before any employee offer.
• Use TM Headstart for a new brand and file before launch.