This page was authored by:
The NTA states that once PBCs are established they must register under the Corporations (Aboriginal and Torres Strait Islander Act 2006 (CATSI Act). The CATSI Act is the law that guides how Aboriginal and Torres Strait Islander corporations are run. It includes guidance on:
- The level of reporting required;
- What records must be kept by PBCs;
- Duties of directors and managers;
- Member rights; and
- the role of the Registrar and special administration.
The CATSI Act has similarities with the Corporations Act 2001 (Cth), which governs the operation of companies in Australia, but has been created with the particular needs of Indigneous corporations in mind. It includes specific provisions for Registered Native Title Bodies Corporate (RNTBC) to ensure that their obligations don’t conflict under the NTA, Native Title (Prescribed Bodies Corporate Regulations 1999 (PBC Regulations) and CATSI Act.
What does ORIC do?
The CATSI Act is administered by the Registrar of Indigenous Corporations, an independent statutory office holder appointed by the Minister for Indigenous Affairs and supported by the Office of the Registrar of Indigenous Corporations (ORIC). The Registrar’s key functions are to administer the CATSI Act, assist Indigenous groups to register corporations and operate in compliance with the Act, and support Indigenous corporations by providing training in good corporate governance, and mediation and dispute resolution services. The ORIC website contains a range of factsheets and on-line compliance and governance tools including (ORIC fact sheets):
- Report lodgement portal service - online system for Aboriginal and Torres Strait Islander corporations to lodge their reports;
- ORIC recruitment assistance (ORA) - recruitment assistance to corporations registered under the CATSI Act; and
- Independent directory - online service to match independent directors to Aboriginal and Torres Strait Islander corporations.
ORIC also keeps a register of all Aboriginal and Torres Strait Islander corporations that are incorporated under the CATSI Act. The register contains key information including contact information and copies of public documents such as PBC constitutions (ORIC website).
The Registrar exercises oversight over corporations’ compliance with the CATSI Act and has broad powers to intervene in the running of corporations to ensure they comply with the Act and with their own rule books. ORIC’s compliance oversight function includes, examining PBCs’ records, convening meetings, issuing compliance notices (providing guidance to corporations that are not meeting their obligations under the Act), responding to complaints, and placing non-compliant corporations under external administration.
Where a corporation is experiencing difficulties, the Registrar may intervene to support and restore it to operational order, or restructure it to enable it to better meet its aims, objectives and obligations to its members (see Special Administration below).
Registering under the CATSI Act
PBCs must take certain steps to prepare for incorporation (Setting up a PBC) before registering under the CATSI Act. These include:
- Hold an initial general meeting;
- Agree on proposed constitution (rule book);
- Conduct an election for first board of directors and office bearers; and
- Appoint a contact person or company secretary.
Once registered as an RNTBC a corporation will need to:
- Set up a register of PBC members and former members;
- Set up a minute book for directors’ meetings, general meetings and annual general meetings; and
- Set up bank accounts and financial records (depending on the size of the PBC, it will need to maintain necessary records, taxation structure, superannuation, employee matters).
The CATSI Act requires that all corporations have a rule book (PBC Constitutions) that governs how they should be run. The rule book details the corporation’s name, a dispute resolution process, and any other matters the corporation wishes to include. The rule book has three parts:
- a constitution (rules that are special to that corporation);
- replaceable rules (standard rules set out in the CATSI Act which a corporation can either keep, or replace with different rules that better suit the corporation’s particular circumstances. For example section 144-5(2) of the Act states that applications for membership of a corporation must be in writing. This is a replaceable rule which a corporation is permitted to change. A new rule must specify how an application can be made (e.g. by phone, in person), and be consistent with the CATSI Act, the NTA, and PBC Regulations. (see ORIC's 'The rule book-info kit')
- set rules (rules about internal governance contained in the CATSI Act that are the same for all corporations and cannot be replaced unless the Registrar provides an exemption). For example section 180-1(1) of the Act states that a corporation must keep an up-to-date register of members. If a corporation is open to membership this rule must be included in its rule book.
PBC record keeping and reporting requirements
The CATSI Act sets out what Aboriginal and Torres Strait Islander corporations must do by law (ORIC - lodging reports).
PBCs have obligations under the CATSI Act to maintain a register of members; conduct annual general and special meetings; maintain financial accounts and records; and lodge documents with the Registrar. For reporting purposes, the CATSI Act classifies PBCs as large, medium or small according to their size and income (Reporting requirements). In order to reduce the administrative burden on small corporations, reporting responsibilities for small corporations are less complex than those of larger ones. Corporation size is calculated as follows:
Size and income of corporation
Small corporations with a consolidated gross operating income of less than $100,000.
Small corporations with a consolidated gross operating income of $100,000 or more and less than $5 million.
Medium corporations with a consolidated gross operating income of less than $5 million.
Large corporations or any corporation with a consolidated gross operating income of $5 million or more.
Adapted from CATSI corporation size and reporting fact sheet
If a PBC is not compliant with the CATSI Act or is experiencing financial or governance issues that may impact upon its capacity to meet its obligations to its members and native title holders, under the special administration provisions in the CATSI Act the Registrar may appoint a special administrator to safeguard the corporation for a specified period of time. The special administrator has the powers of an officer of the corporation. Usually when a special administrator is appointed the elected directors will step down. The aim of special administration is to return a corporation to operational stability and compliance with the CATSI Act and its own rule book.
The Registrar may intervene in the operations of a PBC in order to:
- Maintain public confidence in corporations;
- Improve the governance of corporations;
- Prevent or minimise the risk of fraud, dishonesty and misconduct;
- Take action when there are serious breaches of the CATSI Act;
- Protect innocent parties;
- Deter or punish those who cause or might cause harm to others; and
- Educate those involved with corporations about unacceptable behaviour (see ORIC's The Registrar's powers to intervene)
Teasons a PBC may be placed under special administration include:
- Non-compliance with reporting requirements under the CATSI Act;
- Insolvency or the inability to pay a debt;
- Non-compliance with the corporation’s rule book;
- Acting contrary to the interests of a corporation’s members;
- Disputes between corporation members or officers that may affect the stability of the corporation; and
- A request by a majority of a corporation’s officers for a special administrator to be appointed.
Before making a special administration decision, the Registrar has the discretionary powers to take into account a PBCs particular circumstances, such as its size, whether it is located in a regional or remote area and its core business. Usually, before placing a corporation under special administration the Registrar will provide an opportunity for it to respond to concerns raised, through a ‘show cause’ notice and argue for why it should not be placed under special administration.