Constitution for a B Corporation (Proprietary Company)
A Constitution is an essential and crucial document that regulates a company's activities and management.
5.0 (1 reviews)
Last updated January 14, 2025
Under 10 minutes
Suitable for Australia
Written by
Edwin Montoya Zorrilla
Reviewed by
Damin Murdock
Document Overview
A constitution is an essential and crucial document that oversees the activities of your company as well as the relationship of your company’s directors and shareholders. This constitution has been drafted with additional clauses in order to make it compatible with the requirements of B Lab's B Corporation certification. In addition to these clauses, the company must also comply with the following two requirements:
- it must have been in operation for more than 12 months; and
- it must not have deductible gift recipient status.
For more information, see the B Corporation website.
This constitution is drafted for a proprietary company limited by shares. Public company constitutions must follow different rules.
Constitutions may operate alongside or overrule the replaceable rules contained in the Corporations Act 2001 (Cth). For more information, see Company Constitution or Replaceable Rules?
This constitution has optional wording to make the constitution compatible with a shareholders' agreement. Lawpath provides a shareholders' agreement template compatible with this constitution.
The Legal Risk Score of a Constitution for a B Corporation (Proprietary Company) Template
Our legal team have marked this document as medium risk considering:
- The document allows directors considerable discretion in managing the company, including decisions related to dividends, borrowing, and appointment of directors, which could lead to governance practices that may not align with all shareholders' interests.
- The document does not specify any limits on the number of shares a single shareholder can hold, potentially leading to a risk where a single shareholder or a small group could control significant decisions, affecting minority shareholder interests.
- The document grants the directors the power to delegate their responsibilities extensively, which might lead to a dilution of accountability if not monitored carefully.
Constitution for a B Corporation (Proprietary Company) Checklist
Complete your free Constitution for a B Corporation (Proprietary Company) with our checklist
Verify Director and Shareholder Approval
Ensure that all resolutions regarding the appointment of directors, share allocations, and other significant decisions documented are approved and consented to by the appropriate majority of directors and shareholders.
Update Company Records
Maintain accurate and up-to-date records of all meetings, resolutions, and decisions made, as required under the document, to ensure compliance and facilitate future governance activities.
Review by Legal Professional
Have the completed document reviewed by a legal professional to ensure that all provisions comply with current laws and regulations and that the interests of the company and its stakeholders are adequately protected.
Certify with B Corporation
B Corporation certifies individual B corporations and helps them with marketing.
Use this Constitution if:
- You want to decide how your company is run and governed.
- You have chosen not to adopt the Replaceable Rules provided by the Corporation Act.
- You want a more tailored and customisable internal governance approach.
What does the Constitution cover?
The following list are some of the main areas that the company constitution will address:
- The company’s structure;
- The issue of shares;
- Transfer of shares;
- Share certificates;
- Meeting governance;
- Voting procedures;
- Directors;
- Company secretary; and
- Dividends.
Further information
It's never been so easy
Sign-up to a free Lawpath account
Get started and we’ll take care of you. It’s that easy.
Collaborate with e-Sign and Sharing
Having access to your legal documents has never been easier. You can request e-signature, share the document and download for an efficient collaboration.
Create unlimited legal documents and eSignatures for only $39/month.
Upgrade to a Lawpath legal plan to boost your new business.
Here's what people say about Lawpath’s Constitution for a B Corporation (Proprietary Company)
Reviews are managed by BazaarVoice and comply with the BazaarVoice Authenticity Policy. Reviews are independently verified by BazaarVoice and detail our customers' real experiences.