Company Constitution
A Company Constitution is a legal document that sets the rules for how a company is governed. It outlines director powers, shareholder rights, decision-making procedures, and internal control structures. Lenders review the constitution during applications for Business Loans, Working Capital Loans, and Invoice Finance to confirm who is authorised to borrow on behalf of the company.
A constitution works alongside ASIC records, ACN, and Director appointments. For a bigger-picture view of how structure and authority affect approvals, explore our Business Owners Finance Hub.
Why a Company Constitution Matters in Lending
Lenders must ensure the entity has the legal authority to enter into a finance contract. The constitution clarifies who can sign, what approvals are needed, and whether borrowing limits apply.
- Confirms director signing powers
- Shows how decisions must be approved (e.g., majority vote)
- Reveals borrowing restrictions or special conditions
- Identifies shareholder rights and ownership structure
- Used to validate PPSR and guarantee requirements
How a Company Constitution Works
- Companies adopt it on registration or replace it later
- It governs director responsibilities and meeting rules
- It defines how shares can be issued or transferred
- Lenders analyse the constitution when authority is unclear
- Acts as the company’s internal rulebook
Official source: asic.gov.au