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When setting up a company, it’s important to know how everything will work. For example, you need to consider crucial issues such as:
- Who can be a shareholder?
- How many shares can be purchased?
- What if a director wants to step down?
- What are the rights and duties of key personnel?
- How will disputes be handled?
These are all matters that would generally be covered in a Company Constitution. This is essentially the governing document which sets out how the company will operate. With recent updates in Australian corporate law for 2025, having an up-to-date constitution is more important than ever.
If you’re thinking of converting your existing company into a special purpose company, it’s crucial to have a Special Purpose Company Constitution drafted by an expert lawyer who is well-versed in the latest legal requirements.
So, what exactly is a special purpose company, and what might your constitution look like? Read on to learn more and discover how updated regulations in 2025 impact your business operations.
What Is A Special Purpose Company?
Traditional companies are typically designed to generate a profit and operate under general commercial purposes. In contrast, a special purpose company is established to fulfil a particular aim-be it charitable, social, environmental, or another specified objective. This tailored approach ensures that the company’s activities remain focused on its defined mission and adhere to specialised regulatory standards implemented in 2025.
For example, a Not-for-profit company is considered a special purpose company because it operates solely to support charitable initiatives. Similarly, enterprises set up for social impact or environmental sustainability are also categorised as special purpose companies. The updated legal framework now requires these companies to clearly articulate their purpose within their constitution.
Given these nuances, the constitution for a special purpose company must be drafted differently from that of a traditional profit-oriented company. It is essential that the document not only outlines management structures and shareholder rights but also explicitly states the company’s mission and details how funds will be reinvested to support the designated objectives.
What Does A Special Purpose Company Constitution Cover?
A Special Purpose Company Constitution is similar to a regular constitution in that it sets out the key matters for running the company. However, what differentiates it is the requirement to specify your company’s unique purpose and establish strict guidelines on how income is utilised. In 2025, heightened transparency requirements mean that your constitution should detail how funds are allocated, ensuring that any income is reinvested to further your company’s mission.
For example, if you’re a Not-for-profit organisation, your Special Purpose Company Constitution should outline some of the following:
- The company must use all income exclusively for promoting its charitable or special objectives.
- No profits are to be distributed amongst members.
- The company cannot pay standard directors’ fees, ensuring that funds directly support the core mission.
- Any additional payments to directors require prior board approval.
This approach aligns with the evolving Australian legal landscape regarding not-for-profit organisations. If you’re planning to Set Up A Charity, you’ll also need to have a proper Charity Charter prepared before registering with the ACNC.
Special purpose companies have additional statutory requirements in 2025, and failure to comply can risk your company’s recognised status or incur heavy penalties. Moreover, it is advisable to maintain some flexibility within your constitution to accommodate any future regulatory changes. For further guidance, you might also explore our resources on Business Set Up and our detailed article on Legal Requirements for Starting a Business.
Where Can I Get A Special Purpose Company Constitution?
No matter what type of company you are, it’s always best to have your Company Constitution drafted by an expert lawyer. In 2025, with evolving legal requirements and stricter compliance standards, having a clear and comprehensive constitution is key to avoiding future legal complications.
At Sprintlaw, we offer a Special Purpose Company Constitution package which includes the following:
- A constitution tailored to your company’s specific purpose
- Phone consultations with one of our expert lawyers who will walk you through your options
- Customised clauses to address the unique requirements of your business structure
Our lawyers specialise in a broad range of industries, ensuring your constitution accurately reflects your business structure, goals, and overall purpose. For more advice on establishing your company’s legal framework, check out our Company Set Up services.
In today’s fast-changing regulatory environment, it’s also wise to review your constitution periodically. Our team at Sprintlaw stays current with the latest legislative updates and can advise on any necessary amendments to ensure continuous compliance.
Key Takeaways
A Special Purpose Company Constitution will look a little different from a standard company constitution; therefore, obtaining professional legal assistance is highly recommended.
Your constitution should be drafted with careful consideration of your business plan, resources, and the roles of key personnel. By ensuring the document is compliant with 2025 regulations, you safeguard your company’s mission and mitigate potential legal risks. If you need assistance setting up a special purpose company or require customised documents, our team of legal consultants is here to help.
If you would like a consultation on your options, please call us on 1800 730 617 or email team@sprintlaw.com.au for a free, no-obligation chat.
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