Company schemes

Company schemes

In Victoria the most common form of communal title is an owners corporation, formerly called a body corporate.

Other forms of community titles include:

  • Company share scheme
  • Stratum estate

A company schemes are governed by the Corporation Act 2001 and not the Owners Corporation Act 2006.

A company of either type has a constitution which was previously known as the Memorandum and Articles of Association.

Company Share Scheme

  • The building has not been subdivided
  • There is no certificate of land title to a particular lot
  • The land together with building improvements is owned by a company
  • The shares in the company are issued in groups and the ownership of a group entitles the holder to exclusive occupancy of a particular flat
  • The rights and obligations of the member and the company are usually be set out in the company constitution

Stratum Estate

  • The building has been subdivided and a plan of subdivision (called a lodged plan) setting out lot boundaries is lodged with the Registrar of Titles
  • A certificate of title issues for each lot
  • Each owner of a lot holds a group of shares in the service company with the share undertaken in conjunction with the sale of a lot
  • The rights and obligations of the company and member are set out in the service agreement which a member is required to enter into

Share Certificates

A share certificate is a valuable document and should be stored in a safe place.  If there is a loan secured by the share certificate, some lenders will take possession of the share certificate.  A shareholder should always be aware of who has possession of a share certificate.

In most cases it is necessary to surrender the existing share certificate settlement of the sale transaction.

If a share certificate has been lost or destroyed application to me made to the company for a replacement.  This requires the completion of a statutory declaration setting the circumstances of the loss or destruction and may require advertising of the intention to seek a replacement.  This will usually take at least 28 days and may take more.

Conversion to Owners Corporation

  • Company schemes may be converted to a plan of subdivision with an owners corporation to replace the existing scheme.
  • Advice can be obtained from a legal practitioner experienced in this area.