A proprietary company is a form of corporation in Australia and South Africa that is either limited or unlimited. However, unlike a public company there are, depending on jurisdiction, restrictions on what they can and cannot do.
In Australia, a proprietary company is defined under section 45A(1) of the Corporations Act.
The Act puts certain restrictions on proprietary companies such as not permitting them to have more than 50 members (shareholders). Another important restriction relates to fundraising. A proprietary company must not engage in fundraising that would require a disclosure document such as a prospectus, offer information statement, or profile statement to be issued (section 113(3)). The Corporations Act states in which circumstances a company must issue a prospectus when attempting to raise funds. This means that a Proprietary company must not offer its shares to the public.
Section 45A of the Act also distinguishes proprietary companies as either "large proprietary" or "small proprietary". The differences here relate to issues such as operating revenue, consolidated gross assets, and the number of employed persons.
Large proprietary companies are required to appoint an auditor and lodge appropriate financial statements with the Australian Securities and Investments Commission (ASIC).
Read more about Proprietary Company: Proprietary Limited or Unlimited Company, Company Names, Other Countries, Company Number
Famous quotes containing the words proprietary and/or company:
“Words can have no single fixed meaning. Like wayward electrons, they can spin away from their initial orbit and enter a wider magnetic field. No one owns them or has a proprietary right to dictate how they will be used.”
—David Lehman (b. 1948)
“It’s given new meaning to me of the scientific term black hole.”
—Don Logan, U.S. businessman, president and chief executive of Time Inc. His response when asked how much his company had spent in the last year to develop Pathfinder, Time Inc.’S site on the World Wide Web. Quoted in New York Times, p. D7 (November 13, 1995)