Constitutional Corporation

Constitutional Corporations are businesses that engage in financial transactions or trade, and they can be either Australian or foreign based companies. The designation 'Pty Ltd' (Proprietary Limited) or 'Ltd' (Limited) in a business name usually indicates this status. These corporations are subject to specific legal and regulatory frameworks, which include certain workplace and employment laws under the Australian Constitution.

Why constitutional corporations matter

The Fair Work Act relies largely on the Commonwealth's power to regulate constitutional corporations. That is why a Pty Ltd company that trades is in the national workplace relations system anywhere in Australia, including Western Australia, where sole traders and partnerships are covered by the state system instead. For example, a Perth café run through a trading Pty Ltd company is covered by the Fair Work Act and modern awards, while the same café run by a sole trader is covered by Western Australian law.

See national workplace relations system and our guide to the Fair Work Act.