What are corporate actions?

Corporate actions are initiated by a company or corporation, for the purpose of giving an entitlement to shareholders.

There are two types of corporate actions – voluntary and mandatory.

Voluntary corporate actions are ones where the shareholder has the option to participate.

Typically the shareholder will receive documentation from the company to participate or give up the offer.

Common voluntary corporate actions include:

  • Rights Issue: An offer of securities to existing shareholders in proportion to their shareholding. This enables shareholders to subscribe for additional shares at a pre-determined price
  • Buy Back: The purchase of its own shares by a company. Shareholders can sell their shares back to the company for the Buy Back price
  • Bonus Issue: When additional shares are issued by a company on a pro rata basis for free
  • Dividend Payment: A voluntary payment made by a company to its shareholders. The payment is a share of the company's profits and is based on the number of shares you hold. Shareholders may receive dividend payments in the form of cash or shares.
  • Company Option: This gives the holder the opportunity to buy shares at a fixed price by a predetermined date. At the predetermined date the shareholder must either acquire the shares or let the options expire
  • Call: A request for the shareholder to make a payment on outstanding amounts due on a share. The shareholder must meet the call request or forfeit the shares held. Calls can also be mandatory.

Mandatory corporate actions typically relate to company restructures or company administration.

Shareholders do not have a choice to participate or opt out. Mandatory corporate actions are published to advise shareholders of the event.


How do I get notified about a corporate action?

The company will notify you in writing about a corporate action it is responsible for. This information is also available in CommSec under ASX announcements.


What do I need to do to participate in a corporate action?

Shareholders will receive documentation from the company detailing corporate actions and how to participate or give up the offer.


You might also like...

How are dividends taxed?

What you'll learn:
  • What income is taxed
  • How the tax scales work
  • How share dividends are taxed
Written for:Beginner | Intermediate

How do I manage my dividends?

What you'll learn:
  • Different types of dividends
  • Lodgement of tax
  • Dividend reinvestment plans
Written for:Intermediate

How do franking credits work?

What you'll learn:
  • Definition of franking credits
  • Excess imputation credits
  • Franking credits case study
Written for:Intermediate

Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. This information is not advice and has been prepared without taking account of the objectives, financial or taxation situation or needs of any particular individual. For this reason, any individual should, before acting on this information, consider the appropriateness of the information, having regards to the individual's objectives, financial or taxation situation and needs, and, if necessary, seek appropriate professional advice. Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and a Participant of the ASX Group and Chi-X Australia. 



This site is directed and available to and for the benefit of Australian residents only. © Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 ("CommSec") is a wholly owned, but non guaranteed, subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and both entities are incorporated in Australia with limited liability.

By clicking on the "Download the CommSec App" buttons above, you will be directed to itunes.apple.com or play.google.com. These sites are not affiliated with CommSec and may offer a different Privacy Policy and level of security.