THE CORPORATIONS LAW

SCHEDULES

SCHEDULE 4

TRANSFER OF FINANCIAL INSTITUTIONS AND FRIENDLY SOCIETIES

Note:

See section 1465A.

PART 5 - DEMUTUALISATIONS

Disclosure for proposed demutualisation  

29(1) 

If a modification of the constitution of an unlisted company registered under clause 3 is proposed and the modification would have the effect of:

(a)  varying or cancelling the rights of members, or a class of members, to the reserves of the company; or

(b)  varying or cancelling the rights of members, or a class of members, to the assets of the company on a winding up; or

(c)  varying or cancelling the voting rights of members or a class of members; or

(d)  otherwise varying or cancelling rights so that Part 2F.2 (Class rights) applies; or

(e)  allowing 1 of those variations or cancellations of rights;

the following rules apply:

(f)  notice of the meeting of the company's members at which the proposed modification is to be considered must be accompanied by the documents listed in subclause (4);

(g)  notice of the meeting may not be shortened under subsection 249H(2);

(h)  the company must lodge with ASIC the notice and the documents referred to in paragraphs (4)(a) and (c) within 7 days after notice of the meeting is given.

29(2) 

If:

(a)  an issue of shares by an unlisted company registered under clause 3 would have the effect of varying or cancelling rights so that Part 2F.2 (Class rights) applies; and

(b)  at least 1 of the following is required to approve the share issue, or variation or cancellation of rights:

(i) a meeting of the company's members;

(ii) a resolution passed at a meeting of the class of members concerned;

(iii) written consent of a specified proportion of members in the class concerned;

the following rules apply (in addition to those that apply under Part 2F.2):

(c)  notice of the meeting or consent process must be accompanied by the documents listed in subclause (4);

(d)  the company must lodge with ASIC the notice of the meeting or consent process and the documents referred to in paragraphs (4)(a) and (c) within 7 days after the notice is given;

(e)  notice of the meeting may not be shortened under subsection 249H(2).

Paragraph (c) need not be complied with to the extent that a person has already been given the documents.

29(3) 

ASIC may exempt a company from this Part under clause 30.

29(4) 

The documents that must accompany the notice are:

(a)  a disclosure statement that:

(i) satisfies clause 31; and

(ii) ASIC has registered under clause 32; and

(b)  in the case of a proposed modification of the constitution of a company - an estimate of the financial benefits (if any) the member will be offered if the proposed modification occurs; and

(c)  a report by an expert that:

(i) states whether, in the expert's opinion, the proposed modification or share issue is in the best interests of the members of the company as a whole; and

(ii) gives the expert's reasons for forming that opinion; and

(iii) complies with subclauses 33(2) and (3).

29(5) 

If the company contravenes subclause (1) or (2) it is not guilty of an offence.

29(6) 

A person contravenes this subclause if they are involved in a contravention of subclause (1) or (2).

Note 1:

This subclause is a civil penalty provision.

Note 2:

Section 79 defines involved .

29(7) 

A person commits an offence if they are involved in a contravention of subclause (1) or (2) and the involvement is dishonest.

Penalty: 2,000 penalty units or imprisonment for 5 years, or both.

29(8) 

In this clause:

reserves includes general reserves and retained earnings of the company.

unlisted company means a company (registered under clause 3) that does not have voting shares quoted on a stock market of a securities exchange.