Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.12 - MISCELLANEOUS  

Division 1A - Employee share schemes  

Subdivision C - Offers that are eligible to be made under this Division  

SECTION 1100U   REQUIREMENTS FOR CONNECTED LOANS  

1100U(1)    
A loan offered by a body corporate or responsible entity, or an associated entity of a body corporate or responsible entity, in connection with an employee share scheme complies with this section if:

(a)    the loan is offered on the following terms:

(i) that the loan has no interest or fees payable;

(ii) that the rights of the body corporate, responsible entity or associated entity as against the ESS participant, in the event of default in payment of the loan, are wholly limited to forfeiture of the ESS interests acquired using the loan; and

(b)    the borrower is the ESS participant who will acquire ESS interests offered under the employee share scheme; and

(c)    the terms of the loan meet any requirements prescribed in the regulations for the purposes of this paragraph.

Additional requirement for unlisted bodies corporate

1100U(2)    
However, if the offer is of ESS interests in a body corporate that is not included in the official list of a financial market covered by section 1100K , a loan does not comply with this section if it is offered or made by the body corporate to any ESS participant who, at the time the loan is offered or made (as the case may be), is a shareholder of the body corporate.