Corporations Act 2001
Note: This Chapter is modified for CCIVs: see Division 2 of Part 8B.4 .
Note: This Division does not apply to a CCIV: see subsection 1231C(6) .
The following table specifies the steps required for, and the sections that apply to, the different types of buy-back.
Procedures | minimum holding | employee share | on-market | equal access scheme | selective buy-back | |||
[ and sections applied ] | ||||||||
within 10/12 limit | over 10/12 limit | within 10/12 limit | over 10/12 limit | within 10/12 limit | over 10/12 limit | |||
ordinary resolution [ 257C ] | - | - | yes | - | yes | - | yes | - |
special/unanimous resolution [ 257D ] | - | - | - | - | - | - | - | yes |
lodge offer documents with ASIC [ 257E ] | - | - | - | - | - | yes | yes | yes |
14 days notice [ 257F ] | - | yes | yes | yes | yes | yes | yes | yes |
disclose relevant information when offer made [ 257G ] | - | - | - | - | - | yes | yes | yes |
cancel shares [ 257H ] | yes | yes | yes | yes | yes | yes | yes | yes |
notify cancellation to ASIC [ 254Y ] | yes | yes | yes | yes | yes | yes | yes | yes |
Note: Subsections (2) and (3) of this section explain what an equal access scheme is. The 10/12 limit is the 10% in 12 months limit laid down in subsections (4) and (5) . Subsections (6) and (7) of this section explain what an on-market buy-back is. See section 9 for definitions of minimum holding buy-back, employee share buy-back and selective buy-back .
[ CCH Note: S 257B(1) will be amended by No 69 of 2020, s 3, Sch 1[576], by substituting " the Registrar " for " ASIC " (wherever occurring) in the table, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
Equal access scheme
257B(2)
An equal access scheme is a scheme that satisfies all the following conditions: (a) the offers under the scheme relate only to ordinary shares; (b) the offers are to be made to every person who holds ordinary shares to buy back the same percentage of their ordinary shares; (c) all of those persons have a reasonable opportunity to accept the offers made to them; (d) buy-back agreements are not entered into until a specified time for acceptances of offers has closed; (e) the terms of all the offers are the same.
257B(3)
In applying subsection (2) , ignore: (a) differences in consideration attributable to the fact that the offers relate to shares having different accrued dividend entitlements; (b) differences in consideration attributable to the fact that the offers relate to shares on which different amounts remain unpaid; (c) differences in the offers introduced solely to ensure that each shareholder is left with a whole number of shares.
10/12 limit
257B(4)
The 10/12 limit for a company proposing to make a buy-back is 10% of the smallest number, at any time during the last 12 months, of votes attaching to voting shares of the company.
Exceeding the 10/12 limit
257B(5)
A proposed buy-back would exceed the 10/12 limit if the number of votes attaching to: (a) all the voting shares in the company that have been bought back during the last 12 months; and (b) the voting shares that will be bought back if the proposed buy-back is made;
would exceed the 10/12 limit.
On-market buy-backs
257B(6)
A buy-back is an on-market buy-back if it results from an offer made by a listed corporation on a prescribed financial market in the ordinary course of trading on that market.
257B(7)
A buy-back by a company (whether listed or not) is also an on-market buy-back if it results from an offer made in the ordinary course of trading in a financial market outside Australia which ASIC declares in writing to be an approved overseas financial market for the purposes of this subsection. A buy-back by a listed company is an on-market buy-back under this subsection only if an offer to buy-back those shares is also made on a prescribed financial market at the same time.
257B(8)
A declaration under subsection (7) may be subject to conditions. Notice of the making of the declaration must be published in the Gazette .
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