THE CORPORATIONS LAW
CCH Note: Part 13 of the Corporations Act 1989, inserted by sec 6 of No 110 of 1990, Sch 1 (effective 1 January 1991), begins as follows:
PART 13 - THE CORPORATIONS LAWTHE CORPORATIONS LAW 82 The Corporations Law is as follows:...
CHAPTER 2J - TRANSACTIONS AFFECTING SHARE CAPITAL
PART 2J.3 - FINANCIAL ASSISTANCE
SECTION 260C EXEMPTED FINANCIAL ASSISTANCE 260C(1) General exemptions based on ordinary course of commercial dealing. Financial assistance is exempted from section 260A if it is given in the ordinary course of commercial dealing and consists of: (a) acquiring or creating a lien on partly-paid shares in the company for amounts payable to the company on the shares; or (b) entering into an agreement with a person under which the person may make payments to the company on shares by instalments.
260C(2) Special exemptions for financial institutions. Financial assistance is exempted from section 260A if: (a) the company's ordinary business includes providing finance; and (b) the financial assistance is given in the ordinary course of that business and on ordinary commercial terms.
260C(3) Special exemptions for subsidiaries of debenture issuers. Financial assistance is exempted from section 260A if: (a) the company is a subsidiary of a borrower in relation to debentures; and (b) the financial assistance is a guarantee or other security given by the company for the repayment by the borrower of money that it is or will be liable to repay; and (c) the borrower is a borrower in relation to the debentures because it is or will be liable to repay the money; and (d) the guarantee or security is given by the company in the ordinary course of commercial dealing.
260C(4) Special exemption for approved employee share schemes. Financial assistance is exempted from section 260A if it is given under an employee share scheme that has been approved by: (a) a resolution passed at a general meeting of the company; and (b) if the company is a subsidiary of a listed domestic corporation - a resolution passed at a general meeting of the listed domestic corporation; and (c) if paragraph (b) does not apply but the company has a holding company that is a domestic corporation and that is not itself a subsidiary of a domestic corporation - a resolution passed at a general meeting of that holding company.
260C(5) Other exemptions. The following types of financial assistance are exempted from section 260A: (a) a reduction of share capital in accordance with Division 1 of Part 2J.1 (b) a share buy-back in accordance with Division 2 of Part 2J.1 (c) assistance given under a court order (d) a discharge on ordinary commercial terms of a liability that the company incurred as a result of a transaction entered into on ordinary commercial terms.
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