Corporations Act 2001
[ CCH Note: Ch 2J will be amended by No 8 of 2022, s 3, Sch 2, by inserting the note, (effective 1 July 2022). The note will read:
[ CCH Note: Div 2 will be amended by No 8 of 2022, s 3, Sch 2, by inserting the note, (effective 1 July 2022). The note will read:
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 scheme||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 scheme buy-back and selective buy-back .
[ CCH Note 1: S 257B(1) will be amended by No 69 of 2020, s 3, Sch 1, by substituting " the Registrar " for " ASIC " (wherever occurring) in the table, (effective 22 June 2022 or a day or days to be fixed by Proclamation).]
[ CCH Note 2: S 257B(1) will be amended by No 14 of 2022, s 3, Sch 4 and [ 13], by substituting " employee share " for " employee share scheme " in the table and " employee share buy-back " for " employee share scheme buy-back " in the note, (effective 30 September 2022).]
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.
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.
A declaration under subsection (7) may be subject to conditions. Notice of the making of the declaration must be published in the Gazette .