INCOME TAX ASSESSMENT ACT 1936

SCHEDULE 2H - DEMUTUALISATION OF MUTUAL ENTITIES OTHER THAN INSURANCE COMPANIES AND HEALTH INSURERS  

Division 326 - DEMUTUALISATION  

Subdivision 326-B - How demutualisation is to be effected  

SECTION 326-45   DIRECT METHOD  

326-45(1)  
The direct method of demutualisation is as follows:


(a) all membership rights in the entity are extinguished;


(b) the entity becomes a company with a share capital;


(c) shares ( ordinary shares ) of only one class in the entity are issued within the limitation period to existing members in exchange for the membership rights referred to in paragraph (a);


(d) shares (also ordinary shares ) of the same class in the entity may be issued within the limitation period to new members;


(e) if a listing resolution was passed by the members of the entity - the ordinary shares are listed within the limitation period.

Note:

Other things may happen in connection with the implementation of the demutualisation.

326-45(2)  
The following diagram shows, where this demutualisation method is used, the issue of shares to members of the entity.

Direct method of demutualisation


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