CORPORATIONS ACT 2001

CHAPTER 2J - TRANSACTIONS AFFECTING SHARE CAPITAL  

PART 2J.1 - SHARE CAPITAL REDUCTIONS AND SHARE BUY-BACKS  

Division 2 - Share buy-backs  

SECTION 257J   257J   SIGNPOSTS TO OTHER RELEVANT PROVISIONS  


The following table sets out other provisions of this Act that are relevant to buy-backs.


Other provisions relevant to buy-backs
provision comment
1 section 588G liability of directors on insolvency
section 1317H The directors may have to compensate the company if the company is, or becomes, insolvent when the company enters into the buy-back agreement.
2 section 1324 injunctions to restrain contravention
The Court may grant an injunction against conduct that constitutes, or would constitute, a contravention of this Act.
[ CCH Note: There is no item 3 in the table to s 257J. ]
4 subsection 609(4) application of takeover provisions
section 611 (item 19 of the table) These sections deal with the application of Chapter 6 to buy-backs.
5 section 259A consequences of failure to follow procedures - the company and the officers
If a company fails to follow the procedure in this Division, the company contravenes this section and the officers who are involved in the contravention are liable to a civil penalty under Part 9.4B and may commit an offence.
6 section 256D consequences of failure to follow procedures if reduction in share capital involved - the company and the officers
If the buy-back involves a reduction in share capital and the company fails to follow the procedures in this Division, the company contravenes this section and the officers who are involved in the contravention are liable to a civil penalty under Part 9.4B and may commit an offence.
7 section 256D consequences of failure to follow procedures if reduction in share capital involved - the transaction
This section provides that a failure to follow the procedures for share capital reductions does not affect the validity of the buy-back transaction itself.
8 Chapter 6CA continuous disclosure provisions
Under this Chapter a disclosing entity is required to disclose information about its securities that is material and not generally available.
9 Chapter 2E benefits to related parties to be disclosed
Under this Chapter, a financial benefit to a director or other related party may need to be approved at a general meeting before it is given.
10 section 125 provisions in constitution
This section deals with the way in which a company's constitution may restrict the exercise of the company's powers and the consequences of a failure to observe these restrictions.
11 sections 246B-246G variation of class rights
These sections deal with the variation of rights attached to a class of shares. This variation may be governed by the provisions of a company's constitution.


 

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