Corporations Act 2001

CHAPTER 2J - TRANSACTIONS AFFECTING SHARE CAPITAL  

Note: This Chapter is modified for CCIVs: see Division 2 of Part 8B.4 .

PART 2J.3 - FINANCIAL ASSISTANCE  

Note: This Part does not apply to a CCIV: see section 1231L .

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.


 

Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.