VENTURE CAPITAL ACT 2002

PART 2 - REGISTRATION OF LIMITED PARTNERSHIPS  

Division 9 - Registration requirements  

SECTION 9-10   MEANING OF PERMITTED LOAN  

9-10(1)  


A debt interest is a permitted loan if:


(a) it is a loan made to a *company and the sum of:


(i) the *equity interests that the partnership owns in the company; and

(ii) any debt interests that the partnership owns in the company that can be converted into equity interests in the company;
is at least 10% of the sum of:

(iii) all of the equity interests in the company; and

(iv) all of the debt interests in the company that can be converted into equity interests in the company;
and the company meets the requirements of subsections 118-425(2) to (7) of the Income Tax Assessment Act 1997 in relation to the investments referred to in subparagraphs (i) and (ii); or


(aa) it is a loan made to a unit trust and the sum of:


(i) the *equity interests that the partnership owns in the unit trust; and

(ii) any *debt interests that the partnership owns in the unit trust that can be converted into equity interests in the unit trust;
is at least 10% of the sum of:

(iii) all of the equity interests in the unit trust; and

(iv) all of the debt interests in the unit trust that can be converted into equity interests in the unit trust;
and the unit trust meets the requirements of subsections 118-427(3) to (8) of the Income Tax Assessment Act 1997 in relation to the investments referred to in subparagraphs (i) and (ii); or


(b) it is repaid within 6 months, or such longer period as *Innovation and Science Australia allows under subsection (3).

9-10(2)  


A *general partner may apply to *Innovation and Science Australia, in the *form approved by Innovation and Science Australia, for Innovation and Science Australia to allow a longer period for the purposes of paragraph (1)(b).

9-10(3)  


*Innovation and Science Australia may, for the purposes of paragraph (1)(b), allow a longer period if Innovation and Science Australia is satisfied that:


(a) there are exceptional circumstances; and


(b) the extended period is no longer than reasonably necessary.


 

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