Division 1AA - Interpretative provisions relating to exempting companies and former exempting companies  


160APHBC(1)   [Identifying relevant shares]  

The purpose of this section is to identify which shares in a company are relevant in determining whether the company is effectively owned by prescribed persons.

160APHBC(2)   [``accountable share'']  

A share in a company is an accountable share if it is not an excluded share.

160APHBC(3)   [When share is excluded share]  

A share in a company is an excluded share if, having regard to:

(a) the purposes for which the share was issued; and

(b) any special or limited rights connected with, arising from, or attached to:

(i) the share; or

(ii) other shares in the company held by the holder of the share; or

(iii) shares in the company held by persons other than the holder of the share; or

(iv) interests in any of the above;
including rights that are conferred or exercisable only if the holder of the shares or interests concerned is, or is not, a prescribed person; and

(c) the extent to which any such special or limited rights are similar to or differ from the rights that are normally attached to the ownership of ordinary shares in companies; and

(d) the relationship between the value of the share and the value of company; and

(e) any relationship or connection (whether of a personal or business nature) between holders of shares in the company of which the company is aware; and

(f) any arrangement in respect of shares (including unissued shares) in the company, or interests in shares in the company, of which the company is aware;

it would be reasonable to conclude that the share is not relevant in determining whether the company is effectively owned by prescribed persons because holding the share does not involve the holder bearing the risks, or result in the accrual to the holder of the opportunities, of ownership of the company that ordinarily arise from, or are ordinarily attached to, the holding of ordinary shares in a company.

160APHBC(4)   [Matter disregarded]  

In applying subsection (3), the fact that a person is a trustee is to be disregarded.

160APHBC(5)   [Persons not prescribed persons]  

Without limiting subsection (3), a share in a company held by a person who is not a prescribed person is an excluded share if:

(a) it is a finance share; or

(b) it is a dividend access share; or

(c) it does not carry the right to receive dividends; or

(d) it was issued, transferred or acquired for a purpose (other than an incidental purpose) of ensuring that the company is not effectively owned by prescribed persons.

160APHBC(6)   [Finance share]  

A share is a finance share if:

(a) the share is a non-equity share in the company; or

(b) having regard to the rights attached to the share and to any arrangement with respect to the share of which the company is aware, the share is equivalent to a debt owed by the company to the holder of the share.

160APHBC(7)   [Other grounds for ``finance share'']  

A share to which subsection (6) does not apply is a finance share if:

(a) the manner in which the dividends payable in respect of the share are calculated, and the conditions applying to the payment of such dividends, indicate that the dividends paid are equivalent to the receipt by the person to whom they are paid of interest or an amount in the nature of or similar to interest; or

(b) the capital invested by the holder of the share will be redeemed, or, because of an arrangement between the holder and the company or an associate of the company, it is reasonable for the holder to expect that the capital will be redeemed, for an amount that is not less than, or for property (including other shares in the company) the value of which is not less than, the amount paid for the share; or

(c) the share is redeemable by the company by payment of a lump sum or by the transfer of property, or the share has a preferred right to a repayment of capital on a winding up, where the amount of the lump sum or the value of the property, or the amount of the capital to be repaid, as the case may be, is to be calculated by reference to an implicit interest rate.

160APHBC(8)   [``dividend access share'']  

A share in a company is a dividend access share if, having regard to:

(a) the terms of the issue of the share, including any guarantee of payment of dividends; and

(b) the amounts of the dividends paid on the share relative to the issue price of the share; and

(c) whether there is any guaranteed rate at which franked dividends are to be paid on the share; and

(d) the duration of the period within which the share was issued; and

(e) the rights attached to other shares in the company; and

(f) any other relevant matters;

it could be concluded that the share was issued only for the purpose of paying dividends to the holder of the share.


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