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CORPORATIONS ACT 2001 - SECT 208

Need for member approval for financial benefit

             (1)  For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company:

                     (a)  the public company or entity must:

                              (i)  obtain the approval of the public company's members in the way set out in sections 217 to 227; and

                             (ii)  give the benefit within 15 months after the approval; or

                     (b)  the giving of the benefit must fall within an exception set out in sections 210 to 216.

Note 1:       Section 228 defines related party , section 9 defines entity , section 50AA defines control and section 229 affects the meaning of giving a financial benefit .

Note 2:       For the criminal liability of a person dishonestly involved in a contravention of this subsection, see subsection 209(3). Section 79 defines involved .

             (2)  If:

                     (a)  the giving of the benefit is required by a contract; and

                     (b)  the making of the contract was approved in accordance with subparagraph (1)(a)(i) as a financial benefit given to the related party; and

                     (c)  the contract was made:

                              (i)  within 15 months after that approval; or

                             (ii)  before that approval, if the contract was conditional on the approval being obtained;

member approval for the giving of the benefit is taken to have been given and the benefit need not be given within the 15 months.



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