Commonwealth Consolidated Acts

[Index] [Table] [Search] [Search this Act] [Notes] [Noteup] [Previous] [Next] [Download] [Help]

CORPORATIONS ACT 2001 - SECT 257B

Buy-back procedure--general

             (1)  The following table specifies the steps required for, and the sections that apply to, the different types of buy-back.

 

Procedures

[and sections applied]

minimum holding

employee share scheme

on-market

equal access scheme

selective buy-back

 

 

within 10/12 limit

over 10/12 limit

within 10/12 limit

over 10/12 limit

within 10/12 limit

over 10/12 limit

 

ordinary resolution
[257C]

--

--

yes

--

yes

--

yes

--

special/unanimous resolution [ 257D]

--

--

--

--

--

--

--

yes

lodge offer documents with ASIC [257E]

--

--

--

--

--

yes

yes

yes

14 days notice [257F]

--

yes

yes

yes

yes

yes

yes

yes

disclose relevant information when offer made [257G]

--

--

--

--

--

yes

yes

yes

cancel shares [257H]

yes

yes

yes

yes

yes

yes

yes

yes

notify cancellation to ASIC [254Y]

yes

yes

yes

yes

yes

yes

yes

yes

Note:          Subsections (2) and (3) of this section explain what an equal access scheme is. The 10/12 limit is the 10% in 12 months limit laid down in subsections (4) and (5). Subsections (6) and (7) of this section explain what an on-market buy-back is. See section 9 for definitions of minimum holding buy-back , employee share scheme buy-back and selective buy-back .

Equal access scheme

             (2)  An equal access scheme is a scheme that satisfies all the following conditions:

                     (a)  the offers under the scheme relate only to ordinary shares;

                     (b)  the offers are to be made to every person who holds ordinary shares to buy back the same percentage of their ordinary shares;

                     (c)  all of those persons have a reasonable opportunity to accept the offers made to them;

                     (d)  buy-back agreements are not entered into until a specified time for acceptances of offers has closed;

                     (e)  the terms of all the offers are the same.

             (3)  In applying subsection (2), ignore:

                     (a)  differences in consideration attributable to the fact that the offers relate to shares having different accrued dividend entitlements;

                     (b)  differences in consideration attributable to the fact that the offers relate to shares on which different amounts remain unpaid;

                     (c)  differences in the offers introduced solely to ensure that each shareholder is left with a whole number of shares.

10/12 limit

             (4)  The 10/12 limit for a company proposing to make a buy-back is 10% of the smallest number, at any time during the last 12 months, of votes attaching to voting shares of the company.

Exceeding the 10/12 limit

             (5)  A proposed buy-back would exceed the 10/12 limit if the number of votes attaching to:

                     (a)  all the voting shares in the company that have been bought back during the last 12 months; and

                     (b)  the voting shares that will be bought back if the proposed buy-back is made;

would exceed the 10/12 limit.

On-market buy-backs

             (6)  A buy-back is an on-market buy-back if it results from an offer made by a listed corporation on a prescribed financial market in the ordinary course of trading on that market.

             (7)  A buy-back by a company (whether listed or not) is also an on-market buy-back if it results from an offer made in the ordinary course of trading in a financial market outside Australia which ASIC declares in writing to be an approved overseas financial market for the purposes of this subsection. A buy-back by a listed company is an on-market buy-back under this subsection only if an offer to buy-back those shares is also made on a prescribed financial market at the same time.

             (8)  A declaration under subsection (7) may be subject to conditions. Notice of the making of the declaration must be published in the Gazette .



AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback