Commonwealth Consolidated Acts

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CORPORATIONS ACT 2001 - SECT 257J

Signposts to other relevant provisions

                   The following table sets out other provisions of this Act that are relevant to buy-backs.

 

Other provisions relevant to buy-backs

 

 

 

provision

comment

1

section 588G section 1317H

liability of directors on insolvency

The directors may have to compensate the company if the company is, or becomes, insolvent when the company enters into the buy-back agreement.

2

section 1324

injunctions to restrain contravention

The Court may grant an injunction against conduct that constitutes, or would constitute, a contravention of this Act.

4

subsection 609(4) section 611 (item  19 of the table)

application of takeover provisions

These sections deal with the application of Chapter 6 to buy-backs.

5

section 259A

consequences of failure to follow procedures--the company and the officers

If a company fails to follow the procedure in this Division, the company contravenes this section and the officers who are involved in the contravention are liable to a civil penalty under Part 9.4B and may commit an offence.

6

section 256D

consequences of failure to follow procedures if reduction in share capital involved--the company and the officers

If the buy-back involves a reduction in share capital and the company fails to follow the procedures in this Division, the company contravenes this section and the officers who are involved in the contravention are liable to a civil penalty under Part 9.4B and may commit an offence.

7

section 256D

consequences of failure to follow procedures if reduction in share capital involved--the transaction

This section provides that a failure to follow the procedures for share capital reductions does not affect the validity of the buy-back transaction itself.

8

Chapter 6CA

continuous disclosure provisions

Under this Chapter a disclosing entity is required to disclose information about its securities that is material and not generally available.

9

Chapter 2E

benefits to related parties to be disclosed

Under this Chapter, a financial benefit to a director or other related party may need to be approved at a general meeting before it is given.

10

section 125

provisions in constitution

This section deals with the way in which a company's constitution may restrict the exercise of the company's powers and the consequences of a failure to observe these restrictions.

11

sections 246B- 246G

variation of class rights

These sections deal with the variation of rights attached to a class of shares. This variation may be governed by the provisions of a company's constitution.



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