Commonwealth Consolidated Acts

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Issuing or transferring shares to controlled entity

             (1)  The issue or transfer of shares (or units of shares) of a company to an entity it controls is void unless:

                     (a)  the issue or transfer is to the entity as a personal representative; or

                     (b)  the issue or transfer is to the entity as trustee and neither the company nor any entity it controls has a beneficial interest in the trust, other than a beneficial interest that satisfies these conditions:

                              (i)  the interest arises from a security given for the purposes of a transaction entered into in the ordinary course of business in connection with providing finance; and

                             (ii)  that transaction was not entered into with an associate of the company or an entity it controls; or

                     (c)  the issue to the entity is made as a result of an offer to all the members of the company who hold shares of the class being issued and is made on a basis that does not discriminate unfairly, either directly or indirectly, in favour of the entity; or

                     (d)  the transfer to the entity is by a wholly-owned subsidiary of a body corporate and the entity is also a wholly-owned subsidiary of that body corporate.

             (2)  ASIC may exempt a company from the operation of this section. The exemption:

                     (a)  must be in writing; and

                     (b)  may be granted subject to conditions.

             (3)  If paragraph (1)(c) or (d) applies to an issue or transfer of shares (or units of shares), section 259D applies.

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