Commonwealth Consolidated Acts

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Financial assistance by a company for acquiring shares in the company or a holding company

             (1)  A company may financially assist a person to acquire shares (or units of shares) in the company or a holding company of the company only if:

                     (a)  giving the assistance does not materially prejudice:

                              (i)  the interests of the company or its shareholders; or

                             (ii)  the company's ability to pay its creditors; or

                     (b)  the assistance is approved by shareholders under section 260B (that section also requires advance notice to ASIC); or

                     (c)  the assistance is exempted under section 260C.

Note:          For the criminal liability of a person dishonestly involved in a contravention of this section, see subsection 260D(3). Section 79 defines involved .

             (2)  Without limiting subsection (1), financial assistance may:

                     (a)  be given before or after the acquisition of shares (or units of shares); and

                     (b)  take the form of paying a dividend.

             (3)  Subsection (1) extends to the acquisition of shares (or units of shares) by:

                     (a)  issue; or

                     (b)  transfer; or

                     (c)  any other means.

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