Commonwealth Numbered Acts

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

(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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