Corporations Act 2001

CHAPTER 2E - RELATED PARTY TRANSACTIONS  

Note: This Chapter applies to a CCIV with modifications: see Division 5 of Part 8B.3 .

PART 2E.2 - RELATED PARTIES AND FINANCIAL BENEFITS  

SECTION 229   GIVING A FINANCIAL BENEFIT  

229(1)    

In determining whether a financial benefit is given for the purposes of this Act:

(a)    give a broad interpretation to financial benefits being given, even if criminal or civil penalties may be involved; and

(b)    the economic and commercial substance of conduct is to prevail over its legal form; and

(c)    disregard any consideration that is or may be given for the benefit, even if the consideration is adequate.

229(2)    
Giving a financial benefit includes the following:

(a)    giving a financial benefit indirectly, for example, through 1 or more interposed entities;

(b)    giving a financial benefit by making an informal agreement, oral agreement or an agreement that has no binding force;

(c)    giving a financial benefit that does not involve paying money (for example by conferring a financial advantage).

229(3)    
The following are examples of giving a financial benefit to a related party:

(a)    giving or providing the related party finance or property;

(b)    buying an asset from or selling an asset to the related party;

(c)    leasing an asset from or to the related party;

(d)    supplying services to or receiving services from the related party;

(e)    issuing securities or granting an option to the related party;

(f)    taking up or releasing an obligation of the related party.