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CORPORATIONS ACT 2001

CHAPTER 2E - RELATED PARTY TRANSACTIONS  

PART 2E.1 - MEMBER APPROVAL NEEDED FOR RELATED PARTY BENEFIT  

Division 1 - Need for member approval  

SECTION 208  NEED FOR MEMBER APPROVAL FOR FINANCIAL BENEFIT  

208(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 1: Section 228 defines related party, section 9 defines entity, section 50AA defines control and section 229 affects the meaning of giving a financial benefit.

Note 2: For the criminal liability of a person dishonestly involved in a contravention of this subsection, see subsection 209(3). Section 79 defines involved.

[CCH Note: Act No 180 of 2012, s 3, Sch 7[1] contained the following application provision (which was effective 11 December 2012):

Application of amendments made by this Act

The amendments made by this Act apply in relation to an act or omission by a body corporate occurring on or after the day this Act commences.

]

208(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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