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CORPORATIONS ACT 2001

CHAPTER 2E - RELATED PARTY TRANSACTIONS  

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

Division 3 - Procedure for obtaining member approval  

SECTION 224  VOTING BY OR ON BEHALF OF RELATED PARTY INTERESTED IN PROPOSED RESOLUTION  

224(1)  [Who cannot vote]  


At a general meeting, a vote on a proposed resolution under this Division must not be cast (in any capacity) by or on behalf of:


(a) a related party of the public company to whom the resolution would permit a financial benefit to be given; or


(b) an associate of such a related party.

224(2)  [Vote by proxy]  


Subsection (1) does not prevent the casting of a vote if:


(a) it is cast by a person as a proxy appointed by writing that specifies how the proxy is to vote on the proposed resolution; and


(b) it is not cast on behalf of a related party or associate of a kind referred to in subsection (1).

224(3)  [Regulations]  


The regulations may prescribe cases where subsection (1) does not apply.

224(4)  [ASIC declarations]  


ASIC may by writing declare that:


(a) subsection (1) does not apply to a specified proposed resolution; or


(b) subsection (1) does not prevent the casting of a vote, on a specified proposed resolution, by a specified entity, or on behalf of a specified entity;

but may only do so if satisfied that the declaration will not cause unfair prejudice to the interests of any member of the public company.

224(5)  [Effect of declarations]  


A declaration in force under subsection (4) has effect accordingly.

224(6)  [Contravention of section]  


If a vote is cast in contravention of subsection (1), the related party or associate, as the case may be, contravenes this subsection, whether or not the proposed resolution is passed.

224(7)  [When vote cast]  


For the purposes of this section, a vote is cast on behalf of an entity if, and only if, it is cast:


(a) as proxy for the entity; or


(b) otherwise on behalf of the entity; or


(c) in respect of a share in respect of which the entity has:


(i) power to vote; or

(ii) power to exercise, or control the exercise of, a right to vote.

224(8)  [Effect of contravention]  


Subject to subsection 225(1), a contravention of this section does not affect the validity of a resolution.

224(9)  [Paramountcy]  


Subject to Part 1.1A, this section has effect despite:


(a) anything else in:


(i) this Act; or

(ii) any other law (including the general law) of a State or Territory; or


(b) anything in a body corporate's constitution.

 



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