Corporations Act 2001

CHAPTER 2J - TRANSACTIONS AFFECTING SHARE CAPITAL  

Note: This Chapter is modified for CCIVs: see Division 2 of Part 8B.4 .

PART 2J.2 - SELF-ACQUISITION AND CONTROL OF SHARES  

Note: This Part applies to a CCIV with modifications: see sections 1231J and 1231K .

SECTION 259C   ISSUING OR TRANSFERRING SHARES TO CONTROLLED ENTITY  

259C(1)   [ Issue to controlled entity void]  

The issue or transfer of shares (or units of shares) of a company to an entity it controls is void unless:

(a) the issue or transfer is to the entity as a personal representative; or

(b) the issue or transfer is to the entity as trustee and neither the company nor any entity it controls has a beneficial interest in the trust, other than a beneficial interest that satisfies these conditions:

(i) the interest arises from a security given for the purposes of a transaction entered into in the ordinary course of business in connection with providing finance; and

(ii) that transaction was not entered into with an associate of the company or an entity it controls; or

(c) the issue to the entity is made as a result of an offer to all the members of the company who hold shares of the class being issued and is made on a basis that does not discriminate unfairly, either directly or indirectly, in favour of the entity; or

(d) the transfer to the entity is by a wholly-owned subsidiary of a body corporate and the entity is also a wholly-owned subsidiary of that body corporate.

259C(2)   [ ASIC may exempt]  

ASIC may exempt a company from the operation of this section. The exemption:

(a) must be in writing; and

(b) may be granted subject to conditions.

259C(3)   [ Cease to hold or control]  

If paragraph (1)(c) or (d) applies to an issue or transfer of shares (or units of shares), section 259D applies.