Income Tax Assessment Act 1936

SCHEDULE 2H - DEMUTUALISATION OF MUTUAL ENTITIES OTHER THAN INSURANCE COMPANIES AND HEALTH INSURERS  

Division 326 - DEMUTUALISATION  

Subdivision 326-B - How demutualisation is to be effected  

SECTION 326-52   COMBINED DIRECT AND HOLDING COMPANY METHOD  

326-52(1)    
The combined direct and holding company method of demutualisation is as follows:

(a) all membership rights in the entity are extinguished;

(b) the entity becomes a company with a share capital;

(c) shares ( ordinary shares ) of only one class in the entity are issued within the limitation period to existing members in exchange for the membership rights referred to in paragraph (a);

(d) shares (also ordinary shares ) of the same class in the entity are also issued to a company (the holding company ) within the limitation period;

(e) shares (also ordinary shares ) of the same class in the entity may be issued within the limitation period to new members;

(f) shares (also ordinary shares ) of only one class in the holding company are issued within the limitation period to existing members as a result of the extinguishment of the membership rights referred to in paragraph (a);

(g) shares (also ordinary shares ) of the same class in the holding company may be issued within the limitation period to new members;

(h) the total number of ordinary shares issued to members under paragraphs (f) and (g) is the same as the total number of ordinary shares issued to the holding company under paragraph (d);

(i) if a listing resolution was passed by the members of the entity - the ordinary shares in the entity are listed within the limitation period.

Note:

Other things may happen in connection with the implementation of the demutualisation.

326-52(2)    
The following diagram shows the main events that occur where this demutualisation method is used.

Combined direct and holding company method of demutualisation