THE CORPORATIONS LAW

CHAPTER 2E - RELATED PARTY TRANSACTIONS

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

Division 2 - Exceptions to the requirement for member approval

SECTION 214   BENEFIT TO OR BY CLOSELY-HELD SUBSIDIARY  

214(1)  [When approval not needed]  

Member approval is not needed to give a financial benefit if the benefit is given:

(a)  by a body corporate to a closely-held subsidiary of the body; or

(b)  by a closely-held subsidiary of a body corporate to the body or an entity it controls.

214(2)  [Definition of closely-held subsidiary]  

For the purposes of this section, a body corporate is a closely-held subsidiary of another body corporate if, and only if, no member of the first-mentioned body is a person other than:

(a)  the other body; or

(b)  a nominee of the other body; or

(c)  a body corporate that is a closely-held subsidiary of the other body because of any other application or applications of this subsection; or

(d)  a nominee of a body referred to in paragraph (c).

214(3)  [Disregard non-voting shares]  

For the purposes of subsection (2), disregard shares that are not voting shares.