Corporations Act 2001
Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .
View history note
Hide history noteCCH note - modifying legislative instruments: The application of Pt 7.12 is affected by the following legislative instruments that commenced or were amended on or after 1 January 2022: the ASIC Corporations (IPH Limited Employee Share Scheme Disclosure) Instrument 2024/293; and the ASIC Corporations (L ' Or é al SA Employee Share Scheme Disclosure) Instrument 2024/296.
For legislative instruments or class orders before 1 January 2022 that affect the application of Pt 7.12, please consult the legislative instruments or class orders directly. These are reproduced in the regulatory-resources section of the company-law practice area in CCH iKnowConnect.
CCH note - modifying legislative instruments: The application of Division 1A is affected by the following legislative instruments that commenced on or after 1 January 2022: the ASIC Corporations (Employee Share Schemes) Instrument 2022/1021; the ASIC Corporations (IPH Limited Employee Share Scheme Disclosure) Instrument 2024/293; and the ASIC Corporations (L ' Or é al SA Employee Share Scheme Disclosure) Instrument 2024/296.
For legislative instruments or class orders before 1 January 2022 that affect the application of Division 1A, please consult the legislative instruments or class orders directly. These are reproduced in the regulatory-resources section of the company-law practice area in CCH iKnowConnect.
CCH Note: Subdivision C is modified by the ASIC Corporations (Employee Share Schemes) Instrument 2022/1021.
CCH Note: Section 1100Z is modified by the ASIC Corporations (Employee Share Schemes) Instrument 2022/1021.
The terms of an offer of ESS interests in connection with an employee share scheme comply with this section if, under those terms: (a) the ESS offer document, any supporting information required under section 1100X (if applicable), and the terms of the offer:
(i) must not include a misleading or deceptive statement; and
(b) the person who makes the offer (the offeror ) must provide each ESS participant with an updated ESS offer document as soon as practicable after becoming aware that the document that was provided has become out of date, or is otherwise not correct, in a material respect; and (c) if the offer is of options or incentive rights and monetary consideration is to be provided on the exercise of the options or incentive rights - the offeror must provide each ESS participant with updated documents in satisfaction of paragraph 1100Y(4)(a) as soon as practicable after becoming aware that the information that was provided has become out of date, or is otherwise not correct, in a material respect; and (d) each person mentioned in items 2, 3 and 4 of the table in subsection (2) must notify, in writing, the offeror as soon as practicable if, during the application period for the offer mentioned in paragraph 1100W(2)(e) , the person becomes aware that:
(ii) must not omit any information that would result in the ESS offer document, supporting information or terms of the offer being misleading or deceptive; and
(i) a material statement in the documents mentioned in paragraph (a) is misleading or deceptive; or
(ii) information was omitted from any of those documents that has resulted in one or more of those documents being misleading or deceptive; or
(e) if the offer is of options or incentive rights and monetary consideration is to be provided on the exercise of the options or incentive rights - each person mentioned in items 2, 3 and 4 of the table in subsection (2) must notify, in writing, the offeror as soon as practicable if, after the documents mentioned in paragraph 1100Y(4)(a) have been provided to an ESS participant in accordance with that paragraph, the person becomes aware that:
(iii) a new circumstance has arisen during the application period which means the ESS offer document is out of date, or otherwise not correct, in a material respect; and
(i) a material statement in the documents is misleading or deceptive; or
(ii) information was omitted from any of the documents that has resulted in one or more of those documents being misleading or deceptive; or
(f) an ESS participant who suffers loss or damage because of a contravention of a term of the offer covered by paragraph (a) , (b) , (c) , (d) or (e) of this subsection can recover the amount of loss or damage in accordance with the table in subsection (2) .
(iii) a new circumstance has arisen since the documents were provided to an ESS participant which means the documents are out of date, or otherwise not correct, in a material respect; and
1100Z(2)
For the purposes of paragraph (1)(f) , an ESS participant must be able to recover loss or damage in accordance with the following table:
| Item | An ESS participant may recover loss or damage suffered as a result of a contravention of … | from these people … |
| 1 | a term of the offer covered by any of the following paragraphs: | the body corporate or responsible entity making the offer |
| (a) | paragraph (1)(a) (misleading or deceptive statements and omissions); | |
| (b) | paragraph (1)(b) (out of date ESS offer document); | |
| (c) | paragraph (1)(c) (out of date option or incentive right information) | |
| 2 | a term of the offer covered by any of the following paragraphs: | each director of the body corporate or responsible entity making the offer |
| (a) | paragraph (1)(a) (misleading or deceptive statements and omissions); | |
| (b) | paragraph (1)(b) (out of date ESS offer document); | |
| (c) | paragraph (1)(c) (out of date option or incentive right information) | |
| 3 | a term of the offer covered by any of the following paragraphs: | a person named, with their consent, in an ESS offer document, any supporting information required under section 1100X (if applicable) or the terms of the offer as a proposed director of the body corporate or responsible entity of a registered scheme whose ESS interests are being offered |
| (a) | paragraph (1)(a) (misleading or deceptive statements and omissions); | |
| (b) | paragraph (1)(b) (out of date ESS offer document); | |
| (c) | paragraph (1)(c) (out of date option or incentive right information) | |
| 4 | a term of the offer covered by paragraph (1)(a) (misleading or deceptive statements and omissions) | a person named, with their consent, in the ESS offer document, any supporting information required under section 1100X (if applicable) or the terms of the offer as having made: |
| (a) | the misleading or deceptive statement; or | |
| (b) | a statement on which the misleading or deceptive statement is based | |
| 5 | a term of the offer covered by paragraph (1)(d) or (e) (failure to notify body corporate or responsible entity of misleading or deceptive statement and omissions or new circumstances) | the person mentioned in item 2, 3 or 4 of this table who failed to notify the body corporate or responsible entity in accordance with the term covered by paragraph (1)(d) or (e) |
Note: Item 2 - director includes a shadow director (see section 9 ).
Additional terms of the offer - no liability terms
1100Z(3)
The terms of the offer may also include terms to the effect that a person mentioned in the table in subsection (2) is not liable for any loss or damage suffered by an ESS participant because of a contravention of a term of the offer covered by paragraph (1)(a) , (b) or (c) if: (a) the person:
(i) made all inquiries (if any) that were reasonable in the circumstances; and
(b) the person did not know that the statement was misleading or deceptive; or (c) the person placed reasonable reliance on information given to the person by:
(ii) after doing so, believed on reasonable grounds that the statement was not misleading or deceptive; or
(i) if the person is a body corporate or a responsible entity of a registered scheme - someone other than a director, employee or agent of the body corporate or responsible entity; or
(d) for a person mentioned in column 2 of item 3 or 4 of the table in subsection (2) - the person proves that they publicly withdrew their consent to being named in the document in that way; or (e) the contravention arose because of a new circumstance that has arisen since the ESS offer document was prepared and the person proves that they were not aware of the matter.
(ii) if the person is an individual - someone other than an employee or agent of the individual; or
1100Z(4)
The terms of the offer must not limit liability of a person mentioned in the table in subsection (2) in any way other than as required by subsection (3) .
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