THE CORPORATIONS LAW

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)  [Effect of 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)  [Definition of vote]  

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 on validity of resolution]  

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

224(9)  [Effect of section]  

This section has effect despite:

(a)  anything else in this Law or in any other law of this jurisdiction (including the general law); or

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