THE CORPORATIONS LAW

CHAPTER 2J - TRANSACTIONS AFFECTING SHARE CAPITAL

PART 2J.1 - SHARE CAPITAL REDUCTIONS AND SHARE BUY-BACKS

Division 2 - Share buy-backs

SECTION 257J   SIGNPOSTS TO OTHER RELEVANT PROVISIONS  

257J     The following table sets out other provisions of this Law that are relevant to buy-backs.

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Other provisions relevant to buy-backs
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     provision          comment
 1   section 588G       liability of directors on insolvency

     section 1317H     The directors may have to compensate the
                        company if the company is, or becomes,
                        insolvent when the company enters into
                        the buy-back agreement.

 2    section 1324      injunctions to restrain contravention

                        The Court may grant an injunction against
                        conduct that constitutes, or would
                        constitute, a contravention of this Law.
 
 3    (Repealed)                                                 
                                                                 
 4    section 609(4)    application of takeover provisions       

      section 632A      These sections deal with the application
                        of Chapter 6 to buy-backs.

 5    section 259A      consequences of failure to follow
                        procedures - the company and the officers

                        If a company fails to follow the procedure
                        in this Division, the company contravenes
                        this section and the officers who are
                        involved in the contravention are liable to
                        a civil penalty under Part 9.4B and may
                        commit an offence.

 6    section 256F      consequences of failure to follow procedures
                        if reduction in share capital involved - the
                        company and the officers

                        If the buy-back involves a reduction in share
                        capital and the company fails to follow the
                        procedures in this Division, the company
                        contravenes this section and the officers who
                        are involved in the contravention are liable
                        to a civil penalty under Part 9.4B and may
                        commit an offence.

 7     section 256D     consequences of failure to follow procedures
                        if reduction in share capital involved - the
                        transaction

                        This section provides that a failure to
                        follow the procedures for share capital
                        reductions does not affect the validity of
                        the buy-back transaction itself.

 8     sections 1001A-  continuous disclosure provisions
       1001D

                         A disclosing entity is required to
                         disclose information about its securities
                         that is material and not generally
                         available.

 9     Chapter 2E        benefits to related parties to be
                         disclosed

                         Under this Chapter, a financial benefit
                         to a director or other related party may
                         need to be approved at a general meeting
                         before it is given.

10     section 125       provisions in constitution

                         This section deals with the way in which
                         a company's constitution may restrict
                         the exercise of the company's powers and
                         the consequences of a failure to observe
                         these restrictions.

11     sections 246A-    variation of class rights
       246F
                         These sections deal with the variation of
                         rights attached to a class of shares. This
                         variation may be governed by the provisions
                         of a company's constitution.

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