THE CORPORATIONS LAW

CHAPTER 2J - TRANSACTIONS AFFECTING SHARE CAPITAL

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PART 2J.2 - SELF-ACQUISITION AND CONTROL OF SHARES

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SECTION 259C   ISSUING OR TRANSFERRING SHARES TO CONTROLLED ENTITY  

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259C(1)  [Issue to controlled entity void]  

The issue or transfer of shares (or units of shares) of a company to an entity it controls is void unless:

(a)  the issue or transfer is to the entity as a personal representative; or

(b)  the issue or transfer is to the entity as trustee and neither the company nor any entity it controls has a beneficial interest in the trust, other than a beneficial interest that satisfies these conditions:

(i) the interest arises from a security given for the purposes of a transaction entered into in the ordinary course of business in connection with providing finance; and
(ii) that transaction was not entered into with an associate of the company or an entity it controls; or

(c)  the issue to the entity is made as a result of an offer to all the members of the company who hold shares of the class being issued and is made on a basis that does not discriminate unfairly, either directly or indirectly, in favour of the entity; or

(d)  the transfer to the entity is by a wholly-owned subsidiary of a body corporate and the entity is also a wholly-owned subsidiary of that body corporate.

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259C(2)  [ASIC may exempt]  
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ASIC may exempt a company from the operation of this section. The exemption:

(a)  must be in writing; and

(b)  may be granted subject to conditions.

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259C(3)  [Cease to hold or control]  

If paragraph (1)(c) or (d) applies to an issue or transfer of shares (or units of shares), section 259D applies.

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