Corporations Act 2001
View history note
Hide history noteCCH note - modifying legislative instruments: The application of Pt 8B.4 is affected by the following legislative instruments that commenced or were amended on or after 1 January 2022: the ASIC Corporations (CCIV Auditors) Instrument 2024/668.
For other legislative instruments or class orders before 1 January 2022 that affect the application of Pt 8B.4, 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.
Redemption must be in accordance with terms of issue
1230F(1)
A CCIV must not redeem shares if the redemption is not on the terms on which the shares are on issue.
Sub-fund must be solvent
1230F(2)
A CCIV must not redeem shares if, immediately before the redemption: (a) the sub-fund to which the shares are referable is insolvent; or (b) there are reasonable grounds for suspecting that the sub-fund to which the shares are referable is insolvent, or would become insolvent immediately after the redemption.
Note 1: For when a sub-fund of a CCIV is solvent , or insolvent , see section 1231A .
Note 2: The directors of the corporate director have a duty to prevent insolvent trading by sub-funds: see section 588G (as modified by Division 6 of Part 8B.6 ).
Consequences of contravention
1230F(3)
If a CCIV redeems shares in contravention of subsection (1) or (2) : (a) the contravention does not affect the validity of the redemption or of any contract or transaction connected with it; and (b) the CCIV does not commit an offence.
Fault-based offence
1230F(4)
A person commits an offence if the person is involved in a CCIV ' s contravention of subsection (1) or (2) and the involvement is dishonest.
Civil liability
1230F(5)
A person who is involved in a CCIV ' s contravention of subsection (1) or (2) contravenes this subsection.
Note: This subsection is a civil penalty provision (see section 1317E ).
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