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CORPORATIONS ACT 2001 - SECT 260A Financial assistance by a company for acquiring shares in the company or a holding company

CORPORATIONS ACT 2001 - SECT 260A

Financial assistance by a company for acquiring shares in the company or a holding company

  (1)   A company may financially assist a person to acquire shares (or units of shares) in the company or a holding company of the company only if:

  (a)   giving the assistance does not materially prejudice:

  (i)   the interests of the company or its shareholders; or

  (ii)   the company's ability to pay its creditors; or

  (b)   the assistance is approved by shareholders under section   260B (that section also requires advance notice to ASIC); or

  (c)   the assistance is exempted under section   260C.

Note:   For the criminal liability of a person dishonestly involved in a contravention of this section, see subsection   260D(3). Section   79 defines involved .

  (2)   Without limiting subsection   (1), financial assistance may:

  (a)   be given before or after the acquisition of shares (or units of shares); and

  (b)   take the form of paying a dividend.

  (3)   Subsection   (1) extends to the acquisition of shares (or units of shares) by:

  (a)   issue; or

  (b)   transfer; or

  (c)   any other means.

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