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CORPORATIONS ACT 2001 - SECT 451GA Self - executing provisions

CORPORATIONS ACT 2001 - SECT 451GA

Self - executing provisions

  (1)   The object of subsection   (2) is to ensure that a self - executing provision:

  (a)   cannot start to apply against a company for certain reasons; and

  (b)   can be the subject of a Court order providing that the provision can only start to apply against a company with the leave of the Court, and in accordance with such terms (if any) as the Court imposes.

  (2)   Sections   451E to 451G also apply in relation to a self - executing provision in a corresponding way to the way they apply in relation to a right. For this purpose, assume those sections apply with such modifications as are necessary, including any prescribed by the regulations for the purposes of this subsection.

Note 1:   This subsection achieves the object in subsection   (1) by extending the application of all of the outcomes, exceptions and powers in sections   451E to 451G.

Note 2:   These modifications include, for example, treating:

(a)   a reference that a right cannot be enforced (however described) as including a reference that a self - executing provision cannot start to apply; and

(b)   the words "if the right arises for that reason by express provision (however described) of a contract, agreement or arrangement" as being omitted from subsection   451E(1); and

(c)   a reference that one or more rights are enforceable as including a reference that one or more self - executing provisions can start to apply; and

(d)   paragraph   451G(2)(b) as alternatively providing that the Court is satisfied that one or more reasons referred to in paragraphs 451E(1)(a) to (d) can cause the self - executing provisions to start to apply.

  (3)   In this section:

"self-executing provision" means a provision of a contract, agreement or arrangement that can start to apply automatically:

  (a)   for one or more reasons; and

  (b)   without any party to the contract, agreement or arrangement making a decision that the provision should start to apply.

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