remuneration of an officer or employee of a corporation. A benefit given to an officer or employee of a corporation is remuneration if and only if the benefit, were it received by a director of the corporation, would be remuneration of the director for the purposes of an accounting standard that deals with disclosure in companies' financial reports of information about related parties. For the purposes of this definition, the following are not officers of a corporation:

(a)

a receiver, or receiver and manager, of the property of the corporation

(b)

an administrator of the corporation

(c)

an administrator of a deed of company arrangement executed by the corporation

(d)

a liquidator of the corporation

(e)

a trustee or other person administering a compromise or arrangement made between the corporation and someone else.

188 Section 9 (definition of sibling entity)

Repeal the definition.

189 After section 50

Insert in Division 6 of Part 1.2:

50AA Control

(1)

For the purposes of this Law, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity's financial and operating policies.

(2)

In determining whether the first entity has this capacity:

(a)

the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and

(b)

any practice or pattern of behaviour affecting the second entity's financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

(3)

The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity's financial and operating policies.

(4)

If the first entity:

(a)

has the capacity to influence decisions about the second entity's financial and operating policies; and

(b)

is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity's members;

the first entity is taken not to control the second entity.

190 Paragraph 103(2)(a)

Omit "243H, 243ZE", substitute "208, 209".

191 Section 256E (table item 5)

Omit "members of a public company, or diminish or endanger its resources", substitute "a public company's members as a whole".

192 Subsection 300(4)

Repeal the subsection.

193 Section 601LA

Omit "Part 3.2A", substitute "Chapter 2E".

194 Sections 601LB to 601LE

Repeal the sections, substitute:

601LB Replacement section 207

Chapter 2E applies as if section 207 were replaced by the following section:

207 Purpose

The rules in this Chapter, as they apply to a registered scheme, are designed to protect the interests of the scheme's members as a whole, by requiring member approval for giving financial benefits to the responsible entity or its related parties that come out of scheme property or that could endanger those interests.

601LC Replacement section 208

Chapter 2E applies as if section 208 were replaced by the following section:

208 Need for member approval for financial benefit

(1)

If all the following conditions are satisfied in relation to a financial benefit:

(a)

the benefit is given by:

(i)

the responsible entity of a registered scheme; or

(ii)

an entity that the responsible entity controls; or

(iii)

an agent of, or person engaged by, the responsible entity

(b)

the benefit either:

(i)

is given out of the scheme property; or

(ii)

could endanger the scheme property

(c)

the benefit is given to:

(i)

the person or a related party; or

(ii)

another person referred to in paragraph (a) or a related party of that person;

then, for the person referred to in paragraph (a) to give the benefit,
either:

(d)

the person referred to in paragraph (a) must:

(i)

obtain the approval of the scheme's members in the way set out in sections 217 to 227; and

(ii)

give the benefit within 15 months after the approval; or

(e)

the giving of the benefit must fall within an exception set out in sections 210 to 216.

Note: Section 228 defines related party , section 191 defines entity , section 191 defines control and section 229 affects the meaning of giving a financial benefit .

(2)

If:

(a)

the giving of the benefit is required by a contract; and

(b)

the making of the contract was approved in accordance with subparagraph (1)(d)(i) as a financial benefit given to the entity or related party; and

(c)

the contract was made:

(i)

within 15 months after that approval; or

(ii)

before that approval, if the contract was conditional on the approval being obtained;

member approval for the giving of the benefit is taken to have been given and the benefit need not be given within the 15 months.

(3)

Subsection (1) does not prevent the responsible entity from paying itself fees, and exercising rights to an indemnity, as provided for in the scheme's constitution under subsection 601GA(2).

601LD Omission of sections 213, 214 and 224

Chapter 2E applies as if sections 213, 214 and 224 were omitted.

Note: Instead of section 224, the rule in section 253E will apply.

601LE Modification of section 225

Chapter 2E applies as if subsection 225(1) were amended by omitting "subsection 224(1)" and substituting "section 253E".

195 Schedule 3

Repeal the items relating to sections 243ZF and 243ZH. Insert the following item in its appropriate place according to the order that the provision referred to occurs in the Corporations Law:

Part 5—Amendments relating to new Part 2F.1 (Oppressive conduct of affairs)
196 Section 53

Omit " or 246AA", substitute "232, 233 or 234".

197 At the end of paragraph 136(1)(b)

Add "or a court order is made under section 233 that requires the company to adopt the constitution".

198 At the end of subsection 136(2)

Add:

Note: The company may need leave of the Court to modify or repeal its constitution if it was adopted as the result of a Court order (see subsection 233(3)).

199 Section 137

Repeal the section, substitute:

137 Date of effect of adoption, modification or repeal of constitution

If a new constitution is adopted or an existing constitution is modified or repealed, that adoption, modification or repeal takes effect:

(a)

if it is the result of a special resolution:

(i)

on the date on which the resolution is passed if it specified no later date; or

(ii)

on a date specified in, or determined in accordance with, the resolution if the relevant date is later than the date on which the resolution is passed; or

(b)

if it is the result of a Court order made under section 233:

(i)

on the date on which the order is made if it specifies no later date; or

(ii)

on a date specified by the order.

200 Section 459B

Omit "246AA", substitute "234".

Note: The heading to section 459B of the Corporations Law is altered by omitting "246AA" and substituting "234".

201 Paragraph 459C(1)(a)

Omit "246AA", substitute "234".

202 Section 467B

Omit "246AA", substitute "233".

203 Section 513A

Omit "246AA", substitute "233".

204 Paragraph 513D(a)

Omit "246AA", substitute "233".

205 Schedule 3

Repeal the item relating to section 246AA and insert the following item in its appropriate place according to the order that the provision referred to occurs in the Corporations Law:

Part 6—Amendments relating to new Part 2F.1A (Proceedings on behalf of a company by members and others)
206 At the end of section 247A

Add:

(3)

A person who:

(a)

is granted leave under section 237; or

(b)

applies for leave under that section; or

(c)

is eligible to apply for leave under that section;

may apply to the Court for an order under this section.

(4)

On application, the Court may make an order authorising:

(a)

the applicant to inspect books of the company; or

(b)

another person to inspect books of the company on the applicant's behalf.

(5)

The Court may make the order only if it is satisfied that:

(a)

the applicant is acting in good faith; and

(b)

the inspection is to be made for a purpose connected with:

(i)

applying for leave under section 237; or

(ii)

bringing or intervening in proceedings with leave under that section.

(6)

A person authorised to inspect books may make copies of the books unless the Court orders otherwise.

207 At the end of section 300

Add:

Proceedings on behalf of a company

(14)

The report for a company must also include the following details of any application for leave under section 237 made in respect of the company:

(a)

the applicant's name; and

(b)

a statement whether leave was granted.

(15)

The report for a company must also include the following details of any proceedings that a person has brought or intervened in on behalf of the company with leave under section 237:

(a)

the person's name

(b)

the names of the parties to the proceedings

(c)

sufficient information to enable members to understand the nature and status of the proceedings (including the cause of action and any orders made by the court).

Part 7—Amendments relating to new Part 9.4B (Civil penalty provisions)
208 Section 9 (definition of civil penalty order)

Repeal the definition, substitute:
"civil penalty" order means any of the following :

(a)

a declaration of contravention under section 1317F

(b)

a pecuniary penalty order under section 1317G

(c)

a compensation order under section 1317H

(d)

an order under section 206C disqualifying a person from managing corporations.

209 Section 9 (definition of civil penalty provision)

Repeal the definition, substitute: