Section 29 — Corporations Act 2001: Disclosure for proposed demutualisation

(1) If: (a) a modification of the constitution of an unlisted company registered under clause 3 of the transfer provisions is proposed; and (b) the unlisted company is a mutual entity; and (c) the modification would have the effect that the unlisted company would cease to be a mutual entity; the following rules apply: (f) notice of the meeting of the company’s members at which the proposed modification is to be considered must be accompanied by the documents listed in subclause (4); (g) notice of the meeting may not be shortened under subsection 249H(2); (h) the company must lodge with ASIC the notice and the documents referred to in paragraphs (4)(a) and (c) within 7 days after notice of the meeting is given. (3) ASIC may exempt a company from this Part under clause 30. (4) The documents that must accompany the notice are: (a) a disclosure statement that: (i) satisfies clause 31; and (ii) ASIC has registered under clause 32; and (b) an estimate of the financial benefits (if any) the member will be offered if the proposed modification occurs; and (c) a report by an expert that: (i) states whether, in the expert’s opinion, the proposed modification is in the best interests of the members of the company as a whole; and (ii) gives the expert’s reasons for forming that opinion; and (iii) complies with subclauses 33(2) and (3). (5) If the company contravenes subclause (1) it is not guilty of an offence. (6) A person contravenes this subclause if they are involved in a contravention of subclause (1). Note 1: This subclause is a civil penalty provision. Note 2: Section 79 defines involved. (7) A person commits an offence if they are involved in a contravention of subclause (1) and the involvement is dishonest. Penalty: (a) for an individual—5 years imprisonment, 2,000 penalty units, or both; and (b) for a body corporate—20,000 penalty units. (8) In this clause: reserves includes general reserves and retained earnings of the company. unlisted company means a company (registered under clause 3) that does not have voting shares quoted on a declared financial market.