Corporations Act 2001
Sections and provisions with full text and the judgments that cite each one.
Section 256E — Signposts to other relevant provisions
The following table lists other provisions of this Act that are relevant to reductions in share capital. Other provisions relevant to reductions in share capital 1 section 588G section 1317H…
Section 257A — The company’s power to buy back its own shares
A company may buy back its own shares if: (a) the buy-back does not materially prejudice the company’s ability to pay its creditors; and (b) the company follows the procedures laid down in this…
Section 257B — Buy-back procedure—general
(1) The following table specifies the steps required for, and the sections that apply to, the different types of buy-back. Procedures [and sections applied] minimum holding employee share on-market…
Section 257C — Buy-back procedure—shareholder approval if the 10/12 limit exceeded
Ordinary resolution required (1) If section 257B applies this section to a buy-back, the terms of the buy-back agreement must be approved before it is entered into by a resolution passed at a general…
Section 257D — Buy-back procedure—special shareholder approval for selective buy-back
Selective buy-back requires special or unanimous resolution (1) If section 257B applies this section to a buy-back, the terms of the buy-back agreement must be approved before it is entered into by…
Section 257E — Buy-back procedure—lodgment of offer documents with ASIC
If section 257B applies this section to a buy-back, the company must lodge with ASIC, before the buy-back agreement is entered into, a copy of: (a) a document setting out the terms of the offer; and…
Section 257F — Notice of intended buy-back
(1) If section 257B applies this section to a buy-back, the company must satisfy the lodgment requirement in subsection (2) at least 14 days before: (a) if the buy-back agreement is conditional on…
Section 257G — Buy-back procedure—disclosure of relevant information when offer made
If section 257B applies this section to a buy-back, the company must include with the offer to buy back shares a statement setting out all information known to the company that is material to the…
Section 257H — Acceptance of offer and transfer of shares to the company
Effect of acceptance of the buy-back offer on share rights (1) Once a company has entered into an agreement to buy back shares, all rights attaching to the shares are suspended. The suspension is…
Section 257J — Signposts to other relevant provisions
The following table sets out other provisions of this Act that are relevant to buy-backs. Other provisions relevant to buy-backs provision comment 1 section 588G section 1317H liability of directors…
Section 258A — Unlimited companies
An unlimited company may reduce its share capital in any way.
Section 258B — Right to occupy or use real property
(1) If a company has a constitution, under it the company may grant to a shareholder, as a shareholder, a right to occupy or use real property that the company owns or holds under lease, whether the…
Section 258C — Brokerage or commission
A company may pay brokerage or commission to a person in respect of that person or another person agreeing to take up shares in the company.
Section 258D — Cancellation of forfeited shares
A company may, by resolution passed at a general meeting, cancel shares that have been forfeited under the terms on which the shares are on issue.
Section 258E — Other share cancellations
(1) Any reduction in share capital involved in: (a) the redemption of redeemable preference shares out of the proceeds of a new issue of shares made for the purpose of the redemption (see section…
Section 258F — Reductions because of lost capital
(1) A company may reduce its share capital by cancelling any paid-up share capital that is lost or is not represented by available assets. (2) This power does not apply if: (a) the company also…
Section 258G — Application of this Part to MCI mutual entities
(1) For the purposes of applying this Part to an MCI mutual entity, a reference (other than in section 258B) to a shareholder of the entity is taken to include a non-shareholder mutual member of the…
Section 259A — Directly acquiring own shares
A company must not acquire shares (or units of shares) in itself except: (a) in buying back shares under section 257A; or (b) in acquiring an interest (other than a legal interest) in fully-paid…
Section 259B — Taking security over own shares or shares in holding company
(1) A company must not take security over shares (or units of shares) in itself or in a company that controls it, except as permitted by subsection (2) or (3). Note 1: For the criminal liability of a…
Section 259C — Issuing or transferring shares to controlled entity
(1) The issue or transfer of shares (or units of shares) of a company to an entity it controls is void unless: (a) the issue or transfer is to the entity as a personal representative; or (b) the…
Section 259D — Company controlling entity that holds shares in it
(1) If any of the following occur: (a) a company obtains control of an entity that holds shares (or units of shares) in the company; (b) a company’s control over an entity that holds shares (or units…
Section 259E — When a company controls an entity
(1) For the purposes of this Part, a company controls an entity if the company has the capacity to determine the outcome of decisions about the entity’s financial and operating policies. (2) In…
Section 259F — Consequences of failing to comply with section 259A or 259B
(1) If a company contravenes section 259A or subsection 259B(1): (a) the contravention does not affect the validity of the acquisition or security or of any contract or transaction connected with it;…
Section 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…
Section 260DA — Application of this Part to MCI mutual entities
(1) For the purposes of applying this Part to an MCI mutual entity: (a) a reference to a shareholder of the entity is taken to include a non-shareholder mutual member of the entity; and (b) the…
Section 260B — Shareholder approval
Approval by company’s own shareholders (1) Shareholder approval for financial assistance by a company must be given by: (a) a special resolution passed at a general meeting of the company, with no…
Section 260C — Exempted financial assistance
General exemptions based on ordinary course of commercial dealing (1) Financial assistance is exempted from section 260A if it is given in the ordinary course of commercial dealing and consists of:…
Section 260D — Consequences of failing to comply with section 260A
(1) If a company provides financial assistance in contravention of section 260A: (a) the contravention does not affect the validity of the financial assistance or of any contract or transaction…
Section 260E — General duties still apply
A director is not relieved from any of their duties under this Act (including sections 180, 181, 182, 183 and 184), or their fiduciary duties, in connection with a transaction merely because the…
Section 283AA — Requirement for trust deed and trustee
(1) Before a body: (a) makes an offer of debentures in this jurisdiction that needs disclosure to investors under Chapter 6D, or does not need disclosure to investors under Chapter 6D because of…
Section 283BA — Duties of borrower
A borrower that is required to enter into a trust deed under section 283AA has the duties imposed by this Part.
Section 283BCA — Register relating to trustees for debenture holders
The register (1) ASIC must establish and maintain a register relating to trustees for debenture holders. (2) The regulations may prescribe the way in which the register must be established or…
Section 283BHA — Additional requirements for describing debentures as secured notes
Advertisements and publications (1) If the borrower proposes to describe or refer to the debentures as secured notes in an advertisement or publication in relation to the offer, or intended offer, of…
Section 283CA — Duties of guarantor
If a borrower is required to enter into a trust deed under section 283AA in relation to debentures, a guarantor in respect of the debentures has the duties imposed by this Part.
Section 283DA — Trustee’s duties
The trustee of a trust deed entered into under section 283AA must: (a) exercise reasonable diligence to ascertain whether the property of the borrower and of each guarantor that is or should be…
Section 283EA — Borrower’s duty to call meeting
Duty to call meeting (1) The borrower must call a meeting of debenture holders if: (a) debenture holders who together hold 10% or more of the nominal value of the issued debentures to which the trust…
Section 283GA — ASIC’s power to exempt and modify
(1) ASIC may: (a) exempt a person from a provision of this Chapter; or (b) declare that this Chapter applies to a person as if specified provisions were omitted, modified or varied as specified in…
Section 283HA — General Court power to give directions and determine questions
If the trustee applies to the Court for any direction in relation to the performance of the trustee’s functions or to determine any question in relation to the interests of the debenture holders, the…
Section 283AB — Trust deed
(1) The trust deed must provide that the following are held in trust by the trustee for the benefit of the debenture holders: (a) the right to enforce the borrower’s duty to repay; (b) any charge or…
Section 283BB — General duties
The borrower must: (a) carry on and conduct its business in a proper and efficient manner; and (b) provide a copy of the trust deed to: (i) a debenture holder; or (ii) the trustee; if they request a…
Section 283CB — General duties
The guarantor must: (a) carry on and conduct its business in a proper and efficient manner; and (b) make all of its financial and other records available for inspection by: (i) the trustee; or (ii)…
Section 283DB — Exemptions and indemnifications of trustee from liability
(1) A term of a debenture, provision of a trust deed or a term of a contract with holders of debentures secured by a trust deed, is void in so far as the term or provision would have the effect of:…
Section 283EB — Trustee’s power to call meeting
Trustee may call meeting in event of breach (1) If the borrower or a guarantor fails to remedy any breach of the terms of the debentures or provisions of the trust deed or this Chapter when required…
Section 283GB — ASIC may approve body corporate to be trustee
(1) ASIC may approve a body corporate in writing to be a trustee for the purposes of paragraph 283AC(1)(f). The approval may allow the body corporate to act as trustee: (a) in any circumstances; or…
Section 283HB — Specific Court powers
(1) If the trustee or ASIC applies to the Court, the Court may make any or all of the following orders: (a) an order staying an action or other civil proceedings before a court by or against the…
Section 283AC — Who can be a trustee
Who can be trustee (1) The trustee must be: (a) the Public Trustee of any State or Territory; or (aa) a licensed trustee company; or (b) a body corporate authorised by a law of any State or Territory…
Section 283BC — Duty to notify ASIC of information related to trustee
(1) Within 14 days after the trustee is appointed, the borrower must lodge with ASIC a notice containing the following information: (a) the name of the trustee; (b) any other information related to…
Section 283CC — Duty to inform trustee about security interests
If the guarantor creates a security interest, it must: (a) give the trustee written details of the security interest within 21 days after it is created; and (b) if the total amount to be advanced on…
Section 283DC — Indemnity
The trustee is not liable for anything done or omitted to be done in accordance with a direction given to it by the debenture holders at any meeting called under section 283EA, 283EB or 283EC.
Section 283EC — Court may order meeting
(1) Without limiting section 283HA or 283HB, the Court may make an order under either of those sections for a meeting of all or any of the debenture holders to be held to give directions to the…