Document ID: chunk:federal_register_of_legislation:C2025C00014:schedule:2h:p5
Version: federal_register_of_legislation:C2025C00014
Segment Type: schedule
Provision Reference: sch 2H (pt 5/165)
Character Range: 2407652–2410514

post‑CGT member of a demutualising entity if the person is not a pre‑CGT member.

Subdivision 326‑B—How demutualisation is to be effected

Table of sections
326‑40 Methods of demutualisation
326‑45 Direct method
326‑50 Holding company method
326‑52 Combined direct and holding company method
326‑55 Distributing trust method
326‑60 Continuity of beneficial interest test

326‑40  Methods of demutualisation
  A demutualisation of a mutual entity is to be implemented in accordance with one of the methods set out in sections 326‑45, 326‑50, 326‑52 and 326‑55.

326‑45  Direct method
 (1) The direct method of demutualisation is as follows:
 (a) all membership rights in the entity are extinguished;
 (b) the entity becomes a company with a share capital;
 (c) shares (ordinary shares) of only one class in the entity are issued within the limitation period to existing members in exchange for the membership rights referred to in paragraph (a);
 (d) shares (also ordinary shares) of the same class in the entity may be issued within the limitation period to new members;
 (e) if a listing resolution was passed by the members of the entity—the ordinary shares are listed within the limitation period.
Note: Other things may happen in connection with the implementation of the demutualisation.
 (2) The following diagram shows, where this demutualisation method is used, the issue of shares to members of the entity.

326‑50  Holding company method
 (1) The holding company method of demutualisation is as follows:
 (a) all membership rights in the entity are extinguished;
 (b) the entity becomes a company with a share capital;
 (c) shares of only one class in the entity are issued to a company (the holding company) within the limitation period;
 (d) shares (ordinary shares) of only one class in the holding company are issued within the limitation period to existing members in exchange for the membership rights referred to in paragraph (a);
 (e) shares (also ordinary shares) in the holding company of the same class may be issued within the limitation period to new members;
 (f) if a listing resolution was passed by the entity—the ordinary shares are listed within the limitation period.
Note: Other things may happen in connection with the implementation of the demutualisation.
 (2) The following diagram shows the main events that occur where this demutualisation method is used.

326‑52  Combined direct and holding company method
 (1) The combined direct and holding company method of demutualisation is as follows:
 (a) all membership rights in the entity are extinguished;
 (b) the entity becomes a company with a share capital;
 (c) shares (ordinary shares) of only one class in the entity are issued within the limitation period to existing members in exchange for the membership rights referred to in paragraph (a);
 (d) shares (also ordinary