Document ID: chunk:federal_register_of_legislation:C2004C01070:clause:1_207
Version: federal_register_of_legislation:C2004C01070
Segment Type: clause
Provision Reference: sch 1 cl 207
Character Range: 89797–91312

207  Purpose

  The rules in this Chapter are designed to protect the interests of a public company's members as a whole, by requiring member approval for giving financial benefits to related parties that could endanger those interests.

Part 2E.1—Member approval needed for related party benefit

Division 1—Need for member approval

    208  Need for member approval for financial benefit

 (1) For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company:
 (a) the public company or entity must:
 (i) obtain the approval of the public company's members in the way set out in sections 217 to 227; and
 (ii) give the benefit within 15 months after the approval; or
 (b) the giving of the benefit must fall within an exception set out in sections 210 to 216.

Note: Section 228 defines related party, section 9 defines entity, section 55AA 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)(a)(i) as a financial benefit given to the 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.