Corporations Act. Australia

Corporations Act

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Note: Subsections (2) and (3) of this section explain what an equal access scheme is. The 10/12 limit is the 10 % in 12 months limit laid down in subsections (4) and (5). Subsections (6) and (7) of this section explain what an on‑market buy‑back is. See section 9 for definitions of minimum holding buy‑back, employee share scheme buy‑back and selective buy‑back.

Equal access scheme

(2) An equal access scheme is a scheme that satisfies all the following conditions:

(a) the offers under the scheme relate only to ordinary shares;

(b) the offers are to be made to every person who holds ordinary shares to buy back the same percentage of their ordinary shares;

(d) buy‑back agreements are not entered into until a specified time for acceptances of offers has closed;

(e) the terms of all the offers are the same.

(3) In applying subsection (2), ignore:

(a) differences in consideration attributable to the fact that the offers relate to shares having different accrued dividend entitlements;

(b) differences in consideration attributable to the fact that the offers relate to shares on which different amounts remain unpaid;

10/12 limit

(4) The 10/12 limit for a company proposing to make a buy‑back is 10 % of the smallest number, at any time during the last 12 months, of votes attaching to voting shares of the company.

Exceeding the 10/12 limit

(5) A proposed buy‑back would exceed the 10/12 limit if the number of votes attaching to:

(a) all the voting shares in the company that have been bought back during the last 12 months; and

(b) the voting shares that will be bought back if the proposed buy‑back is made;

would exceed the 10/12 limit.

On‑market buy‑backs

(6) A buy‑back is an on‑market buy‑back if it results from an offer made by a listed corporation on a prescribed financial market in the ordinary course of trading on that market.

(7) A buy‑back by a company (whether listed or not) is also an on‑market buy‑back if it results from an offer made in the ordinary course of trading in a financial market outside Australia which ASIC declares in writing to be an approved overseas financial market for the purposes of this subsection. A buy‑back by a listed company is an on‑market buy‑back under this subsection only if an offer to buy‑back those shares is also made on a prescribed financial market at the same time.

(8) A declaration under subsection (7) may be subject to conditions. Notice of the making of the declaration must be published in the Gazette.

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 meeting of the company, or the agreement must be conditional on such an approval.

Information to accompany the notice of meeting

(2) The company must include with the notice of the meeting a statement setting out all information known to the company that is material to the decision how to vote on the resolution. However, the company does not have to disclose information if it would be unreasonable to require the company to do so because the company had previously disclosed the information to its shareholders.

Documents to be lodged with the ASIC

(3) Before the notice of the meeting is sent to shareholders, the company must lodge with ASIC a copy of:

(a) the notice of the meeting; and

(b) any document relating to the buy‑back that will accompany the notice of the meeting sent to shareholders.

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 either:

(a) a special resolution passed at a general meeting of the company, with no votes being cast in favour of the resolution by any person whose shares are proposed to be bought back or by their associates; or

(b) a resolution agreed to, at a general meeting, by all ordinary shareholders;

or the agreement must be conditional on such an approval.

Information to accompany the notice of meeting

Documents to be lodged with the ASIC

(3) Before the notice of the meeting is sent to shareholders, the company must lodge with ASIC a copy of:

(a) the notice of the meeting; and

(b) any document relating to the buy‑back that will accompany the notice of the meeting sent to shareholders.

(4) ASIC may exempt a company from the operation of this section. The exemption:

(a) must be in writing; and

(b) must be granted before the buy‑back agreement is entered into; and

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

(b) any document that is to accompany the offer.

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 the passing of a resolution under subsection 257C(1) or 257D(1) — the resolution is passed; or

(b) if it is not — the agreement is entered into.

(2) The company satisfies the lodgment requirement when it lodges with ASIC:

(a) documents under subsection 257C(3) or 257D(3) or section 257E; or

(b) a notice that the company intends to carry out the buy‑back.

Note 1: A company that has

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