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Consequences of failing to comply with section 260A
Consequences of failing to comply with section 260A
What the Law states - Consequences of failing to comply with section 260A
CORPORATIONS ACT 2001 - SECT 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 connected with it; and
(b) the company is not guilty of an offence.
(2) Any person who is involved in a company's contravention of section 260A contravenes this subsection.
Note 1: Subsection (2) is a civil penalty provision (see section 1317E).
Note 2: Section 79 defines involved .
(3) A person commits an offence if they are involved in a company's contravention of section 260A and the involvement is dishonest.Maximum Penalty in Victoria
Pecuniary order of $200,000.00 or disqualification from managing a corporation
What the Prosecution must prove - Consequences of failing to comply with section 260A - Vic
1. That a company provides financial assistance to a person to acquire shares in a company
2. That the acquisition materially prejudiced the interests of the company, or its ability to pay creditors; or
3. The assistance was not approved by the shareholders
Possible Defences - Consequences of failing to comply with section 260A
1. Lack of intent
2. Factual dispute
Which court will hear the charge of Consequences of failing to comply with section 260A
County Court
