Section 259C — Corporations Act 2001 (Cth)

(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 issue or transfer is to the entity as trustee and neither the company nor any entity it controls has a beneficial interest in the trust, other than a beneficial interest that satisfies these conditions:

(i) the interest arises from a security given for the purposes of a transaction entered into in the ordinary course of business in connection with providing finance; and

(ii) that transaction was not entered into with an associate of the company or an entity it controls; or

(c) the issue to the entity is made as a result of an offer to all the members of the company who hold shares of the class being issued and is made on a basis that does not discriminate unfairly, either directly or indirectly, in favour of the entity; or

(d) the transfer to the entity is by a wholly‑owned subsidiary of a body corporate and the entity is also a wholly‑owned subsidiary of that body corporate.

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

(a) must be in writing; and

(b) may be granted subject to conditions.

(3) If paragraph (1)(c) or (d) applies to an issue or transfer of shares (or units of shares), section 259D applies.

Related sections

• s 258G — Application of this Part to MCI mutual entities
• s 259A — Directly acquiring own shares
• s 259B — Taking security over own shares or shares in holding company
• s 259D — Company controlling entity that holds shares in it
• s 259E — When a company controls an entity
• s 259F — Consequences of failing to comply with section 259A or 259B

Research how courts apply s 259C

BriefBridge searches Australian caselaw by meaning — every answer cited to the paragraph.