Corporations Act - Australia

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at arm’s length; or

      (b) are less favourable to the related party than the terms referred to in paragraph (a).

      211 Remuneration and reimbursement for officer or employee

      Benefits that are reasonable remuneration

      (1) Member approval is not needed to give a financial benefit if:

      (a) the benefit is remuneration to a related party as an officer or employee of the following:

      (i) the public company;

      (ii) an entity that the public company controls;

      (iii) an entity that controls the public company;

      (iv) an entity that is controlled by an entity that controls the public company; and

      (b) to give the remuneration would be reasonable given:

      (i) the circumstances of the public company or entity giving the remuneration; and

      (ii) the related party’s circumstances (including the responsibilities involved in the office or employment).

      Benefits that are payments of expenses incurred

      (2) Member approval is not needed to give a financial benefit if:

      (a) the benefit is payment of expenses incurred or to be incurred, or reimbursement for expenses incurred, by a related party in performing duties as an officer or employee of the following:

      (i) the public company;

      (ii) an entity that the public company controls;

      (iii) an entity that controls the public company;

      (iv) an entity that is controlled by an entity that controls the public company; and

      (b) to give the benefit would be reasonable in the circumstances of the public company or entity giving the remuneration.

      (3) For the purposes of this section:

      (a) a contribution made by a body corporate to a fund for the purpose of making provision for, or obtaining, superannuation benefits for an officer of the body, or for dependants of an officer of the body, is remuneration provided by the body to the officer of the body; and

      (b) a financial benefit given to a person because of the person ceasing to hold an office or employment as an officer or employee of a body corporate is remuneration paid or provided to the person in a capacity as an officer of the body.

      212 Indemnities, exemptions, insurance premiums and payment for legal costs for officers

      Indemnities, exemptions and insurance premiums

      (1) Member approval is not needed to give a financial benefit if:

      (a) the benefit is for a related party who is an officer of the public company or entity; and

      (b) the benefit is:

      (i) an indemnity, exemption or insurance premium in respect of a liability incurred as an officer of the public company or entity; or

      (ii) an agreement to give an indemnity or exemption, or to pay an insurance premium, of that kind; and

      (c) to give the benefit would be reasonable in the circumstances of the public company or entity giving the benefit.

      Note: Sections 199A to 199C may prohibit giving an indemnity or exemption or paying an insurance premium for an officer.

      Payments in respect of legal costs

      (2) Member approval is not needed to give a financial benefit if:

      (a) the benefit is for a related party who is an officer of the public company or entity; and

      (b) the benefit is the making of, or an agreement to make, a payment (whether by way of advance, loan or otherwise) in respect of legal costs incurred by the officer in defending an action for a liability incurred as an officer of the public company or entity; and

      (c) either:

      (i) section 199A does not apply to the costs; or

      (ii) if section 199A applies to the costs — the officer must repay the amount paid if the costs become costs for which the company must not give the officer an indemnity under that section; and

      (d) to give the benefit would be reasonable in the circumstances of the public company or entity giving the benefit.

      (3) In working out for the purposes of subsection (1) or (2) whether giving the benefit is reasonable in the circumstances:

      (a) assess whether it would be reasonable on the basis of the circumstances existing:

      (i) if the benefit is given under an agreement — at the time when the agreement is or was made; or

      (ii) if the benefit is not given under an agreement — at the time when the benefit is or was given; and

      (b) disregard any other financial benefit given or payable to the officer by the public company or entity.

      213 Small amounts given to related entity

      (1) Member approval is not needed to give a financial benefit to a related party in a financial year if the total of the following amounts or values is less than or equal to the amount prescribed by the regulations for the purposes of this section:

      (a) the amount or value of the financial benefit;

      (b) the total of all other amounts or values of financial benefits given to the related party, in the financial year, for which member approval was not needed because of this section.

      (2) In working out the total of the amounts or values referred to in paragraphs (1)(a) and (b):

      (a) add in all amounts or values of financial benefits given to the related party in the financial year by:

      (i) the public company or entity; and

      (ii) any entities controlled by the public company or entity; and

      (b) disregard:

      (i) amounts that have been repaid; and

      (ii) amounts that fall under any other exception in this Part.

      For the purposes of this subsection, the time at which the entity must be controlled by the public company is the time at which the financial benefit is given.

      214 Benefit to or by closely‑held subsidiary

      (1) Member approval is not needed to give a financial benefit if the benefit is given:

      (a) by a body corporate to a closely‑held subsidiary of the body; or

      (b) by a closely‑held subsidiary of a body corporate to the body or an entity it controls.

      (2) For the purposes of this section, a body corporate is a closely‑held subsidiary of another body corporate if, and only if, no member of the first‑mentioned body is a person other than:

      (a) the other body; or

      (b) a nominee of the other body; or

      (c) a body corporate that is a closely‑held subsidiary of the other body because of any other application or applications of this subsection; or

      (d) a nominee of a body referred to in paragraph (c).

      (3) For the purposes of subsection (2), disregard shares that are not voting shares.

      215 Benefits to members that do not discriminate unfairly

      Member approval is not needed to give a financial benefit if:

      (a) the benefit is given to the related party in their capacity as a member of the public company; and

      (b) giving the benefit does not discriminate unfairly against the other members

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