Failing to Comply with Section 260A – Have you been charged with Financial Assistance by a Company for Acquiring Shares in the Company or a Holding Company?
If so, you will require the services of a law firm that specialises in criminal law.
Some issues you will need to discuss with your lawyer include: Did your company financially assist a person to acquire shares in either the company or a holding company?
If so, did the acquisition materially prejudice the interests of the company or its shareholders? Did it influence the company’s ability to pay its creditors? Was the assistance approved by the shareholders? Did it need to be, or was it exempt?
It is possible that defences are available to you? Ensure you seek appropriate advice from an expert criminal lawyer before proceeding further, as the maximum penalty is severe.
Please read below for more information in relation to this charge.
Section 260A of the Corporations Act 2001.
The prosecution must prove:
A company provided financial assistance to a person to acquire shares in a company; and
Materially prejudiced the interests of the corporation
Materially prejudiced the company’s ability to pay its creditors; or
The assistance was not approved by the shareholders.
The maximum penalty
A fine of $200,000 or disqualification from managing a corporation.
Where will my case be heard?
Financial Assistance by a Company for Acquiring Shares in the Company or a Holding Company cases can only be heard in the County Court of Victoria.
Questions to consider
Do you have a defence?
If you are pleading guilty, what can you do to minimise your sentence?
What to do next?
See an experienced criminal lawyer immediately. Preparation in relation to any matter is critical. Don’t leave it to the last minute.
If you have been charged with Financial Assistance by a Company for Acquiring Shares in the Company or a Holding Company make an appointment to see one of our experienced lawyers today.
Section 260A Financial assistance by a company for acquiring shares in the company or a holding company
(1) A company may financially assist a person to acquire shares (or units of shares) in the company or a holding company of the company only if:
(a) giving the assistance does not materially prejudice:
(i) the interests of the company or its shareholders; or
(ii) the company’s ability to pay its creditors; or
(b) the assistance is approved by shareholders under section 260B (that section also requires advance notice to ASIC); or
(c) the assistance is exempted under section 260C.
(2) Without limiting subsection (1), financial assistance may:
(a) be given before or after the acquisition of shares (or units of shares); and
(b) take the form of paying a dividend.
(3) Subsection (1) extends to the acquisition of shares (or units of shares) by:
(a) issue; or
(b) transfer; or
(c) any other means.