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Corporations (Aboriginal and Torres Strait Islander) Bill 2006

Part 17-1 Meaning of some important concepts

Division 683 Directors and officers of Aboriginal and Torres Strait Islander corporations

683-1   Meaning of director and officer

             (1)  A person is a director of an Aboriginal and Torres Strait Islander corporation if the person:

                     (a)  is appointed to the position of a director of the corporation; or

                     (b)  is appointed to the position of an alternate director of the corporation and is acting in that capacity.

This is so regardless of the name that is given to the person’s position.

             (2)  A person is also a director of an Aboriginal and Torres Strait Islander corporation if:

                     (a)  the person is not validly appointed as a director of the corporation; and

                     (b)  either:

                              (i)  the person acts in the position of a director of the corporation; or

                             (ii)  subject to subsections (4), (5) and (7), the directors of the corporation are accustomed to act in accordance with the person’s instructions or wishes.

This subsection has effect unless the contrary intention appears.

Note:          Contrary intention—Examples of provisions for which a person referred to in paragraph (b) would not be included in the term “director” are:

(a)           section 201-1 (power to call meetings of the corporation’s members); and

(b)           subsection 220-5(8) (signing minutes of meetings); and

(c)           section 304-5 (notice to Registrar of change of address).

             (3)  A person is an officer of an Aboriginal and Torres Strait Islander corporation if:

                     (a)  the person is a director or secretary of the corporation; or

                     (b)  a person:

                              (i)  makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or

                             (ii)  has the capacity to affect significantly the corporation’s financial standing; or

                     (c)  subject to subsections (4), (5) and (7), the directors of the corporation are accustomed to act in accordance with the person’s instructions or wishes; or

                     (d)  the person is:

                              (i)  a special administrator of the corporation; or

                             (ii)  a receiver, or receiver and manager, of the property of the corporation; or

                            (iii)  a person appointed as an administrator of the corporation under Part 5.3A of the Corporations Act (as applied by section 521-1 of this Act); or

                            (iv)  a liquidator of the corporation; or

                             (v)  a trustee or other person administering a compromise or arrangement made between the corporation and someone else.

Note:          Section 246-1 contains rules about who can be a director of an Aboriginal and Torres Strait Islander corporation.

             (4)  A person is not a director under subparagraph (2)(b)(ii), or an officer under paragraph (3)(c), merely because the directors act on advice given by the person in the proper performance of functions attaching to the person’s professional capacity, or the person’s business relationship with the directors or the corporation.

             (5)  A common law holder of native title is not a director of an Aboriginal and Torres Strait Islander corporation under subparagraph (2)(b)(ii), or an officer of an Aboriginal and Torres Strait Islander corporation under paragraph (3)(c), merely because the directors of the corporation take action, or refrain from taking action, to ensure that the corporation complies with a Native Title legislation obligation.

             (6)  A person who is a common law holder of native title is not an officer of an Aboriginal and Torres Strait Islander corporation under paragraph (3)(b), merely because:

                     (a)  the person, in complying with a Native Title legislation obligation, makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or

                     (b)  the person, as a common law holder of native title, has the capacity to affect significantly the corporation’s financial standing.

             (7)  The Registrar is not a director , or an officer , of an Aboriginal and Torres Strait Islander corporation merely because of the exercise by the Registrar of powers under this Act.



 

Division 686 Associates

686-1   Effect of Division

             (1)  This Division has effect for the purposes of interpreting a reference (the associate reference ), in relation to a person (the primary person ), to an associate.

             (2)  A person is not an associate of the primary person except as provided in this Division.

             (3)  Nothing in this Division limits the generality of anything else in it.

686-5   Associates of bodies corporate

                   If the primary person is a body corporate, the associate reference includes a reference to:

                     (a)  a director or secretary of the body; and

                     (b)  a related body corporate; and

                     (c)  a director or secretary of a related body corporate.

686-10   General

             (1)  The associate reference includes a reference to:

                     (a)  a person in concert with whom the primary person is acting, or proposes to act; and

                     (b)  a person who, under the regulations, is, for the purposes of the provision in which the associate reference occurs, an associate of the primary person; and

                     (c)  a person with whom the primary person is, or proposes to become, associated, whether formally or informally, in any other way;

in respect of the matter to which the associate reference relates.

             (2)  If the primary person has entered, or proposes to enter, into a transaction, or has done, or proposes to do, any act or thing, in order to become associated with another person as mentioned in subsection (1), the associate reference includes a reference to that other person.

686-15   Exclusions

             (1)  A person is not an associate of another person by virtue of subsection 686-10(1), or by virtue of subsection 686-10(2) as it applies in relation to subsection 686-10(1), merely because of one or more of the following:

                     (a)  one gives advice to the other, or acts on the other’s behalf, in the proper performance of the functions attaching to a professional capacity or a business relationship;

                     (b)  one has appointed the other, otherwise than for valuable consideration given by the other or by an associate of the other, to vote as a proxy or representative at a meeting of members, or of a class of members, of a body corporate.

             (2)  A person who is a common law holder of native title is not an associate of another person by virtue of subsection 686-10(1), or by virtue of subsection 686-10(2) as it applies in relation to subsection 686-10(1), merely because a Native Title legislation obligation has been complied with.



 

Division 689 Subsidiaries and control

689-1   What is a subsidiary

                   A body corporate (the first body ) is a subsidiary of another body corporate if, and only if:

                     (a)  the other body:

                              (i)  controls the composition of the first body’s board; or

                             (ii)  is in a position to cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a general meeting of the first body; or

                            (iii)  holds more than one-half of the issued share capital of the first body (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or

                     (b)  the first body is a subsidiary of a subsidiary of the other body.

Note:          Subparagraph (a)(iii)—although an Aboriginal and Torres Strait Islander corporation itself does not have shares, the corporation may hold shares in a body corporate that does have shares.

689-5   Control of a body corporate’s board

             (1)  For the purposes of this Act, the composition of the board of a body corporate (the first body ) is taken to be controlled by another body (the second body ) if the second body, by exercising a power exercisable (whether with or without the consent or concurrence of any other person) by it, can appoint or remove all, or the majority, of the directors of the first body.

             (2)  For the purposes of this Division, the second body is taken to have power to make such an appointment if:

                     (a)  a person cannot be appointed as a director of the first body without the exercise by the second body of such a power in the person’s favour; or

                     (b)  a person’s appointment as a director of the first body follows necessarily from the person being a director or other officer of the second body.

             (3)  Subsections (1) and (2) do not limit the circumstances in which the composition of a body corporate’s board is taken to be controlled by another body corporate.

689-10   Matters to be disregarded

             (1)  This section applies for the purposes of determining whether a body corporate (the first body ) is a subsidiary of another body corporate.

             (2)  Any shares held, or power exercisable, by the other body in a fiduciary capacity are treated as not held or exercisable by it.

             (3)  Subject to subsections (4) and (5), any shares held, or power exercisable:

                     (a)  by a person as a nominee for the other body (except where the other body is concerned only in a fiduciary capacity); or

                     (b)  by, or by a nominee for, a subsidiary of the other body (not being a subsidiary that is concerned only in a fiduciary capacity);

are treated as held or exercisable by the other body.

             (4)  Any shares held, or power exercisable, by a person by virtue of the provisions of debentures of the first body, or of a trust deed for securing an issue of such debentures, are to be disregarded.

             (5)  Any shares held, or power exercisable, otherwise than as mentioned in subsection (4), by, or by a nominee for, the other body or a subsidiary of it are to be treated as not held or exercisable by the other body if:

                     (a)  the ordinary business of the other body or that subsidiary, as the case may be, includes lending money; and

                     (b)  the shares are held, or the power is exercisable, only by way of security given for the purposes of a transaction entered into in the ordinary course of business in connection with lending money, not being a transaction entered into with an associate of the other body, or of that subsidiary, as the case may be.

689-15   References in this Division to a subsidiary

                   A reference in paragraph 689-1(b) or 689-10(3)(b) or subsection 689-10(5) to being a subsidiary, or to a subsidiary, of a body corporate includes a reference to being a subsidiary, or to a body corporate that is a subsidiary, as the case may be, of the first-mentioned body by virtue of any other application or applications of this Division.

689-20   Related bodies corporate

                   If a body corporate is:

                     (a)  a holding body corporate of another body corporate; or

                     (b)  a subsidiary of another body corporate; or

                     (c)  a subsidiary of a holding body corporate of another body corporate;

the first-mentioned body and the other body are related to each other.

689-25   Control

             (1)  For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.

             (2)  In determining whether the first entity has this capacity:

                     (a)  the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and

                     (b)  any practice or pattern of behaviour affecting the second entity’s financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

             (3)  The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.

             (4)  If the first entity:

                     (a)  has the capacity to influence decisions about the second entity’s financial and operating policies; and

                     (b)  is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity’s members;

the first entity is taken not to control the second entity.

             (5)  If the first entity is a common law holder of native title and the second entity is a registered native title body corporate, the first entity does not control the second entity merely because the second entity complies with a Native Title legislation obligation.