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- Acquisition finance
- Security in acquisition finance transactions
Financial assistance
Section 260A of the Corporations Act 2001 (Cth) provides that a company registered in Australia can only provide financial assistance to a person to purchase shares in the company, or the shares of the company's holding company (even if that holding company is incorporated outside of Australia), if:
- • that assistance does not materially prejudice the company or its shareholders, or the company's ability to pay its creditors; or
- • that assistance is approved by shareholders of the company (known as a “whitewash”).
This guidance note explains what constitutes financial assistance, the rationale behind prohibiting companies from giving financial assistance and what is involved in the whitewash process.
See Financial assistance.
