Business Report (Aroposal Arrangement)

The  Articles provide that when a director holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual’s duty or interest as a director (i.e., a disclosable interest), he must declare the nature and extent of his interest in such contract or transaction or of any other possible conflict, in accordance with the provisions of the Business Corporations Act.   A director who holds a disclosable interest may not vote on the transaction but will be counted in the quorum present at the meeting at which such vote is taken.

According to the Business Corporations Act, a director holds a disclosable interest in a contract or transaction if:

  1. 1.the contract or transaction is material to the company;
  2. 2.the company has entered, or proposes to enter, into the contract or transaction, and
  3. 3.either of the following applies to the director:
  1. the director has a material interest in the contract or transaction;
  1. the director is a director or senior officer of, or has a material interest in, a person who has a material interest in the contract or transaction.

However, the Business Corporations Act also provides that in the following circumstances, a director does not hold a disclosable interest in a contract or transaction if:

  1. the situation that would otherwise constitute a disclosable interest arose before the coming into force of the Business Corporations Act or, if the company was recognized under the Business Corporations Act, before that recognition, and was disclosed and approved under, or was not required to be disclosed under, the legislation that:
    1. applied to the company on or after the date on which the situation arose; and
  1. is comparable in scope and intent to the provisions of the Business Corporations Act;
  2. both the company and the other party to the contract or transaction are wholly owned subsid
  3. the company is a wholly owned subsidiary of the other party to the contract or transaction;
  4. the other party to the contract or transaction is a wholly owned subsidiary of the company; or
  5. where the director or senior officer is the sole shareholder of the company or of a corporation of which the company is a wholly owned subsidiary.

The Business Corporations Act further provides that a director of a company does not hold a disclosable interest in a contract or transaction merely because:

  1. the contract or transaction is an arrangement by way of security granted by the company for money loaned to, or obligations undertaken by, the director or senior officer, or a person in whom the director or senior officer has a material interest, for the benefit of the company or an affiliate of the company;
  2. the contract or transaction relates to an indemnity or insurance;
  1. the contract or transaction relates to the remuneration of the director or senior officer in that person’s capacity as director, officer, employee or agent of the company or of an affiliate of the company;
  1. the contract or transa
  2. the contract or transaction relates to a loan to the company, and the director or senior officer, or a person in whom the director or senior officer has a material interest, is or is to be a guarantor of some or all of the loan; or
  3. the contract or transaction has been or will be made with or for the benefit of a corporation that is affiliated with the company and the director or senior officer is also a director or senior officer of that corporation or an affiliate of that corporation
  1. B. Director’s power to vote on a proposal, arrangement or contract in which the director is interested.

The  Articles provide that when a director holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual’s duty or interest as a director (i.e., a disclosable interest), he must declare the nature and extent of his interest in such contract or transaction or of any other possible conflict, in accordance with the provisions of the Business Corporations Act.   A director who holds a disclosable interest may not vote on the transaction but will be counted in the quorum present at the meeting at which such vote is taken.

According to the Business Corporations Act, a director holds a disclosable interest in a contract or transaction if:

  1. the contract or transaction is material to the company;
  2. the company has entered, or proposes to enter, into the contract or transaction, and
  3. either of the following applies to the director:

a.the director has a material interest in the contract or transaction;

b.the director is a director or senior officer of, or has a material interest in, a person who has a material interest in the contract or transaction.

However, the Business Corporations Act also provides that in the following circumstances, a director does not hold a disclosable interest in a contract or transaction if:

  1. 1.the situation that would otherwise constitute a disclosable interest arose before the coming into force of the Business Corporations Act or, if the company was recognized under the Business Corporations Act, before that recognition, and was disclosed and approved under, or was not required to be disclosed under, the legislation that:
    1. applied to the company on or after the date on which the situation arose; and
    2. is comparable in scope and intent to the provisions of the Business Corporations Act;
    3. both the company and the other party to the contract or transaction are wholly owned subsid
    4. the company is a wholly owned subsidiary of the other party to the contract or transaction;
    5. the other party to the contract or transaction is a wholly owned subsidiary of the company; or
    6. where the director or senior officer is the sole shareholder of the company or of a corporation of which the company is a wholly owned subsidiary.

The Business Corporations Act further provides that a director of a company does not hold a disclosable interest in a contract or transaction merely because:

1.the contract or transaction is an arrangement by way of security granted by the company for money loaned to, or obligations undertaken by, the director or senior officer, or a person in whom the director or senior officer has a material interest, for the benefit of the company or an affiliate of the company;

  1. the contract or transaction relates to an indemnity or insurance;
  2. the contract or transaction relates to the remuneration of the director or senior officer in that person’s capacity as director, office

the contract or transaction relates to the remuneration of the director or senior officer in that person’s capacity as director, officer, employee or agent of the company or of an affiliate of the company

  1. the contract or transaction relates to a loan to the company, and the director or senior officer, or a person in whom the director or senior officer has a material interest, is or is to be a guarantor of some or all of the loan; or
  2. the contract or transaction has been or will be made with or for the benefit of a corporation that is affiliated with the company and the director or senior officer is also a director or senior officer of that corporation or an affiliate of that corporation.

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