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This is a Bill, not an Act. For current law, see the Acts databases.
1998
The Parliament of
the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Film Licensed
Investment Company Bill 1998
No. ,
1998
(Arts and the Centenary of
Federation)
A Bill for an Act to establish
the film licensed investment company scheme, and for related
purposes
ISBN: 0642 37743X
Contents
A Bill for an Act to establish the film licensed
investment company scheme, and for related purposes
The Parliament of Australia enacts:
This Act may be cited as the Film Licensed Investment Company Act
1998.
This Act commences on the day on which it receives the Royal
Assent.
(1) This Act sets up a pilot scheme. The purpose of the pilot scheme is to
encourage investment in qualifying Australian films.
(2) Under the scheme, a company may apply for a concessional capital
licence. The shareholders in the licensed companies (FLICs) are able to obtain a
100% tax deduction for money invested in the companies if that money is then
invested in qualifying Australian films.
(3) The scheme operates during the period commencing on the day that
the Minister grants the first licence (which will occur during the 1998-99
financial year) and ending on 30 June 2003. During the licence period, up to $40
million will be able to be raised for investment in qualifying Australian
films.
Note: For qualifying Australian film see
subsection 6(1).
The objects of the scheme are as follows:
(a) to encourage the production of qualifying Australian films which
portray Australian perspectives and Australia’s cultural
diversity;
(b) to encourage the production of qualifying Australian films which are
of a high standard and are likely to be commercially successful;
(c) to support and promote the ongoing development of the Australian film
industry through encouraging the use of Australia’s creative resources and
industry expertise;
(d) to ensure that the level of the Commonwealth’s assistance to the
Australian film industry is quantifiable, accountable, and
transparent.
Subparagraph 25(a)(v), section 27, Part 3 and the Schedule extend to
acts, omissions, matters and things outside Australia, whether or not in a
foreign country.
(1) In this Act, unless the contrary intention appears:
allowable deduction percentage has the meaning given in
section 37.
Application rules means the rules made by the Minister under
section 9.
bank includes but is not limited to a body corporate that
holds an authority under subsection 9(3) of the Banking Act
1959.
concessional capital means money paid to a FLIC by a person
for the issue, during the FLIC’s licence period, of shares to that
person.
concessional capital licence means a licence granted by the
Minister under section 16.
film licensed investment company means a company that has
been granted a concessional capital licence under section 16 (whether or not the
licence has ceased to be in force).
FLIC means a film licensed investment company.
invested in a film has the meaning given in subsection
(2).
licence period, in relation to a FLIC, means the period
commencing on the day on which the FLIC was granted a concessional capital
licence and ending:
(a) if the licence is revoked—on the day specified by the Minister
under section 33 as the day on which it is revoked; or
(b) otherwise—on 30 June 2000.
non-concessional capital means capital raised by the FLIC
after the end of the licence period.
period of the scheme means the period commencing on the day
the Minister grants the first licence under the scheme and ending on 30 June
2003.
provisionally certified film means a film that has been
issued with a provisional certificate under section 124ZAB of the Income Tax
Assessment Act 1936.
qualifying Australian film has the same meaning as it has in
Division 10BA of Part III of the Income Tax Assessment Act
1936.
Secretary means the Secretary to the Department.
Selection Advisory Panel means a body established under the
Application rules to advise the Minister in respect of applications for a
concessional capital licence.
(2) For the purposes of this Act, money is invested in a
film if it is:
(a) spent by a FLIC as a contribution to the cost of producing the film
for the purpose of becoming the first owner, or one of the first owners, of the
copyright in the film when the copyright comes into existence; or
(b) if the FLIC has contributed to the cost of production of a film for
the purpose set out in paragraph (a)—spent by a FLIC as a contribution to
the cost of marketing and distributing the film.
Chapter 2 of the Criminal Code applies to all offences against
this Act.
(1) This Part sets out the pilot scheme. Division 2 provides for the
Minister to make rules that apply to the application process and to determine
criteria and procedures for making decisions as to the grant of
licences.
(2) Division 3 provides for the application process.
(3) Under Division 4, the Minister:
(a) determines which applicants to license as FLICs and how much of the
$40 million in concessional capital to allocate to each FLIC to raise during the
licence period; and
(b) grants the licences.
(4) The conditions that attach to the scheme are set out in Division 6
(although section 22 provides for the Minister to determine further conditions
of the scheme in a disallowable instrument).
(5) Division 7 sets out how a breach of a condition is to be dealt
with.
(6) Division 8 deals with information and reporting requirements.
(7) Division 9 deals with a purported transfer of a licence and the
allowable deduction percentage.
The Minister must, in writing, determine rules concerning the application
process under the scheme. The rules may provide for all or any of the following
matters:
(a) the method of calling for applications;
(b) the closing date for a round of applications;
(c) the form of the application and the documentation that must accompany
an application;
(d) the establishing of a Selection Advisory Panel to advise the Minister
in respect of the applications including the membership of the panel and tenure
of panel members;
(e) the rules governing the operation of the Selection Advisory
Panel;
(f) any other matter relevant to the application process under the
scheme.
Note: A
determination is a disallowable instrument (see section 43).
(1) The Minister must, in writing, determine criteria to be applied and
procedures to be complied with by the Minister in deciding:
(a) whether to grant a concessional capital licence under the scheme;
and
(b) how many licences to grant under the scheme; and
(c) how much concessional capital to allocate to each FLIC to raise during
the licence period.
Note: A determination is a disallowable instrument (see
section 43).
(2) The Minister must also determine the weight to be given to each
criterion.
(1) The Minister may call for applications for a concessional capital
licence under the scheme from interested persons.
(2) If, in the first round of applications, the Minister does not allocate
all of the concessional capital specified in subsection 14(2), the Minister may
call for one further round of applications.
(1) A company may apply for a licence to raise concessional capital under
the scheme.
(2) The application must:
(a) be in the form specified in the Application rules; and
(b) provide such information as is required by the Application rules;
and
(c) be given to the Minister.
(1) The Minister may ask the applicant, in writing, to give to the
Minister, within the period specified in the request, further information about
the application.
(2) The Minister may refuse to consider the application unless the
applicant provides the information within the period specified in the
request.
(1) After receiving applications in respect of the scheme, the Minister
must determine:
(a) how many licences to grant under the scheme; and
(b) the amount of concessional capital that each FLIC will be allocated to
raise during the licence period.
Note: Section 10 requires the Minister to comply with
criteria and procedures determined under that section when making a
determination under this section.
(2) The total amount of concessional capital allocated by the Minister to
FLICs to raise on or before 30 June 2000 must not exceed $40 million.
(3) The amount allocated to a FLIC under paragraph (1)(b) does not have to
be the amount applied for by the FLIC in its application for a
licence.
(4) The total amount of concessional capital allocated by the Minister to
FLICs to raise on or before 30 June 1999 must not exceed $20 million.
(5) In respect of each FLIC, the Minister must determine the amount of
concessional capital that the FLIC is licensed to raise on or before 30 June
1999.
(6) In an application round, the Minister may decide:
(a) not to grant any licences; and
(b) not to allocate all of the concessional capital available to be
allocated.
(7) A determination of the Minister must be in writing.
A company may only be granted a concessional capital licence under the
scheme if all of the following conditions are met:
(a) the company is registered under the Corporations Law;
(b) the company has not commenced business or exercised any borrowing
power;
(c) the company’s central management and control is ordinarily
exercised in a place in Australia;
(d) the chair of the company (however described) and all of the directors
of the company are Australian citizens;
(e) the company’s memorandum and articles of association provide
that all of the shares in the company are to be fully paid and of the same
class.
(1) Subject to this Part, the Minister may grant a company a licence to
raise concessional capital.
(2) A company that has been granted a licence is a film licensed
investment company (FLIC).
(1) A licence under the scheme must:
(a) be in writing; and
(b) state that the FLIC is licensed to raise the amount of concessional
capital determined by the Minister under paragraph 14(1)(b) in respect of the
company during the licence period; and
(c) state that the FLIC is licensed to raise the amount of concessional
capital determined by the Minister under subsection 14(5) in respect of the
company during the period commencing on the day the FLIC’s licence is
granted and ending on 30 June 1999; and
(d) state the conditions of the scheme to which a FLIC is subject;
and
(e) state that the conditions of the scheme determined by the Minister
under section 22 may be altered at any time after consultation with the
FLICs.
The Minister must have regard to the recommendations of the Selection
Advisory Panel in deciding:
(a) whether to grant a licence under the scheme; and
(b) the amount of concessional capital to be allocated to each FLIC to
raise during the licence period.
Note: For Selection Advisory Panel see
subsection 6(1).
(1) If the Minister refuses to grant an application for a concessional
capital licence, the Minister must notify the applicant in writing of the
refusal.
(2) The notice must include the reasons for the decision.
A concessional capital licence comes into force when granted and remains
in force until:
(a) if it is revoked—the day specified by the Minister under section
33 as the day on which it is revoked; or
(b) otherwise—30 June 2000.
(1) The conditions of the scheme may be found in:
(a) sections 23 to 28; and
(b) a determination made under section 22.
(2) The conditions apply for the period of the scheme.
Note: The scheme ends on 30 June 2002.
(1) The Minister may determine in writing conditions that are to apply to
all FLICs under the scheme.
Note: A determination is a disallowable instrument (see
section 43).
(2) The Minister may revoke or vary these conditions (including adding new
conditions) at any time after consulting each of the FLICs.
A FLIC must comply with the following conditions as to raising
capital:
(a) the FLIC must not raise more than the amount of concessional capital
it is licensed to raise (whether in respect of the licence period or the period
commencing on the day on which the FLIC’s licence is granted and ending on
30 June 1999);
(b) the FLIC must not issue debentures or convertible notes;
(c) the FLIC must not borrow money during the licence period except during
the 1998-99 financial year and then only for the short-term purpose of meeting
the costs of its administrative expenses;
(d) the FLIC may raise non-concessional capital but not before 1 July
2000.
A FLIC must comply with the following conditions as to investment of
capital raised under the scheme:
(a) the FLIC must invest in provisionally certified films an amount equal
to the amount of concessional capital raised by the FLIC less the allowable
deduction percentage;
(b) the amount must be so invested on or before 30 June 2002;
(c) if the FLIC invests concessional capital in a film, the FLIC must not
also invest non-concessional capital in that film.
Note 1: The Minister determines an allowable deduction
percentage under section 37.
Note 2: For provisionally certified film see
subsection 6(1).
A FLIC must comply with the following conditions in respect of a film it
invests in under the scheme:
(a) the film must not be developed or produced by a person who
is:
(i) the holder of a licence allocated by the Australian Broadcasting
Authority under the Broadcasting Services Act 1992; or
(ii) the provider of a broadcasting service in accordance with a class
licence determined by the Australian Broadcasting Authority under section 117 of
the Broadcasting Services Act 1992; or
(iii) the Australian Broadcasting Corporation; or
(iv) the Special Broadcasting Service; or
(v) an associate of one of the persons mentioned in subparagraph (i) or
(ii); and
(b) the film must receive a final certificate under section 124ZAC of the
Income Tax Assessment Act 1936 on or before 30 April 2003.
Note: For associate (and for other definitions
relevant to the definition of associate) see Schedule
1.
A FLIC must:
(a) continue to comply with the conditions on grant set out in paragraphs
15 (a), (c), (d) and (e); and
(b) comply with the conditions set out in a determination made
under section 22.
(1) A FLIC must not have an unacceptable level of foreign ownership or an
unacceptable level of individual ownership.
(2) For the purposes of this Act, a FLIC has an unacceptable level
of foreign ownership if a group of foreign persons hold, in total, a
particular stake in the FLIC of 33% or more.
(3) For the purposes of this Act, a FLIC has an unacceptable level
of individual ownership if a person holds a particular stake in the FLIC
of 33% or more.
(4) Schedule 1 sets out definitions of expressions used in this
section.
Note 1: The limits on the ownership of a FLIC relate to a
person’s stake in the FLIC.
Note 2: For stake see Schedule
1.
A FLIC must comply with the following conditions:
(a) the FLIC must not purport to transfer its licence to another
person;
(b) the FLIC must comply with the reporting requirements set out in the
determination made under section 34;
(c) the FLIC must notify each shareholder in writing of any decision taken
by the Minister in relation to the FLIC under section 32 in respect of a breach
of a condition;
(d) the FLIC must maintain a separate bank account for its concessional
capital.
Note: For bank see subsection
6(1).
If the Minister is of the opinion that there may be grounds for deciding
that a FLIC is in breach of a condition of the scheme, the Minister
must:
(a) give the FLIC written notice of the Minister’s opinion
specifying the reasons for the opinion; and
(b) invite the FLIC to make a written submission to the Minister within 28
days.
Note: The conditions of the scheme may be found in sections
23 to 28 and a determination made under section 22.
The Minister may ask the applicant, in writing, to give to the Minister,
within the period specified in the request, information for the purposes of
making a decision under section 32.
In making a decision under section 32 in respect of a FLIC, the Minister
must have regard to the matters raised in the FLIC’s submission (if any)
and any information received by the Minister under section 30.
(1) If the Minister is satisfied that a FLIC has breached a condition of
the scheme the Minister may decide:
(a) not to take any action in respect of the breach (other than to take
the breach into account in determining a course of action in respect of any
further breaches of conditions by the FLIC); or
(b) to take action under the following subsections.
Note: A decision of the Minister under this section is a
reviewable decision (see section 42).
(2) The Minister may take any or all of the following actions in respect
of the breach:
(a) give the FLIC written notice of a day by which the breach of condition
must be remedied;
(b) if the breach occurred during the licence period—revoke the
licence;
(c) decide to remove the concessional status of shares that were issued to
shareholders by the FLIC during the licence period.
Note: Section 375-865 of the Income Tax Assessment Act
1997 provides that shareholders whose shares are affected by a decision
under this paragraph lose their entitlement to a deduction for the
shares.
(3) If a FLIC that has been notified of a day under paragraph (2)(a) does
not remedy the breach of condition by that day, the Minister may make such
decision under subsection (1) as the Minister thinks appropriate.
(4) If the Minister, in respect of a breach of condition by a
FLIC:
(a) makes a decision under paragraph 32(1)(a); or
(b) revokes the FLIC’S licence; or
(c) decides to remove the concessional status of shares in the
FLIC;
the Minister must, within 28 days of making the decision, notify the
Commissioner of Taxation in writing of the decision.
(5) Written notice of a decision of the Minister under this section
must:
(a) be given to the FLIC concerned; and
(b) include reasons for the decision.
Note: A FLIC is required as a condition of the scheme to
notify each of its shareholders if the Minister makes a decision under section
32 in respect of a breach by the FLIC of a condition (see paragraph
28(c)).
(6) If the Minister’s decision in respect of a FLIC is to revoke the
FLIC’s licence, the notice under subsection (5) must also specify the day
on which the revocation takes effect.
(1) The revocation of a licence takes effect on a day specified in writing
by the Minister.
(2) The day specified by the Minister must not be a day earlier than the
seventh day after the day on which the Minister makes a decision under section
32 to revoke the licence.
(3) If:
(a) the Minister decides to revoke a FLIC’s licence under section
32; and
(b) the FLIC has, at the day of the revocation, raised an amount of
concessional capital;
the revocation of the licence does not of itself remove the concessional
status of shares issued by the FLIC before the revocation.
(1) For the purposes of:
(a) monitoring compliance with the Act; and
(b) evaluating the scheme;
the Minister may in writing determine reporting requirements that a FLIC
must comply with.
Note: A determination of the Minister is a disallowable
instrument (see section 43).
(2) The Minister may only require a FLIC to give a report on 31 December
1998 and at 6 monthly intervals after that.
(3) The Minister may ask the FLIC in writing to give to the Minister,
within the period specified in the request, further information concerning the
FLIC’s report.
(1) A person is guilty of an offence if the person:
(a) makes a statement in:
(i) an application for a concessional capital licence under section 12;
or
(ii) a report under section 34; or
(iii) response to a request for information under section 13 or 30 or
subsection 34(3);
that the person knows is false or misleading in a material particular;
or
(b) omits from a statement the person makes in:
(i) an application for a concessional capital licence under section 12;
or
(ii) a report under section 34; or
(iii) response to a request for information under section 13 or 30 or
subsection 34(3);
any matter or thing without which the person knows the statement is
misleading in a material particular.
Penalty: Imprisonment for 12 months or 60 penalty units, or both.
Note: Chapter 2 of the Criminal Code sets out the
general principles of criminal responsibility.
(2) A statement may be oral or in writing.
(1) The Secretary must advise the Commissioner of Taxation as soon as
possible after the end of a financial year of the following information in
respect of a FLIC:
(a) the name and registered address of the FLIC;
(b) the details of any breach of conditions by the FLIC during the
year;
(c) the details of a decision taken by the Minister under section 32 in
respect of the breach;
(d) all other matters that:
(i) the Secretary and the Commissioner of Taxation agree are to be
provided; and
(ii) are necessary to the administration of Subdivision 375-H of the
Income Tax Assessment Act 1997.
(2) The Secretary must advise the Commissioner of Taxation as soon as
possible after the end of the 1998-99 and the 1999-2000 financial years of the
following information in respect of a FLIC:
(a) the number of shares issued during the year by the FLIC; and
(b) the names and addresses of the shareholders to whom the shares were
issued and the amount paid by each shareholder for the shares.
(3) The Secretary’s advice must be in writing.
(1) The Minister may, in writing, in respect of each FLIC, determine an
allowable deduction percentage.
(2) The allowable deduction percentage is a percentage of the concessional
capital raised by a FLIC that may be used by the FLIC to meet the costs of the
FLIC’s administration.
The purported transfer of a licence is void.
Schedule 1 sets out definitions of expressions used in this
Part.
If:
(a) a person, or 2 or more persons under an arrangement, acquire shares in
a company; and
(b) the acquisition has the result, in relation to a FLIC, that:
(i) an unacceptable foreign ownership situation comes into existence in
relation to the FLIC; or
(ii) if an unacceptable foreign ownership situation already exists in
relation to the FLIC because there is a group of foreign persons who hold, in
total, a particular type of stake in the FLIC of 33% or more—there is an
increase in the total of any type of stake held by any group of foreign persons
in the FLIC; or
(iii) an unacceptable individual ownership situation comes into existence
in relation to the FLIC; or
(iv) if an unacceptable individual ownership situation already exists in
relation to the FLIC because there is one or more individuals who hold a
particular type of stake in the FLIC of more than 33%—there is an increase
in the type of stake held by any of those persons in the FLIC; and
(c) the person or persons mentioned in paragraph (a) were reckless as to
whether the acquisition would have that result;
the person or persons mentioned in paragraph (a) are guilty of an
offence.
Penalty: 400 penalty units.
Note: Chapter 2 of the Criminal Code sets out the
general principles of criminal responsibility.
(1) If:
(a) one or more persons enter into, begin to carry out or carry out a
scheme; and
(b) it would be concluded that the person, or any of the persons, who
entered into, began to carry out or carried out the scheme or any part of the
scheme did so for the sole or dominant purpose of avoiding the restriction on
ownership levels set out in section 27; and
(c) as a result of the scheme or a part of the scheme, a person (the
stakeholder) increases the stakeholder’s stake in a
FLIC;
the Minister may give the stakeholder a written direction to cease holding
that stake within a specified time.
(2) A person is guilty of an offence if the person contravenes a direction
under subsection (1).
Penalty: 400 penalty units.
Note: Chapter 2 of the Criminal Code sets out the
general principles of criminal responsibility.
A person whose interests are affected may apply to the Administrative
Appeals Tribunal for review of a decision of the Minister:
(a) under paragraph 32(1)(a), not to take any action in respect of a
breach (other than to take the breach into account in determining a course of
action in respect of any further breaches of conditions); and
(b) under paragraph 32(2)(a), to impose a day by which a breach of a
condition must be remedied; and
(c) under paragraph 32(2)(b), to revoke a licence; and
(d) under paragraph 32(2)(c), to remove the concessional status of shares
that were issued to shareholders by the FLIC during the licence
period.
Determinations made under sections 9, 10, 22 and 34 are disallowable
instruments for the purposes of section 46A of the Acts Interpretation Act
1901.
The Minister may, by instrument in writing, delegate to:
(a) the Secretary to the Department; or
(b) a person holding, or performing the duties of, a Senior Executive
Office, or equivalent, in the Department;
the Minister’s powers under sections 13 and 30 and under subsection
34(3) to ask a FLIC for further information.
The object of this Schedule is to define terms used in the conditions of
the scheme set out in subparagraph 25(a)(v) (which deals with film making
restrictions), section 27 (which deals with ownership restrictions) and in Part
3 (which sets out offences concerning ownership restrictions).
In subparagraph 25(a)(v), section 27, Part 3 and in this Schedule, unless
the contrary intention appears:
acquisition includes an agreement to acquire, but does not
include:
(a) an acquisition by will or by devolution by operation of law;
or
(b) an acquisition by way of enforcement of a loan security.
aggregate substantial interest, in relation to a trust
estate, has the meaning given by clause 13.
agreement means any agreement, whether formal or informal and
whether express or implied.
arrangement has the meaning given by clause 4.
associate has the meaning given by clause 5.
company means a body corporate.
constituent document, in relation to a company,
means:
(a) the memorandum and articles of association of the company;
or
(b) any rules or other documents constituting the company or governing its
activities.
direct control interest has the meaning given by clause
12.
director includes any person occupying the position of
director of a company, by whatever name called.
discretionary trust means a trust where:
(a) a person (who may include the trustee) is empowered (either
unconditionally or on the fulfilment of a condition) to exercise any power of
appointment or other discretion; and
(b) the exercise of the power or discretion, or the failure to exercise
the power or discretion, has the effect of determining, to any extent, either or
both of the following:
(i) the identities of those who may benefit under the trust;
(ii) how beneficiaries are to benefit, as between themselves, under the
trust.
foreign citizen means an individual who is not an Australian
citizen.
foreign company means a company incorporated outside
Australia.
foreign person means:
(a) a foreign citizen not ordinarily resident in Australia; or
(b) a company where:
(i) a foreign citizen not ordinarily resident in Australia; or
(ii) a foreign company;
holds a particular type of stake in the company of 33% or more;
or
(c) a company where a group of 2 or more persons, each of whom is
either:
(i) a foreign citizen not ordinarily resident in Australia; or
(ii) a foreign company;
holds, in total, a particular type of stake in the company of 33% or
more; or
(d) the trustee of a trust estate in which a foreign citizen not
ordinarily resident in Australia or a foreign company holds a substantial
interest; or
(e) the trustee of a trust estate in which 2 or more persons, each of whom
is either a foreign citizen not ordinarily resident in Australia or a foreign
company, hold an aggregate substantial interest.
group includes:
(a) one person alone; or
(b) a number of persons, even if they are not in any way associated with
each other or acting together.
increase, in relation to a stake in a company, includes an
increase from a starting point of nil.
interest in a share has the meaning given by clause
8.
lending money includes providing non-equity finance where the
provision of the finance may reasonably be regarded as equivalent to lending
money.
loan security means a security held solely for the purposes
of a moneylending agreement.
moneylending agreement means an agreement entered into in
good faith in the ordinary course of carrying on a business of lending money,
but does not include an agreement dealing with any matter unrelated to the
carrying on of that business.
officer, in relation to a company, includes:
(a) a director, secretary or employee of the company; or
(b) a receiver and manager of any part of the undertaking of the company
appointed under a power contained in any instrument; or
(c) a liquidator of the company appointed in a voluntary
winding-up.
ordinarily resident in Australia has the meaning given by
clause 3.
ownership provisions means subparagraph 25(a)(v), section 27,
Part 3 and this Schedule.
power to appoint a director of a company has a
meaning affected by clause 6.
relative, in relation to a person, means:
(a) the person’s spouse; or
(b) another person who, although not legally married to the person, lives
with the person on a bona fide domestic basis as the husband or wife of the
person; or
(c) a parent or remoter lineal ancestor of the person; or
(d) a son, daughter or remoter issue of the person; or
(e) a brother or sister of the person.
scheme means:
(a) any agreement, arrangement, understanding, promise or undertaking,
whether express or implied and whether or not enforceable, or intended to be
enforceable, by legal proceedings; and
(b) any scheme, plan, proposal, action, course of action or course of
conduct, whether unilateral or otherwise.
share, in relation to a company, means a share in the share
capital of the company, and includes:
(a) stock into which any or all of the share capital of the company has
been converted; or
(b) an interest in such a share or in such stock.
stake, in relation to a company, has the meaning given by
clause 11.
substantial interest, in relation to a trust estate, has the
meaning given by clause 13.
voting power has the meaning given by clause 10.
For the purposes of the ownership provisions, a foreign citizen is
ordinarily resident in Australia at a particular time if, and only
if:
(a) the foreign citizen has been in Australia during 200 or more days in
the period of 12 months immediately preceding that time; and
(b) at that time, one of the following subparagraphs applies:
(i) the foreign citizen is in Australia and has permission to remain in
Australia indefinitely;
(ii) the foreign citizen is not in Australia but has a right to re-enter
Australia and, on re-entry, to be granted permission to remain in Australia
indefinitely;
(iii) the foreign citizen is in Australia and has a special category visa
under section 32 of the Migration Act 1958;
(iv) the foreign citizen is not in Australia and, on re-entry to
Australia, would have the right to be granted a special category visa under
section 32 of the Migration Act 1958.
(1) For the purposes of the ownership provisions, a person is taken to
have proposed to enter into an agreement or
arrangement if the person takes part in, or proposes to take part in,
negotiations with a view to entering into the agreement or
arrangement.
(2) A reference in the ownership provisions to entering into an
agreement or arrangement includes a reference to altering or varying an
agreement or arrangement.
(3) A reference in the ownership provisions to entering into an
arrangement is a reference to entering into any formal or informal
scheme, arrangement or understanding, whether expressly or by implication and,
without limiting the generality of the foregoing, includes a reference
to:
(a) entering into an agreement; or
(b) creating a trust, whether express or implied; or
(c) entering into a transaction;
and a reference in the ownership provisions to an arrangement
is to be construed accordingly.
(4) A reference in the ownership provisions to an
arrangement does not include a reference to a moneylending
agreement.
(1) For the purposes of the ownership provisions, the following persons
are associates of a person:
(a) a relative of the person;
(b) a partner of the person;
(c) a company of which the person is an officer;
(d) if the person is a company—an officer of the company;
(e) an employee or employer of the person;
(f) an officer of a company of which the person is an officer;
(g) an employee of an individual of whom the person is an
employee;
(h) the trustee of a discretionary trust where the person or another
person who is an associate of the person by virtue of another paragraph of this
subclause benefits, or is capable (whether by the exercise of a power of
appointment or otherwise) of benefiting, under the trust, either directly or
through any interposed companies, partnerships or trusts;
(i) a company whose directors are accustomed or under an obligation,
whether formal or informal, to act in accordance with the directions,
instructions or wishes of the person;
(j) a company where the person is accustomed or under an obligation,
whether formal or informal, to act in accordance with the directions,
instructions or wishes of the company;
(k) a company in which the person has, apart from this paragraph, a
particular type of stake of not less than 33%;
(l) if the person is a company—a person who holds, apart from this
paragraph, a particular type of stake in the company of not less than
33%;
(m) a person who is, because of this subclause, an associate of any other
person who is an associate of the person (including a person who is an associate
of the person by any other application or applications of this
paragraph).
(2) If a person (the first person) enters, or proposes to
enter, into an arrangement with another person (the second person)
that relates to any of the following matters:
(a) the first person and the second person being in a position, by acting
together, to control any of the voting power in a company;
(b) the power of the first person and the second person, by acting
together, to appoint or remove a director of a company;
(c) the situation where one or more of the directors of a company are
accustomed or under an obligation, whether formal or informal, to act in
accordance with the directions, instructions or wishes of the first person and
the second person acting together;
then, the second person is taken to be an associate of the first person for
the purposes of the application of a provision of the ownership provisions in
relation to the matter concerned.
(1) A reference in the ownership provisions to a power to appoint a
director includes a reference to such a power whether exercisable with
or without the consent or concurrence of any other person.
(2) For the purposes of the ownership provisions, a person is taken to
have the power to appoint a director if:
(a) the person has the power (whether exercisable with or without the
consent or concurrence of any other person) to veto such an appointment;
or
(b) a person’s appointment as a director of the company follows
necessarily from that person being a director or other officer of the
first-mentioned person.
For the purposes of the ownership provisions, a person is
entitled to acquire any thing if the person is
absolutely or contingently entitled to acquire it, whether because of any
constituent document of a company, the exercise of any right or option or for
any other reason.
(1) Subject to this clause, for the purposes of the ownership provisions,
a person holds an interest in a share if the person has any legal
or equitable interest in the share.
(2) For the purposes of the ownership provisions, a person is taken to
hold an interest in a share if:
(a) the person has entered into a contract to purchase the share;
or
(b) the person has a right (otherwise than because of having an interest
under a trust) to have the share transferred to the person or to the
person’s order (whether the right is exercisable presently or in the
future and whether or not on the fulfilment of a condition); or
(c) the person has a right to acquire the share, or an interest in the
share, under an option (whether the right is exercisable presently or in the
future and whether or not on the fulfilment of a condition); or
(d) the person is otherwise entitled to acquire the share or an interest
in the share; or
(e) the person is entitled (otherwise than because of having been
appointed as a proxy or representative to vote at a meeting of members of the
company or of a class of its members) to exercise or control the exercise of a
right attached to the share.
(3) Subclause (2) does not, by implication, limit subclause (1).
(4) A person is taken to hold an interest in a share even if
the person holds the interest in the share jointly with another
person.
(5) For the purpose of determining whether a person holds an interest in a
share, it is immaterial that the interest cannot be related to a particular
share.
(6) An interest in a share is not to be disregarded only because
of:
(a) its remoteness; or
(b) the manner in which it arose; or
(c) the fact that the exercise of a right conferred by the interest is, or
is capable of being made, subject to restraint or restriction.
(1) For the purposes of the ownership provisions, an interest in a share
held by a person whose ordinary business includes the lending of money (if the
person holds the interest as a loan security) must be disregarded.
(2) For the purposes of the ownership provisions, if:
(a) a person holds an interest in a share as a loan security;
and
(b) the ordinary business of the person includes the lending of money;
and
(c) the loan security is enforced; and
(d) as a result of the enforcement of the loan security, the person
becomes the holder of the share; and
(e) the person holds the share for a continuous period (the holding
period ) beginning at the time when the security was enforced;
the person’s interest in the share must be disregarded at all times
during so much of the holding period as occurs during whichever of the following
periods is applicable:
(f) the period of 90 days beginning when the security was enforced;
or
(g) if the Minister, by written notice given to the person, allows a
longer period—the end of that longer period.
(1) A reference in the ownership provisions to the voting
power in a company is a reference to the total rights of shareholders to
vote, or participate in any decision-making, concerning any of the
following:
(a) the making of distributions of capital or profits of the company to
its shareholders;
(b) the constituent document of the company;
(c) any variation of the share capital of the company.
(2) A reference in the ownership provisions to control of the voting
power in a company is a reference to control that is direct or indirect,
including control that is exercisable as a result of or by means of arrangements
or practices:
(a) whether or not having legal or equitable force; and
(b) whether or not based on legal or equitable rights.
(3) If the percentage of total rights to vote or participate in
decision-making differs as between different types of voting or decision-making,
the highest of those percentages applies for the purposes of this
clause.
(4) If a company:
(a) is limited both by shares and by guarantee; or
(b) does not have a share capital;
this clause has effect as if the members or policy holders of the company
were shareholders in the company.
(1) A particular type of stake that a person holds in a
company at a particular time is the aggregate of:
(a) the direct control interests in the company of that type that the
person holds at that time; and
(b) the direct control interests in the company of that type held at that
time by associates of the person.
(2) In calculating the stake that a person holds in a company, a direct
control interest held because of subclause 12(5) is not to be counted under
paragraph (1)(a) to the extent to which it is calculated by reference to a
direct control interest in the company that is taken into account under
paragraph (1)(b).
(3) For the purpose of calculating the total of the stakes of a particular
type that a group of persons holds in a company, if a particular stake that a
person holds in a company would be counted more than once because the person is
an associate of one or more other persons in the group, that interest is to be
counted only once.
(1) A person holds a direct control interest in a company at
a particular time equal to the percentage of the total paid-up share capital of
the company in which the person holds an interest at that time.
(2) A person also holds a direct control interest in a
company at a particular time equal to the percentage of the voting power in the
company that the person is in a position to control at that time.
(3) A person also holds a direct control interest in a
company at a particular time equal to the percentage that the person holds, or
is entitled to acquire, at that time of the total rights to distributions of
capital or profits of the company to its shareholders on winding-up.
(4) A person also holds a direct control interest in a
company at a particular time equal to the percentage that the person holds, or
is entitled to acquire, at that time of the total rights to distributions of
capital or profits of the company to its shareholders, otherwise than on
winding-up.
(5) Subject to subsection (6), if:
(a) a person holds a particular type of direct control interest (including
a direct control interest that is taken to be held because of one or more
previous applications of this subclause) in a company (the first level
company); and
(b) the first level company holds the same type of direct control interest
in another company (the second level company);
the person is taken to hold that type of direct control interest in the
second level company equal to the percentage worked out using the
formula:
where:
first level percentage means the percentage of the direct
control interest held by the person in the first level company.
second level percentage means the percentage of the direct
control interest held by the first level company in the second level
company.
(6) In determining, for the purposes of subsection 27(2) or subparagraph
40(b)(ii), the total of the stakes of a particular type that a group of foreign
persons holds in a FLIC, if:
(a) a foreign company (the first company) holds that type of
direct control interest in the FLIC; and
(b) in a case where that interest is held because of subclause
(5)—that interest was not worked out under that subclause on the basis
that one or more foreign companies were interposed between the first company and
the FLIC; and
(c) apart from this subclause, a foreign person other than the first
company would be taken under subclause (5) to hold that type of direct control
interest in the FLIC equal to a particular percentage; and
(d) the direct control interest mentioned in paragraph (c) was worked out
under subclause (5) directly or indirectly by reference to the direct control
interest mentioned in paragraph (a);
the direct control interest mentioned in paragraph (c) is not to be
counted.
(7) For the purposes of subclause (6), a foreign company is
a company that is a foreign person.
(1) For the purposes of the ownership provisions:
(a) a person is taken to hold a substantial interest in a
trust estate if the person, alone or together with an associate or associates,
holds a beneficial interest in not less than 33% of the corpus or income of the
trust estate; and
(b) 2 or more persons are taken to hold an aggregate substantial
interest in a trust estate if the persons, together with an associate or
associates, hold, in the aggregate, beneficial interests in not less than 33% of
the corpus or income of the trust estate.
(2) For the purposes of subclause (1), if, under the terms of a trust, a
trustee has a power or discretion as to the distribution of the income or corpus
of the trust estate to beneficiaries, each beneficiary is taken to hold a
beneficial interest in the maximum percentage of income or corpus of the trust
estate that the trustee is empowered to distribute to that
beneficiary.