Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 202

202. Where any shares in a company are issued for the purpose of raising money
to defray the expenses of the construction of any works or buildings or the
provision of any plant that cannot be made profitable for a long period, the
company may pay interest on so much of that share capital as is for the time
being paid up and charge the interest so paid to capital as part of the
construction or provision, but:

   (a)  no such payment shall be made unless it is:

        (i)    authorised by the articles of the company or by special
               resolution; and

        (ii)   approved by the Court;

   (b)  before approving any such payment, the Court may, at the expense of
        the company, appoint a person to inquire and report as to the
        circumstances of the case, and may require the company to give
        security for the payment of the costs of the inquiry;

   (c)  the payment shall be made for such period only as is determined by the
        Court, but that period shall not in any case extend beyond a period of
        12 months after the works or buildings have been completed or the
        plant has been provided; (d) the rate of interest shall not exceed 8%
        per annum or, if another rate is prescribed, that other rate; and

   (e)  the payment of the interest does not operate as a reduction of the
        amount paid up on the shares in respect of which it is paid.