Commonwealth Repealed Acts

This legislation has been repealed.

CORPORATIONS LAW- SECT 191

Material personal interest—director's duty to disclose

 
Director's duty to notify other directors of material personal
interest when conflict arises
 
 
(1)
A director of a
company who has a material personal interest in a matter that relates to the
affairs of the company must give the other directors notice of the interest
unless subsection (2) says otherwise.


(2)
The director does not need to give notice of an interest under
subsection 
(1)
if: 
 
 

(a)
the interest: 

 
 
(i)
arises
because the director is a member of the company and is held in common with the
other members of the company; or

(ii)
arises in relation to the director's remuneration as a director
of the company; or

(iii)
relates to a contract the company is proposing to enter into
that is subject to approval by the members and will not impose any obligation
on the company if it is not approved by the members; or

(iv)
arises merely because the director is a guarantor or has given
an indemnity or security for all or part of a loan (or proposed loan) to the
company; or

(v)
arises merely because the director has a right of subrogation in
relation to a guarantee or indemnity referred to in subparagraph (iv);
or

(vi)
relates to a contract that insures, or would insure, the
director against liabilities the director incurs as an officer of the company
(but only if the contract does not make the company or a related body
corporate the insurer); or

(vii)
relates to any payment by the company or a related body
corporate in respect of an indemnity permitted under section 199A or any
contract relating to such an indemnity; or

(viii)
is in a contract, or proposed contract, with, or for the
benefit of, or on behalf of, a related body corporate and arises merely
because the director is a director of the related body corporate; or


 
 
(b)
the company is
a proprietary company and the other directors are aware of the nature and
extent of the interest and its relation to the affairs of the company;
or

(c)
all the following conditions are satisfied: 

 
 
(i)
the
director has already given notice of the nature and extent of the interest and
its relation to the affairs of the company under subsection (1)

(ii)
if a person who was not a director of the company at the time
when the notice under subsection (1) was given is appointed as a director of
the company—the notice is given to that person

(iii)
the nature or extent of the interest has not materially
increased above that disclosed in the notice; or 

 
 
(d)
the director
has given a standing notice of the nature and extent of the interest under
section 192 and the notice is still effective in relation to the interest.


 
 Note: Subparagraph
(c)(ii)—the notice may be given to the person referred to in this
subparagraph by someone other than the director to whose interests it relates
(for example, by the secretary). 


 
 
(3)
The notice required by subsection (1) must:
 
 
 
(a)
give details of:


 
 
(i)
the
nature and extent of the interest; and

(ii)
the relation of the interest to the affairs of the company; and


 
 
(b)
be given at a
directors' meeting as soon as practicable after the director becomes aware of
their interest in the matter. 

 
The details must be recorded in the minutes of the meeting.
Effect of contravention by director
 
 
(4)
A
contravention of this section by a director does not affect the validity of
any act, transaction, agreement, instrument, resolution or other thing. 

 
Section does not apply to single director proprietary company
 
(5)
This section does not apply to a proprietary company
that has only 1 director.