18.Division 2 – Disclosure of matters involving material personal interest
Division 2 – Disclosure of matters involving material personal interest
Director’s duty to inform other directors of material personal interest when conflict arises.
A. A director of a company who has a material personal interest in a matter that relates to the affairs of the company must give notice to other directors.
B. The director does not need to give notice of an interest under subsection(1) if the interest arises:
a. Because the director is the member of the company and is held in common with other members of the company
b. In relation to the director’s remuneration as a director of the company
c. 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
d. Merely because a director is a guarantor or has given an indemnity or security for all or part of a loan to the company.
e. Merely because a director has a subrogation in relation to a guarantee or indemnity
f. 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
g. 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.
C. The notice required under this section must give details of the nature and extent of interest and the relation of the interest to the affairs of the company. The details must be recorded in the minutes of the meeting.
D. Directors may give other directors standing notice about an interest. (Section 192)
E. The director must ensure that the nature and extent of the interest disclosed in the standing notice is recorded in the minutes of the meeting at which the standing notice is given or tabled.
If a director of a proprietary company has a material personal interest in a matter that relates to the affairs of the company
a) Under section 191 the director discloses the nature and extent of the interest and its relation to the affairs of the company at a meeting of the directors
b) The interest is one that does not need to be disclosed under section 191,
c) The director may vote on matters that relate to the interest
d) The director may retain benefits under the transaction even though the director has the interest and
e) The company cannot avoid the transaction merely because of the existence of the interest
Effect of contravention by director:
a) A condition attached to a declaration or order made my ASIC under section 196