Screen whether a company may financially assist a share acquisition
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- Record the company, the shares or units, and whether the acquisition is of shares in the company or in a holding company. Record which of the three gates the lawyer marks: no material prejudice, shareholder approval under section 260B, or an exemption under section 260C. Do not decide material prejudice and do not list exemptions.
- What the lawyer must review
- The lawyer decides whether the assistance materially prejudices the company, its shareholders, or its ability to pay its creditors, and which gate in section 260A is relied on. Section 260C was not opened.
- Written for / version
- US
Open a jurisdiction version of this task to see which instruments apply: US
Who does what
| Role | What they do |
|---|---|
| Assistance | Record the company, the shares or units, and whether the acquisition is of shares in the company or in a holding company. Record which of the three gates the lawyer marks: no material prejudice, shareholder approval under section 260B, or an exemption under section 260C. Do not decide material prejudice and do not list exemptions. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Section 260A(1) allows financial assistance to acquire shares, or units of shares, in the company or a holding company only if one of the three gates is met.
- The prejudice gate is that the assistance does not materially prejudice the interests of the company or its shareholders, or the company's ability to pay its creditors. The tool does not make that judgment.
- Assistance may be given before or after the acquisition, may be the payment of a dividend, and covers an acquisition by issue, transfer, or any other means.
- Section 260C is the exemption gate. It was not opened. Do not describe an exemption.
- Subsection 260D(3) is named for criminal liability of a person dishonestly involved. It was not opened. Do not state an offence.
Sources
These are suggested working checks. Confirm the required checking with the responsible lawyer before work starts; the checking approach does not establish permission to use AI.