---
title: "Screen whether a company may financially assist a share acquisition"
url: "https://ailawframework.com/practice/mergers-and-acquisitions-private-equity/screen-whether-a-company-may-financially-assist-a-share-acquisition"
type: "task"
site: "AI Law Framework"
id: "A2-TM20261022-14"
practice_area: "Mergers & Acquisitions / Private Equity"
tier: "yellow"
lawyer_review: "required"
last_reviewed: "2026-10-22"
---

# Screen whether a company may financially assist a share acquisition

> Record the company, the shares or units, and whether the acquisition is of shares in the company or in a holding company.…

Canonical page: https://ailawframework.com/practice/mergers-and-acquisitions-private-equity/screen-whether-a-company-may-financially-assist-a-share-acquisition  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Mergers & Acquisitions / Private Equity](https://ailawframework.com/practice/mergers-and-acquisitions-private-equity.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| 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 / versions | 1 jurisdiction versions below |

## Checking plan

**Source-by-source verification**

Trace relied-on content to independent sources and check for relevant material the output has missed.

- What the AI does: 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 does: 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.
- Who reviews: Responsible lawyer with competence in the matter
- Basis: Practical workflow informed by the linked primary sources; the traffic light and working checks are editorial guidance, not a court classification.
- Why: The level reflects what the work is, the consequence of an error, and how much of the output the lawyer must independently re-derive.

## Checks the lawyer makes

1. 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.
2. 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.
3. 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.
4. Section 260C is the exemption gate. It was not opened. Do not describe an exemption.
5. Subsection 260D(3) is named for criminal liability of a person dishonestly involved. It was not opened. Do not state an offence.

## Notes

- 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.

## Sources

- [Corporations Act 2001 s 260A, financial assistance for acquiring shares](https://classic.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s260a.html) (checked 2026-10-22)

## Jurisdiction versions

| Jurisdiction | Level |
| --- | --- |
| [United States](https://ailawframework.com/practice/mergers-and-acquisitions-private-equity/screen-whether-a-company-may-financially-assist-a-share-acquisition/united-states.md) | Yellow |

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*