198Indemnification and exemption of officer or auditor

#### 198 Indemnification and exemption of officer or auditor 198 Indemnification and exemption of officer or auditor > > (1) Exemptions not allowed > > > > (cf Corporations Act s 199A (1)) > > > > A co-operative or a related corporation must not exempt a person (whether directly or through an interposed entity) from a liability to the co-operative incurred as an officer or auditor of the co-operative. > > > (2) When indemnity for liability (other than for legal costs) not allowed > > > > (cf Corporations Act s 199A (2)) > > > > A co-operative or a related corporation must not indemnify a person (whether by agreement or by making a payment and whether directly or through an interposed entity) against any of the following liabilities incurred as an officer or auditor of the co-operative— > > > > > (a) a liability owed to the co-operative or a related corporation; > > > > > (b) a liability that is owed to someone other than the co-operative or a related corporation and did not arise out of conduct in good faith. > > > > This subsection does not apply to a liability for legal costs. > > > (3) When indemnity for legal costs not allowed > > > > (cf Corporations Act s 199A (3)) > > > > A co-operative or related corporation must not indemnify a person (whether by agreement or by making a payment and whether directly or through an interposed entity) against legal costs incurred in defending an action for a liability incurred as an officer or auditor of the co-operative if the costs are incurred— > > > > > (a) in defending or resisting proceedings in which the person is found to have a liability for which they could not be indemnified under subsection (2); or > > > > > (b) in defending or resisting criminal proceedings in which the person is found guilty; or > > > > > (c) in defending or resisting proceedings brought by the Registrar or a liquidator for a court order if the grounds for making the order are found by the court to have been established; or > > > > > (d) in connection with proceedings for relief to the person under this Law in which the court denies the relief. > > > > Paragraph (c) does not apply to costs incurred in responding to actions taken by the Registrar or a liquidator as part of an investigation before commencing proceedings for the court order. > > > (4) Meaning of outcome of proceedings > > > > (cf Corporations Act s 199A (4)) > > > > For the purposes of subsection (3), the outcome of proceedings is the outcome of the proceedings and any appeal in relation to the proceedings.