Co-operatives National Law Application Act 2013
204Certain financial accommodation to officers prohibited
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204 Certain financial accommodation to officers prohibited
(1) An officer of a co-operative who is not a director of the co-operative must not obtain financial accommodation from the co-operative other than:
(a) with the approval of a majority of the directors; or
(b) under a scheme about providing financial accommodation to officers that has been approved by a majority of the directors.
(2) For the purposes of this section, financial accommodation is taken to be obtained by an officer of a co-operative if it is obtained by:
(a) a proprietary company in which the officer is a shareholder or director; or
(b) a trust of which the officer is a trustee or beneficiary; or
(c) a trust of which a corporation is trustee if the officer is a director or other officer of the corporation.
(3) A co-operative must not give financial accommodation to an officer of the co-operative if:
(a) by giving the financial accommodation, the officer would contravene this section; and
(b) the co-operative knows or should reasonably know of the contravention.
Maximum penalty (for subsection (3)): $50,000.