In a media release issued on 4 September 2009, the Assistant Treasurer, Senator the Nick Sherry, announced the release of Exposure Draft legislation and explanatory material to improve the company loss recoupment rules in Australia.
These laws implement changes to the company loss recoupment rules that will improve the operation of the "continuity of ownership test" where a company has an unfixed share structure. The proposed amendments will allow a company which fails the continuity of ownership test because it has shares with unequal rights to dividends, capital distributions or voting power to reapply the test by disregarding debt interests and secondary classes of shares. If the company still fails, the test can be further applied by fixing the dividend and capital rights of the principal class of shares.
Technical amendments will also be made to modify the definition of voting power and clarify the operation of the same business test for consolidated groups.
The closing date for submissions is Friday 2 October 2009.
For a copy of the Minister's media release, No 2009/044, 4 September 2009, go here
For a copy of the Exposure Draft and draft Explanatory Memorandum, go here