C2004A01402 — Foreign Acquisitions and Takeovers Act 1975

1 Short title This Act may be cited as the Foreign Acquisitions and Takeovers Act 1975 . 2 Commencement This Act shall come into operation on a date to be fixed by Proclamation. 3 Simplified outline of this Act This Act deals with certain actions to acquire interests in securities, assets or Australian land, and actions taken in relation to entities (being corporations and unit trusts) and businesses, that have a connection to Australia. These actions are called significant actions. For an action to be a significant action, the action must in most cases result in a change in control involving a foreign person or be taken by a foreign person. This Act also deals with actions taken by persons that have, or may have, implications for Australia’s national security. These actions may or may not be significant actions. Actions relating to a national security business or national security land are notifiable national security actions. If an action is a reviewable national security action, or a significant action that is not a notifiable action or a notifiable national security action, the Treasurer may review the action if the Treasurer considers that the action may pose a national security concern. If a person proposes to take or has taken an action, the Treasurer has power to do one or more of the following: (a) decide that the Commonwealth has no objection to the action; (b) impose conditions on the action; (c) prohibit the action; (d) require the action to be undone (for example, by requiring the disposal of an interest that has been acquired). Offences and civil penalties apply for failing to comply with: (a) an order made prohibiting an action, or requiring an action to be undone; or (b) a condition imposed on an action. Significant actions that are notifiable actions, and notifiable national security actions, must generally be notified to the Treasurer before the actions can be taken. Offences and civil penalties may apply if a notifiable action is taken without a notice having been given. Broadly, if a notice has been given stating that a significant action is proposed to be taken, the action must not be taken before the end of a specified period (generally of 40 days, or an additional period of up to 90 days from the registration of an interim order). Fees are payable in relation to applications and orders made, and notices and notifications given, under this Act. A person must make and keep records for the purposes of this Act, including in relation to significant actions and notifiable actions. Information that is obtained for the purposes of this Act (called protected information) may be disclosed only for certain purposes. A person who obtains, uses or discloses protected information other than as authorised by this Act may commit an offence. The Register of Foreign Ownership of Australian Assets is kept under Part 7A. The Register records certain actions relating to interests acquired, held or disposed of by foreign persons. A foreign person who takes such an action (which may or may not be a significant action or a notifiable action, or otherwise covered by this Act) must give a register notice to the Registrar. In some circumstances, other people must also give notices to the Register. A civil penalty applies to a failure to give a notice under Part 7A. 4 Dictionary of definitions In this Act: 6 month period has the meaning given by subsection 113(3). acquire an interest of a specified percentage: (a) in a business—has the meaning given by section 19A; and (b) in an entity—has the meaning given by section 20. acquisition of property has the same meaning as in paragraph 51(xxxi) of the Constitution. aggregate interest of a specified percentage in an entity has the meaning given by subsection 17(2). aggregate substantial interest : 2 or more persons hold an aggregate substantial interest in an entity or trust if: (a) for an entity—the persons hold an aggregate interest of at least 40% in the entity; or (b) for a trust (including a unit trust)—the persons, together with any one or more associates of any of them hold, in the aggregate, beneficial interests in at least 40% of the income or property of the trust. Note: See also sections 17 (meanings of interest and aggregate interest of a specified percentage in an entity) and 18 (rules relating to determining percentages of interests in entities). agribusiness : an Australian entity or Australian business is an agribusiness in the circumstances prescribed by the regulations. agricultural land means land in Australia that is used, or that could reasonably be used, for a primary production business. Note: The regulations may provide that land of a specified kind is not agricultural land (see subsection 37(3)). agricultural land corporation has the meaning prescribed by the regulations. agricultural land trust has the meaning prescribed by the regulations. ART Act means the Administrative Review Tribunal Act 2024 . asset includes an interest in an asset. associate has the meaning given by section 6. Australia , when used in a geographical sense, includes the external Territories. Australian business has the meaning given by section 8. Australian corporation means a corporation formed in Australia. Australian entity means an Australian corporation or an Australian unit trust. Australian land means agricultural land, commercial land, residential land or a mining or production tenement. Australian land corporation has the meaning prescribed by the regulations. Australian land trust has the meaning prescribed by the regulations. Australian subsidiary of a foreign entity means an Australian entity that is a subsidiary of the foreign entity. Note: For the definition of subsidiary , see section 21. Australian unit trust means a unit trust: (a) the trustee of which holds relevant Australian assets; or (b) the trustee of which carries on an Australian business; or (c) the central management and control of which is in Australia; or (d) in which one or more persons who are ordinarily resident in Australia hold more than 50% of the beneficial interests in the income or property of the unit trust; or (e) that is listed for quotation in the official list of a stock exchange in Australia. Australian water access entitlement means a perpetual or ongoing entitlement, by or under a law of a State or Territory, to exclusive access to a share of the water resources of an area in the State or Territory. authorised officer means a person appointed as an authorised officer under subsection 101E(1). business includes any activity carried on by: (a) the Commonwealth, a State, a Territory or a local governing body; or (b) a body corporate established for a public purpose by or under a law of the Commonwealth, a State or a Territory; or (c) an entity wholly owned by the Commonwealth, a State, a Territory, a local governing body or a body corporate covered by paragraph (b). change in control has the meaning given by section 54. civil penalty provision has the same meaning as in the Regulatory Powers Act. commercial land means land in Australia or the seabed of the offshore area, other than land: (a) used wholly and exclusively for a primary production business; or (b) on which there is at least one dwelling (except commercial residential premises); or (c) on which the number of dwellings (except commercial residential premises) that could reasonably be built is less than the number prescribed by the regulations for the purposes of subparagraph (a)(ii) of the definition of residential land in this section. commercial residential premises has the same meaning as in the A New Tax System (Goods and Services Tax) Act 1999 . Commonwealth, State or Territory body includes a Department of State, or an authority or agency, of the Commonwealth, a State or a Territory. consideration has the meaning prescribed by the regulations. constituent document of an entity or unincorporated limited partnership means any rules or other document constituting or establishing the entity or partnership or governing its activities, and includes: (a) for a corporation—the constitution of the corporation; and (b) for a unit trust—the trust deed for the trust; and (c) for an unincorporated limited partnership—the partnership agreement. contractual water right of a person means a right that the person holds (alone or jointly) under a contract or a deed to all or part of another person’s: (a) registrable water entitlement; or (b) water allocation; or (c) right of a kind specified in the regulations. controls : (a) the voting power—has the meaning given by section 23; and (b) an entity or business—has the meaning given by subsections 54(4) and (5). core Part 3 action means any of the following: (a) a significant action (other than an action mentioned in paragraph (b)); (b) any of the following actions: (i) a notifiable national security action that is not a significant action; (ii) an action in respect of which the Treasurer has given notice under subsection 66A(4); (iii) a reviewable national security action that is notified to the Treasurer. data standards means standards determined by the Registrar under section 130ZZ. debenture includes: (a) debenture stock, bonds and notes; and (b) any other document evidencing or acknowledging indebtedness of an entity, whether or not constituting a charge on the assets of the entity. decision period has the meaning given by subsection 77(8). determines the policy of a business of exploiting a mining or production tenement has a meaning affected by section 24. development means one or more multi ‑ storey buildings if: (a) the buildings will be, are being or have been built; and (b) the buildings are or were under one development approval; and (c) the number of independent self ‑ contained dwellings (other than townhouses) that the buildings contain or will contain is at least the number prescribed by the regulations. direct interest has the meaning prescribed by the regulations. director includes any person occupying the position of director (however described) of a corporation. eligible Registrar appointee means: (a) an Agency (within the meaning of the Public Service Act 1999 ); or (b) a body, whether incorporated or not, established for a public purpose by or under a law of the Commonwealth; or (c) a person: (i) holding or performing the duties of an office established by or under a law of the Commonwealth; or (ii) holding an appointment made under a law of the Commonwealth. engage in conduct includes fail or refuse to engage in conduct. enters has a meaning affected by section 25. entity means a corporation or a unit trust. established dwelling means a dwelling (except commercial residential premises) on residential land that is not a new dwelling. exempt core Part 3 action means an action which would be a core Part 3 action if an exemption certificate did not relate to the action. exemption certificate means a certificate given under: (a) section 57, 58 or 59; or (b) regulations made for the purposes of section 63. exploration tenement means any of the following: (a) a right (however described) under a law of the Commonwealth, a State or a Territory to recover minerals (such as coal or ore), oil or gas in Australia or from the seabed or subsoil of the offshore area for the purposes of prospecting or exploring for minerals, oil or gas; (b) a right that preserves a right mentioned in paragraph (a); (c) a lease under which the lessee has a right mentioned in paragraph (a) or (b); (d) an interest in a right mentioned in paragraph (a) or (b) or under a lease mentioned in paragraph (c). foreign corporation means a foreign corporation to which paragraph 51(xx) of the Constitution applies. foreign entity means an entity that is not an Australian entity. foreign government means an entity (within the ordinary meaning of the term) that is: (a) a body politic of a foreign country; or (b) a body politic of part of a foreign country; or (c) a part of a body politic mentioned in paragraph (a) or (b). foreign government investor has the meaning prescribed by the regulations. foreign person means: (a) an individual not ordinarily resident in Australia; or (b) a corporation in which an individual not ordinarily resident in Australia, a foreign corporation or a foreign government holds a substantial interest; or (c) a corporation in which 2 or more persons, each of whom is an individual not ordinarily resident in Australia, a foreign corporation or a foreign government, hold an aggregate substantial interest; or (d) the trustee of a trust in which an individual not ordinarily resident in Australia, a foreign corporation or a foreign government holds a substantial interest; or (e) the trustee of a trust in which 2 or more persons, each of whom is an individual not ordinarily resident in Australia, a foreign corporation or a foreign government, hold an aggregate substantial interest; or (f) a foreign government; or (g) any other person, or any other person that meets the conditions, prescribed by the regulations. Note: In certain circumstances, an associate of a foreign person may be taken to be a foreign person even if the associate is not a foreign person (see subsection 54(7)). general meeting of an entity or unincorporated limited partnership means: (a) for a corporation—a general meeting of the corporation; or (b) for a unit trust—a meeting of unit holders of the trust that is held in accordance with a constituent document of the trust; or (c) for an unincorporated limited partnership—a meeting of partners of the partnership that is held in accordance with a constituent document of the partnership. general partner means a partner of a limited partnership whose liability relating to the partnership is not limited. head has the same meaning as in the Office of National Intelligence Act 2018 . holding entity has the meaning given by subsection 21(4). independent director has the meaning given by section 7. interest : (a) in a security—has the meaning given by section 9; and (b) in an asset—has the meaning given by section 10; and (c) in a trust—has the meaning given by section 11; and (ca) in an unincorporated limited partnership—has the meaning given by section 11A; and (d) in Australian land—has the meaning given by section 12; and (da) in a business—has the meaning given by section 16A; and (e) of a specified percentage in an entity—has the meaning given by section 17; and (f) of a specified percentage in an unincorporated limited partnership—has the meaning given by subsection 17(2A). Note: For other rules relating to interests in a security, asset, trust or Australian land, see sections 13 to 15. interim order means an order made under section 68. just terms has the same meaning as in paragraph 51(xxxi) of the Constitution. land includes: (a) a building (including a new dwelling or an established dwelling) or a part of a building; and (b) subsoil of land. land register means a register kept under a law of the Commonwealth, a State or a Territory in which interests (within the ordinary meaning of the term) in Australian land are registered. lease includes a sublease. limited partner means a partner of a limited partnership whose liability relating to the partnership is limited. limited partnership means an association of persons that: (a) was formed solely for the purposes of becoming a partnership where the liability of at least one partner relating to the partnership is limited; and (b) is recognised under a law of the Commonwealth, a State, a Territory, a foreign country or a part of a foreign country as such a partnership. long term lease means a lease granted by the Commonwealth, a State or a Territory for a term (including any extension or renewal) that is reasonably likely, at the time the lease is granted, to exceed 20 years. mining or production tenement means: (a) a right (however described) under a law of the Commonwealth, a State or a Territory to recover minerals (such as coal or ore), oil or gas in Australia or from the seabed or subsoil of the offshore area, other than a right to recover minerals, oil or gas for the purposes of prospecting or exploring for minerals, oil or gas; or (b) a right that preserves a right mentioned in paragraph (a); or (c) a lease under which the lessee has a right mentioned in paragraph (a) or (b); or (d) an interest in a right mentioned in paragraph (a) or (b) or under a lease mentioned in paragraph (c). national intelligence community has the same meaning as in the Office of National Intelligence Act 2018 . national security business has the meaning prescribed by the regulations. national security land has the meaning prescribed by the regulations. near ‑ new dwelling acquisition has the meaning given by subsection 113(4A). near ‑ new dwelling interest has the same meaning as in regulations made for the purposes of section 63 (exemption certificates provided for by the regulations). new dwelling means a dwelling (except commercial residential premises) that will be, is being or has been built on residential land and that: (a) has not been previously sold as a dwelling; and (b) either: (i) has not been previously occupied; or (ii) if the dwelling is contained in a development and the dwelling was sold by the developer of the development—has not been previously occupied for more than 12 months in total. Note: For when a dwelling is sold, see subsections 15(4) and (5). new dwelling acquisition has the meaning given by subsection 113(4). no objection notification means: (a) a written notification given under subsection 74(2) and includes such a notification as varied under section 74, 76 or 79G; or (b) a written notification given under subsection 75(2) and includes such a notification as varied under section 76 or 79G. notice imposing conditions means a written notice given under subsection 79H(1) and includes such a notice as varied under section 79J, 79P or 79Q. notifiable action has the meaning given by Division 3 of Part 2. notifiable national security action has the meaning given by section 55B. occupation day has the meaning given by section 115C. officer of an entity includes the following: (a) for a corporation—a director of the corporation; (b) for a unit trust: (i) the trustee of which is an individual—the trustee; and (ii) the trustee of which is a corporation—a director of the trustee; and (iii) in any case—any other individual involved in the central management and control of the trust; (c) a person who is, or a person in a group of persons who are, in a position to determine the investments or policy of the entity or a trustee of the entity; (d) a person who makes, or participates in making, decisions that affect the whole, or a substantial part of, the business of the entity; (e) a person who has the capacity to affect significantly the financial standing of the entity; (f) a receiver and manager of any part of the business of the entity appointed under a power contained in any instrument; (g) an administrator of the entity; (h) an administrator under a deed of company arrangement executed by the entity; (i) a liquidator of the entity appointed in a voluntary winding up. offshore area means: (a) the exclusive economic zone of Australia; or (b) the continental shelf of Australia. ordinarily resident has a meaning affected by section 5. potential voting power has the meaning given by section 22. primary production business has the same meaning as in the Income Tax Assessment Act 1997 . proposes : (a) to acquire an interest in securities, assets or Australian land—has a meaning affected by subsection 16(1); and (b) to enter or terminate an agreement—has a meaning affected by subsection 16(2). protected information has the meaning given by section 120. Register means the Register of Foreign Ownership of Australian Assets kept under section 130S. Register commencement day has the meaning given by section 130Q. registered circumstance , in relation to a person, means a registered circumstance that exists in relation to the person under a provision of Division 3 of Part 7A (including regulations made for the purposes of subsection 130ZU(1)). register notice means a notice that a person gives or is required to give to the Registrar under a provision of Division 3 of Part 7A (including regulations made for the purposes of subsection 130ZU(1)). registrable event day : (a) in relation to a register notice required to be given under a provision of Division 3 of Part 7A (other than subsection 130ZU(2))—means the day specified by the provision as the registrable event day for the notice; and (b) in relation to a register notice required to be given under subsection 130ZU(2)—has the meaning given by regulations made for the purposes of subsection 130ZU(1). Note: This definition is affected by section 130X (interests acquired by entering agreements etc.). registrable water entitlement has the meaning given by section 26A. registrable water interest means: (a) a registrable water entitlement; or (b) a contractual water right of a person under a contract or deed whose term (including any extension or renewal) after the person starts to hold the right is reasonably likely to exceed 5 years. Registrar means the eligible Registrar appointee appointed under section 130R. Regulatory Powers Act means the Regulatory Powers (Standard Provisions) Act 2014 . relative has the same meaning as in the Income Tax Assessment Act 1997 . relevant Australian assets means: (a) Australian land, including legal and equitable interests (within the ordinary meaning of the term) in such land; or (b) securities in an Australian entity. relevant entity means any of the following: (a) an Australian entity; (b) a foreign corporation: (i) that holds relevant Australian assets; or (ii) that is a holding corporation of one or more Australian corporations; (c) a holding entity of such a foreign corporation or of an Australian unit trust. Note: A holding entity mentioned in paragraph (c) may be a foreign corporation of a kind that is not mentioned in paragraph (b). residential land : (a) means land in Australia if: (i) there is at least one dwelling on the land; or (ii) the number of dwellings that could reasonably be built on the land is less than the number prescribed by the regulations; and (b) does not include land: (i) used wholly and exclusively for a primary production business; or (ii) on which the only dwellings are commercial residential premises. residential land acquisition means a notifiable action to acquire an interest in residential land. residential land (near ‑ new dwelling interests) certificate has the same meaning as in regulations made for the purposes of section 63 (exemption certificates provided for by the regulations). residentially occupied has the meaning given by section 115C. reviewable decision means a decision of the Treasurer under Division 3 of Part 3 that a national security risk exists in relation to an action. reviewable national security action has the meaning given by Division 4B of Part 2. scheme means: (a) any agreement, understanding, promise or undertaking: (i) whether express or implied; and (ii) whether or not enforceable, or intended to be enforceable, by legal proceedings; and (b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise. Secretary means the Secretary of the Department. security means a share in a corporation or a unit in a unit trust. senior officer of an entity means an officer of the entity under any of paragraphs (a) to (e) of the definition of officer in this section, except an independent director of the entity. sensitive business has the meaning given by section 26. separate government entity means an individual, corporation or corporation sole that: (a) is an agency or instrumentality of a foreign country or a part of a foreign country; and (b) is not part of the body politic of a foreign country or of a part of a foreign country. share of a corporation means a share in the share capital of the corporation, and includes: (a) stock into which all or any of the share capital of the corporation has been converted; and (b) except in section 9, an interest in such a share or in such stock. significant action has the meaning given by Division 2 of Part 2. significant agreement with an Australian business is an agreement relating to: (a) the leasing of, the letting on hire of, or the granting of other rights to use, assets of the business; or (b) the participation by a person in the profits or central management and control of the business. starts a national security business has the meaning given by section 8A. starts an Australian business has the meaning given by section 8B. subsidiary has the meaning given by subsections 21(1) to (3). substantial interest : a person holds a substantial interest in an entity, trust or unincorporated limited partnership if: (a) for an entity or unincorporated limited partnership—the person holds an interest of at least 20% in the entity or partnership; or (b) for a trust (including a unit trust)—the person, together with any one or more associates, holds a beneficial interest in at least 20% of the income or property of the trust. Note 1: See also sections 17 (meanings of interest and aggregate interest of a specified percentage in an entity or unincorporated limited partnership) and 18 (rules relating to determining percentages of interests in entities). Note 2: For when a person acquires a substantial interest in an entity, see section 20. temporary resident means an individual who: (a) holds a temporary visa under the Migration Act 1958 that allows the individual to remain in Australia for a continuous period of more than 12 months (disregarding the amount of that period remaining); or (b) meets the following conditions: (i) the individual is residing in Australia; (ii) the individual has applied for a permanent visa under the Migration Act 1958 ; (iii) the individual holds a bridging visa under that Act that allows the individual to remain in Australia until the application has been finally determined; or (c) meets the conditions prescribed by the regulations. this Act includes the regulations. threshold test is met has the meaning given by Subdivision B of Division 4 of Part 2. tier 1 infringement notice has the meaning given by subsection 101(1). tier 2 infringement notice has the meaning given by subsection 101(2). tier 3 infringement notice has the meaning given by subsection 101(4). total asset value for an entity has the meaning prescribed by the regulations. total issued securities value for an entity has the meaning prescribed by the regulations. Tribunal means the Administrative Review Tribunal. unpaid vacancy fees has the meaning given by section 115K. unpaid vacancy penalties has the meaning given by section 115K. vacancy fee has the meaning given by section 115C. vacancy year has the meaning given by section 115C. voting power has the meaning given by subsection 22(1). water allocation means the specific volume of water allocated to an Australian water access entitlement in a given period. water resource means: (a) surface water or ground water; or (b) a watercourse, lake, wetland or aquifer (whether or not it currently has water in it). An expression used in this definition that is also used in the Water Act 2007 has the same meaning as in that Act. 5 Meaning of ordinarily resident (1) An individual who is not an Australian citizen is ordinarily resident in Australia at a particular time if and only if: (a) the individual has actually been in Australia during 200 or more days in the period of 12 months immediately preceding that time; and (b) at that time: (i) the individual is in Australia and the individual’s continued presence in Australia is not subject to any limitation as to time imposed by law; or (ii) the individual is not in Australia but, immediately before the individual’s most recent departure from Australia, the individual’s continued presence in Australia was not subject to any limitation as to time imposed by law. (2) Without limiting paragraph (1)(b), an individual’s continued presence in Australia is subject to a limitation as to time imposed by law if the individual is an unlawful non ‑ citizen within the meaning of the Migration Act 1958 . 6 Meaning of associate (1) Each of the following persons is an associate of a person: (a) any relative of the person; (b) any person with whom the person is acting, or proposes to act, in concert in relation to an action to which this Act may apply; (c) any person with whom the person carries on a business in partnership; (d) any entity of which the person is a senior officer; (e) if the person is an entity: (i) any holding entity of the entity; or (ii) any senior officer of the entity; (f) any entity whose senior officers are accustomed or under an obligation (whether formal or informal) to act in accordance with the directions, instructions or wishes of: (i) the person; or (ii) if the person is an entity—the senior officers of the person; (g) an entity if the person is accustomed or under an obligation (whether formal or informal) to act in accordance with the directions, instructions or wishes of: (i) the entity; or (ii) the senior officers of the entity; (h) any corporation in which the person holds a substantial interest; (i) if the person is a corporation—a person who holds a substantial interest in the corporation; (j) the trustee of a trust in which the person holds a substantial interest; (k) if the person is the trustee of a trust—a person who holds a substantial interest in the trust; (l) if the person is a foreign government, a separate government entity or a foreign government investor in relation to a foreign country (or a part of a foreign country): (i) any other person that is a foreign government in relation to that country (or any part of that country); or (ii) any other person that is a separate government entity in relation to that country (or any part of that country); or (iii) any other foreign government investor in relation to that country (or any part of that country). Note: A person may be taken to be an associate under section 79. Additional associates in relation to interests in residential land (2) For an action taken relating to an interest in residential land (within the meaning of any of the paragraphs of subsection 12(1)), each of the following persons is also an associate of a person: (a) an entity that is not listed for quotation in the official list of a stock exchange if a relative of the person: (i) holds a substantial interest in the entity; or (ii) is a senior officer of the entity; (b) if the person is an entity (the first entity )—another entity (the second entity ) if: (i) an individual holds a substantial interest in the first entity or is a senior officer of the first entity; and (ii) a relative of the individual holds a substantial interest in the second entity or is a senior officer of the second entity; and (iii) the first entity and the second entity are not, and are not a subsidiary or trustee of an entity, listed for quotation in the official list of a stock exchange. Persons who are not associates (3) Despite subsections (1) and (2), a person is not an associate of another person merely because: (a) one gives advice to the other, or acts on the other’s behalf, in the proper performance of the functions attaching to a professional capacity or a business relationship; or (b) one, a client, gives specific instructions to the other, whose ordinary business includes dealing in financial products (within the meaning of Division 3 of Part 7.1 of the Corporations Act 2001 ), to acquire financial products on the client’s behalf in the ordinary course of that business; or (c) one had sent, or proposes to send, to the other an offer under a takeover bid (within the meaning of that Act) for securities held by the other; or (d) one has appointed the other, otherwise than for valuable consideration (within the ordinary meaning of the term) given by the other or by an associate of the other, to vote as a proxy or representative; or (e) both of the following apply: (i) one provides independent services as a trustee of a trust to the other who is a beneficiary of the trust; (ii) the trustee is licensed to provide those services under a law of the Commonwealth, a State, a Territory, a foreign country or a part of a foreign country; or (f) one holds a substantial interest in a registered scheme (within the meaning of the Corporations Act 2001 ) and the other is the responsible entity of the scheme (within the meaning of that Act); or (fa) one holds a substantial interest in a notified foreign passport fund (within the meaning of the Corporations Act 2001 ) and the other is the operator of the fund (within the meaning of that Act); or (g) both are partners of one of the following kinds of partnerships: (i) a partnership of actuaries or accountants; (ii) a partnership of medical practitioners; (iii) a partnership of patent attorneys; (iv) a partnership of sharebrokers or stockbrokers; (v) a partnership of trade mark attorneys; (vi) a partnership that has as its primary purpose collaborative scientific research, and includes at least one university and one private sector participant (whether or not it also includes government agencies or publicly funded research bodies); (vii) a partnership of architects; (viii) a partnership of pharmaceutical chemists or veterinary surgeons; (ix) a partnership of legal practitioners; or (h) both of the following apply: (i) both are partners of a limited partnership; (ii) at least one of them is a limited partner that is not in a position (whether alone or together with one or more persons who are, or would apart from this paragraph be, that partner’s associates) to participate in the management and control of the partnership, or of any of the general partners of the partnership, in relation to any matter. 7 Meaning of independent director Listed entities (1) A person is an independent director of an entity if: (a) the person is: (i) a director of the entity; or (ii) for a unit trust—a director of a trustee of the entity; and (b) the entity is listed for quotation in the official list of a stock exchange (whether or not in Australia); and (c) the director meets the criteria of that stock exchange for a director to be independent (whether or not the criteria are binding). Note: If the stock exchange does not have criteria for a director to be independent, a director of an entity listed for quotation in the official list of the stock exchange is not an independent director. Entities whose securities are stapled (2) A person is an independent director of an entity (the first entity ) if: (a) the person is a director of the first entity and another entity; and (b) the securities in the first entity can only be transferred together with securities in the other entity; and (c) the first entity is not listed for quotation in the official list of a stock exchange, but the other entity is (whether or not in Australia); and (d) the director meets the criteria of that stock exchange for a director to be independent (whether or not the criteria are binding). 8 Meaning of Australian business (1) An Australian business is a business that is carried on wholly or partly in Australia in anticipation of profit or gain. (2) For the purposes of this Act, a person who has an interest in a mining or production tenement is, as a result of having that interest, taken to carry on a business in Australia of exploiting that tenement in anticipation of profit or gain. The tenement is taken to be an asset of that business. (3) Without limiting subsection (1), a business is taken to be an Australian business for the purposes of this Act if: (a) the business is carried on wholly or partly in Australia, whether or not in anticipation of profit or gain, by: (i) the Commonwealth, a State, a Territory or a local governing body; or (ii) a body corporate established for a public purpose by or under a law of the Commonwealth, a State or a Territory; or (iii) an entity wholly owned by the Commonwealth, a State, a Territory, a local governing body or a body corporate covered by subparagraph (ii); and (b) the business would, or could, be carried on in anticipation of profit or gain if it were carried on by someone other than: (i) a body referred to in subparagraph (a)(i) or (ii); or (ii) an entity referred to in subparagraph (a)(iii); or (iii) a foreign government; or (iv) a separate government entity. 8A Meaning of starts a national security business (1) A foreign person starts a national security business if the foreign person starts to carry on a national security business. (2) Despite subsection (1), if a foreign person carries on a national security business, the person does not start a national security business merely because the foreign person, alone or together with one or more persons, establishes a new entity: (a) that carries on the same national security business; or (b) for the purposes of acquiring interests in assets of the same national security business. 8B Meaning of starts an Australian business (1) A foreign person starts an Australian business if: (a) the foreign person starts to carry on an Australian business; or (b) for a foreign person who already carries on an Australian business—the business starts a new activity that: (i) is not incidental to an existing activity of the Australian business; and (ii) is within a different Division under the Australian and New Zealand Standard Industrial Classification Codes from the current activities of the Australian business. (2) Despite subsection (1), if a foreign person carries on an Australian business, the person does not start an Australian business merely because the foreign person, alone or together with one or more persons, establishes a new entity: (a) that carries on the same Australian business; or (b) for the purposes of acquiring interests in assets of the same Australian business. 9 Meaning of interest in a security (1) A person holds or acquires an interest in a security if he or she has any legal or equitable interest in that security. Note 1: For other rules relating to interests in securities, see sections 13 to 15. Note 2: See also section 19 (tracing of substantial interests in corporations, trusts and unincorporated limited partnerships). (2) Without limiting subsection (1), a person holds or acquires an interest in a security in an entity if: (a) the person is not the registered holder of the security; and (b) the person is entitled to exercise or control the exercise of a right attached to the security (other than because he or she was appointed as a proxy or representative). (3) In determining whether a person holds or acquires an interest in a security, it is immaterial that the interest cannot be related to a particular security. Issued shares in a corporation (4) A person holds or acquires an interest in the issued shares in a corporation if: (a) all or part of the share capital of the corporation consists of stock; and (b) the person holds an interest in that stock. (5) For the purposes of this Act, the issued shares are taken to have: (a) the same nominal amount as the amount of that stock; and (b) the same rights attached to them as are attached to that stock. Buying ‑ back securities (6) The buying ‑ back of a security in an entity by the entity does not constitute an acquisition by the entity of an interest in a security in the entity. 10 Meaning of interest in an asset A person holds or acquires an interest in an asset if he or she has any legal or equitable interest in that asset. Note 1: For other rules relating to interests in assets, see sections 13 to 15. Note 2: See also section 19 (tracing of substantial interests in corporations, trusts and unincorporated limited partnerships). 11 Meaning of interest in a trust A person holds or acquires an interest in a trust if: (a) the person holds or acquires a beneficial interest in the income or property of the trust; or (b) the person holds or acquires an interest in a unit in a unit trust. Note 1: For other rules relating to interests in trusts, see sections 13 to 15. Note 2: See also section 19 (tracing of substantial interests in corporations, trusts and unincorporated limited partnerships). 11A Meaning of interest in an unincorporated limited partnership A person holds an interest in an unincorporated limited partnership if the person: (a) is in a position to control all or any of the voting power or potential voting power in the partnership; or (b) is entitled to any or all of the distributions of capital, assets or profits of the partnership on the dissolution of the partnership; or (c) is entitled to any or all of the distributions of capital, assets or profits of the partnership otherwise than on the dissolution of the partnership. Note: See also section 19 (tracing of substantial interests in corporations, trusts and unincorporated limited partnerships). 12 Meaning of interest in Australian land (1) An interest in Australian land (however described) is: (a) a legal or equitable interest in Australian land, other than: (i) an interest under a lease or licence or in a unit in a unit trust; or (ii) an interest in an agreement giving a right (known as a profit à prendre) to take something off another person’s land, or to take something out of the soil of that land; or (iii) an interest in an agreement involving the sharing of profits or income from the use of, or dealings in, Australian land; or (b) an interest in a security in an entity that owns Australian land, being a security that entitles the holder to a right to occupy a dwelling of a kind known as a flat or home unit situated on the land; or (c) an interest as lessee or licensee in a lease or licence giving rights to occupy Australian land if the term of the lease or licence (including any extension or renewal) is reasonably likely, at the time the interest is acquired, to exceed 5 years; or (d) an interest in an agreement giving a right of a kind mentioned in subparagraph (a)(ii) if the term of the agreement (including any extension or renewal) is reasonably likely, at the time the interest in the agreement is acquired, to exceed 5 years; or (e) an interest in an agreement involving the sharing of profits or income from the use of, or dealings in, Australian land if the term of the agreement (including any extension or renewal) is reasonably likely, at the time the interest in the agreement is acquired, to exceed 5 years; or (f) an interest in a share in an Australian land corporation or agricultural land corporation; or (g) an interest in a unit in an Australian land trust or agricultural land trust; or (h) if the trustee of an Australian land trust or agricultural land trust is a corporation—an interest in a share in that corporation. Note 1: For other rules relating to interests in Australian land, see sections 13 to 15. Note 2: Australian land may be described as “residential land”, “agricultural land” or “commercial land”, or as “a new dwelling” or “an established dwelling”. (2) An interest is an interest in Australian land even if it is the only interest that exists in the land or other thing concerned. (3) A person acquires an interest in Australian land even if: (a) the person has previously acquired an interest in Australian land; or (b) the interest is an increase in the amount of an existing interest of the person in Australian land. 13 Interests that are remote or subject to restraint etc. A person holds or acquires an interest in a security, asset, trust or Australian land despite: (a) its remoteness; or (b) the manner in which it arose; or (c) the fact that the exercise of a right conferred by the interest is, or is capable of being made, subject to restraint or restriction. 14 Interests held or acquired jointly A person holds or acquires an interest in a security, asset, trust or Australian land even if the person holds or acquires the interest jointly with one or more other persons. 15 Interests acquired by entering agreements or acquiring options (1) For the purposes of this Act, a person is taken (except as provided by subsections (4) and (5)) to acquire an interest in a security, asset, trust or Australian land if the person: (a) enters an agreement to acquire the interest; or (b) either: (i) for an interest in a security, asset or trust—has a right to acquire such an interest under an option; or (ii) for an interest in Australian land—acquires an option to acquire such an interest; or (c) has a right, other than by reason of having an interest under a trust, to have such an interest transferred to himself or herself or to his or her associate. Note: For the definition of enters , see section 25. (2) To avoid doubt, a right mentioned in paragraph (1)(b) or (c) includes a right under an instrument or agreement. (3) Subsections (1) and (2) apply whether or not: (a) the right or option is presently exercisable or exercisable in the future; or (b) the agreement, right or option requires the fulfilment of a condition. Provisions of agreements that are not currently binding (4) Subsection (5) applies for the purposes of the following provisions: (a) Part 4 (notices required for notifiable actions and notifiable national security actions, and may be given of other actions); (b) Part 5 (offences and civil penalties) to the extent that it relates to Part 4; (c) any other provision of this Act to the extent that it relates to the provisions mentioned in paragraph (a) or (b); (d) the definition of new dwelling in section 4 (including to the extent that the definition affects the definition of established dwelling in that section), except in section 95 (acquisition of interests in established dwellings). (5) If: (a) a person proposes to take an action to acquire or sell an interest in a security, asset, trust or Australian land; and (b) the provisions of the agreement to acquire or sell the interest do not become binding on the person until one or more conditions are met; the person takes the action to acquire or sell the interest, and enters the agreement, only when the provisions become binding. Note: As a result of this subsection, the person acquires or sells the interest only when the provisions become binding. If the provisions do not become binding until one or more conditions are met, and one of those conditions is met only when the Treasurer has given an exemption certificate or no objection notification, then the person does not acquire or sell the interest before the Treasurer has given an exemption certificate or no objection notification. 16 Meaning of proposes to take certain action (1) A person proposes to acquire an interest in securities, assets or Australian land if: (a) the person makes an offer to acquire the interest; or (b) the person makes or publishes a statement (however expressed) that expressly or impliedly invites a holder of an interest in securities, assets or Australian land to offer to dispose of an interest in securities, assets or Australian land; or (c) the person takes part in, or proposes to take part in, negotiations with a view to acquiring an interest in securities, assets or Australian land. (2) A person proposes to enter or terminate an agreement if the person takes part in, or proposes to take part in, negotiations with a view to entering or terminating the agreement. (3) This section does not limit the meaning of propose . 16A Meaning of interest of a specified percentage in a business A person holds an interest of a specified percentage in a business if the value of the interests in assets of the business held by the person, alone or together with one or more associates of the person, is that specified percentage of the value of the total assets of the business. Note 1: See also paragraph (a) of the definition of acquire . Note 2: A percentage may be specified by referring to: (a) “20%”; or (b) “any percentage”; or (c) a “direct interest”; or (d) a percentage that a person holds in other assets. 17 Meanings of interest and aggregate interest of a specified percentage in an entity or unincorporated limited partnership Meaning of interest of a specified percentage in an entity (1) A person holds an interest of a specified percentage in an entity if the person, alone or together with one or more associates of the person: (a) is in a position to control at least that percentage of the voting power or potential voting power in the entity; or (b) holds interests in at least that percentage of the issued securities in the entity; or (c) would hold interests in at least that percentage of the issued securities in the entity if securities in the entity were issued or transferred as the result of the exercise of rights of a kind mentioned in paragraph 15(1)(b) or (c). Note 1: See also section 18 (rules relating to determining percentages of interests in entities) and the definition of acquire in section 20. Note 2: A percentage may be specified by referring to: (a) “20%”; or (b) “any percentage”; or (c) a “substantial interest” or a “direct interest”; or (d) a percentage that a person holds in another entity. Meaning of aggregate interest of a specified percentage in an entity (2) Two or more persons (who are not associates of each other) hold an aggregate interest of a specified percentage in an entity if they, together with any one or more associates of any of them: (a) are in a position to control at least that percentage of the voting power or potential voting power in the entity; or (b) hold interests in at least that percentage of the issued securities in the entity; or (c) would hold interests in at least that percentage of the issued securities in the entity if securities in the entity were issued or transferred as the result of the exercise of rights of a kind mentioned in paragraph 15(1)(b) or (c). Meaning of interest of a specified percentage in an unincorporated limited partnership (2A) A person holds an interest of a specified percentage in an unincorporated limited partnership if the person, alone or together with one or more associates of the person: (a) is in a position to control at least that percentage of the voting power or potential voting power in the partnership; or (b) is entitled to at least that percentage of the total distributions of capital, assets or profits of the partnership on the dissolution of the partnership; or (c) is entitled to at least that percentage of the total distributions of capital, assets or profits of the partnership otherwise than on the dissolution of the partnership. Proxies and representatives (3) In determining the percentage of voting power or potential voting power that a person is in a position to control in an entity or unincorporated limited partnership, disregard any votes that he or she controls as a proxy or representative. 18 Rules relating to determining percentages of interests in entities Exercise of future rights (1) Subsection (2) applies if: (a) a person has a right that, if exercised, would result in the person holding an interest in an issued security in the entity; and (b) it cannot be determined at that time (from the right itself or from the circumstances existing at that time) whether the right would be exercised. (2) For the purposes of this Act, in determining the percentage of the interests in the issued securities in the entity that the person holds, or would hold, at a particular time, assume that the right were exercised at that time. Discretionary trusts (3) For the purposes of this Act, if, under the terms of a trust, a trustee has a power or discretion to distribute the income or property of the trust to one or more beneficiaries, each beneficiary is taken to hold a beneficial interest in the maximum percentage of income or property of the trust that the trustee may distribute to that beneficiary. 18A Increasing percentage of interests without acquiring additional interests in securities Effect of increase—person is taken to take an action of acquiring an interest in securities (1) A person is taken to take an action of acquiring an interest in securities in an entity if: (a) the person holds an interest of a particular percentage in the entity; and (b) the percentage interest that the person holds increases without the person acquiring interests in securities in the entity. Note: The combined effect of this subsection and other provisions of this Act may be that the person takes: (a) a significant action because of paragraph 40(2)(a) or (b) or 43(a) or section 44; or (b) a notifiable action because of paragraph 47(2)(a), (b) or (c) or section 48; or (c) a notifiable national security action because of paragraph 55B(1)(c) or (d); or (d) a reviewable national security action because of paragraph 55D(1)(a) or 55F(a). Effect of potential increase—person is taken to propose to take an action of acquiring an interest in securities (2) A person is taken to propose to take an action of acquiring an interest in securities in an entity if: (a) the person holds an interest of a particular percentage in the entity; and (b) there are reasonable grounds to believe that the percentage interest that the person holds may increase without the person acquiring interests in securities in the entity. (3) Paragraph (2)(b) applies whether or not any person actually has the belief mentioned in that paragraph. Modification of this Act (4) The following table has effect: Increasing percentage of interests without acquiring additional interests in securities—modification of this Act Item The following provisions of this Act … apply in relation to an action or proposed action that is taken to occur because of subsection (1) or (2) of this section as if … 1 subsection 20(1) (meaning of acquire an interest of a specified percentage in an entity) subsection 20(1) provided that the taking of the action resulted in the person acquiring an interest in the entity of the percentage that the person holds immediately after the action is taken. 2 paragraphs 47(2)(a) and (b) (meaning of notifiable action ) those paragraphs only applied where the foreign person did not hold a direct interest or substantial interest (as the case requires) in the entity immediately before the action is taken. 3 item 1 of the table in section 51 (threshold test—acquiring a direct interest in an Australian entity that is an agribusiness) the value mentioned in column 2 of that item were the total value, immediately after the action is taken, of all interests held by the person, alone or together with one or more associates: (a) in the entity; or (b) previously acquired from the entity. 4 paragraph 55B(1)(c) (meaning of notifiable national security action ) that paragraph only applied where the foreign person did not hold a direct interest in the entity immediately before the action is taken. 5 subsections 67(2) and 69(2) (orders) subsections 67(2) and 69(2) authorised the Treasurer to make (subject to subsection (5) of this section) an order directing the person to do within a specified period, or refrain from doing, specified acts or acts of a specified kind, and no other kind of order. 6 subsection 69(5) (extension of periods specified in certain disposal orders) subsection 69(5) applied in relation to an order made under subsection 67(2) or 69(2), as those subsections apply because of item 5 of this table. 7 section 77 (time limit on making orders and decisions) subsection 77(3) were omitted and column 2 of item 1 of the table in subsection 77(6) referred to the following events: (a) the Treasurer receives a notice from a person stating that the action is proposed to be taken, before the action is taken; (b) the Treasurer receives a notice from a person, stating that the action has been taken, before the end of 30 days after the action is taken. 8 subsections 79D(2) and 79E(2) (orders—last resort powers) subsections 79D(2) and 79E(2) authorised the Treasurer to make (subject to subsection (5) of this section) an order directing the person to do within a specified period, or refrain from doing, specified acts or acts of a specified kind, and no other kind of order. 9 subsection 79E(4) (extension of periods specified in certain disposal orders made in exercise of last resort powers) subsection 79E(4) applied in relation to an order made under subsection 79D(2) or 79E(2), as those subsections apply because of item 8 of this table. 10 items 1 and 2 of the table in subsection 101AA(3) (threshold for distinction between tier 2 infringement notices and tier 3 infringement notices) the value for the action mentioned in the relevant item were the total value, immediately after the action is taken, of all interests held by the person, alone or together with one or more associates: (a) in the entity; or (b) previously acquired from the entity. 11 (a) section 15 (interests acquired by entering agreements or acquiring options); (b) section 68 (interim orders); (c) subparagraph 74(1)(c)(iii) (no objection notification imposing conditions); (d) paragraph 79A(3)(b) and subsection 79A(4) (notice of national security review prohibits taking of action until review completed); (e) section 85A (offence for taking action while prohibited by this Act); (f) section 92A (civil penalty for taking action while prohibited by this Act) those provisions were omitted. Purpose for which orders may be made (5) An order may be made under subsection 67(2), 69(2), 79D(2) or 79E(2) as those subsections apply because of the table in subsection (4) of this section, only for the purpose of restoring the percentage of interests that the person holds in the entity as nearly as possible to the percentage interest that the person held immediately before it increased. Further modifications (6) This Act also applies in relation to an action or proposed action that is taken to occur because of subsection (1) or (2) of this section with the modifications prescribed by the regulations. 19 Tracing of substantial interests in corporations, trusts and unincorporated limited partnerships Tracing—general (1) Subsection (2) applies (subject to subsection (3)) if: (a) a person holds a substantial interest in: (i) a corporation (the higher party ); or (ii) a trust (a trustee of which is a higher party ); or (iii) an unincorporated limited partnership (a general partner of which is a higher party ); including because of one or more applications of this section; and (b) the higher party: (i) is in a position to control all or any of the voting power or potential voting power in a corporation or unincorporated limited partnership (the lower party ); or (ii) holds interests in all or any of the shares in a corporation (the lower party ); or (iii) holds an interest in a trust or unincorporated limited partnership (the lower party ), other than the partnership mentioned in subparagraph (a)(iii) (if that subparagraph applies). (2) For the purposes of this Act: (a) if subparagraph (1)(b)(i) applies—the person is taken to be in a position to control the voting power or potential voting power in the lower party that the higher party is in a position to control; or (b) if subparagraph (1)(b)(ii) applies—the person is taken to hold the interests in the shares in the lower party that the higher party holds; or (c) if subparagraph (1)(b)(iii) applies—the person is taken to hold the interest in the lower party that the higher party holds. Tracing—effect of intermediate unincorporated limited partnerships (2A) Subsection (2B) applies (subject to subsection (3)) if: (a) a person holds a substantial interest in an unincorporated limited partnership (the higher partnership ); and (b) there are one or more unincorporated limited partnershi