ABC Ltd is a recently formed, publicly listed company. David is the company’s managing director. The company owns a number of car dealerships and sells cars to the public through various city outlets. Shortly following the formation of the company, the board meets to consider two of David’s proposals for financing the company’s anticipated expansion. David suggests firstly, that ABC Ltd offer Eternal Life Ltd an option to acquire, by way of issue, shares in ABC. Eternal Life would acquire this option for the sum of $1 million. Eternal Life Ltd is a large insurance company that has expressed a wish to be a long term financing partner of ABC Ltd and to offer stability to the company’s share register.
What are the requirements of the Corporations Act 2001 if it decides to go ahead with David’s proposals?