An arrangement between the company and its shareholders which becomes binding once certain statutory tests are met. A scheme of arrangement is effected under section 411 of the Corporations Act 2001 (Cth) (CA 2001). The scheme can be used to compel all shareholders to transfer their shares to a bidder in exchange for cash or other consideration. A scheme of arrangement is a means by which a bidder can achieve control of a target company without undertaking a formal takeover bid that complies with Chapter 6 of the CA 2001. For more information, see Practice note: overview, Members' schemes of arrangement.

In this context, the "scheme of arrangement" can also refer to the formal document containing the terms and conditions of the scheme of arrangement as between the target and its shareholders (see Standard document, Scheme of arrangement).

For a guide to Practical Law's resources on members' schemes of arrangement, including links to our resources, see Toolkit, Members' schemes of arrangement.

See also Practical Law's topic: Members' schemes of arrangement.