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This is a Bill, not an Act. For current law, see the Acts databases.
1998-1999-2000-2001
The
Parliament of the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Corporations
Bill 2001 Volume 2
No. ,
2001
(Treasury)
A Bill
for an Act to make provision in relation to corporations, securities, the
futures industry and financial products and services, and for other
purposes
ISBN: 0642
46636X
Contents
(1) A financial report and a directors’ report must be prepared for
each financial year by:
(a) all disclosing entities; and
(b) all public companies; and
(c) all large proprietary companies; and
(d) all registered schemes.
Note: This Chapter only applies to disclosing entities
incorporated or formed in Australia (see subsection 285(2)).
(2) A small proprietary company has to prepare the financial report and
directors’ report only if:
(a) it is directed to do so under section 293 or 294; or
(b) it was controlled by a foreign company for all or part of the year and
it is not consolidated for that period in financial statements for that year
lodged with ASIC by:
(i) a registered foreign company; or
(ii) a company, registered scheme or disclosing entity.
The rest of this Part does not apply to any other small proprietary
company.
(1) Shareholders with at least 5% of the votes in a small proprietary
company may give the company a direction to:
(a) prepare a financial report and directors’ report for a financial
year; and
(b) send them to all shareholders.
(2) The direction must be:
(a) signed by the shareholders giving the direction; and
(b) made no later than 12 months after the end of the financial year
concerned.
(3) The direction may specify all or any of the following:
(a) that the financial report does not have to comply with some or all of
the accounting standards;
(b) that a directors’ report or a part of that report need not be
prepared;
(c) that the financial report is to be audited.
(1) ASIC may give a small proprietary company a direction to comply with
requirements of this Division and Divisions 3, 4, 5 and 6 for a financial
year.
(2) The direction may be general or may specify the particular
requirements that the company is to comply with.
(3) The direction must specify the date by which the documents have to be
prepared, sent or lodged. The date must be a reasonable one in view of the
nature of the direction.
(4) The direction must:
(a) be made in writing; and
(b) specify the financial year concerned; and
(c) be made no later than 6 years after the end of that financial
year.
Basic contents
(1) The financial report for a financial year consists of:
(a) the financial statements for the year; and
(b) the notes to the financial statements; and
(c) the directors’ declaration about the statements and
notes.
Financial statements
(2) The financial statements for the year are:
(a) a profit and loss statement for the year; and
(b) a balance sheet as at the end of the year; and
(c) a statement of cash flows for the year; and
(d) if required by the accounting standards—a consolidated profit
and loss statement, balance sheet and statement of cash flows.
Notes to financial statements
(3) The notes to the financial statements are:
(a) disclosures required by the regulations; and
(b) notes required by the accounting standards; and
(c) any other information necessary to give a true and fair view (see
section 297).
Directors’ declaration
(4) The directors’ declaration is a declaration by the
directors:
(a) that the financial statements, and the notes referred to in
paragraph (3)(b), comply with the accounting standards; and
(b) that the financial statements and notes give a true and fair view (see
section 297); and
(c) whether, in the directors’ opinion, there are reasonable grounds
to believe that the company, registered scheme or disclosing entity will be able
to pay its debts as and when they become due and payable; and
(d) whether, in the directors’ opinion, the financial statement and
notes are in accordance with this Act, including:
(i) section 296 (compliance with accounting standards); and
(ii) section 297 (true and fair view).
Note: See paragraph 285(3)(c) for the reference to the debts
of a registered scheme.
(5) The declaration must:
(a) be made in accordance with a resolution of the directors;
and
(b) specify the date on which the declaration is made; and
(c) be signed by a director.
(1) The financial report for a financial year must comply with the
accounting standards. However, a small proprietary company’s report does
not have to comply with particular accounting standards if:
(a) the report is prepared in response to a shareholder direction under
section 293; and
(b) the direction specifies that the report does not have to comply with
those accounting standards.
(2) The financial report must comply with any further requirements in the
regulations.
The financial statements and notes for a financial year must give a true
and fair view of:
(a) the financial position and performance of the company, registered
scheme or disclosing entity; and
(b) if consolidated financial statements are required—the financial
position and performance of the consolidated entity.
This section does not affect the obligation under section 296 for a
financial report to comply with accounting standards.
Note: If the financial statements and notes prepared in
compliance with the accounting standards would not give a true and fair view,
additional information must be included in the notes to the financial
statements under paragraph 295(3)(c).
(1) The company, registered scheme or disclosing entity must prepare a
directors’ report for each financial year. The report must
include:
(a) the general information required by section 299; and
(b) the specific information required by section 300.
(2) The report must:
(a) be made in accordance with a resolution of the directors;
and
(b) specify the date on which the report is made; and
(c) be signed by a director.
(3) A small proprietary company does not have to comply with
subsection (1) for a financial year if:
(a) it is preparing financial statements for that year in response to a
shareholder direction under section 293; and
(b) the direction specified that a directors’ report need not be
prepared.
General information about operations and activities
(1) The directors’ report for a financial year must:
(a) contain a review of operations during the year of the entity reported
on and the results of those operations; and
(b) give details of any significant changes in the entity’s state of
affairs during the year; and
(c) state the entity’s principal activities during the year and any
significant changes in the nature of those activities during the year;
and
(d) give details of any matter or circumstance that has arisen since the
end of the year that has significantly affected, or may significantly
affect:
(i) the entity’s operations in future financial years; or
(ii) the results of those operations in future financial years;
or
(iii) the entity’s state of affairs in future financial years;
and
(e) refer to likely developments in the entity’s operations in
future financial years and the expected results of those operations;
and
(f) if the entity’s operations are subject to any particular and
significant environmental regulation under a law of the Commonwealth or of a
State or Territory—give details of the entity’s performance in
relation to environmental regulation.
(2) The entity reported on is:
(a) the company, registered scheme or disclosing entity (if consolidated
financial statements are not required); or
(b) the consolidated entity (if consolidated financial statements are
required).
Prejudicial information need not be disclosed
(3) The report may omit material that would otherwise be included under
paragraph (1)(e) if it is likely to result in unreasonable prejudice
to:
(a) the company, registered scheme or disclosing entity; or
(b) if consolidated financial statements are required—the
consolidated entity or any entity (including the company, registered scheme or
disclosing entity) that is part of the consolidated entity.
If material is omitted, the report must say so.
(1) The directors’ report for a financial year must include details
of:
(a) dividends or distributions paid to members during the year;
and
(b) dividends or distributions recommended or declared for payment to
members, but not paid, during the year; and
(c) the name of each person who has been a director of the company,
registered scheme or disclosing entity at any time during or since the end of
the year and the period for which they were a director; and
(d) options that are:
(i) granted over unissued shares or unissued interests during or since the
end of the year; and
(ii) granted to any of the directors or any of the 5 most highly
remunerated officers of the company; and
(iii) granted to them as part of their remuneration;
(see subsections (3), (4) and (5)); and
(e) unissued shares or interests under option as at the day the report is
made (see subsections (3) and (6)); and
(f) shares or interests issued during or since the end of the year as a
result of the exercise of an option over unissued shares or interests (see
subsections (3) and (7)); and
(g) indemnities given and insurance premiums paid during or since the end
of the year for a person who is or has been an officer or auditor (see
subsections (8) and (9)).
Public companies, listed companies and registered schemes must include
additional information under subsections (10), (11), (12) and
(13).
(2) Details do not have to be included in the directors’ report
under this section if they are included in the company’s financial report
for the financial year.
(3) Paragraphs (1)(d), (e) and (f) cover:
(a) options over unissued shares and interests of the company, registered
scheme or disclosing entity; and
(b) if consolidated financial statements are required—options over
unissued shares and interests of any controlled entity that is a company,
registered scheme or disclosing entity.
Options details
(5) The details of an option granted are:
(a) the company, registered scheme or disclosing entity granting the
option; and
(b) the name of the person to whom the option is granted; and
(c) the number and class of shares or interests over which the option is
granted.
(6) The details of unissued shares or interests under option
are:
(a) the company, registered scheme or disclosing entity that will issue
shares or interests when the options are exercised; and
(b) the number and classes of those shares or interests; and
(c) the issue price, or the method of determining the issue price, of
those shares or interests; and
(d) the expiry date of the options; and
(e) any rights that option holders have under the options to participate
in any share issue or interest issue of the company, registered scheme or
disclosing entity or of any other body corporate or registered scheme.
Shares or interests issued as a result of exercise of
option
(7) The details of shares or interests issued as a result of the exercise
of an option are:
(a) the company, registered scheme or disclosing entity issuing the shares
or interests; and
(b) the number of shares or interests issued; and
(c) if the company, registered scheme or disclosing entity has different
classes of shares or interests—the class to which each of those shares or
interests belongs; and
(d) the amount unpaid on each of those shares or interests; and
(e) the amount paid, or agreed to be considered as paid, on each of those
shares or interests.
Indemnities and insurance premiums for officers or
auditors
(8) The report for a company must include details of:
(a) any indemnity that is given to a current or former officer or auditor
against a liability and that is covered by subsection 199A(2) or (3), or any
relevant agreement under which an officer or auditor may be given an indemnity
of that kind; and
(b) any premium that is paid, or agreed to be paid, for insurance against
a current or former officer’s or auditor’s liability for legal
costs.
Note: Sections 199A and 199B contain general
prohibitions against giving certain indemnities and paying certain insurance
premiums. This subsection requires transactions that are exceptions to these
prohibitions to be reported.
(9) The details required under subsection (8) are:
(a) for an officer—their name or the class of officer to which they
belong or belonged; and
(b) for an auditor—their name; and
(c) the nature of the liability; and
(d) for an indemnity given—the amount the company paid and any other
action the company took to indemnify the officer or auditor; and
(e) for an agreement to indemnify—the amount that the relevant
agreement requires the company to pay and any other action the relevant
agreement requires the company to take to indemnify the officer or auditor;
and
(f) for an insurance premium—the amount of the premium.
The report need not give details of the nature of the liability covered by,
or the amount of the premium payable under, a contract of insurance to the
extent that disclosure of those details is prohibited by the insurance
contract.
Special rules for public companies
(10) The report for a public company that is not a wholly-owned subsidiary
of another company must also include details of:
(a) each director’s qualifications, experience and special
responsibilities; and
(b) the number of meetings of the board of directors held during the year
and each director’s attendance at those meetings; and
(c) the number of meetings of each board committee held during the year
and each director’s attendance at those meetings.
Special rules for listed companies
(11) The report for a listed company must also include the following
details for each director:
(a) their relevant interests in shares of the company or a related body
corporate;
(b) their relevant interests in debentures of, or interests in a
registered scheme made available by, the company or a related body
corporate;
(c) their rights or options over shares in, debentures of or interests in
a registered scheme made available by, the company or a related body
corporate;
(d) contracts:
(i) to which the director is a party or under which the director is
entitled to a benefit; and
(ii) that confer a right to call for or deliver shares in, or debentures
of or interests in a registered scheme made available by the company or a
related body corporate.
Note: Directors must also disclose interests of these kinds
to the ASX under section 205G as they are acquired.
Special rules for listed registered schemes
(12) The report for a registered scheme whose interests are quoted on a
stock market of a securities exchange must also include the following details
for each director of the company that is the responsible entity for the
scheme:
(a) their relevant interests in interests in the scheme;
(b) their rights or options over interests in the scheme;
(c) contracts to which the director is a party or under which the director
is entitled to a benefit and that confer a right to call for or deliver
interests in the scheme.
Special rules for registered schemes
(13) The report for a registered scheme must also include details
of:
(a) the fees paid to the responsible entity and its associates out of
scheme property during the financial year; and
(b) the number of interests in the scheme held by the responsible entity
or its associates as at the end of the financial year; and
(c) interests in the scheme issued during the financial year;
and
(d) withdrawals from the scheme during the financial year; and
(e) the value of the scheme’s assets as at the end of the financial
year, and the basis for the valuation; and
(f) the number of interests in the scheme as at the end of the financial
year.
Proceedings on behalf of a company
(14) The report for a company must also include the following details of
any application for leave under section 237 made in respect of the
company:
(a) the applicant’s name; and
(b) a statement whether leave was granted.
(15) The report for a company must also include the following details of
any proceedings that a person has brought or intervened in on behalf of the
company with leave under section 237:
(a) the person’s name;
(b) the names of the parties to the proceedings;
(c) sufficient information to enable members to understand the nature and
status of the proceedings (including the cause of action and any orders made by
the court).
(1) The directors’ report for a financial year for a company must
also include:
(a) discussion of board policy for determining the nature and amount of
emoluments of board members and senior executives of the company; and
(b) discussion of the relationship between such policy and the
company’s performance; and
(c) details of the nature and amount of each element of the emolument of
each director and each of the 5 named officers of the company receiving the
highest emolument.
(2) This section applies only to a company that is included in an official
list of the Exchange.
(3) This section applies despite anything in the company’s
constitution.
(1) A company, registered scheme or disclosing entity must have the
financial report for a financial year audited in accordance with Division 3
and obtain an auditor’s report.
(2) A small proprietary company’s financial report for a financial
year does not have to be audited if:
(a) the report is prepared in response to a direction under
section 293; and
(b) the direction did not ask for the financial report to be
audited.
A disclosing entity must:
(a) prepare a financial report and directors’ report for each
half-year; and
(b) have the financial report audited or reviewed in accordance with
Division 3 and obtain an auditor’s report; and
(c) lodge the financial report, the directors’ report and the
auditor’s report on the financial report with ASIC;
unless the entity is not a disclosing entity when lodgment is
due.
Note 1: This Chapter only applies to disclosing entities
incorporated or formed in Australia (see subsection 285(2)).
Note 2: See section 320 for the time for lodgment with
ASIC.
Note 3: Subsection 318(4) requires disclosing entities that
are borrowers in relation to debentures to also report to the trustee for
debenture holders.
Basic contents
(1) The financial report for a half-year consists of:
(a) the financial statements for the half-year; and
(b) the notes to the financial statements; and
(c) the directors’ declaration about the statements and
notes.
Financial statements
(2) The financial statements for the half-year are:
(a) except where paragraph (b) applies:
(i) a profit and loss statement for the half-year; and
(ii) a balance sheet as at the end of the half-year; and
(iii) a statement of cash flows for the half-year; and
(b) if required by the accounting standards—a consolidated profit
and loss statement, balance sheet and statement of cash flows.
Notes to financial statements
(3) The notes to the financial statements are:
(a) disclosures required by the regulations; and
(b) notes required by the accounting standards; and
(c) any other information necessary to give a true and fair view (see
section 305).
Directors’ declaration
(4) The directors’ declaration is a declaration by the
directors:
(a) that the financial statements, and the notes referred to in
paragraph (3)(b), comply with the accounting standards; and
(b) that the financial statements and notes give a true and fair view (see
section 305); and
(c) whether, in the directors’ opinion, there are reasonable grounds
to believe that the disclosing entity will be able to pay its debts as and when
they become due and payable.
Note: See paragraph 285(3)(c) for the reference to the debts
of a disclosing entity that is a registered scheme.
(5) The declaration must:
(a) be made in accordance with a resolution of the directors;
and
(b) specify the day on which the declaration is made; and
(c) be signed by a director.
The financial report for a half-year must comply with the accounting
standards and any further requirements in the regulations.
The financial statements and notes for a half-year must give a true and
fair view of:
(a) the financial position and performance of the disclosing entity;
or
(b) if consolidated financial statements are required—the financial
position and performance of the consolidated entity.
This section does not affect the obligation under section 304 for
financial reports to comply with accounting standards.
Note: If the financial statements prepared in compliance
with the accounting standards would not give a true and fair view, additional
information must be included in the notes to the financial statements under
paragraph 303(3)(c).
The directors of the disclosing entity must prepare a directors’
report for each half-year that consists of:
(a) a review of the entity’s operations during the half-year and the
results of those operations; and
(b) the name of each person who has been a director of the disclosing
entity at any time during or since the end of the half-year and the period for
which they were a director.
If consolidated financial statements are required, the review under
paragraph (a) must cover the consolidated entity.
An auditor who conducts an audit of the financial report for a financial
year or half-year must form an opinion about:
(a) whether the financial report is in accordance with this Act,
including:
(i) section 296 or 304 (compliance with accounting standards);
and
(ii) section 297 or 305 (true and fair view); and
(b) whether the auditor has been given all information, explanation and
assistance necessary for the conduct of the audit; and
(c) whether the company, registered scheme or disclosing entity has kept
financial records sufficient to enable a financial report to be prepared and
audited; and
(d) whether the company, registered scheme or disclosing entity has kept
other records and registers as required by this Act.
(1) An auditor who audits the financial report for a financial year must
report to members on whether the auditor is of the opinion that the financial
report is in accordance with this Act, including:
(a) section 296 (compliance with accounting standards); and
(b) section 297 (true and fair view).
If not of that opinion, the auditor’s report must say why.
(2) If the auditor is of the opinion that the financial report does not
comply with an accounting standard, the auditor’s report must, to the
extent it is practicable to do so, quantify the effect that non-compliance has
on the financial report. If it is not practicable to quantify the effect fully,
the report must say why.
(3) The auditor’s report must describe:
(a) any defect or irregularity in the financial report; and
(b) any deficiency, failure or shortcoming in respect of the matters
referred to in paragraph 307(b), (c) or (d).
(4) The report must specify the date on which it is made.
Audit of financial report
(1) An auditor who audits the financial report for a half-year must report
to members on whether the auditor is of the opinion that the financial report is
in accordance with this Act, including:
(a) section 304 (compliance with accounting standards); and
(b) section 305 (true and fair view).
If not of that opinion, the auditor’s report must say why.
(2) If the auditor is of the opinion that the financial report does not
comply with an accounting standard, the auditor’s report must, to the
extent that it is practicable to do so, quantify the effect that non-compliance
has on the financial report. If it is not practicable to quantify the effect
fully, the report must say why.
(3) The auditor’s report must describe:
(a) any defect or irregularity in the financial report; and
(b) any deficiency, failure or shortcoming in respect of the matters
referred to in paragraph 307(b), (c) or (d).
Review of financial report
(4) An auditor who reviews the financial report for a half-year must
report to members on whether the auditor became aware of any matter in the
course of the review that makes the auditor believe that the financial report
does not comply with Division 2.
(5) A report under subsection (4) must:
(a) describe any matter referred to in subsection (4); and
(b) say why that matter makes the auditor believe that the financial
report does not comply with Division 2.
Report to specify day made
(6) A report under subsection (1) or (4) must specify the date on
which it is made.
The auditor:
(a) has a right of access at all reasonable times to the books of the
company, registered scheme or disclosing entity; and
(b) may require any officer to give the auditor information, explanations
or other assistance for the purposes of the audit or review.
A request under paragraph (b) must be a reasonable one.
The auditor conducting an audit or review must, as soon as possible,
notify ASIC in writing if the auditor:
(a) has reasonable grounds to suspect that a contravention of this Act has
occurred; and
(b) believes that the contravention has not been or will not be adequately
dealt with by commenting on it in the auditor’s report or bringing it to
the attention of the directors.
Note: Section 1289 gives an auditor qualified privilege
for a notification to ASIC under this section.
An officer of a company, registered scheme or disclosing entity
must:
(a) allow the auditor access to the books of the company, scheme or
entity; and
(b) give the auditor any information, explanation or assistance required
under section 310.
Note: Books include registers and documents generally (not
only the accounting “books”): see the definition of
books in section 9.
Auditor to give trustee for debenture holders copies of reports,
certificates etc.
(1) The auditor of a borrower in relation to debentures must give the
trustee for debenture holders:
(a) a copy of any report, certificate or other document that the auditor
must give the borrower or its members under this Act, the debentures or the
trust deed; and
(b) a copy of any document that accompanies it.
The copies must be given within 7 days after the auditor gives the
originals to the borrower or its members.
Auditor to report on matters prejudicial to debenture holders’
interests
(2) The auditor of a borrower, or guarantor, in relation to debentures
must give the borrower or guarantor a written report about any matter
that:
(a) the auditor became aware of in conducting the audit or review;
and
(b) in the auditor’s opinion, is or is likely to be prejudicial to
the interests of debenture holders; and
(c) in the auditor’s opinion, is relevant to the exercise of the
powers of the trustee for debenture holders, or the performance of the
trustee’s duties, under this Act or the trust deed.
The auditor must give a copy of the report to the trustee for debenture
holders. The report and the copy must be given within 7 days after the auditor
becomes aware of the matter.
Full or concise report to members
(1) A company, registered scheme or disclosing entity must report to
members for a financial year by either:
(a) sending members copies of:
(i) the financial report for the year; and
(ii) the directors’ report for the year (see sections 298-300);
and
(iii) the auditor’s report on the financial report; or
(b) sending members a concise report for the year that complies with
subsection (2).
Concise report
(2) A concise report for a financial year consists of:
(a) a concise financial report for the year drawn up in accordance with
accounting standards made for the purposes of this paragraph; and
(b) the directors’ report for the year (see sections 298-300);
and
(c) a statement by the auditor:
(i) that the financial report has been audited; and
(ii) whether, in the auditor’s opinion, the concise financial report
complies with the accounting standards made for the purposes of
paragraph (a); and
(d) a copy of any qualification in, and of any statements included in the
emphasis of matter section of, the auditor’s report on the financial
report; and
(e) a statement that the report is a concise report and that the full
financial report and auditor’s report will be sent to the member free of
charge if the member asks for them.
(3) If the accounting standards made for the purposes of
paragraph (2)(a) require a discussion and analysis to be included in a
concise financial report:
(a) the auditor must report on whether the discussion and analysis
complies with the requirements that the accounting standards lay down for the
discussion and analysis; and
(b) the auditor does not otherwise need to audit the statements made in
the discussion and analysis.
Public companies and disclosing entities that are not registered
schemes
(1) A public company, or a disclosing entity that is not a registered
scheme, must report to members under section 314 by the earlier
of:
(a) 21 days before the next AGM after the end of the financial year;
or
(b) 4 months after the end of the financial year.
Note: For the deadline for holding an AGM, see
section 250N.
Small proprietary companies (shareholder direction under
section 293)
(2) If a shareholder direction is given to a small proprietary company
under section 293 after the end of the financial year, the company must
report to members under section 314 by the later of:
(a) 2 months after the date on which the direction is given; and
(b) 4 months after the end of the financial year.
Registered schemes
(3) A registered scheme must report to members under section 314
within 3 months after the end of the financial year.
Other proprietary companies
(4) A proprietary company that is not covered by subsection (1) or
(2) must report to members under section 314 within 4 months after the end
of the financial year.
(1) A member may request the company, registered scheme or disclosing
entity:
(a) not to send them the material required by section 314;
or
(b) to send them a full financial report and the directors’ report
and auditor’s report.
A request may be a standing request or for a particular financial year. The
member is not entitled to a report for a financial year earlier than the one
before the financial year in which the request is made.
(2) The time for complying with a request under paragraph (1)(b)
is:
(a) 7 days after the request is received; or
(b) the deadline for reporting under section 315;
whichever is later.
(3) A full financial report, directors’ report and auditor’s
report are to be sent free of charge unless the member has already received a
copy of them free of charge.
The directors of a public company that is required to hold an AGM must
lay before the AGM:
(a) the financial report; and
(b) the directors’ report; and
(c) the auditor’s report;
for the last financial year that ended before the AGM.
Note 1: If the company’s first AGM is held before the
end of its first financial year, there will be no reports to lay before the
meeting.
Note 2: A public company that has only 1 member is not
required to hold an AGM (see section 250N).
(1) A company or disclosing entity that was a borrower in relation to
debentures at the end of a financial year must give a copy of the annual
financial report, directors’ report and auditor’s report to the
trustee for debenture holders by the deadline for the financial year set by
section 315.
(2) A debenture holder may ask the company or disclosing entity that
issued the debenture for copies of:
(a) the last reports sent to members under section 314; or
(b) the full financial report and the directors’ report and
auditor’s report for the last financial year.
(3) The company or entity must give the debenture holder the copies as
soon as practicable after the request and free of charge.
(4) A disclosing entity that was a borrower in relation to debentures at
the end of a half-year must give a copy of the half-year financial report,
directors’ report and auditor’s report to the trustee for debenture
holders within 75 days after the end of the half-year.
(1) A company, registered scheme or disclosing entity that has to prepare
or obtain a report for a financial year under Division 1 must lodge the
report with ASIC. This obligation extends to a concise report sent to members
under section 314.
(2) Subsection (1) does not apply to a small proprietary company that
prepares a report in response to a shareholder direction under section 293
or an ASIC direction under section 294.
(3) The time for lodgment is:
(a) within 3 months after the end of the financial year for a disclosing
entity or registered scheme; and
(b) within 4 months after the end of the financial year for anyone
else.
(5) A company that has the benefit of subsection (4) must lodge with
ASIC notice of any of the following events:
(a) the resignation or retirement of the company’s
auditor;
(b) the appointment of a new auditor (including details of the new
auditor).
The notice must be lodged within 14 days after the resignation, retirement
or appointment.
(6) For the purposes of paragraph (4)(d), the deadline for reporting
to members is:
(a) for a financial year ending after 1 July 1998—the deadline
for reporting to members under section 315; and
(b) for an earlier financial year—the deadline for that year within
the meaning of the old Corporations Law for a State or Territory in this
jurisdiction as in force immediately before 1 July 1998.
A disclosing entity that has to prepare or obtain a report for a
half-year under Division 2 must lodge the report with ASIC within 75 days
after the end of the half-year.
(1) ASIC may give a company, registered scheme or disclosing entity a
direction to lodge with ASIC a copy of reports prepared or obtained by it under
Division 1 or 2.
(2) The direction must:
(a) be made in writing; and
(b) specify the period or periods concerned; and
(c) be made no later than 6 years after the end of the period or periods;
and
(d) specify the date by which the documents have to be lodged.
The date specified under paragraph (d) must be at least 14 days after
the date on which the direction is given.
(1) If a financial report or directors’ report is amended after it
is lodged with ASIC, the company, registered scheme or disclosing entity
must:
(a) lodge the amended report with ASIC within 14 days after the amendment;
and
(b) give a copy of the amended report free of charge to any member who
asks for it.
(2) If the amendment is a material one, the company, registered scheme or
disclosing entity must also notify members as soon as practicable of:
(a) the nature of the amendment; and
(b) their right to obtain a copy of the amended report under
subsection (1).
If a company, registered scheme or disclosing entity has to prepare
consolidated financial statements, a director or officer of a controlled entity
must give the company, registered scheme or disclosing entity all information
requested that is necessary to prepare the consolidated financial statements and
the notes to those statements.
(1) An auditor who audits or reviews a financial report that includes
consolidated financial statements:
(a) has a right of access at all reasonable times to the books of any
controlled entity; and
(b) may require any officer of the entity to give the auditor information,
explanations or other assistance for the purposes of the audit or
review.
A request under paragraph (b) must be a reasonable one.
(2) The information, explanations or other assistance required under
paragraph (1)(b) is to be given at the expense of the company, registered
scheme or disclosing entity whose financial report is being audited or
reviewed.
If a company, registered scheme or disclosing entity has to prepare a
financial report that includes consolidated financial statements, an officer or
auditor of a controlled entity must:
(a) allow the auditor for the company, scheme or entity access to the
controlled entity’s books; and
(b) give the auditor any information, explanation or assistance required
under section 323A.
Sections 323, 323A and 323B apply to the preparation or audit of a
financial report that covers a controlled entity even if the entity is no longer
controlled by the company, registered scheme or disclosing entity whose
financial report is being prepared or audited.
First financial year
(1) The first financial year for a company, registered scheme or
disclosing entity starts on the day on which it is registered or incorporated.
It lasts for 12 months or the period (not longer than 18 months) determined by
the directors.
Financial years after first year
(2) Subject to subsection (4), subsequent financial years
must:
(a) start at the end of the previous financial year; and
(b) be 12 months long.
The directors may determine that the financial year is to be shorter or
longer (but not by more than 7 days).
Synchronisation of financial years where consolidated financial
statements are required
(3) A company, registered scheme or disclosing entity that has to prepare
consolidated financial statements must do whatever is necessary to ensure that
the financial years of the consolidated entities are synchronised with its own
financial years. It must achieve this synchronisation by the end of 12 months
after the situation that calls for consolidation arises.
(4) To facilitate this synchronisation, the financial year for a
controlled entity may be extended or shortened. The extended financial year
cannot be longer than 18 months.
Half-years
(5) A half-year for a company, registered scheme or disclosing entity is
the first 6 months of a financial year. The directors may determine that the
half-year is to be shorter or longer (but not by more than 7
days).
(1) A company that discloses information to, or as required by:
(a) the Securities and Exchange Commission of the United States of
America; or
(b) the New York Stock Exchange; or
(c) a prescribed securities exchange in a foreign country;
must disclose that information in English to the Exchange on the next
business day after doing so.
(2) This section applies only to a company that is included in an official
list of the Exchange.
(3) This section applies despite anything in the company’s
constitution.
(1) Subject to this section, a person must not:
(a) consent to be appointed as auditor of a company;
(b) act as auditor of a company; or
(c) prepare a report required by this Act to be prepared by a registered
company auditor or by an auditor of a company;
if:
(d) the person is not a registered company auditor;
(e) the person, or a body corporate in which the person has a substantial
holding, owes more than $5,000 to the company, to a related body corporate or to
an entity that the company controls; or
(f) except where the company is a proprietary company, the
person:
(i) is an officer of the company; or
(ii) is a partner, employer or employee of an officer of the company;
or
(iii) is a partner or employee of an employee of an officer of the
company.
(2) Subject to this section, a firm must not:
(a) consent to be appointed as auditor of a company; or
(b) act as auditor of a company; or
(c) prepare a report required by this Act to be prepared by a registered
company auditor or by an auditor of a company;
unless:
(d) at least 1 member of the firm is a registered company auditor who is
ordinarily resident in Australia; and
(e) the business name under which the firm is carrying on business is
registered under a law of a State or Territory relating to the registration of
business names or a return in the prescribed form has been lodged showing, in
relation to each member of the firm, the member’s full name and address as
at the time when the firm so consents, acts or prepares a report; and
(f) no member of the firm, and no body corporate in which a member of the
firm has a substantial holding, owes more than $5,000 to the company, to a
related body corporate or to an entity that the company controls; and
(g) except where the company is a proprietary company, no member of the
firm is:
(i) an officer of the company; or
(ii) a partner, employer or employee of an officer of the company;
or
(iii) a partner or employee of an employee of an officer of the company;
and
(h) except where the company is a proprietary company, no officer of the
company receives any remuneration from the firm for acting as a consultant to it
on accounting or auditing matters.
(3) For the purposes of paragraphs (1)(e) and (2)(f), disregard a
debt owed by a natural person to a body corporate or entity if:
(a) the body corporate or entity is:
(i) an Australian ADI; or
(ii) a body corporate registered under the Life Insurance Act
1995; and
(b) the debt arose because of a loan that the body corporate or entity
made to the person in the ordinary course of its ordinary business;
and
(c) the person used the amount of the loan to pay the whole or part of the
purchase price of premises that the person uses as their principal place of
residence.
(4) For the purposes of subsections (1) and (2), a person is taken to
be an officer of a company if:
(a) the person is an officer of a related body corporate or of an entity
that the company controls; or
(b) except where ASIC, if it thinks fit in the circumstances of the case,
directs that this paragraph is not apply in relation to the person in relation
to the company—the person has, at any time within the immediately
preceding period of 12 months, been an officer or promoter of the company, of a
related body corporate or of an entity that the company controlled at that
time.
(5) For the purposes of this section, a person is not taken to be an
officer of a company by reason only of being or having been the liquidator of
that company, of a related body corporate or of an entity that that company
controls or has controlled.
(6) For the purposes of this section, a person is not taken to be an
officer of a company merely because of one or more of the following:
(a) having been appointed as auditor of the company, of a related body
corporate or of an entity that the company controls or has controlled;
(b) having been appointed, for any purpose relating to taxation, as public
officer of a body corporate, an unincorporated body or a trust estate;
(c) being or having been authorised to accept, on behalf of the company, a
related body corporate or an entity that the company controls or has controlled,
service of process or notices.
(7) The appointment of a firm as auditor of a company is taken to be an
appointment of all persons who are members of the firm and are registered
company auditors, whether resident in Australia or not, at the date of the
appointment.
(8) Where a firm that has been appointed as auditor of a company is
reconstituted by reason of the death, retirement or withdrawal of a member or
members or by reason of the admission of a new member or new members, or
both:
(a) a person who was taken under subsection (7) to be an auditor of
the company and who has so retired or withdrawn from the firm as previously
constituted is taken to have resigned as auditor of the company as from the day
of his or her retirement or withdrawal but, unless that person was the only
member of the firm who was a registered company auditor and, after the
retirement or withdrawal of that person, there is no member of the firm who is a
registered company auditor, section 329 does not apply to that resignation;
and
(b) a person who is a registered company auditor and who is so admitted to
the firm is taken to have been appointed as an auditor of the company as from
the day of his or her admission; and
(c) the reconstitution of the firm does not affect the appointment of the
continuing members of the firm who are registered company auditors as auditors
of the company;
but nothing in this subsection affects the operation of
subsection (2).
(9) Except as provided by subsection (8), the appointment of the
members of a firm as auditors of a company that is taken by subsection (7)
to have been made by reason of the appointment of the firm as auditor of the
company is not affected by the dissolution of the firm.
(10) A report or notice that purports to be made or given by a firm
appointed as auditor of a company is not taken to be duly made or given unless
it is signed in the firm name and in his or her own name by a member of the firm
who is a registered company auditor.
(11) Without limiting the generality of section 1311, if, in
contravention of this section, a firm consents to be appointed, or acts as,
auditor of a company or prepares a report required by this Act to be prepared by
an auditor of a company, each member of the firm is guilty of an
offence.
(12) Where it is, in the opinion of ASIC, impracticable for a proprietary
company to obtain the services of a registered company auditor as auditor of the
company by reason of the place where the company carries on business, a person
who is, in the opinion of ASIC, suitably qualified or experienced and is
approved by ASIC for the purposes of this Act in relation to the audit of the
company’s financial reports may be appointed as auditor of the company,
subject to such terms and conditions as are specified in the approval.
(13) A person appointed in accordance with subsection (12) is, in
relation to the auditing of the company’s financial reports (if any), but
subject to the terms and conditions of the approval under that subsection, taken
to be a registered company auditor and the provisions of this Act apply, with
the necessary modifications, in relation to the person accordingly.
(14) Where a person approved by ASIC under subsection (12) is acting
as auditor of a company, ASIC may at any time, by notice in writing given to the
company:
(a) amend, revoke or vary the terms and conditions of its approval;
or
(b) terminate the appointment of that person as auditor of the
company.
(15) A notice under subsection (14) terminating the appointment of a
person as auditor of a company takes effect as if, on the date on which the
notice is received by the company, the company had received from the person
notice of the person’s resignation as auditor taking effect from that
date.
(16) A person must not:
(a) if the person has been appointed auditor of a company—knowingly
disqualify himself or herself while the appointment continues from acting as
auditor of the company; or
(b) if the person is a member of a firm that has been appointed auditor of
a company—knowingly disqualify the firm while the appointment continues
from acting as auditor of the company.
The directors of a proprietary company may appoint an auditor for the
company if an auditor has not been appointed by the company in general
meeting.
(1A) Only subsections (6) to (10) of this section apply to a
proprietary company.
(1) Within 1 month after the day on which a company is incorporated, the
directors of the company must appoint, unless the company at a general meeting
has appointed, a person or persons, a firm or firms, or a person or persons and
a firm or firms, as auditor or auditors of the company.
(2) A person or firm appointed as auditor of a company under
subsection (1) holds office, subject to this Part, until the first annual
general meeting of the company.
(3) A company must:
(a) at its first annual general meeting, appoint a person or persons, a
firm or firms, or a person or persons and a firm or firms, as auditor or
auditors of the company; and
(b) at each subsequent annual general meeting, if there is a vacancy in
the office of auditor of the company, appoint a person or persons, a firm or
firms, or a person or persons and a firm or firms, to fill the
vacancy.
(4) A person or firm appointed as auditor under subsection (3) holds
office until death or removal or resignation from office in accordance with
section 329 or until ceasing to be capable of acting as auditor by reason
of subsection 324(1) or (2).
(5) If:
(a) a vacancy occurs in the office of auditor of the company (other than a
vacancy caused by the removal of an auditor from office); and
(b) there is no surviving or continuing auditor of the company;
the directors must, within 1 month after the vacancy occurs, appoint a
person or persons, a firm or firms, or a person or persons or a firm or firms,
to fill the vacancy unless the company at a general meeting has appointed a
person or persons, a firm or firms, or a person or persons and a firm or firms,
to fill the vacancy.
(6) While a vacancy in the office of auditor continues, the surviving or
continuing auditor or auditors (if any) may act.
(7) A company or the directors of a company must not appoint a person or
firm as auditor of the company unless that person or firm has, before the
appointment, consented by notice in writing given to the company or to the
directors to act as auditor and has not withdrawn his, her or its consent by
notice in writing given to the company or to the directors.
(8) A notice under subsection (7) given by a firm must be signed in
the firm name and in his or her own name by a member of the firm who is a
registered company auditor.
(9) If a company appoints a person or firm as auditor of a company in
contravention of subsection (7), the purported appointment does not have
any effect and the company and any officer of the company who is in default are
each guilty of an offence.
(10) Where an auditor of a company is removed from office at a general
meeting in accordance with section 329:
(a) the company may at that meeting (without adjournment), by a resolution
passed by a majority of not less than three-quarters of such members of the
company as, being entitled so to do, vote in person or, where proxies are
allowed, by proxy, forthwith appoint as auditor or auditors a person or persons,
a firm or firms, or a person or persons and a firm or firms, to whom or which
has been sent a copy of the notice of nomination in accordance with subsection
328(3); or
(b) if such a resolution is not passed or, by reason only that such a copy
of the notice of nomination has not been sent to a person, could not be passed,
the meeting may be adjourned to a day not earlier than 20 days and not later
than 30 days after the day of the meeting and the company may, at the adjourned
meeting, by ordinary resolution appoint as auditor or auditors a person or
persons, a firm or firms, or a person or persons and a firm or firms, notice of
whose nomination for appointment as auditor has been received by the company
from a member of the company at least 14 clear days before the day to which the
meeting is adjourned.
(11) Where, after the removal from office of an auditor of a company, the
company fails to appoint an auditor under subsection (10), the company
must, within the period of 7 days commencing on the day of the failure, give to
ASIC notice of the failure, and, subject to subsection (12),
ASIC:
(a) in a case where the company, before the end of that period, gives to
ASIC notice of the failure—must, upon receiving the notice; or
(b) in any other case:
(i) may, at any time after the end of that period and before ASIC receives
from the company notice of the failure; and
(ii) if the company, after the end of that period, gives to ASIC notice of
the failure—must, upon receiving the notice;
appoint as auditor or auditors of the company a person or persons, a firm
or firms, or a person or persons and a firm or firms, who or which consents or
consent to be so appointed.
(12) Where, after the removal from office of an auditor of a company, the
company fails to appoint an auditor under subsection (10), ASIC must not
appoint an auditor of the company under subsection (11):
(a) in any case—if there is another auditor of the company whom ASIC
believes to be able to carry out the responsibilities of auditor alone and who
agrees to continue as auditor; or
(c) in a case where, at the end of the period of 7 days commencing on the
day of the failure, the company has not given to ASIC notice of the
failure—if ASIC has, at any time after the end of that period, already
appointed an auditor of the company under subsection (11).
(13) Subject to subsection (11), if a company does not appoint an
auditor when required by this Act to do so, ASIC may, on the application in
writing of a member of the company, appoint as auditor or auditors of the
company a person or persons, a firm or firms, or a person or persons and a firm
or firms, who or which consents or consent to be so appointed.
(14) A person or firm appointed as auditor of a company under
subsection (5), (10), (11) or (13) holds office, subject to this Part,
until the next annual general meeting of the company.
(15) Notwithstanding subsection (4), a person or firm who holds the
office of auditor of a company that begins to be controlled by a corporation
must, unless the person or firm sooner vacates that office, retire at the annual
general meeting of the company next held after it begins to be controlled by the
corporation but, subject to this Part, is eligible for re-appointment.
(16) If a director of a company fails to take all reasonable steps to
comply with, or to secure compliance with, subsection (1) or (5), he or she
is guilty of an offence.
(1) Subject to this section, a company is not entitled to appoint a person
or a firm as auditor of the company at its annual general meeting, not being a
meeting at which an auditor is removed from office, unless notice in writing of
his, her or its nomination as auditor was given to the company by a member of
the company:
(a) before the meeting was convened; or
(b) not less than 21 days before the meeting.
(2) If a company purports to appoint a person or firm as auditor of the
company in contravention of subsection (1), the purported appointment is of
no effect and the company and any officer of the company who is in default are
each guilty of an offence.
(3) Where notice of nomination of a person or firm for appointment as
auditor of a company is received by the company, whether for appointment at a
meeting or an adjourned meeting referred to in subsection 327(10) or at an
annual general meeting, the company must:
(a) not less than 7 days before the meeting; or
(b) at the time notice of the meeting is given;
send a copy of the notice of nomination to each person or firm nominated,
to each auditor of the company and to each person entitled to receive notice of
general meetings of the company.
(1) An auditor of a company may be removed from office by resolution of
the company at a general meeting of which notice under subsection (1A) has
been given, but not otherwise.
(1A) Notice of intention to move the resolution must be given to the
company at least 2 months before the meeting is to be held. However, if the
company calls a meeting after the notice of intention is given under this
subsection, the meeting may pass the resolution even though the meeting is held
less than 2 months after the notice of intention is given.
Note: Short notice of the meeting cannot be given for this
resolution (see subsection 249H(4)).
(2) Where notice under subsection (1A) of a resolution to remove an
auditor is received by a company, it must as soon as possible send a copy of the
notice to the auditor and lodge a copy of the notice.
(3) Within 7 days after receiving a copy of the notice, the auditor may
make representations in writing, not exceeding a reasonable length, to the
company and request that, before the meeting at which the resolution is to be
considered, a copy of the representations be sent by the company at its expense
to every member of the company to whom notice of the meeting is sent.
(4) Unless ASIC on the application of the company otherwise orders, the
company must send a copy of the representations in accordance with the
auditor’s request, and the auditor may, without prejudice to his or her
right to be heard orally or, where a firm is the auditor, to have a member of
the firm heard orally on its behalf, require that the representations be read
out at the meeting.
(5) An auditor of a company may, by notice in writing given to the
company, resign as auditor of the company if:
(a) the auditor has, by notice in writing given to ASIC, applied for
consent to the resignation and stated the reasons for the application and, at or
about the same time as the notice was given to ASIC, notified the company in
writing of the application to ASIC; and
(b) the consent of ASIC has been given.
(6) ASIC must, as soon as practicable after receiving a notice from an
auditor under subsection (5), notify the auditor and the company whether it
consents to the resignation of the auditor.
(7) A statement made by an auditor in an application to ASIC under
subsection (5) or in answer to an inquiry by ASIC relating to the reasons
for the application:
(a) is not admissible in evidence in any civil or criminal proceedings
against the auditor; and
(b) may not be made the ground of a prosecution, action or suit against
the auditor;
and a certificate by ASIC that the statement was made in the application or
in the answer to the inquiry by ASIC is conclusive evidence that the statement
was so made.
(8) Subject to subsection (9), the resignation of an auditor takes
effect:
(a) on the day (if any) specified for the purpose in the notice of
resignation; or
(b) on the day on which ASIC gives its consent to the resignation;
or
(c) on the day (if any) fixed by ASIC for the purpose;
whichever last occurs.
(9) The resignation of an auditor of a proprietary company does not
require the consent of ASIC under subsection (5), and takes
effect:
(a) on the day (if any) specified for the purpose in the notice of
resignation; or
(b) on the day on which the notice is received by the company;
whichever is the later.
(10) Where on the retirement or withdrawal from a firm of a member the
firm will no longer be capable, by reason of the provisions of paragraph
324(2)(d) of acting as auditor of a company, the member so retiring or
withdrawing is (if not disqualified from acting as auditor of the company) taken
to be the auditor of the company until he or she obtains the consent of ASIC to
his or her retirement or withdrawal.
(11) Within 14 days after:
(a) the removal from office of an auditor of a company; or
(b) the receipt of a notice of resignation from an auditor of a
company;
the company must:
(c) lodge with ASIC a notice of the removal or resignation in the
prescribed form; and
(d) where there is a trustee for the holders of debentures of the
company—give to the trustee a copy of the notice lodged with
ASIC.
An auditor of a company ceases to hold office if:
(a) a special resolution is passed for the voluntary winding up of the
company; or
(b) in a case to which paragraph (a) does not apply—an order is
made by the Court for the winding up of the company.
The reasonable fees and expenses of an auditor of a company are payable
by the company.
(1) Subject to this section, a person must not:
(a) consent to be appointed as auditor of a registered scheme;
or
(b) act as auditor of a registered scheme; or
(c) prepare a report required by this Act to be prepared by a registered
company auditor or by an auditor of a registered scheme;
if:
(d) the person is not a registered company auditor; or
(e) the person, or a body corporate in which the person has a substantial
holding, owes more than $5,000 to the scheme’s responsible entity, to a
related body corporate or to an entity that the responsible entity controls;
or
(f) the person:
(i) is an officer of the responsible entity; or
(ii) is a partner, employer or employee of an officer of the responsible
entity; or
(iii) is a partner or employee of an employee of an officer of the
responsible entity.
(2) Subject to this section, a firm must not:
(a) consent to be appointed as auditor of a registered scheme;
or
(b) act as auditor of a registered scheme; or
(c) prepare a report required by this Act to be prepared by a registered
company auditor or by an auditor of a registered scheme;
unless:
(d) at least 1 member of the firm is a registered company auditor who is
ordinarily resident in Australia; and
(e) the business name under which the firm is carrying on business is
registered under a law of a State or Territory relating to the registration of
business names or a return in the prescribed form has been lodged showing, in
relation to each member of the firm, the member’s full name and address as
at the time when the firm so consents, acts or prepares a report; and
(f) no member of the firm, and no body corporate in which a member of the
firm has a substantial holding, owes more than $5,000 to the scheme’s
responsible entity or to an entity that the responsible entity controls;
and
(g) no member of the firm is:
(i) an officer of the responsible entity; or
(ii) a partner, employer or employee of an officer of the responsible
entity; or
(iii) a partner or employee of an employee of an officer of the
responsible entity; and
(h) no officer of the responsible entity receives any remuneration from
the firm for acting as a consultant to it on accounting or auditing
matters.
(3) Subsections 324(3), (4), (5) and (6) apply in relation to a registered
scheme as if:
(a) those subsections were part of this section; and
(b) references in those subsections to a company were instead references
to the registered scheme’s responsible entity.
(4) Subsections 324(7), (8), (9), (10), (11) and (16) apply in relation to
a registered scheme as if:
(a) those subsections were part of this subsection; and
(b) references in those subsections to a company were instead references
to the registered scheme.
(1) Within 1 month after the day on which a registered scheme is
registered, the responsible entity must appoint a person or persons, a firm or
firms, or a person or persons and a firm or firms, as auditor or auditors of the
scheme.
(2) Within 1 month after a vacancy occurs in the office of auditor of a
registered scheme, if there is no surviving or continuing auditor of the scheme,
the responsible entity must appoint a person or persons, a firm or firms, or a
person or persons and a firm or firms, to fill the vacancy.
(3) While a vacancy in the office of auditor of a registered scheme
continues, the surviving or continuing auditor or auditors (if any) may
act.
(4) The responsible entity of a registered scheme must not appoint a
person or firm as auditor of the scheme unless that person or firm has, before
the appointment, consented to act as auditor by notice in writing given to the
responsible entity and has not withdrawn that consent by notice in writing given
to the responsible entity.
(5) A notice given by a firm under subsection (4) is to be signed by
a member of the firm who is a registered company auditor:
(a) in the firm’s name; and
(b) in the member’s name.
(6) If the responsible entity of a registered scheme appoints a person or
firm as auditor of the scheme in contravention of subsection (4), the
purported appointment does not have any effect and the responsible entity, and
any officer of the responsible entity who is in default, are each guilty of an
offence.
(7) If the responsible entity of a registered scheme does not appoint an
auditor when required by this Act to do so, ASIC may, on application in writing
by a member of the scheme, appoint as auditor or auditors of the scheme a person
or persons, a firm or firms, or a person or persons and a firm or firms. An
appointment can only be made with the consent of the person or firm
concerned.
(8) If a director of the responsible entity of a registered scheme fails
to take all reasonable steps to secure compliance with subsection (1) or
(2), the director is guilty of an offence.
(1) The responsible entity of a registered scheme may, with ASIC’s
consent, remove the auditor of the scheme from office.
(2) An auditor of a registered scheme may, by notice in writing given to
the responsible entity, resign as auditor of the scheme if:
(a) the auditor:
(i) has, by notice in writing given to ASIC, applied for consent to the
resignation and stated the reasons for the application; and
(ii) has, at or about the same time as giving the notice to ASIC, given
the responsible entity notice in writing of the application to ASIC;
and
(b) ASIC has given its consent.
(3) As soon as practicable after ASIC receives a notice from an auditor
under subsection (2), ASIC must notify the auditor, and the responsible
entity of the registered scheme, whether it consents to the
resignation.
(4) A statement made by an auditor in an application to ASIC under
subsection (2) or in answer to an inquiry by ASIC relating to the reasons
for the application:
(a) is not admissible in evidence in any civil or criminal proceedings
against the auditor; and
(b) must not be made the ground of a prosecution, action or suit against
the auditor.
A certificate by the ASIC that the statement was made in the application or
in answer to the inquiry by ASIC is conclusive evidence that the statement was
so made.
(5) The resignation of an auditor takes effect:
(a) on the day (if any) specified for the purpose in the notice of
resignation; or
(b) on the day on which ASIC gives its consent to the resignation;
or
(c) on the day (if any) fixed by ASIC for the purpose;
whichever occurs last.
(6) If, on the retirement or withdrawal of a member of a firm, the firm
will no longer be capable of acting as auditor of a registered scheme because of
paragraph 331AA(2)(d), the member is (if not disqualified from acting as auditor
of the scheme) taken to be the auditor of the scheme until he or she obtains the
consent of ASIC to his or her retirement or withdrawal.
(7) Within 14 days after:
(a) the removal from office of an auditor of a registered scheme;
or
(b) the receipt of a notice of resignation from an auditor of a registered
scheme;
the responsible entity must lodge with ASIC a notice of the removal or
resignation in the prescribed form.
An auditor of a registered scheme ceases to hold office if:
(a) the scheme’s constitution provides that the scheme is to be
wound up at a specified time, in specified circumstances or on the happening of
a specified event, and that time is reached, those circumstances occur or that
event occurs; or
(b) the members pass a resolution directing the responsible entity to wind
up the scheme; or
(c) the Court makes an order directing the responsible entity to wind up
the scheme; or
(d) the members pass a resolution to remove the responsible entity but do
not, at the same meeting, pass a resolution choosing a company to be the new
responsible entity that consents to becoming the scheme’s responsible
entity.
The reasonable fees and expenses of an auditor of a registered scheme are
payable by the responsible entity.
AASB’s power to make accounting standards
(1) The AASB may make accounting standards for the purposes of this Act.
The standards must be in writing and must not be inconsistent with this Act or
the regulations.
(2) A standard made under subsection (1) is a disallowable instrument
for the purposes of section 46A of the Acts Interpretation Act
1901.
Note: Section 5C provides that the Acts
Interpretation Act 1901 (as in force on 1 November 2000) applies to
this Act.
(4) An accounting standard applies to:
(a) periods ending after the commencement of the standard; or
(b) periods ending, or starting, on or after a later date specified in the
standard.
(5) A company, registered scheme or disclosing entity may elect to apply
the accounting standard to an earlier period unless the standard says otherwise.
The election must be made in writing by the directors.
This Chapter (and, in particular, the provisions on consolidation of
financial statements) does not prevent accounting standards from incorporating
equity accounting principles.
In interpreting an accounting standard, unless the contrary intention
appears:
(a) expressions used in the standard have the same meaning as they have in
this Chapter; and
(b) the provisions of Part 1.2 apply as if the standard’s
provisions were provisions of this Chapter.
(1) This section applies to a document that purports to be published by or
on behalf of the AASB or ASIC and to set out the text of:
(a) a specified standard as in force at a specified time under
section 334; or
(b) a specified provision of a standard of that kind.
It also applies to a copy of a document of that kind.
(2) In the absence of evidence to the contrary, a document to which this
section applies is proof in proceedings under this Act that:
(a) the specified standard was in force at that time under that section;
and
(b) the text set out in the document is the text of the standard referred
to in paragraph (1)(a) or the provision referred to in
paragraph (1)(b).
(1) On an application made in accordance with subsection (3) in
relation to a company, registered scheme or disclosing entity, ASIC may make an
order in writing relieving any of the following from all or specified
requirements of Parts 2M.2, 2M.3 and 2M.4:
(a) the directors;
(b) the company, scheme or entity;
(c) the auditor.
Note: For the criteria for making orders under this section,
see section 342.
(2) The order may:
(a) be expressed to be subject to conditions; and
(b) be indefinite or limited to a specified period.
(3) The application must be:
(a) authorised by a resolution of the directors; and
(b) in writing and signed by a director; and
(c) lodged with ASIC.
(4) ASIC must give the applicant written notice of the making, revocation
or suspension of the order.
(1) ASIC may make an order in writing in respect of a specified class of
companies, registered schemes or disclosing entities, relieving any of the
following from all or specified requirements of Parts 2M.2, 2M.3 and
2M.4:
(a) directors;
(b) the companies, registered schemes or disclosing entities
themselves;
(c) auditors of the companies, registered schemes or disclosing
entities.
Note: For the criteria for making orders under this section,
see section 342.
(2) The order may:
(a) be expressed to be subject to conditions; and
(b) be indefinite or limited to a specified period.
(3) Notice of the making, revocation or suspension of the order must be
published in the Gazette.
(1) To make an order under section 340 or 341, ASIC must be satisfied
that complying with the relevant requirements of Parts 2M.2, 2M.3 and 2M.4
would:
(a) make the financial report or other reports misleading; or
(b) be inappropriate in the circumstances; or
(c) impose unreasonable burdens.
(2) In deciding for the purposes of subsection (1) whether the audit
requirements for a proprietary company, or a class of proprietary companies,
would impose an unreasonable burden on the company or companies, ASIC is to have
regard to:
(a) the expected costs of complying with the audit requirements;
and
(b) the expected benefits of having the company or companies comply with
the audit requirements; and
(c) any practical difficulties that the company or companies face in
complying effectively with the audit requirements (in particular, any
difficulties that arise because a financial year is the first one for which the
audit requirements apply or because the company or companies are likely to move
frequently between the small and large proprietary company categories from one
financial year to another); and
(d) any unusual aspects of the operation of the company or companies
during the financial year concerned; and
(e) any other matters that ASIC considers relevant.
(3) In assessing expected benefits under subsection (2), ASIC is to
take account of:
(a) the number of creditors and potential creditors; and
(b) the position of creditors and potential creditors (in particular,
their ability to independently obtain financial information about the company or
companies); and
(c) the nature and extent of the liabilities of the company or
companies.
The regulations may modify the operation of this Chapter in relation
to:
(a) a specified company, registered scheme or disclosing entity;
or
(b) all companies, registered schemes or disclosing entities of a
specified kind.
(1) A director of a company, registered scheme or disclosing entity
contravenes this section if they fail to take all reasonable steps to comply
with, or to secure compliance with, Part 2M.2 or 2M.3.
Note: This section is a civil penalty provision (see
section 1317E).
(2) A person commits an offence if they contravene subsection (1) and
the contravention is dishonest.
(3) Subsection (1) does not apply to section 310, 312, 323A or
323B.
(4) This section does not affect the application of the provisions of
Part 2M.2 or 2M.3 to a director as an officer.
Companies
(1) A company must lodge an annual return with the ASIC by 31 January
each year, unless ASIC and the company agree to a different lodgment date (see
subsection (3)).
Responsible entities of registered schemes
(2) The responsible entity of a registered scheme must lodge an annual
return for the scheme with ASIC. The return for a scheme must be lodged within 3
months after the end of the scheme’s financial year unless ASIC and the
responsible entity agree to a different lodgment date (see
subsection (3)).
Agreed lodgment date
(3) ASIC and the company or ASIC and the responsible entity may agree to a
different lodgment date. The agreement must be in writing and may cover 1 or
more years. The annual return must be lodged by the agreed date.
Company’s obligation to lodge some notices ceases on lodgment of
annual return
(4) A company’s obligation to lodge a notice under section 142,
146, 242 or 254X, ceases when:
(a) the company lodges an annual return; and
(b) the annual return sets out the information required by the
notice.
This subsection does not affect the company’s liability for late
lodgment fees incurred before the annual return is lodged or continuing offences
committed before that time.
Note: ASIC has a practice of sending out partly completed
annual returns. The partly completed return may be used to comply with the
obligation to lodge an annual return by correcting any information in it that is
not accurate, completing the rest and lodging it with ASIC.
(1) Within 1 month before the annual return is lodged, the directors of a
company must resolve whether, in their opinion, there are reasonable grounds to
believe that the company will be able to pay its debts as and when they become
due and payable.
(2) Subsection (1) does not apply to a company that has lodged a
financial report of the company with ASIC under Chapter 2M within 12 months
before the annual return is lodged.
An annual return may be lodged with ASIC:
(a) in writing in the form approved by ASIC and signed in accordance with
section 351; or
(b) electronically in accordance with section 352.
A company’s annual return must contain the information set out in
the following table, current as at the date when the annual return is signed or
authenticated. It must also contain any other information required by the
regulations.
|
Contents of annual return—companies |
[operative table] |
||
|---|---|---|---|
|
1 |
ACN |
|
|
|
2 |
name |
|
|
|
3 |
address of registered office |
|
|
|
4 |
address of principal place of business in this
jurisdiction |
|
|
|
5 |
each director and company secretary |
• name and address The address must be the person’s usual residential address.
However, if the person is entitled to have an alternative address under
subsection 205D(2), the annual return may contain that address. |
|
|
6 |
issued shares |
The classes into which the shares are divided and for each class of share
issued: |
|
|
7 |
options granted |
The number of unissued shares in each class that are subject to
options. |
|
|
8 |
all members (if company has 20 or fewer members) OR the top 20 members in each class (if company has more than 20
members) The requirement to list the top 20 members does not apply to a company
limited only by guarantee. |
• the names and addresses of the members If the company has a share capital: If 2 or more members in the top 20 members in a class of shares each
hold the same number of shares, the company must include the details set out
above for each of them. |
|
|
9 |
company solvency Not necessary if company lodged a financial report with ASIC within last
12 months. |
Statement whether the directors have resolved within the last month under
section 346 that, in their opinion, there are reasonable grounds to believe
that the company will be able to pay its debts as and when they become due and
payable. |
|
|
10 |
ultimate holding company |
• name either: OR |
|
Note: If the details referred to in items 3, 4, 5 and 6
change after the annual return is lodged, the company must notify ASIC of the
change (see section 142 (registered office), section 146 (principal
place of business), section 205B (director and company secretary) and
section 254X (issued shares)).
An annual return for a registered scheme must contain the information set
out in the following table, current as at the date when the annual return is
signed or authenticated. It must also contain any other information required by
the regulations.
|
Contents of annual return—registered schemes |
[operative table] |
||
|---|---|---|---|
|
1 |
registration number of scheme |
|
|
|
2 |
name of scheme |
|
|
|
3 |
name and ACN of the responsible entity |
|
|
|
4 |
issued interests in a managed investment scheme Only if the scheme is a unit trust. |
The classes into which the interests are divided and for each class of
interest issued: |
|
|
5 |
issued interests in a managed investment scheme Only if 4 does not apply. |
• a description of the nature of the interests (for example, interest
in a limited partnership, right to participate in a timesharing
scheme) |
|
|
6 |
options granted |
• the number of unissued managed investment interests that are
subject to options |
|
|
7 |
all interest holders (if scheme has 20 or fewer interest holders) OR the top 20 interest holders in each class (if scheme has more than 20
interest holders) |
• the names and addresses of the interest holders If 2 or more interest holders in the top 20 interest holders in a class
each hold the same number of interests, the responsible entity must include the
details set out above for each of them. |
|
A document that this Act requires to be lodged with the ASIC in a
prescribed form must be:
(a) if a form for the document is prescribed in the regulations—in
the prescribed form; or
(b) if a form for the document is not prescribed in regulations but the
ASIC has approved a form for the document—in the approved form.
(1) A document lodged with ASIC in writing by, or on behalf of, a body or
a registered scheme must be signed by a director or secretary of the body or of
the responsible entity of the registered scheme. If the body is a foreign
company, it may be signed by:
(a) its local agent; or
(b) if the local agent is a company—a director or secretary of the
company.
(2) An individual who lodges a document with ASIC in writing must sign
it.
(3) The person’s name must be printed next to the
signature.
(1) A document may be lodged with ASIC electronically only if:
(a) ASIC and the person seeking to lodge it (either on their own behalf or
as agent) have agreed, in writing, that it may be lodged electronically;
or
(b) ASIC has approved, in writing, the electronic lodgment of documents of
that kind.
The document is taken to be lodged with ASIC if it is lodged in accordance
with the agreement or approval (including any requirements of the agreement or
approval as to authentication).
(2) Any agreement or approval must provide for a signed copy of the
document to be held by the person lodging the document and for the person to
make the signed copy of the document available to the ASIC if
required.
A reference in this Part, in relation to a Part 5.1 body, to the
directors is a reference to the directors of the body or any one or more of
them.
(1) Where a compromise or arrangement is proposed between a Part 5.1
body and its creditors or any class of them or between a Part 5.1 body and
its members or any class of them, the Court may, on the application in a summary
way of the body or of any creditor or member of the body, or, in the case of a
body being wound up, of the liquidator, order a meeting or meetings of the
creditors or class of creditors or of the members of the body or class of
members to be convened in such manner, and to be held in such place or places
(in this jurisdiction or elsewhere), as the Court directs and, where the Court
makes such an order, the Court may approve the explanatory statement required by
paragraph 412(1)(a) to accompany notices of the meeting or meetings.
(1A) Where:
(a) a compromise or arrangement is proposed:
(i) between 30 or more Part 5.1 bodies that are wholly-owned
subsidiaries of a holding company and the creditors or a class of the creditors
of each of those subsidiaries; and
(ii) between the holding company and the creditors or a class of the
creditors of the holding company; and
(b) the proposed compromise or arrangement in relation to each subsidiary
includes a term that orders will be sought under section 413 transferring
the whole of the undertaking and of the property and liabilities of the
subsidiary to the holding company; and
(c) the Court is satisfied, on the application in a summary way:
(i) of the holding company or of a creditor of the holding company;
or
(ii) if the holding company is being wound up—of the
liquidator;
that the number of meetings that would be required between creditors in
order to consider the proposed compromises or arrangements would be so great as
to result in a significant impediment to the timely and effective consideration
by those creditors of the terms of the compromises or arrangements;
the Court may order a meeting or meetings, on a consolidated basis, of the
creditors of the holding company and of each of the subsidiaries or of such
class or classes of those creditors as the Court determines and, where the Court
makes such an order, the Court may approve the explanatory statement required by
paragraph 412(1)(a) to accompany notices of the meeting or meetings.
(1B) Where:
(a) there are fewer than 30 wholly-owned subsidiaries of the holding
company but the matters referred to in paragraphs (1A)(b) and (c) are
satisfied; and
(b) the Court considers that circumstances exist that would justify its
doing so;
the Court may make an order under subsection (1A) in relation to the
proposed compromise or arrangement.
(1C) Where an order is made under subsection (1A) in relation to a
proposed compromise or arrangement, the succeeding provisions of this Part apply
to the compromise or arrangement as if:
(a) references in this Part to a company included references to all of the
Part 5.1 bodies to which the order relates; and
(b) references in this Part to creditors of a company included references
to the creditors of all the Part 5.1 bodies to which the order relates;
and
(c) references in this Part to a class of the creditors of a company were
references to the relevant class of creditors of all of the Part 5.1 bodies
to which the order relates.
(2) The Court must not make an order pursuant to an application under
subsection (1) or (1A) unless:
(a) 14 days notice of the hearing of the application, or such lesser
period of notice as the Court or ASIC permits, has been given to ASIC;
and
(b) the Court is satisfied that ASIC has had a reasonable
opportunity:
(i) to examine the terms of the proposed compromise or arrangement to
which the application relates and a draft explanatory statement relating to the
proposed compromise or arrangement; and
(ii) to make submissions to the Court in relation to the proposed
compromise or arrangement and the draft explanatory statement.
(3) In subsection (2), draft explanatory statement, in
relation to a proposed compromise or arrangement between a body and its
creditors or any class of them or between a body and its members or any class of
them, means a statement:
(a) explaining the effect of the proposed compromise or arrangement and,
in particular, stating any material interests of the directors of the body,
whether as directors, as members or creditors of the body or otherwise, and the
effect on those interests of the proposed compromise or arrangement in so far as
that effect is different from the effect on the like interests of other persons;
and
(b) setting out such information as is prescribed and any other
information that is material to the making of a decision by a creditor or member
of the body whether or not to agree to the proposed compromise or arrangement,
being information that is within the knowledge of the directors of the body and
has not previously been disclosed to the creditors or members of the
body.
(3A) In considering whether to make an order under subsection (1) or
(1A) for a meeting to be held outside this jurisdiction, the Court must have
regard to where the creditors or members, or the creditors or members included
in the class concerned, as the case requires, reside.
(4) A compromise or arrangement is binding on the creditors, or on a class
of creditors, or on the members, or on a class of members, as the case may be,
of the body and on the body or, if the body is in the course of being wound up,
on the liquidator and contributories of the body, if, and only if:
(a) at a meeting convened in accordance with an order of the Court under
subsection (1) or (1A):
(i) in the case of a compromise or arrangement between a body and its
creditors or a class of creditors—the compromise or arrangement is agreed
to by a majority in number of the creditors, or of the creditors included in
that class of creditors, present and voting, either in person or by proxy, being
a majority whose debts or claims against the company amount in the aggregate to
at least 75% of the total amount of the debts and claims of the creditors
present and voting in person or by proxy, or of the creditors included in that
class present and voting in person or by proxy, as the case may be;
and
(ii) in the case of a compromise or arrangement between a body and
its members or a class of members—a resolution in favour of the compromise
or arrangement is:
(A) passed by a majority in number of the members, or members in that
class, present and voting (either in person or by proxy); and
(B) if the body has a share capital—passed by 75% of the votes cast
on the resolution; and
(b) it is approved by order of the Court.
(5) Where the Court orders 2 or more meetings of creditors or of a class
of creditors, or 2 or more meetings of members or of a class of members, to be
held in relation to the proposed compromise or arrangement:
(a) in the case of meetings of creditors—the meetings is, for the
purposes of subsection (4), taken together to constitute a single meeting
and the votes in favour of the proposed compromise or arrangement cast at each
of the meetings are to be aggregated, and the votes against the proposed
compromise or arrangement cast at each of the meetings are to be aggregated,
accordingly; or
(b) in the case of meetings of members—the meetings is, for the
purposes of subsection (4), taken together to constitute a single meeting
and the votes in favour of the proposed compromise or arrangement cast at each
of the meetings is to be aggregated, and the votes against the proposed
compromise or arrangement cast at each of the meetings is to be aggregated,
accordingly.
(6) The Court may grant its approval to a compromise or arrangement
subject to such alterations or conditions as it thinks just.
(7) Except with the leave of the Court, a person must not be appointed to
administer, and must not administer, a compromise or arrangement approved under
this Act between a body and its creditors or any class of them or between a body
and its members or any class of them, whether by the terms of that compromise or
arrangement or pursuant to a power given by the terms of a compromise or
arrangement, if the person:
(a) is a mortgagee of any property of the body; or
(b) is an auditor or an officer of the body; or
(c) is an officer of a body corporate that is a mortgagee of property of
the body; or
(d) is not a registered liquidator; or
(e) is an officer of a body corporate related to the body; or
(f) unless ASIC directs in writing that this paragraph does not apply in
relation to the person in relation to the body—has at any time within the
last 12 months been an officer or promoter of the body or of a related body
corporate.
(8) Paragraph (7)(d) does not apply in relation to a body corporate
authorised by or under a law of a State or Territory in this jurisdiction to
administer the compromise or arrangement concerned.
(8A) Subsection (7) does not disqualify a person from administering a
compromise or arrangement under an appointment validly made before
1 January 1991.
(9) Where a person is or persons are appointed by, or under a power given
by, the terms of a compromise or arrangement, to administer the compromise or
arrangement:
(a) section 425, subsections 427(2) and (4) and sections 428,
432 and 434 apply in relation to that person or those persons as if:
(i) the appointment of the person or persons to administer the compromise
or arrangement were an appointment of the person or persons as a receiver and
manager, or as receivers and managers, of property of the body; and
(ii) a reference in any of those sections or subsections to a receiver, or
to a receiver of property, of a corporation were a reference to that person or
to those persons; and
(b) section 536 applies in relation to that person or those persons
as if:
(i) the appointment of the person or persons to administer the compromise
or arrangement were an appointment of the person or persons as a liquidator of
the body; and
(ii) a reference in that section to a liquidator were a reference to that
person or to those persons.
(10) An order of the Court made for the purposes of paragraph (4)(b)
does not have any effect until an office copy of the order is lodged with ASIC,
and upon being so lodged, the order takes effect, or is taken to have taken
effect, on and from the date of lodgment or such earlier date as the Court
determines and specifies in the order.
(11) Subject to subsection (12), a copy of every order of the Court
made for the purposes of paragraph (4)(b) must be annexed to every copy of
the constitution of the body issued after the order has been made.
(12) The Court may, by order, exempt a body from compliance with
subsection (11) or determine the period during which the body must comply
with that subsection.
(13) Where a compromise or arrangement referred to in subsection (1)
or (1A) (whether or not for the purposes of or in connection with a scheme for
the reconstruction of a body or bodies or the amalgamation of any 2 or more
bodies) has been proposed, the directors of the body must:
(a) if a meeting of the members of the body by resolution so
directs—instruct such accountants or solicitors or both as are named in
the resolution to report on the proposals and send their report or reports to
the directors as soon as practicable; and
(b) if a report or reports is or are obtained pursuant to
paragraph (a)—make the report or reports available at the registered
office of the body for inspection by the shareholders and creditors of the body
at least 7 days before the day of the meeting ordered by the Court to be
convened as provided in subsection (1) or (1A), as the case may
be.
(14) If default is made in complying with subsection (11), the body
contravenes this subsection.
(15) If default is made in complying with subsection (13), each
director of the body contravenes this subsection.
(16) Where no order has been made or resolution passed for the winding up
of a Part 5.1 body and a compromise or arrangement has been proposed
between the body and its creditors or any class of them, the Court may, in
addition to exercising any of its other powers, on the application in a summary
way of the body or of any member or creditor of the body, restrain further
proceedings in any action or other civil proceeding against the body except by
leave of the Court and subject to such terms as the Court imposes.
(17) The Court must not approve a compromise or arrangement under this
section unless:
(a) it is satisfied that the compromise or arrangement has not been
proposed for the purpose of enabling any person to avoid the operation of any of
the provisions of Chapter 6; or
(b) there is produced to the Court a statement in writing by ASIC stating
that ASIC has no objection to the compromise or arrangement;
but the Court need not approve a compromise or arrangement merely because a
statement by ASIC stating that ASIC has no objection to the compromise or
arrangement has been produced to the Court as mentioned in
paragraph (b).
(1) Where a meeting is convened under section 411, the body
must:
(a) with every notice convening the meeting that is sent to a creditor or
member, send a statement (in this section called the explanatory
statement):
(i) explaining the effect of the compromise or arrangement and, in
particular, stating any material interests of the directors, whether as
directors, as members or creditors of the body or otherwise, and the effect on
those interests of the compromise or arrangement in so far as that effect is
different from the effect on the like interests of other persons; and
(ii) setting out such information as is prescribed and any other
information that is material to the making of a decision by a creditor or member
whether or not to agree to the compromise or arrangement, being information that
is within the knowledge of the directors and has not previously been disclosed
to the creditors or members; and
(b) in every notice convening the meeting that is given by advertisement,
include either a copy of the explanatory statement or a notification of the
place at which and the manner in which creditors or members entitled to attend
the meeting may obtain copies of the explanatory statement.
(2) In the case of a creditor whose debt does not exceed $200,
paragraph (1)(a) does not apply unless the Court otherwise orders but the
notice convening the meeting that is sent to such a creditor must specify a
place at which a copy of the explanatory statement can be obtained on request
and, where the creditor makes such a request, the body must as soon as
practicable comply with the request.
(3) Where the compromise or arrangement affects the rights of debenture
holders, the explanatory statement must specify any material interests of the
trustees for the debenture holders, whether as such trustees, as members or
creditors of the body or otherwise, and the effect on those interests of the
compromise or arrangement in so far as that effect is different from the effect
on the like interests of other persons.
(4) Where a notice given by advertisement includes a notification that
copies of the explanatory statement can be obtained in a particular manner,
every creditor or member entitled to attend the meeting must, on making
application in that matter, be furnished by the body free of charge with a copy
of the explanatory statement.
(5) Each person who is a director or trustee for debenture holders must
give notice to the body of such matters relating to the person as are required
to be included in the explanatory statement.
(6) In the case of a compromise or arrangement that is not, or does not
include, a compromise or arrangement between a Part 5.1 body and its
creditors or any class of them, the body must not send out an explanatory
statement pursuant to subsection (1) unless a copy of that statement has
been registered by ASIC.
(7) Where an explanatory statement sent out under subsection (1) is
not required by subsection (6) to be registered by ASIC, the Court must not
make an order approving the compromise or arrangement unless it is satisfied
that ASIC has had a reasonable opportunity to examine the explanatory statement
and to make submissions to the Court in relation to that statement.
(8) Where a copy of an explanatory statement is lodged with ASIC for
registration under subsection (6), ASIC must not register the copy of the
statement unless the statement appears to comply with this Act and ASIC is of
the opinion that the statement does not contain any matter that is false in a
material particular or materially misleading in the form or context in which it
appears.
(9) Where a body contravenes this section, a person involved in the
contravention contravenes this subsection.
(10) It is a defence to a prosecution for a contravention of this section
if it is proved that the contravention was due to the failure of a person (other
than the defendant), being a director of the body or a trustee for debenture
holders of the body, to supply for the purposes of the explanatory statement
particulars of the person’s interests.
(1) Where an application is made to the Court under this Part for the
approval of a compromise or arrangement and it is shown to the Court that the
compromise or arrangement has been proposed for the purposes of, or in
connection with, a scheme for the reconstruction of a Part 5.1 body or
Part 5.1 bodies or the amalgamation of 2 or more Part 5.1 bodies and
that, under the scheme, the whole or any part of the undertaking or of the
property of a body concerned in the scheme (in this section called the
transferor body) is to be transferred to a company (in this
section called the transferee company), the Court may, either by
the order approving the compromise or arrangement or by a later order, provide
for all or any of the following matters:
(a) the transfer to the transferee company of the whole or a part of the
undertaking and of the property or liabilities of the transferor body;
(b) the allotting or appropriation by the transferee company of shares,
debentures, policies or other interests in that company that, under the
compromise or arrangement, are to be allotted or appropriated by that company to
or for any person;
(c) the continuation by or against the transferee company of any legal
proceedings pending by or against the transferor body;
(d) if the transferor body is a company—the deregistration by ASIC,
without winding up, of the transferor body;
(e) the provision to be made for any persons who, within such time and in
such manner as the Court directs, dissent from the compromise or
arrangement;
(f) the transfer or allotment of any interest in property to any person
concerned in the compromise or arrangement;
(g) such incidental, consequential and supplemental matters as are
necessary to ensure that the reconstruction or amalgamation is fully and
effectively carried out.
(2) Where an order made under this section provides for the transfer of
property or liabilities, then, by virtue of the order, that property is
transferred to and vests in, and those liabilities are transferred to and become
the liabilities of, the transferee company, free, in the case of any particular
property if the order so directs, from any charge that is, by virtue of the
compromise or arrangement, to cease to have effect.
(3) Where an order is made under this section, each body to which the
order relates must, within 14 days after the making of the order, lodge with
ASIC an office copy of the order.
(4) In this section:
liabilities includes duties of any description, including
duties that are of a personal character or are incapable under the general law
of being assigned or performed vicariously.
property includes rights and powers of any description,
including rights and powers that are of a personal character and are incapable
under the general law of being assigned or performed vicariously.
(1) In this section:
dissenting shareholder, in relation to a scheme or contract,
means a shareholder who has not assented to the scheme or contract or who has
failed to transfer his, her or its shares in accordance with the scheme or
contract.
excluded shares, in relation to a scheme or contract
involving a transfer to a person of shares in a class of shares in a company,
means shares in that class that, when the offer relating to the scheme or
contract is made, are held by:
(a) in any case—the person or a nominee of the person; or
(b) if the person is a body corporate—a subsidiary of the
body.
(2) Where a scheme or contract (not being a scheme or contract arising out
of the making of offers under a takeover bid) involving a transfer of shares in
a class of shares in a company (in this section called the transferor
company) to a person (in this section called the
transferee) has, within 4 months after the making of the offer
relating to the scheme or contract by the transferee, been approved by members
holding shares in that class carrying at least 90% of the votes attached to
shares in that class (other than excluded shares), the transferee may, within 2
months after the offer has been so approved, give notice as prescribed to a
dissenting shareholder that the transferee wishes to acquire the shares held by
that shareholder.
(3) Where such a notice is given, then, unless the Court orders otherwise
on an application by a dissenting shareholder made within one month after the
day on which the notice was given or within 14 days after a statement is
supplied under subsection (7) to a dissenting shareholder, whichever is the
later, the transferee is entitled and bound, subject to this section, to acquire
those shares on the terms on which, under the scheme or contract, the shares of
the approving shareholders are to be transferred to the transferee.
(4) Where alternative terms were offered to the approving shareholders,
the dissenting shareholder is entitled to elect not later than the end of one
month after the date on which the notice is given under subsection (2) or
14 days after a statement is supplied under subsection (7), whichever is
the later, which of those terms he, she or it prefers and, if he, she or it
fails to make the election within the time allowed by this subsection, the
transferee may, unless the Court otherwise orders, determine which of those
terms is to apply to the acquisition of the shares of the dissenting
shareholder.
(5) Despite subsections (3) and (4), if the number of votes attached
to the excluded shares is more than 10% of the votes attached to the excluded
shares and the shares (other than excluded shares) to be transferred under the
scheme or contract, those subsections do not apply unless:
(a) the transferee offers the same terms to all holders of the
shares (other than excluded shares) to be transferred under the scheme or
contract; and
(b) the holders who approve the scheme or contract hold shares to
which are attached at least 90% of the votes attached to the shares (other than
excluded shares) to be transferred under the scheme or contract and are also at
least 75% in number of the holders of those shares.
(6) For the purposes of paragraph (5)(b), 2 or more persons
registered as holding shares jointly are to be counted as one person.
(7) When a notice is given under subsection (2), the dissenting
shareholder may, by written notice given to the transferee within one month
after the day on which the notice was given under subsection (2), ask for a
statement in writing of the names and addresses of all other dissenting
shareholders as shown in the register of members.
(8) Where a notice is given under subsection (7), the transferee must
comply with it.
(9) Where, under a scheme or contract referred to in subsection (2),
the transferee becomes beneficially entitled to shares in the transferor company
which, together with any other shares in the transferor company to which the
transferee or, where the transferee is a body corporate, a body corporate
related to the transferee is beneficially entitled, have attached to them at
least 90% of the votes attached to the shares included in the class of shares
concerned, then:
(a) the transferee must, within one month after the date on which he, she
or it becomes beneficially entitled to those shares (unless in relation to the
scheme or contract he, she or it has already complied with this requirement),
give notice of the fact as prescribed to the holders of the remaining shares
included in that class who, when the notice was given, had not assented to the
scheme or contract or been given notice by the transferee under
subsection (2); and
(b) such a holder may, within 3 months after the giving of the notice to
him, her or it by notice to the transferee, require the transferee to acquire
his, her or its share and, where alternative terms were offered to the approving
shareholders, elect which of those terms he, she or it will accept.
(10) Where a shareholder gives notice under paragraph (9)(b) with
respect to his, her or its shares, the transferee is entitled and bound to
acquire those shares:
(a) on the terms on which under the scheme or contract the shares of the
approving shareholders were transferred to him, her or it and, where alternative
terms were offered to those shareholders, on the terms for which the shareholder
has elected, or where he, she or it has not so elected, for whichever of the
terms the transferee determines; or
(b) on such other terms as are agreed or as the Court, on the application
of the transferee or of the shareholder, thinks fit to order.
(11) Subsections (12) and (13) apply where a notice has been given
under subsection (1) unless the Court, on an application made by the
dissenting shareholder, orders to the contrary.
(12) The transferee must, within 14 days after:
(a) the end of one month after the day on which the notice was given;
or
(b) the end of 14 days after a statement under subsection (7) is
supplied; or
(c) if an application has been made to the Court by a dissenting
shareholder—the application is disposed of;
whichever last happens:
(d) send a copy of the notice to the transferor company together with an
instrument of transfer that relates to the shares that the transferee is
entitled to acquire under this section and is executed, on the
shareholder’s behalf, by a person appointed by the transferee and, on the
transferee’s own behalf, by the transferee; and
(e) pay, allot or transfer to the transferor company the consideration for
the shares.
(13) When the transferee has complied with subsection (12), the
transferor company must register the transferee as the holder of the
shares.
(14) All sums received by the transferor company under this section must
be paid into a separate bank account and those sums, and any other consideration
so received, must be held by that company in trust for the several persons
entitled to the shares in respect of which they were respectively
received.
(15) Where a sum or other property received by a company under this
section has been held in trust by the company for a person for at least 2 years
(whether or not that period began before the commencement of this Act), the
company must, before the end of 10 years after the day on which the sum was
paid, or the consideration was allotted or transferred, to the company, pay the
sum or transfer the consideration, and any accretions to it and any property
that may become substituted for it or for part of it, to ASIC to be dealt with
under Part 9.7.
(1) Within 14 days after being appointed to administer a compromise or
arrangement approved under this Part, a person must lodge a notice in writing of
the appointment.
(2) Where an application is made to the Court under this Part in relation
to a proposed compromise or arrangement, the Court may:
(a) before making any order on the application, require ASIC or another
person specified by the Court to give to the Court a report as to the terms of
the compromise or arrangement or of the scheme for the purposes of or in
connection with which the compromise or arrangement has been proposed, the
conduct of the officers of the body or bodies concerned and any other matters
that, in the opinion of ASIC or that person, ought to be brought to the
attention of the Court;
(b) in deciding the application, have regard to anything contained in the
report; and
(c) make such order or orders as to the payment of the costs of preparing
and giving the report as the Court thinks fit.
In this Part, unless the contrary intention appears:
officer, in relation to a registered foreign company,
includes a local agent of the foreign company.
property, in relation to a corporation, means
property:
(a) in the case of a company—in Australia or outside Australia;
or
(b) in the case of a registered foreign company—in this jurisdiction
or an external Territory; or
(c) in the case of a registrable Australian body—in this
jurisdiction but outside the body’s place of origin.
receiver, in relation to property of a corporation, includes
a receiver and manager.
Except so far as the contrary intention appears in this Part or
Part 11.2, this Part applies in relation to a receiver of property of a
corporation who is appointed after 1 January 1991, even if the appointment
arose out of a transaction entered into, or an act or thing done, before
1 January 1991.
(1) A person is not qualified to be appointed, and must not act, as
receiver of property of a corporation if the person:
(a) is a mortgagee of property of the corporation; or
(b) is an auditor or an officer of the corporation; or
(c) is an officer of a body corporate that is a mortgagee of property of
the corporation; or
(d) is not a registered liquidator; or
(e) is an officer of a body corporate related to the corporation;
or
(f) unless ASIC directs in writing that this paragraph does not apply in
relation to the person in relation to the corporation—has at any time
within the last 12 months been an officer or promoter of the corporation or of a
related body corporate.
(2) In subsection (1):
officer, in relation to a body corporate, does not include a
receiver, appointed under an instrument whether before or after the commencement
of this Act.
(3) Paragraph (1)(d) does not apply in relation to a body corporate
authorised by or under a law of the Commonwealth, of a State or of a Territory
to act as receiver of property of the corporation concerned.
(1) Where there is doubt, on a specific ground, about:
(a) whether a purported appointment of a person, after 23 June 1993,
as receiver of property of a corporation is valid; or
(b) whether a person who has entered into possession, or assumed control,
of property of a corporation after 23 June 1993 did so validly under the
terms of a charge on that property;
the person, the corporation or any of the corporation’s creditors may
apply to the Court for an order under subsection (2).
(2) On an application, the Court may make an order declaring whether or
not:
(a) the purported appointment was valid; or
(b) the person entered into possession, or assumed control, validly under
the terms of the charge;
as the case may be, on the ground specified in the application or on some
other ground.
(1) A receiver, or any other authorised person, who, whether as agent for
the corporation concerned or not, enters into possession or assumes control of
any property of a corporation for the purpose of enforcing any charge is,
notwithstanding any agreement to the contrary, but without prejudice to the
person’s rights against the corporation or any other person, liable for
debts incurred by the person in the course of the receivership, possession or
control for services rendered, goods purchased or property hired, leased, used
or occupied.
(2) Subsection (1) does not constitute the person entitled to the
charge a mortgagee in possession.
(3) Where:
(a) a person (in this subsection called the controller)
enters into possession or assumes control of property of a corporation;
and
(b) the controller purports to have been properly appointed as a receiver
in respect of that property under a power contained in an instrument, but has
not been properly so appointed; and
(c) civil proceedings in an Australian court arise out of an act alleged
to have been done by the controller;
the court may, if it is satisfied that the controller believed on
reasonable grounds that the controller had been properly so appointed, order
that:
(d) the controller be relieved in whole or in part of a liability that the
controller has incurred but would not have incurred if the controller had been
properly so appointed; and
(e) a person who purported to appoint the controller as receiver be liable
in respect of an act, matter or thing in so far as the controller has been
relieved under paragraph (d) of liability in respect of that act, matter or
thing.
(1) This section applies if:
(a) under an agreement made before the control day in relation to a
controller of property of a corporation, the corporation continues after that
day to use or occupy, or to be in possession of, property (the third party
property) of which someone else is the owner or lessor; and
(b) the controller is controller of the third party property.
(2) Subject to subsections (4) and (7), the controller is liable for
so much of the rent or other amounts payable by the corporation under the
agreement as is attributable to a period:
(a) that begins more than 7 days after the control day; and
(b) throughout which:
(i) the corporation continues to use or occupy, or to be in possession of,
the third party property; and
(ii) the controller is controller of the third party property.
(3) Within 7 days after the control day, the controller may give to the
owner or lessor a notice that specifies the third party property and states that
the controller does not propose to exercise rights in relation to that property
as controller of the property, whether on behalf of the corporation or anyone
else.
(4) Despite subsection (2), the controller is not liable for so much
of the rent or other amounts payable by the corporation under the agreement as
is attributable to a period during which a notice under subsection (3) is
in force, but such a notice does not affect a liability of the
corporation.
(5) A notice under subsection (3) ceases to have effect if:
(a) the controller revokes it by writing given to the owner or lessor;
or
(b) the controller exercises, or purports to exercise, a right in relation
to the third party property as controller of the property, whether on behalf of
the corporation or anyone else.
(6) For the purposes of subsection (5), the controller does not
exercise, or purport to exercise, a right as mentioned in paragraph (5)(b)
merely because the controller continues to be in possession, or to have control,
of the third party property, unless the controller:
(a) also uses the property; or
(b) asserts a right, as against the owner or lessor, so to
continue.
(7) Subsection (2) does not apply in so far as a court, by order,
excuses the controller from liability, but an order does not affect a liability
of the corporation.
(8) The controller is not taken because of subsection (2):
(a) to have adopted the agreement; or
(b) to be liable under the agreement otherwise than as mentioned in
subsection (2).
(1) Subject to this section, a receiver of property of a corporation has
power to do, in Australia and elsewhere, all things necessary or convenient to
be done for or in connection with, or as incidental to, the attainment of the
objectives for which the receiver was appointed.
(2) Without limiting the generality of subsection (1), but subject to
any provision of the court order by which, or the instrument under which, the
receiver was appointed, being a provision that limits the receiver’s
powers in any way, a receiver of property of a corporation has, in addition to
any powers conferred by that order or instrument, as the case may be, or by any
other law, power, for the purpose of attaining the objectives for which the
receiver was appointed:
(a) to enter into possession and take control of property of the
corporation in accordance with the terms of that order or instrument;
and
(b) to lease, let on hire or dispose of property of the corporation;
and
(c) to grant options over property of the corporation on such conditions
as the receiver thinks fit; and
(d) to borrow money on the security of property of the corporation;
and
(e) to insure property of the corporation; and
(f) to repair, renew or enlarge property of the corporation; and
(g) to convert property of the corporation into money; and
(h) to carry on any business of the corporation; and
(j) to take on lease or on hire, or to acquire, any property necessary or
convenient in connection with the carrying on of a business of the corporation;
and
(k) to execute any document, bring or defend any proceedings or do any
other act or thing in the name of and on behalf of the corporation;
and
(m) to draw, accept, make and indorse a bill of exchange or promissory
note; and
(n) to use a seal of the corporation; and
(o) to engage or discharge employees on behalf of the corporation;
and
(p) to appoint a solicitor, accountant or other professionally qualified
person to assist the receiver; and
(q) to appoint an agent to do any business that the receiver is unable to
do, or that it is unreasonable to expect the receiver to do, in person;
and
(r) where a debt or liability is owed to the corporation—to prove
the debt or liability in a bankruptcy, insolvency or winding up and, in
connection therewith, to receive dividends and to assent to a proposal for a
composition or a scheme of arrangement; and
(s) if the receiver was appointed under an instrument that created a
charge on uncalled share capital of the corporation:
(i) to make a call in the name of the corporation for the payment
of money unpaid on the corporation’s shares; or
(ii) on giving a proper indemnity to a liquidator of the
corporation—to make a call in the liquidator’s name for the payment
of money unpaid on the corporation’s shares; and
(t) to enforce payment of any call that is due and unpaid, whether the
calls were made by the receiver or otherwise; and
(u) to make or defend an application for the winding up of the
corporation; and
(w) to refer to arbitration any question affecting the
corporation.
(3) The conferring by this section on a receiver of powers in relation to
property of a corporation does not affect any rights in relation to that
property of any other person other than the corporation.
(4) In this section, a reference, in relation to a receiver, to property
of a corporation is, unless the contrary intention appears, a reference to the
property of the corporation in relation to which the receiver was
appointed.
(1) In exercising a power of sale in respect of property of a corporation,
a controller must take all reasonable care to sell the property for:
(a) if, when it is sold, it has a market value—not less than that
market value; or
(b) otherwise—the best price that is reasonably obtainable, having
regard to the circumstances existing when the property is sold.
(2) Nothing in subsection (1) limits the generality of anything in
section 180, 181, 182, 183 or 184.
(1) On the application of a managing controller of property of a
corporation, the Court may by order authorise the controller to sell, or to
dispose of in some other specified way, specified property of the corporation,
even though it is subject to a charge (in this section called the prior
charge) that has priority over a charge (in this section called the
controller’s charge) on that property that the controller is
enforcing.
(2) However, the Court may only make an order if satisfied that:
(a) apart from the existence of the prior charge, the controller would
have power to sell, or to so dispose of, the property; and
(b) the controller has taken all reasonable steps to obtain the consent of
the holder of the prior charge to the sale or disposal, but has not obtained
that consent; and
(c) sale or disposal of the property under the order is in the best
interests of the corporation’s creditors and of the corporation;
and
(d) sale or disposal of the property under the order will not unreasonably
prejudice the rights or interests of the holder of the prior charge.
(3) The Court is to have regard to the need to protect adequately the
rights and interests of the holder of the prior charge.
(4) If the property would be sold or disposed of together with other
property that is subject to the controller’s charge, the Court may have
regard to:
(a) the amount (if any) by which it is reasonable to expect that the net
proceeds of selling or disposing of that other property otherwise than together
with the first-mentioned property would be less than so much of the net proceeds
of selling or disposing of all the property together as would be attributable to
that other property; and
(b) the amount (if any) by which it is reasonable to expect that the net
proceeds of selling or disposing of the first-mentioned property otherwise than
together with the other property would be greater than so much of the net
proceeds of selling or disposing of all the property together as would be
attributable to the first-mentioned property.
(5) Nothing in subsection (3) or (4) limits the matters to which the
Court may have regard for the purposes of subsection (2).
(6) An order may be made subject to conditions, for example (but without
limitation):
(a) a condition that:
(i) the net proceeds of the sale or disposal; and
(ii) the net proceeds of the sale or disposal of such other property (if
any) as is specified in the condition and is subject to the controller’s
charge;
or a specified part of those net proceeds, be applied in payment of
specified amounts secured by the prior charge; or
(b) a condition that the controller apply a specified amount in payment of
specified amounts secured by the prior charge.
(1) A receiver of property of a corporation that is being wound up
may:
(a) with the written approval of the corporation’s liquidator or
with the approval of the Court, carry on the corporation’s business either
generally or as otherwise specified in the approval; and
(b) do whatever is necessarily incidental to carrying on that business
under paragraph (a).
(2) Subsection (1) does not:
(a) affect a power that the receiver has otherwise than under that
subsection; or
(b) empower the receiver to do an act that he or she would not have power
to do if the corporation were not being wound up.
(3) A receiver of property of a corporation who carries on the
corporation’s business under subsection (1) does so:
(a) as agent for the corporation; and
(b) in his or her capacity as receiver of property of the
corporation.
(4) The consequences of subsection (3) include, but are not limited
to, the following:
(a) for the purposes of subsection 419(1), a debt that the receiver incurs
in carrying on the business as mentioned in subsection (3) of this section
is incurred in the course of the receivership;
(b) a debt or liability that the receiver incurs in so carrying on the
business is not a cost, charge or expense of the winding up.
(1) A controller of property of a corporation must:
(a) open and maintain an account, with an Australian ADI,
bearing:
(i) the controller’s own name; and
(ii) in the case of a receiver of the property—the title
“receiver”; and
(iii) otherwise—the title “controller”; and
(iv) the corporation’s name;
or 2 or more such accounts; and
(b) within 3 business days after money of the corporation comes under the
control of the controller, pay that money into such an account that the
controller maintains; and
(c) ensure that no such account that the controller maintains contains
money other than money of the corporation that comes under the control of the
controller; and
(d) keep such financial records as correctly record and explain all
transactions that the controller enters into as the controller.
(2) Any director, creditor or member of a corporation may, unless the
Court otherwise orders, personally or by an agent, inspect records kept by a
controller of property of the corporation for the purposes of
paragraph (1)(d).
(1) A managing controller of property of a corporation must prepare a
report about the corporation’s affairs that is in the prescribed form and
is made up to a day not later than 30 days before the day when it is
prepared.
(2) The managing controller must prepare and lodge the report within 2
months after the control day.
(3) As soon as practicable, and in any event within 14 days, after lodging
the report, the managing controller must cause to be published in a national
newspaper, or in each State or Territory in a daily newspaper that circulates
generally in that State or Territory, a notice stating:
(a) that the report has been prepared; and
(b) that a person can, on paying the prescribed fee, inspect the report at
specified offices of ASIC.
(4) If, in the managing controller’s opinion, it would seriously
prejudice:
(a) the corporation’s interests; or
(b) the achievement of the objectives for which the controller was
appointed, or entered into possession or assumed control of property of the
corporation, as the case requires;
if particular information that the controller would otherwise include in
the report were made available to the public, the controller need not include
the information in the report.
(5) If the managing controller omits information from the report as
permitted by subsection (4), the controller must include instead a
notice:
(a) stating that certain information has been omitted from the report;
and
(b) summarising what the information is about, but without disclosing the
information itself.
(1) If it appears to the receiver of property of a corporation
that:
(a) a past or present officer, or a member, of the corporation may have
been guilty of an offence in relation to the corporation; or
(b) a person who has taken part in the formation, promotion,
administration, management or winding up of the corporation:
(i) may have misapplied or retained, or may have become liable or
accountable for, any money or property (whether the property is in Australia or
elsewhere) of the corporation; or
(ii) may have been guilty of any negligence, default, breach of duty or
breach of trust in relation to the corporation;
the receiver must:
(c) lodge as soon as practicable a report about the matter; and
(d) give to ASIC such information, and such access to and facilities for
inspecting and taking copies of any documents, as ASIC requires.
(2) The receiver may also lodge further reports specifying any other
matter that, in the receiver’s opinion, it is desirable to bring to the
notice of ASIC.
(3) If it appears to the Court:
(a) that a past or present officer, or a member, of a corporation in
respect of property of which a receiver has been appointed has been guilty of an
offence under a law referred to in paragraph (1)(a) in relation to the
corporation; or
(b) that a person who has taken part in the formation, promotion,
administration, management or winding up of a corporation in respect of property
of which a receiver has been appointed has engaged in conduct referred to in
paragraph (1)(b) in relation to the corporation;
and that the receiver has not lodged a report about the matter, the Court
may, on the application of a person interested in the appointment of the
receiver, direct the receiver to lodge such a report.
(1) If:
(a) it appears to the Court or to ASIC that a controller of property of a
corporation has not faithfully performed, or is not faithfully performing, the
controller’s functions or has not observed, or is not observing, a
requirement of:
(i) in the case of a receiver—the order by which, or the instrument
under which, the receiver was appointed; or
(ii) otherwise—an instrument under which the controller entered into
possession, or took control, of that property; or
(iii) in any case—the Court; or
(iv) in any case—this Act, the regulations or the rules;
or
(b) a person complains to the Court or to ASIC about an act or omission of
a controller of property of a corporation in connection with performing or
exercising any of the controller’s functions and powers;
the Court or ASIC, as the case may be, may inquire into the matter and,
where the Court or ASIC so inquires, the Court may take such action as it thinks
fit.
(2) ASIC may report to the Court any matter that in its opinion is a
misfeasance, neglect or omission on the part of a controller of property of a
corporation and the Court may order the controller to make good any loss that
the estate of the corporation has sustained thereby and may make such other
order or orders as it thinks fit.
(3) The Court may at any time:
(a) require a controller of property of a corporation to answer questions
about the performance or exercise of any of the controller’s functions and
powers as controller; or
(b) examine a person about the performance or exercise by such a
controller of any of the controller’s functions and powers as controller;
or
(c) direct an investigation to be made of such a controller’s
books.
(1) A controller of property of a corporation may apply to the Court for
directions in relation to any matter arising in connection with the performance
or exercise of any of the controller’s functions and powers as
controller.
(2) In the case of a receiver of property of a corporation,
subsection (1) applies only if the receiver was appointed under a power
contained in an instrument.
(1) The Court may by order fix the amount to be paid by way of
remuneration to any person who, under a power contained in an instrument, has
been appointed as receiver of property of a corporation.
(2) The power of the Court to make an order under this section:
(a) extends to fixing the remuneration for any period before the making of
the order or the application for the order; and
(b) is exercisable even if the receiver has died, or ceased to act, before
the making of the order or the application for the order; and
(c) if the receiver has been paid or has retained for the receiver’s
remuneration for any period before the making of the order any amount in excess
of that fixed for that period—extends to requiring the receiver or the
receiver’s personal representatives to account for the excess or such part
of the excess as is specified in the order.
(3) The power conferred by paragraph (2)(c) must not be exercised in
respect of any period before the making of the application for the order unless,
in the opinion of the Court, there are special circumstances making it proper
for the power to be so exercised.
(4) The Court may from time to time vary or amend an order under this
section.
(5) An order under this section may be made, varied or amended on the
application of:
(a) a liquidator of the corporation; or
(b) an administrator of the corporation; or
(c) an administrator of a deed of company arrangement executed by the
corporation; or
(d) ASIC.
(6) An order under this section may be varied or amended on the
application of the receiver concerned.
(7) An order under this section may be made, varied or amended only as
provided in subsections (5) and (6).
A controller of property of a corporation has qualified privilege in
respect of:
(a) a matter contained in a report that the controller lodges under
section 421A or 422; or
(b) a comment that the controller makes under paragraph
429(2)(c).
(1) A person who obtains an order for the appointment of a receiver of
property of a corporation, or who appoints such a receiver under a power
contained in an instrument, must:
(a) within 7 days after obtaining the order or making the appointment,
lodge notice that the order has been obtained, or that the appointment has been
made, as the case may be; and
(b) within 21 days after obtaining the order or making the appointment,
cause notice that the order has been obtained, or that the appointment has been
made, as the case may be, to be published in the Gazette.
(1A) A person who appoints another person to enter into possession, or
take control, of property of a corporation (whether or not as agent for the
corporation) for the purpose of enforcing a charge otherwise than as receiver of
that property must:
(a) within 7 days after making the appointment, lodge notice of the
appointment; and
(b) within 21 days after making the appointment, cause notice of the
appointment to be published in the Gazette.
(1B) A person who enters into possession, or takes control, as mentioned
in subsection (1A) must:
(a) within 7 days after so entering into possession or taking control,
lodge notice that the person has done so; and
(b) within 21 days after so entering into possession or taking control,
cause to be published in the Gazette notice that the person has done
so;
unless another person:
(c) appointed the first-mentioned person so to enter into possession or
take control; and
(d) complies with subsection (1A) in relation to the
appointment.
(2) Within 14 days after becoming a controller of property of a
corporation, a person must lodge notice in the prescribed form of the address of
the person’s office.
(3) A controller of property of a corporation must, within 14 days after a
change in the situation of the controller’s office, lodge notice in the
prescribed form of the change.
(4) A person who ceases to be a controller of property of a corporation
must:
(a) within 7 days after so ceasing, lodge notice that the person has so
ceased; and
(b) within 21 days after so ceasing, cause notice that the person has so
ceased to be published in the Gazette.
(1) Where a receiver of property (whether in or outside this jurisdiction
or in or outside Australia) of a corporation has been appointed, the corporation
must set out, in every public document, and in every negotiable instrument, of
the corporation, after the name of the corporation where it first appears, a
statement that a receiver, or a receiver and manager, as the case requires, has
been appointed.
(2) Where there is a controller (other than a receiver) of property
(whether in Australia or elsewhere) of a corporation, the corporation must set
out, in every public document, and in every negotiable instrument, of the
corporation, after the corporation’s name where it first appears, a
statement that a controller is acting.
(1) In this section:
reporting officer, in relation to a corporation in respect of
property of which a person is controller, means a person who was:
(a) in the case of a company or registrable Australian body—a
director or secretary of the company or registrable Australian body;
or
(b) in the case of a foreign company—a local agent of the foreign
company;
on the control day.
(2) Where a person becomes a controller of property of a
corporation:
(a) the person must serve on the corporation as soon as practicable notice
that the person is a controller of property of the corporation; and
(b) within 14 days after the corporation receives the notice, the
reporting officers must make out and submit to the person a report in the
prescribed form about the affairs of the corporation as at the control day;
and
(c) the person must, within one month after receipt of the
report:
(i) lodge a copy of the report and a notice setting out any comments the
person sees fit to make relating to the report or, if the person does not see
fit to make any comment, a notice stating that the person does not see fit to
make any comment; and
(ii) send to the corporation a copy of the notice lodged in accordance
with subparagraph (i); and
(iii) if the person became a controller of the property:
(A) because of an appointment as receiver of the property that was made by
or on behalf of the holder of debentures of the corporation; or
(B) by entering into possession, or taking control, of the property for
the purpose of enforcing a charge securing such debentures;
and there are trustees for the holders of those debentures—send to
those trustees a copy of the report and a copy of the notice lodged under
subparagraph (i).
(3) Where notice has been served on a corporation under
paragraph (2)(a), the reporting officers may apply to the controller or to
the Court to extend the period within which the report is to be submitted
and:
(a) if application is made to the controller—if the controller
believes that there are special reasons for so doing, the controller may, by
notice in writing given to the reporting officers, extend that period until a
specified day; and
(b) if application is made to the Court—if the Court believes that
there are special reasons for so doing, the Court may, by order, extend that
period until a specified day.
(4) As soon as practicable after granting an extension under
paragraph (3)(a), the controller must lodge a copy of the notice.
(5) As soon as practicable after the Court grants an extension under
paragraph (3)(b), the reporting officers must lodge a copy of the
order.
(6) Subsections (2), (3) and (4) do not apply in a case where a
person becomes a controller of property of a corporation:
(a) to act with an existing controller of property of the corporation;
or
(b) in place of a controller of such property who has died or ceased to be
a controller of such property.
(6A) However, if subsection (2) applies in a case where a controller
of property of a corporation dies, or ceases to be a controller of property of
the corporation, before subsection (2) is fully complied with,
then:
(a) the references in paragraphs (2)(b) and (c) to the person;
and
(b) the references in subsections (3) and (4) to the
controller;
include references to the controller’s successor and to any
continuing controller.
(7) Where a corporation is being wound up, this section (including
subsection (6A)) and section 430 apply even if the controller and the
liquidator are the same person, but with any necessary modifications arising
from that fact.
(1) A controller of property of a corporation may, by notice given to the
person or persons, require one or more persons included in one or more of the
following classes of persons to make out as required by the notice, verify by a
statement in writing in the prescribed form, and submit to the controller, a
report, containing such information as is specified in the notice as to the
affairs of the corporation or as to such of those affairs as are specified in
the notice, as at a date specified in the notice:
(a) persons who are or have been officers of the corporation;
(b) where the corporation was incorporated within one year before the
control day—persons who have taken part in the formation of the
corporation;
(c) persons who are employed by the corporation or have been so employed
within one year before the control day and are, in the opinion of the
controller, capable of giving the information required;
(d) persons who are, or have been within one year before the control day,
officers of, or employed by, a corporation that is, or within that year was, an
officer of the corporation.
(2) Without limiting the generality of subsection (1), a notice under
that subsection may specify the information that the controller requires as to
affairs of the corporation by reference to information that this Act requires to
be included in any other report, statement or notice under this Act.
(3) A person making a report and verifying it as required by
subsection (1) must, subject to the regulations, be allowed, and must be
paid by the controller (or the controller’s successor) out of the
controller’s receipts, such costs and expenses incurred in and about the
preparation and making of the report and the verification of the report as the
controller (or the controller’s successor) considers reasonable.
(4) A person must comply with a requirement made under
subsection (1).
(5) A reference in this section to the controller’s successor
includes a reference to a continuing controller.
A controller of property of a corporation is entitled to inspect at any
reasonable time any books of the corporation that relate to that property and a
person must not fail to allow the controller to inspect such books at such a
time.
(1) A controller of property of a corporation must lodge an
account:
(a) within one month after the end of:
(i) 6 months, or such shorter period as the controller determines, after
the day when the controller became a controller of property of the corporation;
and
(ii) each subsequent period of 6 months throughout which the controller is
a controller of property of the corporation; and
(b) within one month after the controller ceases to be a controller of
property of the corporation.
(1A) An account must be in the prescribed form and show:
(a) the controller’s receipts and payments during:
(i) in the case of an account under paragraph (1)(a)—the 6
months or shorter period, as the case requires; or
(ii) in the case of an account under paragraph (1)(b)—the
period beginning at the end of the period to which the last account related, or
on the control day, as the case requires, and ending on the day when the
controller so ceased; and
(b) except in the case of an account lodged under
subparagraph (1)(a)(i)—the respective aggregates of the
controller’s receipts and payments since the control day; and
(c) in the case of:
(i) a receiver appointed under a power contained in an instrument;
or
(ii) anyone else who is in possession, or has control, of property of the
corporation for the purpose of enforcing a charge;
the following:
(iii) the amount (if any) owing under that instrument or charge:
(A) in the case of an account lodged under
subparagraph (1)(a)(i)—at the end of the control day and at the end
of the period to which the account relates; or
(B) otherwise—at the end of the period to which the account
relates;
(iv) the controller’s estimate of the total value, at the end of the
period to which the account relates, of the property of the corporation that is
subject to the instrument or charge.
(2) ASIC may, of its own motion or on the application of the corporation
or a creditor of the corporation, cause the accounts lodged in accordance with
subsection (1) to be audited by a registered company auditor appointed by
ASIC and, for the purpose of the audit, the controller must furnish the auditor
with such books and information as the auditor requires.
(3) Where
ASIC causes the accounts to be audited on the request of the corporation or a
creditor, ASIC may require the corporation or creditor, as the case may be, to
give security for the payment of the cost of the audit.
(4) The costs of an audit under subsection (2) must be fixed by ASIC
and ASIC may if it thinks fit make an order declaring that, for the purposes of
subsection 419(1), those costs are taken to be a debt incurred by the controller
as mentioned in subsection 419(1) and, where such an order is made, the
controller is liable accordingly.
(5) A person must comply with a requirement made under this
section.
(2) This section applies where:
(a) a receiver is appointed on behalf of the holders of any debentures of
a company or registered body that are secured by a floating charge, or
possession is taken or control is assumed, by or on behalf of the holders of any
debentures of a company or registered body, of any property comprised in or
subject to a floating charge; and
(b) at the date of the appointment or of the taking of possession or
assumption of control (in this section called the relevant
date):
(i) the company or registered body has not commenced to be wound up
voluntarily; and
(ii) the company or registered body has not been ordered to be wound up by
the Court.
(3) In the case of a company, the receiver or other person taking
possession or assuming control of property of the company must pay, out of the
property coming into his, her or its hands, the following debts or amounts in
priority to any claim for principal or interest in respect of the
debentures:
(a) first, any amount that in a winding up is payable in priority to
unsecured debts pursuant to section 562;
(b) next, if an auditor of the company had applied to ASIC under
subsection 329(6) for consent to his, her or its resignation as auditor and ASIC
had refused that consent before the relevant date—the reasonable fees and
expenses of the auditor incurred during the period beginning on the day of the
refusal and ending on the relevant date;
(c) subject to subsections (6) and (7), next, any debt or amount that
in a winding up is payable in priority to other unsecured debts pursuant to
paragraph 556(1)(e), (g) or (h) or section 560.
(4) In the case of a registered body, the receiver or other person taking
possession or assuming control of property of the registered body must pay, out
of the property of the registered body coming into his, her or its hands, the
following debts or amounts in priority to any claim for principal or interest in
respect of the debentures:
(a) first, any amount that in a winding up is payable in priority to
unsecured debts pursuant to section 562;
(b) next, any debt or amount that in a winding up is payable in priority
to other unsecured debts pursuant to paragraph 556(1)(e), (g) or (h) or
section 560.
(5) The receiver or other person taking possession or assuming control of
property must pay debts and amounts payable pursuant to paragraph (3)(c) or
(4)(b) in the same order of priority as is prescribed by Division 6 of
Part 5.6 in respect of those debts and amounts.
(6) In the case of a company, if an auditor of the company had applied to
ASIC under subsection 329(6) for consent to his, her or its resignation as
auditor and ASIC had, before the relevant date, refused that consent, a receiver
must, when property comes to the receiver’s hands, before paying any debt
or amount referred to in paragraph (3)(c), make provision out of that
property for the reasonable fees and expenses of the auditor incurred after the
relevant date but before the date on which the property comes into the
receiver’s hands, being fees and expenses in respect of which provision
has not already been made under this subsection.
(7) If an auditor of the company applies to ASIC under subsection 329(6)
for consent to his, her or its resignation as auditor and, after the relevant
date, ASIC refuses that consent, the receiver must, in relation to property that
comes into the receiver’s hands after the refusal, before paying any debt
or amount referred to in paragraph (3)(c), make provision out of that
property for the reasonable fees and expenses of the auditor incurred after the
refusal and before the date on which the property comes into the
receiver’s hands, being fees and expenses in respect of which provision
has not already been made under this subsection.
(8) A receiver must make provision in respect of reasonable fees and
expenses of an auditor in respect of a particular period as required by
subsection (6) or (7) whether or not the auditor has made a claim for fees
and expenses for that period, but where the auditor has not made a claim, the
receiver may estimate the reasonable fees and expenses of the auditor for that
period and make provision in accordance with the estimate.
(9) For the purposes of this section, the references in Division 6 of
Part 5.6 to the relevant date are to be read as references to the date of
the appointment of the receiver, or of possession being taken or control being
assumed, as the case may be.
(1) If a controller of property of a corporation:
(a) who has made default in making or lodging any return, account or other
document or in giving any notice required by law fails to make good the default
within 14 days after the service on the controller, by any member or creditor of
the corporation or trustee for debenture holders, of a notice requiring the
controller to do so; or
(b) who has become a controller of property of the corporation otherwise
than by being appointed a receiver of such property by a court and who has,
after being required at any time by the liquidator of the corporation so to do,
failed to render proper accounts of, and to vouch, the controller’s
receipts and payments and to pay over to the liquidator the amount properly
payable to the liquidator;
the Court may make an order directing the controller to make good the
default within such time as is specified in the order.
(2) An application under subsection (1) may be made:
(a) if paragraph (1)(a) applies—by a member or creditor of the
corporation or by a trustee for debenture holders; and
(b) if paragraph (1)(b) applies—by the liquidator of the
corporation.
Where, on the application of a corporation, the Court is satisfied that a
controller of property of the corporation has been guilty of misconduct in
connection with performing or exercising any of the controller’s functions
and powers, the Court may order that, on and after a specified day, the
controller cease to act as receiver or give up possession or control, as the
case requires, of property of the corporation.
(1) The Court may order that, on and after a specified day, a controller
of property of a corporation:
(a) cease to act as receiver, or give up possession or control, as the
case requires, of property of the corporation; or
(b) act as receiver, or continue in possession or control, as the case
requires, only of specified property of the corporation.
(2) However, the Court may only make an order under subsection (1) if
satisfied that the objectives for which the controller was appointed, or entered
into possession or took control of property of the corporation, as the case
requires, have been achieved, so far as is reasonably practicable, except in
relation to any property specified in the order under
paragraph (1)(b).
(3) For the purposes of subsection (2), the Court must have regard
to:
(a) the corporation’s interests; and
(b) the interests of the holder of the charge that the controller is
enforcing; and
(c) the interests of the corporation’s other creditors;
and
(d) any other relevant matter.
(4) The Court may only make an order under subsection (1) on the
application of a liquidator appointed for the purposes of winding up the
corporation in insolvency.
(5) An order under subsection (1) may also prohibit the holder of the
charge from doing any or all of the following, except with the leave of the
Court:
(a) appointing a person as receiver of property of the corporation under a
power contained in an instrument relating to the charge;
(b) entering into possession, or taking control, of such property for the
purpose of enforcing the charge;
(c) appointing a person so to enter into possession or take control
(whether as agent for the chargee or for the corporation).
(1) Except as expressly provided in section 434A or 434B, an order
under that section does not affect a charge on property of a
corporation.
(2) Nothing in section 434A or 434B limits any other power of the
Court to remove, or otherwise deal with, a controller of property of a
corporation (for example, the Court’s powers under
section 423).
The object of this Part is to provide for the business, property and
affairs of an insolvent company to be administered in a way that:
(a) maximises the chances of the company, or as much as possible of its
business, continuing in existence; or
(b) if it is not possible for the company or its business to continue in
existence—results in a better return for the company’s creditors and
members than would result from an immediate winding up of the company.
In this Part, unless the contrary intention appears:
receiver includes a receiver and manager.
(1) The administration of a company:
(a) begins when an administrator of the company is appointed under
section 436A, 436B or 436C; and
(b) ends on the happening of whichever event of a kind referred to in
subsection (2) or (3) happens first after the administration
begins.
(2) The normal outcome of the administration of a company is
that:
(a) a deed of company arrangement is executed by both the company and the
deed’s administrator; or
(b) the company’s creditors resolve under paragraph 439C(b) that the
administration should end; or
(c) the company’s creditors resolve under paragraph 439C(c) that the
company be wound up.
(3) However, the administration of a company may also end
because:
(a) the Court orders, under section 447A or otherwise, that the
administration is to end, for example, because the Court is satisfied that the
company is solvent; or
(b) the convening period, as fixed by subsection 439A(5), for a meeting of
the company’s creditors ends:
(i) without the meeting being convened in accordance with
section 439A; and
(ii) without an application being made for the Court to extend under
subsection 439A(6) the convening period for the meeting; or
(c) an application for the Court to extend under subsection 439A(6) the
convening period for such a meeting is finally determined or otherwise disposed
of otherwise than by the Court extending the convening period; or
(d) the convening period, as extended under subsection 439A(6), for such a
meeting ends without the meeting being convened in accordance with
section 439A; or
(e) such a meeting convened under section 439A ends (whether or not
it was earlier adjourned) without a resolution under section 439C being
passed at the meeting; or
(f) the company contravenes subsection 444B(2) by failing to execute a
proposed deed of company arrangement; or
(g) the Court appoints a provisional liquidator of the company, or orders
that the company be wound up.
(4) During the administration of a company, the company is taken to be
under administration.
(1) A company may, by writing, appoint an administrator of the company if
the board has resolved to the effect that:
(a) in the opinion of the directors voting for the resolution, the company
is insolvent, or is likely to become insolvent at some future time;
and
(b) an administrator of the company should be appointed.
(2) Subsection (1) does not apply to a company that is already being
wound up.
(1) A liquidator or provisional liquidator of a company may by writing
appoint an administrator of the company if he or she thinks that the company is
insolvent, or is likely to become insolvent at some future time.
(2) With the leave of the Court, a liquidator or provisional liquidator of
a company may appoint himself or herself under subsection (1).
(3) Subsection (2) has effect subject to Division 14.
(1) A person who is entitled to enforce a charge on the whole, or
substantially the whole, of a company’s property may by writing appoint an
administrator of the company if the charge has become, and is still,
enforceable.
(2) Subsection (1) does not apply to a company that is already being
wound up.
An administrator cannot be appointed under section 436A, 436B or
436C if the company is already under administration.
(1) The administrator of a company under administration must convene a
meeting of the company’s creditors in order to determine:
(a) whether to appoint a committee of creditors; and
(b) if so, who are to be the committee’s members.
(2) The meeting must be held within 5 business days after the
administration begins.
(3) The administrator must convene the meeting by:
(a) giving written notice of the meeting to as many of the company’s
creditors as reasonably practicable; and
(b) causing notice of the meeting to be published:
(i) in a national newspaper; or
(ii) in each State or Territory in which the company has its registered
office or carries on business, in a daily newspaper that circulates generally in
that State or Territory;
at least 2 business days before the meeting.
(4) At the meeting, the company’s creditors may also, by
resolution:
(a) remove the administrator from office; and
(b) appoint someone else as administrator of the company.
(1) The functions of a committee of creditors of a company under
administration are:
(a) to consult with the administrator about matters relating to the
administration; and
(b) to receive and consider reports by the administrator.
(2) A committee cannot give directions to the administrator, except as
provided in subsection (3).
(3) As and when a committee reasonably requires, the administrator must
report to the committee about matters relating to the administration.
A person can be a member of a committee of creditors of a company under
administration if, and only if, he or she is:
(a) a creditor of the company; or
(b) the attorney of such a creditor because of a general power of
attorney; or
(c) authorised in writing by such a creditor to be such a
member.
(1) While a company is under administration, the administrator:
(a) has control of the company’s business, property and affairs;
and
(b) may carry on that business and manage that property and those affairs;
and
(c) may terminate or dispose of all or part of that business, and may
dispose of any of that property; and
(d) may perform any function, and exercise any power, that the company or
any of its officers could perform or exercise if the company were not under
administration.
(2) Nothing in subsection (1) limits the generality of anything else
in it.
When performing a function, or exercising a power, as administrator of a
company under administration, the administrator is taken to be acting as the
company’s agent.
(1) While a company is under administration, a person (other than the
administrator) cannot perform or exercise, and must not purport to perform or
exercise, a function or power as an officer of the company, except with the
administrator’s written approval.
(2) Subsection (1) does not remove an officer of a company from his
or her office.
(3) Section 437D does not limit the generality of subsection (1)
of this section.
(4) In this section:
officer, in relation to a company under administration,
includes:
(a) a receiver who is not also a manager; and
(b) a receiver and manager appointed by a court; and
(c) a liquidator or provisional liquidator appointed by the Court before
the administration began.
(5) However, a person is not an officer of a company for the purposes of
this section merely because he or she is an employee of the company.
(1) This section applies where:
(a) a company under administration purports to enter into; or
(b) a person purports to enter into, on behalf of a company under
administration;
a transaction or dealing affecting property of the company.
(2) The transaction or dealing is void unless:
(a) the administrator entered into it on the company’s behalf;
or
(b) the administrator consented to it in writing before it was entered
into; or
(c) it was entered into under an order of the Court.
(3) Subsection (2) does not apply to a payment made:
(a) by an Australian ADI out of an account kept by the company with the
ADI; and
(b) in good faith and in the ordinary course of the ADI’s banking
business; and
(c) after the administration began and on or before the day on
which:
(i) the administrator gives to the ADI (under subsection 450A(3) or
otherwise) written notice of the appointment that began the administration;
or
(ii) the administrator complies with paragraph 450A(1)(b) in relation to
that appointment;
whichever happens first.
(4) Subsection (2) has effect subject to an order that the Court
makes after the purported transaction or dealing.
(5) If, because of subsection (2), the transaction or dealing is
void, or would be void apart from subsection (4), an officer of the company
who:
(a) purported to enter into the transaction or dealing on the
company’s behalf; or
(b) was in any other way, by act or omission, directly or indirectly,
knowingly concerned in, or party to, the transaction or dealing;
contravenes this subsection.
(1) Where:
(a) a court finds a person guilty of an offence constituted by a
contravention of subsection 437D(5) (including such an offence that is taken to
have been committed because of section 5 of the Crimes Act 1914);
and
(b) the court is satisfied that the company or another person has suffered
loss or damage because of the act or omission constituting the
offence;
the court may (whether or not it imposes a penalty) order the
first-mentioned person to pay compensation to the company or other person, as
the case may be, of such amount as the order specifies.
Note: Section 73A defines when a court is taken to find
a person guilty of an offence.
(2) An order under subsection (1) may be enforced as if it were a
judgment of the court.
(3) The power of a court under section 1318 to relieve a person from
liability as mentioned in that section extends to relieving a person from
liability to be ordered under this section to pay compensation.
A transfer of shares in a company, or an alteration in the status of
members of a company, that is made during the administration of the company is
void except so far as the Court otherwise orders.
As soon as practicable after the administration of a company begins, the
administrator must:
(a) investigate the company’s business, property, affairs and
financial circumstances; and
(b) form an opinion about each of the following matters:
(i) whether it would be in the interests of the company’s creditors
for the company to execute a deed of company arrangement;
(ii) whether it would be in the creditors’ interests for the
administration to end;
(iii) whether it would be in the creditors’ interests for the
company to be wound up.
(1) As soon as practicable after the administration of a company begins,
each director must:
(a) deliver to the administrator all books in the director’s
possession that relate to the company, other than books that the director is
entitled, as against the company and the administrator, to retain; and
(b) if the director knows where other books relating to the company
are—tell the administrator where those books are.
(2) Within 7 days after the administration of a company begins or such
longer period as the administrator allows, the directors must give to the
administrator a statement about the company’s business, property, affairs
and financial circumstances.
(3) A director of a company under administration must:
(a) attend on the administrator at such times; and
(b) give the administrator such information about the company’s
business, property, affairs and financial circumstances;
as the administrator reasonably requires.
(4) A person must not, without reasonable excuse, fail to comply with
subsection (1), (2) or (3).
(1) A person is not entitled, as against the administrator of a company
under administration:
(a) to retain possession of books of the company; or
(b) to claim or enforce a lien on such books;
but such a lien is not otherwise prejudiced.
(2) Paragraph (1)(a) does not apply in relation to books of which a
secured creditor of the company is entitled to possession otherwise than because
of a lien, but the administrator is entitled to inspect, and make copies of,
such books at any reasonable time.
(3) The administrator of a company under administration may give to a
person a written notice requiring the person to deliver to the administrator, as
specified in the notice, books so specified that are in the person’s
possession.
(4) A notice under subsection (3) must specify a period of at least 3
business days as the period within which the notice must be complied
with.
(5) A person must comply with a notice under subsection (3) except so
far as the person is entitled, as against the company and the administrator, to
retain possession of the books.
(1) If it appears to the administrator of a company under administration
that:
(a) a past or present officer, or a member, of the company may have been
guilty of an offence in relation to the company; or
(b) a person who has taken part in the formation, promotion,
administration, management or winding up of the company:
(i) may have misapplied or retained, or may have become liable or
accountable for, money or property (in Australia or elsewhere) of the company;
or
(ii) may have been guilty of negligence, default, breach of duty or breach
of trust in relation to the company;
the administrator must:
(c) lodge a report about the matter as soon as practicable; and
(d) give ASIC such information, and such access to and facilities for
inspecting and taking copies of documents, as ASIC requires.
(2) The administrator may also lodge further reports specifying any other
matter that, in his or her opinion, it is desirable to bring to ASIC’s
notice.
(3) If it appears to the Court:
(a) that a past or present officer, or a member, of a company under
administration has been guilty of an offence in relation to the company;
or
(b) that a person who has taken part in the formation, promotion,
administration, management or winding up of a company under administration has
engaged in conduct of a kind referred to in paragraph (1)(b) in relation to
the company;
and that the administrator has not lodged a report about the matter, the
Court may, on the application of an interested person, direct the administrator
to lodge such a report.
(1) The administrator of a company under administration must convene a
meeting of the company’s creditors within the convening period as fixed by
subsection (5) or extended under subsection (6).
Note: For body corporate representatives’ powers at a
meeting of the company’s creditors, see
section 250D.
(2) The meeting must be held within 5 business days after the end of the
convening period.
(3) The administrator must convene the meeting by:
(a) giving written notice of the meeting to as many of the company’s
creditors as reasonably practicable; and
(b) causing notice of the meeting to be published:
(i) in a national newspaper; or
(ii) in each State or Territory in which the company has its registered
office or carries on business, in a daily newspaper that circulates generally in
that State or Territory;
at least 5 business days before the meeting.
(4) The notice given to a creditor under paragraph (3)(a) must be
accompanied by a copy of:
(a) a report by the administrator about the company’s business,
property, affairs and financial circumstances; and
(b) a statement setting out the administrator’s opinion about each
of the following matters:
(i) whether it would be in the creditors’ interests for the company
to execute a deed of company arrangement;
(ii) whether it would be in the creditors’ interests for the
administration to end;
(iii) whether it would be in the creditors’ interests for the
company to be wound up;
and his or her reasons for those opinions; and
(c) if a deed of company arrangement is proposed—a statement setting
out details of the proposed deed.
(5) The convening period is:
(a) if the administration begins on a day that is in December, or is less
than 28 days before Good Friday—the period of 28 days beginning on that
day; or
(b) otherwise—the period of 21 days beginning on the day when the
administration begins.
(6) The Court may extend the convening period on an application made
within the period referred to in paragraph (5)(a) or (b), as the case
requires.
(1) At a meeting convened under section 439A, the administrator is to
preside.
(2) A meeting convened under section 439A may be adjourned from time
to time, but cannot be adjourned to a day that is more than 60 days after the
first day on which the meeting was held, even if no resolution under
section 439C has been passed at the meeting.
At a meeting convened under section 439A, the creditors may
resolve:
(a) that the company execute a deed of company arrangement specified in
the resolution (even if it differs from the proposed deed (if any) details of
which accompanied the notice of meeting); or
(b) that the administration should end; or
(c) that the company be wound up.
(1) A company under administration cannot be wound up voluntarily, except
as provided by section 446A.
(2) The Court is to adjourn the hearing of an application for an order to
wind up a company if the company is under administration and the Court is
satisfied that it is in the interests of the company’s creditors for the
company to continue under administration rather than be wound up.
(3) The Court is not to appoint a provisional liquidator of a company if
the company is under administration and the Court is satisfied that it is in the
interests of the company’s creditors for the company to continue under
administration rather than have a provisional liquidator appointed.
During the administration of a company, a person cannot enforce a charge
on property of the company, except:
(a) with the administrator’s written consent; or
(b) with the leave of the Court.
During the administration of a company, the owner or lessor of property
that is used or occupied by, or is in the possession of, the company cannot take
possession of the property or otherwise recover it, except:
(a) with the administrator’s written consent; or
(b) with the leave of the Court.
(1) During the administration of a company, a proceeding in a court
against the company or in relation to any of its property cannot be begun or
proceeded with, except:
(a) with the administrator’s written consent; or
(b) with the leave of the Court and in accordance with such terms (if any)
as the Court imposes.
(2) Subsection (1) does not apply to:
(a) a criminal proceeding; or
(b) a prescribed proceeding.
A company’s administrator is not liable to an action or other
proceeding for damages in respect of a refusal to give an approval or consent
for the purposes of this Division.
During the administration of a company, no enforcement process in
relation to property of the company can be begun or proceeded with,
except:
(a) with the leave of the Court; and
(b) in accordance with such terms (if any) as the Court imposes.
(1) This section applies where an officer of a court (in this section
called the court officer), being:
(a) a sheriff; or
(b) the registrar or other appropriate officer of the court;
receives written notice of the fact that a company is under
administration.
(2) During the administration, the court officer cannot:
(a) take action to sell property of the company under a process of
execution; or
(b) pay to a person (other than the administrator):
(i) proceeds of selling property of the company (at any time) under a
process of execution; or
(ii) money of the company seized (at any time) under a process of
execution; or
(iii) money paid (at any time) to avoid seizure or sale of property of the
company under a process of execution; or
(c) take action in relation to the attachment of a debt due to the
company; or
(d) pay to a person (other than the administrator) money received because
of the attachment of such a debt.
(3) The court officer must deliver to the administrator any property of
the company that is in the court officer’s possession under a process of
execution (whenever begun).
(4) The court officer must pay to the administrator all proceeds or money
of a kind referred to in paragraph (2)(b) or (d) that:
(a) are in the court officer’s possession; or
(b) have been paid into the court and have not since been paid
out.
(5) The costs of the execution or attachment are a first charge on
property delivered under subsection (3) or proceeds or money paid under
subsection (4).
(6) In order to give effect to a charge under subsection (5) on
proceeds or money, the court officer may retain, on behalf of the person
entitled to the charge, so much of the proceeds or money as the court officer
thinks necessary.
(7) The Court may, if it is satisfied that it is appropriate to do so,
permit the court officer to take action, or to make a payment, that
subsection (2) would otherwise prevent.
(8) A person who buys property in good faith under a sale under a process
of execution gets a good title to the property as against the company and the
administrator, despite anything else in this section.
(1) This section has effect only for the purposes of a law about the
effect of a lis pendens on purchasers or mortgagees.
(2) During the administration of a company, an application to wind up the
company is taken to be pending.
(3) An application that is taken because of subsection (2) to be
pending constitutes a lis pendens.
(1) During the administration of a company:
(a) a guarantee of a liability of the company cannot be enforced, as
against:
(i) a director of the company who is a natural person; or
(ii) a spouse, de facto spouse or relative of such a director;
and
(b) without limiting paragraph (a), a proceeding in relation to such
a guarantee cannot be begun against such a director, spouse, de facto spouse or
relative;
except with the leave of the Court and in accordance with such terms (if
any) as the Court imposes.
(2) While subsection (1) prevents a person (the
creditor) from:
(a) enforcing as against another person (the guarantor) a
guarantee of a liability of a company; or
(b) beginning a proceeding against another person (the
guarantor) in relation to such a guarantee;
section 1323 applies in relation to the creditor and the guarantor as
if:
(c) a civil proceeding against the guarantor had begun under this Act;
and
(d) the creditor were the only person of a kind referred to in that
section as an aggrieved person.
Note: Under section 1323 the Court can make a range of
orders to ensure that a person can meet the person’s
liabilities.
(3) The effect that section 1323 has because of a particular
application of subsection (2) is additional to, and does not prejudice, the
effect the section otherwise has.
(4) In this section:
guarantee, in relation to a liability of a company, includes
a relevant agreement (as defined in section 9) because of which a person
other than the company has incurred, or may incur, whether jointly with the
company or otherwise, a liability in respect of the liability of the
company.
liability means a debt, liability or other
obligation.
(1) This section applies where:
(a) the whole, or substantially the whole, of the property of a company
under administration is subject to a charge; and
(b) before or during the decision period, the chargee enforced the charge
in relation to all property of the company subject to the charge, whether or not
the charge was enforced in the same way in relation to all that
property.
(2) This section also applies where:
(a) a company is under administration; and
(b) the same person is the chargee in relation to each of 2 or more
charges on property of the company; and
(c) the property of the company (in this subsection called the
charged property) subject to the respective charges together
constitutes the whole, or substantially the whole, of the company’s
property; and
(d) before or during the decision period, the chargee enforced the charges
in relation to all the charged property:
(i) whether or not the charges were enforced in the same way in relation
to all the charged property; and
(ii) whether or not any of the charges was enforced in the same way in
relation to all the property of the company subject to that charge;
and
(iii) in so far as the charges were enforced in relation to property of
the company in a way referred to in paragraph (a), (b) or (d) of the
definition of enforce in section 9—whether or not the
same person was appointed in respect of all of the last-mentioned
property.
(3) Nothing in section 437C or 440B, or in an order under subsection
444F(2), prevents any of the following from enforcing the charge, or any of the
charges:
(a) the chargee;
(b) a receiver or person appointed as mentioned in paragraph (a), (b)
or (d) of the definition of enforce in section 9 as that
definition applies in relation to the charge, or any of the charges (even if
appointed after the decision period).
(4) Section 437D does not apply in relation to a transaction or
dealing that affects property of the company and is entered into by:
(a) the chargee; or
(b) a receiver or person of a kind referred to in paragraph (3)(b) of
this section;
in the performance or exercise of a function or power as chargee, or as
such a receiver or person, as the case may be.
(1) This section applies if, before the beginning of the administration of
a company, a chargee, receiver or other person:
(a) entered into possession, or assumed control, of property of the
company; or
(b) entered into an agreement to sell such property; or
(c) made arrangements for such property to be offered for sale by public
auction; or
(d) publicly invited tenders for the purchase of such property;
or
(e) exercised any other power in relation to such property;
for the purpose of enforcing a charge on that property.
(2) Nothing in section 437C or 440B prevents the chargee, receiver or
other person from enforcing the charge in relation to that property.
(3) Section 437D does not apply in relation to a transaction or
dealing that affects that property and is entered into:
(a) in the exercise of a power of the chargee as chargee; or
(b) in the performance or exercise of a function or power of the receiver
or other person;
as the case may be.
(1) This section applies where perishable property of a company under
administration is subject to a charge.
(2) Nothing in section 437C or 440B prevents:
(a) the chargee; or
(b) a receiver or person appointed (at any time) as mentioned in
paragraph (a), (b) or (d) of the definition of enforce in
section 9;
from enforcing the charge, so far as it is a charge on perishable
property.
(3) Section 437D does not apply in relation to a transaction or
dealing that affects perishable property of the company and is entered into
by:
(a) the chargee; or
(b) a receiver or person appointed (at any time) as mentioned in
paragraph (a), (b) or (d) of the definition of enforce in
section 9;
in the performance or exercise of a function or power as chargee, or as
such a receiver or person, as the case may be.
(1) This section applies if:
(a) for the purpose of enforcing a charge on property of a company, the
chargee, or a receiver or other person, does an act of a kind referred to in a
paragraph of subsection 441B(1); and
(b) the company is under administration when the chargee, receiver or
other person does the act, or the company later begins to be under
administration;
but does not apply in a case where section 441A applies.
(2) On application by the administrator, the Court may order the chargee,
receiver or other person not to perform specified functions, or exercise
specified powers, except as permitted by the order.
(3) The Court may only make an order if satisfied that what the
administrator proposes to do during the administration will adequately protect
the chargee’s interests.
(4) An order may only be made, and only has effect, during the
administration.
(5) An order has effect despite sections 441B and 441C.
Nothing in section 437C or 440B prevents a person from giving a
notice under the provisions of a charge.
(1) This section applies if, before the beginning of the administration of
a company, a receiver or other person:
(a) entered into possession, or assumed control, of property used or
occupied by, or in the possession of, the company; or
(b) exercised any other power in relation to such property;
for the purpose of enforcing a right of the owner or lessor of the property
to take possession of the property or otherwise recover it.
(2) Nothing in section 437C or 440C prevents the receiver or other
person from performing a function, or exercising a power, in relation to the
property.
(3) Section 437D does not apply in relation to a transaction or
dealing that affects the property and is entered into in the performance or
exercise of a function or power of the receiver or other person.
(1) Nothing in section 437C or 440C prevents a person from taking
possession of, or otherwise recovering, perishable property.
(2) Section 437D does not apply in relation to a transaction or
dealing that affects perishable property and is entered into for the purpose of
enforcing a right of the owner or lessor of the property to take possession of
the property or otherwise recover it.
(1) This section applies if:
(a) for the purpose of enforcing a right of the owner or lessor of
property used or occupied by, or in the possession of, a company to take
possession of the property or otherwise recover it, a person:
(i) enters into possession, or assumes control, of the property;
or
(ii) exercises any other power in relation to the property; and
(b) the company is under administration when the person does so, or the
company later begins to be under administration.
(2) On application by the administrator, the Court may order the person
not to perform specified functions, or exercise specified powers, in relation to
the property, except as permitted by the order.
(3) The Court may only make an order if satisfied that what the
administrator proposes to do during the administration will adequately protect
the interests of the owner or lessor.
(4) An order may only be made, and only has effect, during the
administration.
(5) An order has effect despite sections 441F and 441G.
Nothing in section 437C or 440C prevents a person from giving a
notice to a company under an agreement relating to property that is used or
occupied by, or is in the possession of, the company.
Except as expressly provided, nothing in this Division limits the
generality of anything else in it.
Without limiting section 437A, the administrator of a company under
administration has power to do any of the following:
(a) remove from office a director of the company;
(b) appoint a person as such a director, whether to fill a vacancy or
not;
(c) execute a document, bring or defend proceedings, or do anything else,
in the company’s name and on its behalf;
(d) whatever else is necessary for the purposes of this Part.
(1) This section applies where a charge on property of a company under
administration was a floating charge when created but has since become a fixed
or specific charge.
(2) Subject to sections 442C and 442D, the administrator may deal
with any of that property as if the charge were still a floating
charge.
(1) The administrator of a company under administration or of a deed of
company arrangement must not dispose of:
(a) property of the company that is subject to a charge; or
(b) property that is used or occupied by, or is in the possession of, the
company but of which someone else is the owner or lessor.
(2) Subsection (1) does not prevent a disposal:
(a) in the ordinary course of the company’s business; or
(b) with the written consent of the chargee, owner or lessor, as the case
may be; or
(c) with the leave of the Court.
(3) The Court may only give leave under paragraph (2)(c) if satisfied
that arrangements have been made to protect adequately the interests of the
chargee, owner or lessor, as the case may be.
(1) Where section 441A applies, the administrator’s functions
and powers are subject to the functions and powers of a person as:
(a) the chargee; or
(b) a receiver or person of a kind referred to in paragraph 441A(3)(b)
(even if appointed after the decision period).
(2) Where section 441C applies, then, so far as concerns perishable
property of the company, the administrator’s functions and powers are
subject to the functions and powers of a person as:
(a) the chargee; or
(b) a receiver or person appointed (at any time) as mentioned in
paragraph (a), (b) or (d) of the definition of enforce in
section 9.
(3) Where section 441B, 441F or 441G applies, then, so far as
concerns the property referred to in subsection 441B(1), 441F(1) or 441G(1), the
administrator’s functions and powers are subject to the functions and
powers of the chargee, receiver or other person.
A person who is or has been the administrator of a company under
administration has qualified privilege in respect of a statement that he or she
has made, whether orally or in writing, in the course of performing or
exercising any of his or her functions and powers as administrator of the
company.
(1) Sections 128 and 129 apply in relation to a company under
administration as if:
(a) a reference in those sections to the company, or to an officer of the
company, included a reference to the administrator; and
(b) a reference in those sections to an assumption referred to in
section 129 included a reference to an assumption that the administrator
is:
(i) acting within his or her functions and powers as administrator;
and
(ii) in particular, is complying with this Act.
(2) The effect that sections 128 and 129 have because of
subsection (1) of this section is additional to, and does not prejudice,
the effect that sections 128 and 129 otherwise have in relation to a
company under administration.
(1) The administrator of a company under administration is liable for
debts he or she incurs, in the performance or exercise, or purported performance
or exercise, of any of his or her functions and powers as administrator,
for:
(a) services rendered; or
(b) goods bought; or
(c) property hired, leased, used or occupied.
(2) Subsection (1) has effect despite any agreement to the contrary,
but without prejudice to the administrator’s rights against the company or
anyone else.
(1) This section applies if, under an agreement made before the
administration of a company began, the company continues to use or occupy, or to
be in possession of, property of which someone else is the owner or
lessor.
(2) Subject to this section, the administrator is liable for so much of
the rent or other amounts payable by the company under the agreement as is
attributable to a period:
(a) that begins more than 7 days after the administration began;
and
(b) throughout which:
(i) the company continues to use or occupy, or to be in possession of, the
property; and
(ii) the administration continues.
(3) Within 7 days after the beginning of the administration, the
administrator may give to the owner or lessor a notice that specifies the
property and states that the company does not propose to exercise rights in
relation to the property.
(4) Despite subsection (2), the administrator is not liable for so
much of the rent or other amounts payable by the company under the agreement as
is attributable to a period during which a notice under subsection (3) is
in force, but such a notice does not affect a liability of the
company.
(5) A notice under subsection (3) ceases to have effect if:
(a) the administrator revokes it by writing given to the owner or lessor;
or
(b) the company exercises, or purports to exercise, a right in relation to
the property.
(6) For the purposes of subsection (5), the company does not
exercise, or purport to exercise, a right in relation to the property merely
because the company continues to occupy, or to be in possession of, the
property, unless the company:
(a) also uses the property; or
(b) asserts a right, as against the owner or lessor, so to
continue.
(7) Subsection (2) does not apply in relation to so much of a period
as elapses after:
(a) a receiver of the property is appointed; or
(b) a chargee appoints an agent, under the provisions of a charge on the
property, to enter into possession, or to assume control, of the property;
or
(c) a chargee takes possession, or assumes control, of the property under
the provisions of a charge on the property;
but this subsection does not affect a liability of the company.
(8) Subsection (2) does not apply in so far as a court, by order,
excuses the administrator from liability, but an order does not affect a
liability of the company.
(9) The administrator is not taken because of
subsection (2):
(a) to have adopted the agreement; or
(b) to be liable under the agreement otherwise than as mentioned in
subsection (2).
(1) The administrator of a company is liable to pay to the Commissioner of
Taxation:
(a) each amount payable under a remittance provision because of a
deduction made by the administrator; and
(b) without limiting paragraph (a), so much of each amount payable
under a remittance provision because of a deduction made by the company during
the administration as equals so much of the deduction as is attributable to a
period throughout which the administration continued;
even if the amount became payable after the end of the
administration.
(2) In this section:
remittance provision means any of the following provisions of
the Income Tax Assessment Act 1936:
(a) section 221F (except subsection 221F(12)) or section 221G
(except subsection 221G(4A));
(b) subsection 221YHDC(2);
(c) subsection 221YHZD(1) or (1A);
(d) subsection 221YN(1);
and any of the provisions of Subdivision 16-B in Schedule 1 to
the Taxation Administration Act 1953.
unpaid amount, in relation to an estimate, has the same
meaning as in Division 8 of Part VI of the Income Tax Assessment Act
1936.
The administrator of a company under administration is not liable for the
company’s debts except under this Subdivision.
The administrator of a company under administration is entitled to be
indemnified out of the company’s property for:
(a) debts for which the administrator is liable under Subdivision A or a
remittance provision as defined in subsection 443BA(3); and
(b) his or her remuneration as fixed under section 449E.
(1) Subject to section 556, a right of indemnity under
section 443D has priority over:
(a) all the company’s unsecured debts; and
(b) subject to subsections (2) and (3) of this section, debts of the
company secured by a floating charge on property of the company.
(2) Where:
(a) debts of a company under administration are secured by a floating
charge on property of the company; and
(b) before the beginning of the administration, the chargee:
(i) appointed a receiver of property of the company under a power
contained in an instrument relating to the charge; or
(ii) obtained an order for the appointment of a receiver of property of
the company for the purpose of enforcing the charge; or
(iii) entered into possession, or assumed control, of property of the
company for that purpose; or
(iv) appointed a person so to enter into possession or assume control
(whether as agent for the chargee or for the company); and
(c) the receiver or person is still in office, or the chargee is still in
possession or control of the property;
the right of indemnity of the administrator under section 443D does
not have priority over those debts, except so far as the chargee
agrees.
(3) Where:
(a) debts of a company under administration are secured by a floating
charge on property of the company; and
(b) during the administration, the chargee, consistently with this
Part:
(i) appoints a receiver of property of the company under a power contained
in an instrument relating to the charge; or
(ii) obtains an order for the appointment of a receiver of property of the
company for the purpose of enforcing the charge; or
(iii) enters into possession, or assumes control, of property of the
company for that purpose; or
(iv) appoints a person so to enter into possession or assume control
(whether as agent for the chargee or for the company);
the right of indemnity of the administrator under section 443D has
priority over those debts only in so far as it is a right of indemnity for debts
incurred, or remuneration accruing, before written notice of the appointment, or
of the entering into possession or assuming of control, as the case may be, was
given to the administrator.
(1) To secure a right of indemnity under section 443D, the
administrator has a lien on the company’s property.
(2) A lien under subsection (1) has priority over a charge only in so
far as the right of indemnity under section 443D has priority over debts
secured by the charge.
(1) This section applies where, at a meeting convened under
section 439A, a company’s creditors resolve that the company execute
a deed of company arrangement.
(2) The administrator of the company is to be the administrator of the
deed, unless the creditors, by resolution passed at the meeting, appoint someone
else to be administrator of the deed.
(3) The administrator of the deed must prepare an instrument setting out
the terms of the deed.
(4) The instrument must also specify the following:
(a) the administrator of the deed;
(b) the property of the company (whether or not already owned by the
company when it executes the deed) that is to be available to pay
creditors’ claims;
(c) the nature and duration of any moratorium period for which the deed
provides;
(d) to what extent the company is to be released from its debts;
(e) the conditions (if any) for the deed to come into operation;
(f) the conditions (if any) for the deed to continue in
operation;
(g) the circumstances in which the deed terminates;
(h) the order in which proceeds of realising the property referred to in
paragraph (b) are to be distributed among creditors bound by the
deed;
(i) the day (not later than the day when the administration began) on or
before which claims must have arisen if they are to be admissible under the
deed.
(5) The instrument is taken to include the prescribed provisions, except
so far as it provides otherwise.
(1) This section applies where an instrument is prepared under
section 444A.
(2) The company must execute the instrument within:
(a) 21 days after the end of the meeting of creditors; or
(b) such further period as the Court allows on an application made within
those 21 days.
(3) The board of the company may, by resolution, authorise the instrument
to be executed by or on behalf of the company.
(4) Subsection (3) has effect despite section 437C, but does not
limit the functions and powers of the administrator of the company.
(5) The administrator of the deed must execute the instrument before, or
as soon as practicable after, the company executes it.
(6) When executed by both the company and the deed’s administrator,
the instrument becomes a deed of company arrangement.
(7) Division 12 provides for consequences of the company contravening
subsection (2).
(1) Where, at a meeting convened under section 439A, a
company’s creditors resolve that the company execute a deed of company
arrangement, this section applies until:
(a) the deed is executed by both the company and the deed’s
administrator; or
(b) the period within which subsection 444B(2) requires the company to
execute the deed ends;
whichever happens sooner.
(2) In so far as a person would be bound by the deed if it had already
been so executed, the person:
(a) must not do anything inconsistent with the deed, except with the leave
of the Court; and
(b) is subject to section 444E.
(1) A deed of company arrangement binds all creditors of the company, so
far as concerns claims arising on or before the day specified in the deed under
paragraph 444A(4)(i).
(2) Subsection (1) does not prevent a secured creditor from realising
or otherwise dealing with the security, except so far as:
(a) the deed so provides in relation to a secured creditor who voted in
favour of the resolution of creditors because of which the company executed the
deed; or
(b) the Court orders under subsection 444F(2).
(3) Subsection (1) does not affect a right that an owner or lessor of
property has in relation to that property, except so far as:
(a) the deed so provides in relation to an owner or lessor of property who
voted in favour of the resolution of creditors because of which the company
executed the deed; or
(b) the Court orders under subsection 444F(4).
(1) Until a deed of company arrangement terminates, this section applies
to a person bound by the deed.
(2) The person cannot:
(a) make an application for an order to wind up the company; or
(b) proceed with such an application made before the deed became binding
on the person.
(3) The person cannot:
(a) begin or proceed with a proceeding against the company or in relation
to any of its property; or
(b) begin or proceed with enforcement process in relation to property of
the company;
except:
(c) with the leave of the Court; and
(d) in accordance with such terms (if any) as the Court imposes.
(4) In subsection (3):
property, in relation to the company, includes property used
or occupied by, or in the possession of, the company.
(1) This section applies where:
(a) it is proposed that a company execute a deed of company arrangement;
or
(b) a company has executed such a deed.
(2) Subject to subsection 441A(3), the Court may order a secured creditor
of the company not to realise or otherwise deal with the security, except as
permitted by the order.
(3) The Court may only make an order under subsection (2) if
satisfied that:
(a) for the creditor to realise or otherwise deal with the security would
have a material adverse effect on achieving the purposes of the deed;
and
(b) having regard to:
(i) the terms of the deed; and
(ii) the terms of the order; and
(iii) any other relevant matter;
the creditor’s interests will be adequately protected.
(4) The Court may order the owner or lessor of property that is used or
occupied by, or is in the possession of, the company not to take possession of
the property or otherwise recover it.
(5) The Court may only make an order under subsection (4) if
satisfied that:
(a) for the owner or lessor to take possession of the property or
otherwise recover it would have a material adverse effect on achieving the
purposes of the deed; and
(b) having regard to:
(i) the terms of the deed; and
(ii) the terms of the order; and
(iii) any other relevant matter;
the interests of the owner or lessor will be adequately
protected.
(6) An order under this section may be made subject to
conditions.
(7) An order under this section may only be made on the application
of:
(a) if paragraph (1)(a) applies—the administrator of the
company; or
(b) if paragraph (1)(b) applies—the deed’s
administrator.
A deed of company arrangement also binds:
(a) the company; and
(b) its officers and members; and
(c) the deed’s administrator.
A deed of company arrangement releases the company from a debt only in so
far as:
(a) the deed provides for the release; and
(b) the creditor concerned is bound by the deed.
A deed of company arrangement may be varied by a resolution passed at a
meeting of the company’s creditors convened under section 445F, but
only if the variation is not materially different from a proposed variation set
out in the notice of the meeting.
(1) Where a deed of company arrangement is varied under section 445A,
a creditor of the company may apply to the Court for an order cancelling the
variation.
(2) On an application, the Court:
(a) may make an order cancelling the variation, or confirming it, either
wholly or in part, on such conditions (if any) as the order specifies;
and
(b) may make such other orders as it thinks appropriate.
A deed of company arrangement terminates when:
(a) the Court makes under section 445D an order terminating the deed;
or
(b) the company’s creditors pass a resolution terminating the deed
at a meeting that was convened under section 445F by a notice setting out
the proposed resolution; or
(c) if the deed specifies circumstances in which it is to
terminate—those circumstances exist;
whichever happens first.
(1) The Court may make an order terminating a deed of company arrangement
if satisfied that:
(a) information about the company’s business, property, affairs or
financial circumstances that:
(i) was false or misleading; and
(ii) can reasonably be expected to have been material to creditors of the
company in deciding whether to vote in favour of the resolution that the company
execute the deed;
was given to the administrator of the company or to such creditors;
or
(b) such information was contained in a report or statement under
subsection 439A(4) that accompanied a notice of the meeting at which the
resolution was passed; or
(c) there was an omission from such a report or statement and the omission
can reasonably be expected to have been material to such creditors in so
deciding; or
(d) there has been a material contravention of the deed by a person bound
by the deed; or
(e) effect cannot be given to the deed without injustice or undue delay;
or
(f) the deed or a provision of it is, an act or omission done or made
under the deed was, or an act or omission proposed to be so done or made would
be:
(i) oppressive or unfairly prejudicial to, or unfairly discriminatory
against, one or more such creditors; or
(ii) contrary to the interests of the creditors of the company as a whole;
or
(g) the deed should be terminated for some other reason.
(2) An order may be made on the application of:
(a) a creditor of the company; or
(b) the company; or
(c) any other interested person.
Where:
(a) at a meeting convened under section 445F, the company’s
creditors pass a resolution terminating the deed; and
(b) the notice of the meeting set out a proposed resolution that the
company be wound up;
the creditors may also resolve at the meeting that the company be wound
up.
(1) The administrator of a deed of company arrangement:
(a) may at any time convene a meeting of the company’s creditors;
and
(b) must convene such a meeting if so requested in writing by creditors
the value of whose claims against the company is not less than 10% of the value
of all the creditors’ claims against the company.
(2) A meeting under this section must be convened by the deed’s
administrator:
(a) giving written notice of the meeting to as many of the company’s
creditors as reasonable practicable; and
(b) causing notice of the meeting to be published:
(i) in a national newspaper; or
(ii) in each State or Territory in which the company has its registered
office or carries on business, in a daily newspaper that circulates generally in
that State or Territory;
at least 5 business days before the meeting.
(3) The notice given to a creditor under paragraph (2)(a)
must:
(a) set out each resolution (if any) under section 445A or paragraph
445C(b) that the deed’s administrator proposes that the meeting vote on;
and
(b) if the meeting is convened under paragraph (1)(b) of this
section—set out each proposed resolution under section 445A or
paragraph 445C(b) that is set out in the request.
(4) At a meeting convened under this section, the deed’s
administrator is to preside.
(5) A meeting convened under this section may be adjourned from time to
time.
(1) Where there is doubt, on a specific ground, whether a deed of company
arrangement was entered into in accordance with this Part or complies with this
Part, the administrator of the deed, a member or creditor of the company, or
ASIC, may apply to the Court for an order under this section.
(2) On an application, the Court may make an order declaring the deed, or
a provision of it, to be void or not to be void, as the case requires, on the
ground specified in the application or some other ground.
(3) On an application, the Court may declare the deed, or a provision of
it, to be valid, despite a contravention of a provision of this Part, if the
Court is satisfied that:
(a) the provision was substantially complied with; and
(b) no injustice will result for anyone bound by the deed if the
contravention is disregarded.
(4) Where the Court declares a provision of a deed of company arrangement
to be void, the Court may by order vary the deed, but only with the consent of
the deed’s administrator.
The termination or avoidance, in whole or in part, of a deed of company
arrangement does not affect the previous operation of the deed.
(1) This section applies if:
(a) the creditors of a company under administration resolve at a
particular time under paragraph 439C(c) that the company be wound up;
or
(b) a company under administration contravenes subsection 444B(2) at a
particular time; or
(c) at a meeting convened under section 445F, a company’s
creditors:
(i) pass a resolution terminating a deed of company arrangement executed
by the company; and
(ii) also resolve at a particular time under section 445E that the
company be wound up.
(2) The company is taken:
(a) to have passed, at the time referred to in paragraph (1)(a) or
(b) or subparagraph (1)(c)(ii), as the case may be, a special resolution
under section 491 that the company be wound up voluntarily; and
(b) to have done so without a declaration having been made and lodged
under section 494.
(3) Section 497 is taken to have been complied with in relation to
the winding up.
(4) For the purposes of subsection 499(1):
(a) the company is taken to have nominated:
(i) if paragraph (1)(a) or (b) of this section applies—the
administrator of the company; or
(ii) if paragraph (1)(c) of this section applies—the
administrator of the deed;
to be liquidator for the purposes of the winding up; and
(b) the creditors are taken not to have so nominated anyone.
(5) The liquidator must:
(a) within 7 days after the day on which the company is taken to have
passed the resolution, lodge a written notice stating that the company is taken
because of this section to have passed such a resolution and specifying that
day; and
(b) cause a notice of that kind to be published, within 21 days after that
day:
(i) in a national newspaper; or
(ii) in each State or Territory in which the company has its registered
office or carries on business, in a daily newspaper that circulates generally in
that State or Territory.
(6) Section 482 applies in relation to the winding up as if it were a
winding up in insolvency or by the Court.
Note: Section 482 empowers the Court to stay or
terminate a winding up and give consequential directions.
(7) An application under section 482 as applying because of
subsection (6) may be made:
(a) despite subsection 499(4), by the company pursuant to a resolution of
the board; or
(b) by the liquidator; or
(c) by a creditor; or
(d) by a contributory.
(1) The regulations may prescribe cases where:
(a) a company under administration; or
(b) a company that has executed a deed of company arrangement (even if the
deed has terminated);
is taken to have passed a special resolution under section 491 that
the company be wound up voluntarily.
(2) The regulations may provide for Part 5.5 to apply with prescribed
modifications in cases prescribed for the purposes of
subsection (1).
(3) Without limiting subsection (2), the regulations may provide, in
relation to such cases, for matters of a kind provided for by any of subsections
446A(2) to (7), inclusive.
(4) Regulations in force for the purposes of this section have effect
accordingly.
(1) The Court may make such order as it thinks appropriate about how this
Part is to operate in relation to a particular company.
(2) For example, if the Court is satisfied that the administration of a
company should end:
(a) because the company is solvent; or
(b) because provisions of this Part are being abused; or
(c) for some other reason;
the Court may order under subsection (1) that the administration is to
end.
(3) An order may be made subject to conditions.
(4) An order may be made on the application of:
(a) the company; or
(b) a creditor of the company; or
(c) in the case of a company under administration—the administrator
of the company; or
(d) in the case of a company that has executed a deed of company
arrangement—the deed’s administrator; or
(e) ASIC; or
(f) any other interested person.
(1) On the application of ASIC, the Court may make such order as it thinks
necessary to protect the interests of a company’s creditors while the
company is under administration.
(2) On the application of a creditor of a company, the Court may make such
order as it thinks necessary to protect the creditor’s interests while the
company is under administration.
(3) An order may be made subject to conditions.
(1) If there is doubt, on a specific ground, about whether a purported
appointment of a person as administrator of a company, or of a deed of company
arrangement, is valid, the person, the company or any of the company’s
creditors may apply to the Court for an order under
subsection (2).
(2) On an application, the Court may make an order declaring whether or
not the purported appointment was valid on the ground specified in the
application or on some other ground.
(1) The administrator of a company under administration, or of a deed of
company arrangement, may apply to the Court for directions about a matter
arising in connection with the performance or exercise of any of the
administrator’s functions and powers.
(2) The administrator of a deed of company arrangement may apply to the
Court for directions about a matter arising in connection with the operation of,
or giving effect to, the deed.
(1) Where the Court is satisfied that the administrator of a company under
administration, or of a deed of company arrangement:
(a) has managed, or is managing, the company’s business, property or
affairs in a way that is prejudicial to the interests of some or all of the
company’s creditors or members; or
(b) has done an act, or made an omission, or proposes to do an act, or to
make an omission, that is or would be prejudicial to such interests;
the Court may make such order as it thinks just.
(2) Where the Court is satisfied that:
(a) a company is under administration but:
(i) there is a vacancy in the office of administrator of the company;
or
(ii) no administrator of the company is acting; or
(b) a deed of company arrangement has not yet terminated but:
(i) there is a vacancy in the office of administrator of the deed;
or
(ii) no administrator of the deed is acting;
the Court may make such order as it thinks just.
(3) An order may only be made on the application of ASIC or of a creditor
or member of the company.
Nothing in this Division limits the generality of anything else in
it.
A person cannot be appointed as administrator of a company or of a deed
of company arrangement unless:
(a) the person has consented in writing to the appointment; and
(b) as at the time of the appointment, the person has not withdrawn the
consent.
A person must not consent to be appointed, and must not act, as
administrator of a company or of a deed of company arrangement unless he or she
is a registered liquidator.
(1) Subject to this section, a person must not, except with the leave of
the Court, seek or consent to be appointed as, or act as, administrator of a
company or of a deed of company arrangement if:
(a) the person, or a body corporate in which the person has a substantial
holding, is indebted in an amount exceeding $5,000 to the company or to a body
corporate related to the company; or
(b) the person is, otherwise than in a capacity as administrator or
liquidator of, or as administrator of a deed of company arrangement executed by,
the company or a related body corporate, a creditor of the company or of a
related body corporate in an amount exceeding $5,000; or
(c) the person is an officer of the company (otherwise than because of
being an administrator or liquidator of, or an administrator of a deed of
company arrangement executed by, a body corporate related to the company);
or
(d) the person is an officer of a body corporate that is a mortgagee of
property of the company; or
(e) the person is an auditor of the company; or
(f) the person is a partner or employee of an auditor of the company;
or
(g) the person is a partner, employer or employee of an officer of the
company; or
(h) the person is a partner or employee of an employee of an officer of
the company.
(2) For the purposes of paragraph (1)(a), disregard a debt owed by a
natural person to a body corporate if:
(a) the body corporate is:
(i) an Australian ADI; or
(ii) a body corporate registered under the Life Insurance Act 1995;
and
(b) the debt arose because of a loan that the body corporate or entity
made to the person in the ordinary course of its ordinary business;
and
(c) the person used the amount of the loan to pay the whole or part of the
purchase price of premises that the person uses as their principal place of
residence.
(3) For the purposes of subsection (1), a person is taken to be an
officer or auditor of a company if:
(a) the person is an officer or auditor of the company or of a related
body corporate; or
(b) except where ASIC, if it thinks fit in the circumstances of the case,
directs that this paragraph not apply in relation to the person—the person
has, within the last 2 years, been an officer, auditor or promoter of the
company or of a related body corporate.
A person must not consent to be appointed, and must not act, as
administrator of a company or of a deed of company arrangement if he or she is
an insolvent under administration.
The appointment of a person as administrator of a company or of a deed of
company arrangement cannot be revoked.
On the application of ASIC or of a creditor of the company concerned, the
Court may:
(a) remove from office the administrator of a company under administration
or of a deed of company arrangement; and
(b) appoint someone else as administrator of the company or
deed.
(1) Where the administrator of a company under administration:
(a) dies; or
(b) becomes prohibited from acting as administrator of the company;
or
(c) resigns by notice in writing given to his or her appointer and to the
company;
his or her appointer may appoint someone else as administrator of the
company.
(2) In subsection (1):
appointer, in relation to the administrator of a company
under administration, means:
(a) if the administrator was appointed by the Court under
section 449B or subsection (6) of this section—the Court;
or
(b) otherwise:
(i) if the administration began because of an appointment under
section 436A—the company; or
(ii) if the administration began because of an appointment under
section 436B—a liquidator or provisional liquidator of the company;
or
(iii) if the administration began because of an appointment under
section 436C—a person who is entitled, or would apart from
section 440B or 441D be entitled, to enforce the charge.
(3) An appointment under subsection (1) by the company under
administration must be made pursuant to a resolution of the board.
(4) Within 5 business days after being appointed under subsection (1)
as administrator of a company otherwise than by the Court, a person must convene
a meeting of the company’s creditors so that they may:
(a) determine whether to remove the person from office; and
(b) if so, appoint someone else as administrator of the company.
(5) A person must convene a meeting under subsection (4)
by:
(a) giving written notice of the meeting to as many of the company’s
creditors as reasonably practicable; and
(b) causing notice of the meeting to be published:
(i) in a national newspaper; or
(ii) in each State or Territory in which the company has its registered
office or carries on business, in a daily newspaper that circulates generally in
that State or Territory;
at least 2 business days before the meeting.
(6) Where a company is under administration, but for some reason no
administrator is acting, the Court may appoint a person as administrator on the
application of ASIC or of an officer, member or creditor of the
company.
(7) Subsections (3) and (6) have effect despite
section 437C.
(1) Where the administrator of a deed of company arrangement:
(a) dies; or
(b) becomes prohibited from acting as administrator of the deed;
or
(c) resigns by notice in writing given to the company;
the Court may appoint someone else as administrator of the deed.
(2) Where a deed of company arrangement has not yet terminated, but for
some reason no administrator of the deed is acting, the Court may appoint a
person as administrator of the deed.
(3) An appointment may be made on the application of ASIC or of an
officer, member or creditor of the company.
(1) The administrator of a company under administration, or of a deed of
company arrangement, is entitled to:
(a) such remuneration as is fixed by a resolution of the company’s
creditors passed at a meeting convened under section 439A, or under
section 439A or 445F, as the case may be; or
(b) if no remuneration is so fixed—such remuneration as the Court
fixes on the application of the administrator.
(2) Where remuneration is fixed under paragraph (1)(a), the Court
may, on the application of the administrator or of an officer, member or
creditor of the company:
(a) review the remuneration; and
(b) confirm, increase or reduce it.
(3) Subsection (2) has effect despite
section 437C.
(1) Where an administrator of a company is appointed under
section 436A, 436B or 436C, the administrator must:
(a) lodge a notice of the appointment before the end of the next business
day after the appointment; and
(b) cause such a notice to be published, within 3 business days after the
appointment:
(i) in a national newspaper; or
(ii) in each State or Territory in which the company has its registered
office or carries on business, in a daily newspaper that circulates generally in
that State or Territory.
(2) As soon as practicable, and in any event before the end of the next
business day, after appointing an administrator of a company under
section 436C, a person must give to the company a written notice of the
appointment.
(3) As soon as practicable, and in any event before the end of the next
business day, after an administrator of a company is appointed under
section 436A, 436B or 436C, he or she must give a written notice of the
appointment to:
(a) each person who holds a charge on the whole, or substantially the
whole, of the company’s property; and
(b) each person who holds 2 or more charges on property of the company
where the property of the company subject to the respective charges together
constitutes the whole, or substantially the whole, of the company’s
property.
(4) An administrator need not give a notice under subsection (3) to
the person who appointed the administrator.
As soon as practicable after a deed of company arrangement is executed,
the deed’s administrator must:
(a) send to each creditor of the company a written notice of the execution
of the deed; and
(b) cause such a notice to be published:
(i) in a national newspaper; or
(ii) in each State or Territory in which the company has its registered
office or carries on business, in a daily newspaper that circulates generally in
that State or Territory; and
(c) lodge a copy of the deed.
As soon as practicable after a company contravenes subsection 444B(2),
the deed’s administrator must:
(a) lodge a notice that the company has failed to execute the instrument
within the required period; and
(b) cause a notice of the failure to be published as prescribed.
Where a deed of company arrangement terminates because of paragraph
445C(b), the deed’s administrator must:
(a) lodge a notice of the termination; and
(b) send such a notice to each of the company’s creditors;
and
(c) cause such a notice to be published as prescribed.
(1) A company under administration must set out, in every public document,
and in every negotiable instrument, of the company, after the company’s
name where it first appears, the expression (“administrator
appointed”).
(2) Until a deed of company arrangement terminates, the company must set
out, in every public document, and in every negotiable instrument, of the
company, after the company’s name where it first appears, the expression
(“subject to deed of company arrangement”).
A contravention of this Division does not affect the validity of anything
done or omitted under this Part, except so far as the Court otherwise
orders.
(1) Where a provision of this Act provides for an administrator of a
company to be appointed, 2 or more persons may be appointed as administrators of
the company.
(2) Where, because of subsection (1), there are 2 or more
administrators of a company:
(a) a function or power of an administrator of the company may be
performed or exercised by any one of them, or by any 2 or more of them together,
except so far as the instrument or resolution appointing them otherwise
provides; and
(b) a reference in this Act to an administrator, or to the administrator,
of a company is, in the case of the first-mentioned company, a reference to
whichever one or more of those administrators the case requires.
(1) Where a provision of this Act provides for an administrator of a deed
of company arrangement to be appointed, 2 or more persons may be appointed as
administrators of the deed.
(2) Where, because of subsection (1), there are 2 or more
administrators of a deed of company arrangement:
(a) a function or power of an administrator of the deed may be performed
or exercised by any one of them, or by any 2 or more of them together, except so
far as the deed, or the resolution or instrument appointing them, otherwise
provides; and
(b) a reference in this Act to an administrator, or to the administrator,
of a deed of company arrangement is, in the case of the first-mentioned deed, a
reference to whichever one or more of those administrators the case
requires.
A payment made, transaction entered into, or any other act or thing done,
in good faith, by, or with the consent of, the administrator of a company under
administration:
(a) is valid and effectual for the purposes of this Act; and
(b) is not liable to be set aside in a winding up of the
company.
Where:
(a) for any purpose (for example, the purposes of a law, agreement or
instrument) an act must or may be done within a particular period or before a
particular time; and
(b) this Part prevents the act from being done within that period or
before that time;
the period is extended, or the time is deferred, because of this section,
according to how long this Part prevented the act from being done.
On an application under section 459P, the Court may order that an
insolvent company be wound up in insolvency.
Where, on an application under section 234, 462 or 464, the Court is
satisfied that the company is insolvent, the Court may order that the company be
wound up in insolvency.
(1) This section has effect for the purposes of:
(a) an application under section 234, 459P, 462 or 464; or
(b) an application for leave to make an application under
section 459P.
(2) The Court must presume that the company is insolvent if, during or
after the 3 months ending on the day when the application was made:
(a) the company failed (as defined by section 459F) to comply with a
statutory demand; or
(b) execution or other process issued on a judgment, decree or order of an
Australian court in favour of a creditor of the company was returned wholly or
partly unsatisfied; or
(c) a receiver, or receiver and manager, of property of the company was
appointed under a power contained in an instrument relating to a floating charge
on such property; or
(d) an order was made for the appointment of such a receiver, or receiver
and manager, for the purpose of enforcing such a charge; or
(e) a person entered into possession, or assumed control, of such property
for such a purpose; or
(f) a person was appointed so to enter into possession or assume control
(whether as agent for the chargee or for the company).
(3) A presumption for which this section provides operates except so far
as the contrary is proved for the purposes of the application.
(1) In determining, for the purposes of an application of a kind referred
to in subsection 459C(1), whether or not the company is solvent, the Court may
take into account a contingent or prospective liability of the
company.
(2) Subsection (1) does not limit the matters that may be taken into
account in determining, for a particular purpose, whether or not a company is
solvent.
(1) A person may serve on a company a demand relating to:
(a) a single debt that the company owes to the person, that is due and
payable and whose amount is at least the statutory minimum; or
(b) 2 or more debts that the company owes to the person, that are due and
payable and whose amounts total at least the statutory minimum.
(2) The demand:
(a) if it relates to a single debt—must specify the debt and its
amount; and
(b) if it relates to 2 or more debts—must specify the total of the
amounts of the debts; and
(c) must require the company to pay the amount of the debt, or the total
of the amounts of the debts, or to secure or compound for that amount or total
to the creditor’s reasonable satisfaction, within 21 days after the demand
is served on the company; and
(d) must be in writing; and
(e) must be in the prescribed form (if any); and
(f) must be signed by or on behalf of the creditor.
(3) Unless the debt, or each of the debts, is a judgment debt, the demand
must be accompanied by an affidavit that:
(a) verifies that the debt, or the total of the amounts of the debts, is
due and payable by the company; and
(b) complies with the rules.
(4) A person may make a demand under this section relating to a debt even
if the debt is owed to the person as assignee.
(5) A demand under this section may relate to a liability under any of the
following provisions of the Income Tax Assessment Act 1936:
(a) section 221F (except subsection 221F(12)), section 221G
(except subsection 221G(4A)) or section 221P;
(b) subsection 221YHDC(2);
(c) subsection 221YHZD(1) or (1A);
(d) subsection 221YN(1);
(e) section 222AHA;
and any of the provisions of Subdivision 16-B in Schedule 1 to
the Taxation Administration Act 1953, even if the liability arose before
1 January 1991.
(6) Subsection (5) is to avoid doubt and is not intended to limit the
generality of a reference in this Act to a debt.
(1) If, as at the end of the period for compliance with a statutory
demand, the demand is still in effect and the company has not complied with it,
the company is taken to fail to comply with the demand at the end of that
period.
(2) The period for compliance with a statutory demand is:
(a) if the company applies in accordance with section 459G for an
order setting aside the demand:
(i) if, on hearing the application under section 459G, or on an
application by the company under this paragraph, the Court makes an order that
extends the period for compliance with the demand—the period specified in
the order, or in the last such order, as the case requires, as the period for
such compliance; or
(ii) otherwise—the period beginning on the day when the demand is
served and ending 7 days after the application under section 459G is
finally determined or otherwise disposed of; or
(b) otherwise—21 days after the demand is served.
(1) A company may apply to the Court for an order setting aside a
statutory demand served on the company.
(2) An application may only be made within 21 days after the demand is so
served.
(3) An application is made in accordance with this section only if, within
those 21 days:
(a) an affidavit supporting the application is filed with the Court;
and
(b) a copy of the application, and a copy of the supporting affidavit, are
served on the person who served the demand on the company.
(1) This section applies where, on an application under section 459G,
the Court is satisfied of either or both of the following:
(a) that there is a genuine dispute between the company and the respondent
about the existence or amount of a debt to which the demand relates;
(b) that the company has an offsetting claim.
(2) The Court must calculate the substantiated amount of the demand in
accordance with the formula:
where:
admitted total means:
(a) the admitted amount of the debt; or
(b) the total of the respective admitted amounts of the debts;
as the case requires, to which the demand relates.
offsetting total means:
(a) if the Court is satisfied that the company has only one offsetting
claim—the amount of that claim; or
(b) if the Court is satisfied that the company has 2 or more offsetting
claims—the total of the amounts of those claims; or
(c) otherwise—a nil amount.
(3) If the substantiated amount is less than the statutory minimum, the
Court must, by order, set aside the demand.
(4) If the substantiated amount is at least as great as the statutory
minimum, the Court may make an order:
(a) varying the demand as specified in the order; and
(b) declaring the demand to have had effect, as so varied, as from when
the demand was served on the company.
(5) In this section:
admitted amount, in relation to a debt, means:
(a) if the Court is satisfied that there is a genuine dispute between the
company and the respondent about the existence of the debt—a nil amount;
or
(b) if the Court is satisfied that there is a genuine dispute between the
company and the respondent about the amount of the debt—so much of that
amount as the Court is satisfied is not the subject of such a dispute;
or
(c) otherwise—the amount of the debt.
offsetting claim means a genuine claim that the company has
against the respondent by way of counterclaim, set-off or cross-demand (even if
it does not arise out of the same transaction or circumstances as a debt to
which the demand relates).
respondent means the person who served the demand on the
company.
(6) This section has effect subject to section 459J.
(1) On an application under section 459G, the Court may by order set
aside the demand if it is satisfied that:
(a) because of a defect in the demand, substantial injustice will be
caused unless the demand is set aside; or
(b) there is some other reason why the demand should be set
aside.
(2) Except as provided in subsection (1), the Court must not set
aside a statutory demand merely because of a defect.
A statutory demand has no effect while there is in force under
section 459H or 459J an order setting aside the demand.
Unless the Court makes, on an application under section 459J, an
order under section 459H or 459J, the Court is to dismiss the
application.
An order under section 459H or 459J may be made subject to
conditions.
Where, on an application under section 459G, the Court sets aside
the demand, it may order the person who served the demand to pay the
company’s costs in relation to the application.
(1) Any one or more of the following may apply to the Court for a company
to be wound up in insolvency:
(a) the company;
(b) a creditor (even if the creditor is a secured creditor or is only a
contingent or prospective creditor);
(c) a contributory;
(d) a director;
(e) a liquidator or provisional liquidator of the company;
(f) ASIC;
(g) a prescribed agency.
(2) An application by any of the following, or by persons including any of
the following, may only be made with the leave of the Court:
(a) a person who is a creditor only because of a contingent or prospective
debt;
(b) a contributory;
(c) a director;
(d) ASIC.
(3) The Court may give leave if satisfied that there is a prima facie case
that the company is insolvent, but not otherwise.
(4) The Court may give leave subject to conditions.
(5) Except as permitted by this section, a person cannot apply for a
company to be wound up in insolvency.
If an application for a company to be wound up in insolvency relies on a
failure by the company to comply with a statutory demand, the
application:
(a) must set out particulars of service of the demand on the company and
of the failure to comply with the demand; and
(b) must have attached to it:
(i) a copy of the demand; and
(ii) if the demand has been varied by an order under subsection
459H(4)—a copy of the order; and
(c) unless the debt, or each of the debts, to which the demand relates is
a judgment debt—must be accompanied by an affidavit that:
(i) verifies that the debt, or the total of the amounts of the debts, is
due and payable by the company; and
(ii) complies with the rules.
(1) An application for a company to be wound up in insolvency is to be
determined within 6 months after it is made.
(2) The Court may by order extend the period within which an application
must be determined, but only if:
(a) the Court is satisfied that special circumstances justify the
extension; and
(b) the order is made within that period as prescribed by
subsection (1), or as last extended under this subsection, as the case
requires.
(3) An application is, because of this subsection, dismissed if it is not
determined as required by this section.
(4) An order under subsection (2) may be made subject to
conditions.
(1) In so far as an application for a company to be wound up in insolvency
relies on a failure by the company to comply with a statutory demand, the
company may not, without the leave of the Court, oppose the application on a
ground:
(a) that the company relied on for the purposes of an application by it
for the demand to be set aside; or
(b) that the company could have so relied on, but did not so rely on
(whether it made such an application or not).
(2) The Court is not to grant leave under subsection (1) unless it is
satisfied that the ground is material to proving that the company is
solvent.
(1) A single application may be made for 2 or more companies to be wound
up in insolvency if they are joint debtors, whether partners or not.
(2) On such an application, the Court may order that one or more of the
companies be wound up in insolvency, even if it dismisses the application in so
far as it relates to another or others.
(1) The Court may order the winding up of a company if:
(a) the company has by special resolution resolved that it be wound up by
the Court; or
(c) the company does not commence business within one year from its
incorporation or suspends its business for a whole year; or
(d) the company has no members; or
(e) directors have acted in affairs of the company in their own interests
rather than in the interests of the members as a whole, or in any other manner
whatsoever that appears to be unfair or unjust to other members; or
(f) affairs of the company are being conducted in a manner that is
oppressive or unfairly prejudicial to, or unfairly discriminatory against, a
member or members or in a manner that is contrary to the interests of the
members as a whole; or
(g) an act or omission, or a proposed act or omission, by or on behalf of
the company, or a resolution, or a proposed resolution, of a class of members of
the company, was or would be oppressive or unfairly prejudicial to, or unfairly
discriminatory against, a member or members or was or would be contrary to the
interests of the members as a whole; or
(h) ASIC has stated in a report prepared under Division 1 of
Part 3 of the ASIC Act that, in its opinion:
(i) the company cannot pay its debts and should be wound up; or
(ii) it is in the interests of the public, of the members, or of the
creditors, that the company should be wound up;
(j) if the application was made by APRA—the Court is of opinion that
it is in the interests of the public, of the members or of the creditors that
the company should be wound up; or
(k) the Court is of opinion that it is just and equitable that the company
be wound up.
(2) A company must lodge a copy of a special resolution referred to in
paragraph (1)(a) with ASIC within 14 days after the resolution is
passed.
(1) A reference in this section to an order to wind up a company is a
reference to an order to wind up the company on a ground provided for by
section 461.
(2) Subject to this section, any one or more of the following may apply
for an order to wind up a company:
(a) the company; or
(b) a creditor (including a contingent or prospective creditor) of the
company; or
(c) a contributory; or
(d) the liquidator of the company; or
(e) ASIC pursuant to section 464; or
(f) ASIC (in the circumstances set out in subsection (2A));
or
(h) APRA.
(2A) ASIC may apply for an order to wind up a company under
paragraph (2)(f) only if:
(a) the company has no members; and
(b) ASIC has given the company at least 1 month’s written notice of
its intention to apply for the order.
(3) A person being, or persons including, APRA may only apply for an order
to wind up a company if:
(a) an inspector has been appointed to make an investigation in respect of
the company under section 52 of the Insurance Act 1973;
and
(b) the company’s liabilities within the meaning of Part III of that
Act exceed the company’s assets within the meaning of that Part.
(4) The Court must not hear an application by a person being, or persons
including, a contingent or prospective creditor of a company for an order to
wind up the company unless and until:
(a) such security for costs has been given as the Court thinks reasonable;
and
(b) a prima facie case for winding up the company has been
established to the Court’s satisfaction.
(5) Except as permitted by this section, a person is not entitled to apply
for an order to wind up a company.
(1) Where ASIC is investigating, or has investigated, under
Division 1 of Part 3 of the ASIC Act:
(a) matters being, or connected with, affairs of a company; or
(b) matters including such matters;
ASIC may apply to the Court for the winding up of the company.
(2) For the purposes of an application under subsection (1), this Act
applies, with such modifications as the circumstances require, as if a winding
up application had been made by the company.
(3) ASIC must give a copy of an application made under subsection (1)
to the company.
A person who applies under section 459P, 462 or 464 for a company to
be wound up must:
(a) lodge notice in the prescribed form that the application has been
made; and
(b) within 14 days after the application is made, serve a copy of it on
the company; and
(c) advertise the application as prescribed by the rules.
(1) The Court may by order substitute, as applicant or applicants in an
application under section 459P, 462 or 464 for a company to be wound up, a
person or persons who might otherwise have so applied for the company to be
wound up.
(2) The Court may only make an order if the Court thinks it appropriate to
do so:
(a) because the application is not being proceeded with diligently enough;
or
(b) for some other reason.
(3) The substituted applicant may be, or the substituted applicants may be
or include, the person who was the applicant, or any of the persons who were the
applicants, before the substitution.
(4) After an order is made, the application may proceed as if the
substituted applicant or applicants had been the original applicant or
applicants.
On the hearing of an application under section 459P, 462 or 464, a
person may not, without the leave of the Court, oppose the application unless,
within the period prescribed by the rules, the person has filed, and served on
the applicant:
(a) notice of the grounds on which the person opposes the application;
and
(b) an affidavit verifying the matters stated in the notice.
(1) The persons, other than the company itself or the liquidator of the
company, on whose application any winding up order is made must, at their own
cost, prosecute all proceedings in the winding up until a liquidator has been
appointed under this Part.
(2) The liquidator must, unless the Court orders otherwise, reimburse the
applicant out of the property of the company the taxed costs incurred by the
applicant in any such proceedings.
(3) Where the company has no property or does not have sufficient property
and, in the opinion of ASIC, a fraud has been committed by any person in the
promotion or formation of the company or by any officer of the company in
relation to the company since its formation, the taxed costs or so much of them
as is not reimbursed under subsection (2) may be reimbursed by ASIC to an
amount not exceeding $1,000.
(4) Where any winding up order is made upon the application of the company
or a liquidator of the company, the costs incurred must, subject to any order of
the Court, be paid out of the property of the company in like manner as if they
were the costs of any other applicant.
(1) Subject to subsection (2) and section 467A, on hearing a
winding up application the Court may:
(a) dismiss the application with or without costs, even if a ground has
been proved on which the Court may order the company to be wound up on the
application; or
(b) adjourn the hearing conditionally or unconditionally; or
(c) make any interim or other order that it thinks fit.
(2) The Court must not refuse to make a winding up order merely
because:
(a) the property of the company has been mortgaged to an amount equal to
or greater than the value or amount of that property; or
(b) the company has no property.
(3) The Court may, on the application coming on for hearing or at any time
at the request of the applicant, the company or any person who has given notice
of intention to appear on the hearing of the application:
(a) direct that any notices be given or any steps be taken before or after
the hearing of the application; and
(b) dispense with any notices being given or steps being taken that are
required by this Act, or by the rules, or by any prior order of the Court;
and
(c) direct that oral evidence be taken on the application or any matter
relating to the application; and
(d) direct a speedy hearing or trial of the application or of any issue or
matter; and
(e) allow the application to be amended or withdrawn; and
(f) give such directions as to the proceedings as the Court thinks
fit.
(4) Where the application is made by members as contributories on the
ground that it is just and equitable that the company should be wound up or that
the directors have acted in a manner that appears to be unfair or unjust to
other members, the Court, if it is of the opinion that:
(a) the applicants are entitled to relief either by winding up the company
or by some other means; and
(b) in the absence of any other remedy it would be just and equitable that
the company should be wound up;
must make a winding up order unless it is also of the opinion that some
other remedy is available to the applicants and that they are acting
unreasonably in seeking to have the company wound up instead of pursuing that
other remedy.
(5) Notwithstanding any rule of law to the contrary, the Court must not
refuse to make an order for winding up on the application of a contributory on
the ground that, if the order were made, no property of the company would be
available for distribution among the contributories.
(7) At any time after the filing of a winding up application and before a
winding up order has been made, the company or any creditor or contributory may,
where any action or other civil proceeding against the company is pending, apply
to the Court to stay or restrain further proceedings in the action or
proceeding, and the Court may stay or restrain the proceedings accordingly on
such terms as it thinks fit.
An application under Part 5.4 or 5.4A must not be dismissed merely
because of one or more of the following:
(a) in any case—a defect or irregularity in connection with the
application;
(b) in the case of an application for a company to be wound up in
insolvency—a defect in a statutory demand;
unless the Court is satisfied that substantial injustice has been caused
that cannot otherwise be remedied (for example, by an adjournment or an order
for costs).
The Court may make an order under section 233, 459A, 459B or 461
even if the company is already being wound up voluntarily.
(1) Any disposition of property of the company, other than an exempt
disposition, and any transfer of shares or alteration in the status of the
members of the company made after the commencement of the winding up by the
Court is, unless the Court otherwise orders, void.
(2) In subsection (1), exempt disposition, in relation
to a company that has commenced to be wound up by the Court, means:
(a) a disposition made by the liquidator, or by a provisional liquidator,
of the company pursuant to a power conferred on him or her by:
(i) this Act; or
(ii) rules of the Court that appointed him or her; or
(iii) an order of the Court; or
(aa) a disposition made in good faith by, or with the consent of, an
administrator of the company; or
(ab) a disposition under a deed of company arrangement executed by the
company; or
(b) a payment of money by an Australian ADI out of an account maintained
by the company with the Australian ADI, being a payment made by the Australian
ADI:
(i) on or before the day on which the Court makes the order for the
winding up of the company; and
(ii) in good faith and in the ordinary course of the banking business of
the Australian ADI.
(3) Notwithstanding subsection (1), the Court may, where an
application for winding up has been filed but a winding up order has not been
made, by order:
(a) validate the making, after the filing of the application, of a
disposition of property of the company; or
(b) permit the business of the company or a portion of the business of the
company to be carried on, and such acts as are incidental to the carrying on of
the business or portion of the business to be done, during the period before a
winding up order (if any) is made;
on such terms as it thinks fit.
(4) Any attachment, sequestration, distress or execution put in force
against the property of the company after the commencement of the winding up by
the Court is void.
An application for winding up a company constitutes a lis pendens for the
purposes of any law relating to the effect of a lis pendens upon purchasers or
mortgagees.
(1) An applicant (other than ASIC) for the winding up of a company
must:
(a) lodge, not later than 10.30 am on the next business day after the
filing of the application, notice of the filing of the application and of the
date on which the application was filed; and
(b) after an order for winding up is made—lodge, within 2 business
days after the making of the order, notice of the making of the order, of the
date on which the order was made and of the name and address of the liquidator;
and
(c) if the application is withdrawn or dismissed—lodge, within 2
business days after the withdrawal or dismissal of the application, notice of
the withdrawal or dismissal of the application and of the date on which the
application was withdrawn or dismissed.
(2) The applicant must, within 7 days after the passing and entering of a
winding up order:
(a) except where the applicant is ASIC—lodge an office copy of the
order; and
(b) serve an office copy of the order on the company or such other person
as the Court directs; and
(c) deliver to the liquidator an office copy of the order together with a
statement that the order has been served as mentioned in
paragraph (b).
(3) Where ASIC applies for the winding up of a company, ASIC must enter in
its records particulars of the application and, after the passing and entering
of a winding up order, an office copy of the order, and subsection 1274(2)
applies in relation to the document containing those particulars and to the
office copy as if they were documents lodged with ASIC.
An order for winding up a company operates in favour of all the creditors
and contributories of the company as if it had been made on the joint
application of all the creditors and contributories.
(1) While a company is being wound up in insolvency or by the Court, a
person cannot perform or exercise, and must not purport to perform or exercise,
a function or power as an officer of the company, except:
(a) as a liquidator appointed for the purposes of the winding up;
or
(b) as an administrator appointed for the purposes of an administration of
the company beginning after the winding up order was made; or
(c) with the liquidator’s written approval; or
(d) with the approval of the Court.
(2) While a provisional liquidator of a company is acting, a person cannot
perform or exercise, and must not purport to perform or exercise, a function or
power as an officer of the company, except:
(a) as a provisional liquidator of the company; or
(b) as an administrator appointed for the purposes of an administration of
the company beginning after the provisional liquidator was appointed;
or
(c) with the provisional liquidator’s written approval; or
(d) with the approval of the Court.
(3) This section does not remove an officer of a company from
office.
(4) For the purposes of this section, a person is not an officer of a
company merely because he or she is:
(a) a receiver and manager, appointed under a power contained in an
instrument, of property of the company; or
(b) an employee of the company.
While a company is being wound up in insolvency or by the Court, or a
provisional liquidator of a company is acting, a person cannot begin or proceed
with:
(a) a proceeding in a court against the company or in relation to property
of the company; or
(b) enforcement process in relation to such property;
except with the leave of the Court and in accordance with such terms (if
any) as the Court imposes.
Nothing in section 471A or 471B affects a secured creditor’s
right to realise or otherwise deal with the security.
(1) On an order being made for the winding up of a company, the Court may
appoint an official liquidator to be liquidator of the company.
(2) The Court may appoint an official liquidator provisionally at any time
after the filing of a winding up application and before the making of a winding
up order or, if there is an appeal against a winding up order, before a decision
in the appeal is made.
(3) A liquidator appointed provisionally has or may exercise such
functions and powers:
(a) as are conferred on him or her by this Act or by rules of the Court
that appointed him or her; or
(b) as the Court specifies in the order appointing him or her.
(4) A liquidator of a company appointed provisionally also has:
(a) power to carry on the company’s business; and
(b) the powers that a liquidator of the company would have under paragraph
477(1)(d), subsection 477(2) (except paragraph 477(2)(m)) and subsection 477(3)
if the company were being wound up in insolvency or by the Court.
(5) Subsections 477(2A) and (2B) apply in relation to a company’s
provisional liquidator, with such modifications (if any) as the circumstances
require, as if he or she were a liquidator appointed for the purposes of a
winding up in insolvency or by the Court.
(6) The exercise by a company’s provisional liquidator of the powers
conferred by subsection (4) is subject to the control of the Court, and a
creditor or contributory, or ASIC, may apply to the Court in relation to the
exercise or proposed exercise of any of those powers.
(1) A liquidator appointed by the Court may resign or, on cause shown, be
removed by the Court.
(2) A provisional liquidator is entitled to receive such remuneration by
way of percentage or otherwise as is determined by the Court.
(3) A liquidator is entitled to receive such remuneration by way of
percentage or otherwise as is determined:
(a) if there is a committee of inspection—by agreement between the
liquidator and the committee of inspection; or
(b) if there is no committee of inspection or the liquidator and the
committee of inspection fail to agree:
(i) by resolution of the creditors; or
(ii) if no such resolution is passed—by the Court.
(4) A meeting of creditors for the purposes of subsection (3) must be
convened by the liquidator by sending to each creditor a notice to which is
attached a statement of all receipts and expenditure by the liquidator and of
the amount of remuneration sought by him or her.
(5) Where the remuneration of a liquidator is determined in the manner
specified in paragraph (3)(a), the Court may, on the application
of:
(a) a member or members whose shareholding or shareholdings represents or
represent in the aggregate at least 10% of the issued capital of the company;
or
(b) a creditor or creditors whose debts against the company that have been
admitted to proof amount in the aggregate to at least 10% of the total amount of
the debts of the creditors of the company that have been admitted to proof;
or
(c) ASIC;
review the liquidator’s remuneration and may confirm, increase or
reduce that remuneration.
(6) Where the remuneration of a liquidator is determined in the manner
specified in subparagraph (3)(b)(i) the Court may, on the application of
the liquidator or of a member or members referred to in subsection (5),
review the liquidator’s remuneration and may confirm, increase or reduce
that remuneration.
(7) A vacancy in the office of a liquidator appointed by the Court must be
filled by the Court.
(8) If more than one liquidator is appointed by the Court, the Court must
declare whether anything that is required or authorised by this Act to be done
by the liquidator is to be done by all or any one or more of the persons
appointed.
(9) Subject to this Act, the acts of a liquidator are valid
notwithstanding any defects that may afterwards be discovered in his or her
appointment or qualification.
(1) If a company is being wound up in insolvency or by the Court, or a
provisional liquidator of a company has been appointed, the liquidator or
provisional liquidator must take into his or her custody or under his or her
control all the property to which the company is or appears to be entitled, and,
if there is no liquidator, all the property of the company is to be in the
custody of the Court.
(2) The Court may, on the application of the liquidator, by order direct
that all or any part of the property of the company vests in the liquidator and
thereupon the property to which the order relates vests accordingly and the
liquidator may, after giving such indemnity (if any) as the Court directs,
bring, or may defend, any action or other legal proceeding that relates to that
property or that it is necessary to bring or defend for the purpose of
effectually winding up the company and recovering its property.
(3) Where an order is made under this section, the liquidator of the
company to which the order relates must, within 14 days after the making of the
order, lodge with ASIC an office copy of the order.
(1A) In this section:
liquidator includes a provisional liquidator.
(1) There must be made out and verified by a statement in writing in the
prescribed form, and submitted to the liquidator, by the persons who were, at
the date of the winding up order or, if the liquidator specifies an earlier
date, that earlier date, the directors and secretary of the company a report in
the prescribed form as to the affairs of the company as at the date
concerned.
(2) The liquidator may, by notice in writing served personally or by post
addressed to the last known address of the person, require one or more persons
included in one or more of the following classes of persons to make out as
required by the notice, verify by a statement in writing in the prescribed form,
and submit to him or her, a report, containing such information as is specified
in the notice as to the affairs of the company or as to such of those affairs as
are specified in the notice, as at a date specified in the notice:
(a) persons who are or have been officers of the company;
(b) where the company was formed within one year before the date of the
winding up order—persons who have taken part in the formation of the
company;
(c) persons who are employed by the company or have been employed by the
company within one year before the date of the winding up order and are, in the
opinion of the liquidator, capable of giving the information required;
(d) persons who are, or have been within one year before the date of the
winding up order, officers of, or employed by, a body corporate that is, or
within that year was, an officer of the company to the affairs of which the
report relates;
(e) a person who was a provisional liquidator of the company.
(3) The liquidator may, in a notice under subsection (2), specify the
information that he or she requires as to affairs of the company by reference to
information required by this Act or the regulations to be included in any other
report, statement or notice under this Act.
(4) A report referred to in subsection (1) must, subject to
subsection (6), be submitted to the liquidator not later than 14 days after
the making of the winding up order.
(5) A person required to submit a report referred to in
subsection (2) must, subject to subsection (6), submit it not later
than 14 days after the liquidator serves notice of the requirement.
(6) Where the liquidator believes there are special reasons for so doing,
he or she may, on an application in writing made to him or her before the end of
the time limited by subsection (4) or (5) for the submission by the
applicant of a report under subsection (1) or (2), grant, by notice in
writing, an extension of that time.
(7) A liquidator:
(a) must, within 7 days after receiving a report under subsection (1)
or (2), cause a copy of the report to be filed with the Court and a copy to be
lodged; and
(b) must, where he or she gives a notice under subsection (6), as
soon as practicable lodge a copy of the notice.
(8) A person making or concurring in making a report required by this
section and verifying it as required by this section must, subject to the rules,
be allowed, and must be paid by the liquidator out of the property of the
company, such costs and expenses incurred in and about the preparation and
making of the report and the verification of that report as the liquidator
considers reasonable.
(9) A person must not, without reasonable excuse, contravene a provision
of this section other than subsection (7).
(10) A person must not, without reasonable excuse, contravene
subsection (7).
A liquidator of a company must, within 2 months, or such longer period
(if any) as ASIC allows, after receiving a report referred to in subsection
475(1) or (2), lodge a preliminary report:
(a) in the case of a company having a share capital—as to the amount
of capital issued, subscribed and paid up; and
(b) as to the estimated amounts of assets and liabilities of the company;
and
(c) if the company has failed—as to the causes of the failure;
and
(d) as to whether, in his or her opinion, further inquiry is desirable
with respect to a matter relating to the promotion, formation or insolvency of
the company or the conduct of the business of the company.
(1) Subject to this section, a liquidator of a company may:
(a) carry on the business of the company so far as is necessary for the
beneficial disposal or winding up of that business; and
(b) subject to the provisions of section 556, pay any class of
creditors in full; and
(c) make any compromise or arrangement with creditors or persons claiming
to be creditors or having or alleging that they have any claim (present or
future, certain or contingent, ascertained or sounding only in damages) against
the company or whereby the company may be rendered liable; and
(d) compromise any calls, liabilities to calls, debts, liabilities capable
of resulting in debts and any claims (present or future, certain or contingent,
ascertained or sounding only in damages) subsisting or supposed to subsist
between the company and a contributory or other debtor or person apprehending
liability to the company, and all questions in any way relating to or affecting
the property or the winding up of the company, on such terms as are agreed, and
take any security for the discharge of, and give a complete discharge in respect
of, any such call, debt, liability or claim.
(2) Subject to this section, a liquidator of a company may:
(a) bring or defend any legal proceeding in the name and on behalf of the
company; and
(b) appoint a solicitor to assist him or her in his or her duties;
and
(c) sell or otherwise dispose of, in any manner, all or any part of the
property of the company; and
(ca) exercise the Court’s powers under subsection 483(3) (except
paragraph 483(3)(b)) in relation to calls on contributories; and
(d) do all acts and execute in the name and on behalf of the company all
deeds, receipts and other documents and for that purpose use when necessary a
seal of the company; and
(e) subject to the Bankruptcy Act 1966, prove in the bankruptcy of
any contributory or debtor of the company or under any deed executed under that
Act; and
(f) draw, accept, make and indorse any bill of exchange or promissory note
in the name and on behalf of the company; and
(g) obtain credit, whether on the security of the property of the company
or otherwise; and
(h) take out letters of administration of the estate of a deceased
contributory or debtor, and do any other act necessary for obtaining payment of
any money due from a contributory or debtor, or his or her estate, that cannot
be conveniently done in the name of the company; and
(k) appoint an agent to do any business that the liquidator is unable to
do, or that it is unreasonable to expect the liquidator to do, in person;
and
(m) do all such other things as are necessary for winding up the affairs
of the company and distributing its property.
(2A) Except with the approval of the Court, of the committee of inspection
or of a resolution of the creditors, a liquidator of a company must not
compromise a debt to the company if the amount claimed by the company is more
than:
(a) if an amount greater than $20,000 is prescribed—the prescribed
amount; or
(b) otherwise—$20,000.
(2B) Except with the approval of the Court, of the committee of inspection
or of a resolution of the creditors, a liquidator of a company must not enter
into an agreement on the company’s behalf (for example, but without
limitation, a lease or a charge) if:
(a) without limiting paragraph (b), the term of the agreement may
end; or
(b) obligations of a party to the agreement may, according to the terms of
the agreement, be discharged by performance;
more than 3 months after the agreement is entered into, even if the term
may end, or the obligations may be discharged, within those 3 months.
(3) A liquidator of a company is entitled to inspect at any reasonable
time any books of the company and a person who refuses or fails to allow the
liquidator to inspect such books at such a time is guilty of an
offence.
(5) For the purpose of enabling the liquidator to take out letters of
administration or recover money as mentioned in paragraph (2)(h), the money
due is taken to be due to the liquidator.
(6) The exercise by the liquidator of the powers conferred by this section
is subject to the control of the Court, and any creditor or contributory, or
ASIC, may apply to the Court with respect to any exercise or proposed exercise
of any of those powers.
(7) This section does not apply to calls on shares in a no liability
company.
(1) As soon as practicable after the Court orders that a company be wound
up, the liquidator must:
(a) cause the company’s property to be collected and applied in
discharging the company’s liabilities; and
(b) consider whether subsection (1A) requires him or her to settle a
list of contributories.
(1A) A liquidator of a company that is being wound up in insolvency or by
the Court must settle a list of contributories if it appears to him or her
likely that:
(a) either:
(i) there are persons liable as members or past members to contribute to
the company’s property on the winding up; or
(ii) there will be a surplus available for distribution; and
(b) it will be necessary:
(i) to make calls on contributories; or
(ii) to adjust the rights of the contributories among
themselves.
(1B) A liquidator of such a company may rectify the register of members so
far as required under this Part.
(3) In settling the list of contributories the liquidator must distinguish
between persons who are contributories in their own right and persons who are
contributories by virtue of representing, or being liable for the debts of,
other persons.
(4) The list of contributories, when settled in accordance with the
regulations, is prima facie evidence of the liabilities of the persons named in
the list as contributories.
(5) Paragraph (1)(b) and subsections (1A), (1B), (3) and (4) do
not apply to a no liability company.
(1) Subject to this Part, the liquidator must, in the administration of
the property of the company and in the distribution of the property among its
creditors, have regard to any directions given by resolution of the creditors or
contributories at any general meeting or by the committee of inspection, and, in
case of conflict, any directions so given by the creditors or contributories
override any directions given by the committee of inspection.
(2) The liquidator may convene general meetings of the creditors or
contributories for the purpose of ascertaining their wishes, and he or she must
convene meetings at such times as the creditors or contributories by resolution
direct or whenever requested in writing to do so by at least one-tenth in value
of the creditors or contributories.
(3) The liquidator may apply to the Court for directions in relation to
any particular matter arising under the winding up.
(4) Subject to this Part, the liquidator must use his or her own
discretion in the management of affairs and property of the company and the
distribution of its property.
When the liquidator:
(a) has realised all the property of the company or so much of that
property as can in his or her opinion be realised without needlessly protracting
the winding up, and has distributed a final dividend (if any) to the creditors
and adjusted the rights of the contributories among themselves and made a final
return (if any) to the contributories; or
(b) has resigned or has been removed from office;
he or she may apply to the Court:
(c) for an order that he or she be released; or
(d) for an order that he or she be released and that ASIC deregister the
company.
(1) The Court:
(a) may cause a report on the accounts of the liquidator to be prepared by
the auditor appointed by ASIC under section 539 or by some other registered
company auditor appointed by the Court; and
(b) on the liquidator complying with all the requirements of the
Court—must take into consideration the report and any objection against
the release of the liquidator that is made by the auditor or by any creditor,
contributory or other person interested; and
(c) must either grant or withhold the release accordingly.
(2) Where the release of a liquidator is withheld and the Court is
satisfied that the liquidator has been guilty of default, negligence, breach of
trust or breach of duty, the Court may order the liquidator to make good any
loss that the company has sustained by reason of the default, negligence, breach
of trust or breach of duty and may make such other order as it thinks
fit.
(3) An order of the Court releasing the liquidator discharges him or her
from all liability in respect of any act done or default made by him or her in
the administration of the affairs of the company or otherwise in relation to his
or her conduct as liquidator, but any such order may be revoked on proof that it
was obtained by fraud or by suppression or concealment of any material
fact.
(4) Where the liquidator has not previously resigned or been removed, his
or her release operates as a removal from office.
(5) Where the Court has made:
(a) an order that the liquidator be released; or
(b) an order that the liquidator be released and that ASIC deregister the
company;
the liquidator must, within 14 days after the making of the order, lodge an
office copy of the order.
(1) At any time during the winding up of a company, the Court may, on
application, make an order staying the winding up either indefinitely or for a
limited time or terminating the winding up on a day specified in the
order.
(1A) An application may be made by:
(a) in any case—the liquidator, or a creditor or contributory, of
the company; or
(b) in the case of a company registered under the Life Insurance Act
1995—APRA.
(2) On such an application, the Court may, before making an order, direct
the liquidator to give a report with respect to a relevant fact or
matter.
(3) Where the Court has made an order terminating the winding up, the
Court may give such directions as it thinks fit for the resumption of the
management and control of the company by its officers, including directions for
the convening of a general meeting of members of the company to elect directors
of the company to take office upon the termination of the winding up.
(4) The costs of proceedings before the Court under this section and the
costs incurred in convening a meeting of members of the company in accordance
with an order of the Court under this section, if the Court so directs, forms
part of the costs, charges and expenses of the winding up.
(5) Where an order is made under this section, the company must lodge an
office copy of the order within 14 days after the making of the order.
(1) The Court may require a person who is a contributory, trustee,
receiver, banker, agent or officer of the company to pay, deliver, convey,
surrender or transfer to the liquidator or provisional liquidator, as soon as
practicable or within a specified period, any money, property or books in the
person’s hands to which the company is prima facie entitled.
(2) The Court may make an order directing any contributory for the time
being on the list of contributories to pay to the company in the manner directed
by the order any money due from the contributory or from the estate of the
person whom the contributory represents, exclusive of any money payable by the
contributory or the estate by virtue of any call pursuant to this Act, and
may:
(a) in the case of an unlimited company—allow to the contributory by
way of set-off any money due to the contributory or to the estate that the
contributory represents from the company on any independent dealing or contract
but not any money due to the contributory as a member of the company in respect
of any dividend or profit; and
(b) in the case of a limited company—make to any director whose
liability is unlimited or to such a director’s estate the like
allowance;
and, in the case of any company whether limited or unlimited, when all the
creditors are paid in full, any money due on any account whatever to a
contributory from the company may be allowed to him, her or it by way of set-off
against any subsequent call.
(3) The Court may, either before or after it has ascertained the
sufficiency of the property of the company:
(a) make calls on all or any of the contributories for the time being on
the list of contributories, to the extent of their liability, for payment of any
money that the Court considers necessary to satisfy the debts and liabilities of
the company and the costs, charges and expenses of winding up and for the
adjustment of the rights of the contributories among themselves; and
(b) make an order for payment of any calls made by the Court or the
company’s liquidator;
and, in making a call, may take into consideration the probability that
some of the contributories may partly or wholly fail to pay the call.
(3A) Subsection (3) does not apply to a no liability
company.
(4) The Court may order any contributory, purchaser or other person from
whom money is due to the company to pay the amount due into a bank named in the
order to the account of the liquidator instead of to the liquidator, and any
such order may be enforced in the same manner as if it had directed payment to
the liquidator.
(5) All money and securities paid or delivered into any bank under this
Division are subject in all respects to orders of the Court.
(6) An order made by the Court under this section is, subject to any right
of appeal, conclusive evidence that the money (if any) thereby appearing to be
due or ordered to be paid is due, and all other pertinent matters stated in the
order are taken to be truly stated as against all persons and in all
proceedings.
(1) The liquidator may, if satisfied that the nature of the property or
business of the company, or the interests of the creditors or contributories
generally, requires or require the appointment of a special manager of the
property or business of the company other than himself or herself, apply to the
Court, and the Court may appoint a special manager of the property or business
to act during such time as the Court directs with such powers, including any of
the powers of a receiver or manager, as are entrusted to him or her by the
Court.
(2) The special manager:
(a) must give such security and account in such manner as the Court
directs; and
(b) must receive such remuneration as is fixed by the Court; and
(c) may at any time resign by notice in writing addressed to the
liquidator or may, on cause shown, be removed by the Court.
(1) The Court may fix a day on or before which creditors are to prove
their debts or claims or after which they will be excluded from the benefit of
any distribution made before those debts are proved.
(2) The Court must adjust the rights of the contributories among
themselves and distribute any surplus among the persons entitled to
it.
(3) The Court may, in the event of the property being insufficient to
satisfy the liabilities, make an order as to the payment out of the property of
the costs, charges and expenses incurred in the winding up in such order of
priority as the Court thinks just.
The Court may make such order for inspection of the books of the company
by creditors and contributories as the Court thinks just, and any books in the
possession of the company may be inspected by creditors or contributories
accordingly, but not further or otherwise.
(1) On the application of a liquidator or provisional liquidator of a
company, the Court may make one or more of the following:
(a) an order prohibiting, either absolutely or subject to conditions, an
officer or related entity of the company from taking or sending out of this
jurisdiction, or out of Australia, money or other property of the company or of
the officer or related entity;
(b) an order appointing:
(i) a receiver or trustee, with specified powers, of property of an
officer of the company, or of property of a related entity of the company that
is a natural person; or
(ii) a receiver, or a receiver and manager, with specified powers, of
property of a related entity of the company that is not a natural
person;
(c) an order requiring an officer of the company, or a related entity of
the company that is a natural person, to surrender to the Court his or her
passport and any other specified documents;
(d) an order prohibiting an officer of the company, or a related entity of
the company that is a natural person, from leaving this jurisdiction, or
Australia, without the Court’s consent.
(2) The Court may only make an order under subsection (1)
if:
(a) the company is being wound up in insolvency or by the Court, or an
application has been made for the company to be so wound up; and
(b) the Court is satisfied that there is at least a prima facie case that
the officer or related entity is or will become liable:
(i) to pay money to the company, whether in respect of a debt, by way of
damages or compensation or otherwise; or
(ii) to account for property of the company; and
(c) the Court is also satisfied that there is substantial evidence that
the officer or related entity:
(i) has concealed or removed money or other property, has tried to do so,
or intends to do so; or
(ii) has tried to leave this jurisdiction or Australia, or intends to do
so;
in order to avoid that liability or its consequences; and
(d) the Court thinks it necessary or desirable to make the order in order
to protect the company’s rights against the officer or related
entity.
(3) On hearing an application under subsection (1), the Court must
have regard to any relevant application under section 1323.
(4) Before considering an application under subsection (1), the Court
may, if in the Court’s opinion it is desirable to do so, grant an interim
order of the kind applied for that is expressed to have effect until the
application is determined.
(5) The Court must not require an applicant under subsection (1) or
any other person, as a condition of granting an interim order under
subsection (4), to give an undertaking as to damages.
(6) On the application of a person who applied for, or is affected by, an
order under this section, the Court may make a further order discharging or
varying the first-mentioned order.
(7) An order under subsection (1) may be expressed to operate for a
specified period or until it is discharged by a further order.
(8) A person must not contravene an order under this section that is
applicable to the person.
(9) This section has effect subject to the Bankruptcy Act
1966.
(10) Nothing in this section affects any other powers of the
Court.
(1) The Court may issue a warrant for a person to be arrested and brought
before the Court if:
(a) a company is being wound up in insolvency or by the Court, or an
application has been made for a company to be so wound up; and
(b) the Court is satisfied that the person:
(i) is about to leave this jurisdiction, or Australia, in order to
avoid:
(A) paying money payable to the company; or
(B) being examined about the company’s affairs; or
(C) complying with an order of the Court, or some other obligation, under
this Chapter in connection with the winding up; or
(ii) has concealed or removed property of the company in order to prevent
or delay the taking of the property into the liquidator’s custody or
control; or
(iii) has destroyed, concealed or removed books of the company or is about
to do so.
(2) A warrant under subsection (1) may also provide for property or
books of the company in the person’s possession to be seized and delivered
into the custody of a specified person.
(3) A warrant under subsection (1) may only be issued on the
application of:
(a) a liquidator or provisional liquidator of the company; or
(b) ASIC.
The Court, at any time before or after making a winding up order, on
proof of probable cause for believing that a contributory is about to leave this
jurisdiction, or Australia, or otherwise to abscond or to remove or conceal any
of his or her property for the purpose of evading payment of calls or of
avoiding examination respecting affairs of the company, may cause the
contributory to be arrested and held in custody and the books and movable
personal property of the contributory to be seized and safely kept until such
time as the Court orders.
(1) Provision may be made by rules or regulations for enabling or
requiring all or any of the powers and duties conferred and imposed on the Court
by this Part in respect of:
(a) the holding and conducting of meetings to ascertain the wishes of
creditors and contributories; and
(b) the paying, delivery, conveyance, surrender or transfer of money,
property or books to the liquidator; and
(c) the adjusting of the rights of contributories among themselves and the
distribution of any surplus among the persons entitled to it; and
(d) the fixing of a time within which debts and claims must be
proved;
to be exercised or performed by the liquidator as an officer of the Court
and subject to the control of the Court.
(2) Despite anything in rules or regulations made for the purposes of
subsection (1), a liquidator may distribute a surplus only with the
Court’s special leave.
Any powers conferred on the Court by this Act are in addition to, and not
in derogation of, any existing powers of instituting proceedings against any
contributory or debtor of the company or the property of any contributory or
debtor for the recovery of any call or other sums.
Except with the leave of the Court, a company cannot resolve that it be
wound up voluntarily if:
(a) an application for the company to be wound up in insolvency has been
filed; or
(b) the Court has ordered that the company be wound up in insolvency,
whether or not the order was made on such an application.
(1) Subject to section 490, a company may be wound up voluntarily if
the company so resolves by special resolution.
(2) A company must:
(a) within 7 days after the passing of a resolution for voluntary winding
up, lodge a printed copy of the resolution; and
(b) within 21 days after the passing of the resolution, cause notice of
the resolution to be published in the Gazette.
(1) The company must, from the passing of the resolution, cease to carry
on its business except so far as is in the opinion of the liquidator required
for the beneficial disposal or winding up of that business, but the corporate
state and corporate powers of the company, notwithstanding anything to the
contrary in its constitution, continue until it is deregistered.
(2) Any transfer of shares, not being a transfer made to or with the
sanction of the liquidator, and any alteration in the status of the members,
made after the passing of the resolution are void.
(1) Where it is proposed to wind up a company voluntarily, a majority of
the directors may, before the date on which the notices of the meeting at which
the resolution for the winding up of the company is to be proposed are sent out,
make a written declaration to the effect that they have made an inquiry into the
affairs of the company and that, at a meeting of directors, they have formed the
opinion that the company will be able to pay its debts in full within a period
not exceeding 12 months after the commencement of the winding up.
(2) There must be attached to the declaration a statement of affairs of
the company showing, in the prescribed form:
(a) the property of the company, and the total amount expected to be
realised from that property; and
(b) the liabilities of the company; and
(c) the estimated expenses of winding up;
made up to the latest practicable date before the making of the
declaration.
(3) A declaration so made has no effect for the purposes of this Act
unless:
(a) the declaration is made at the meeting of directors referred to in
subsection (1); and
(b) the declaration is lodged before the date on which the notices of the
meeting at which the resolution for the winding up of the company is to be
proposed are sent out or such later date as ASIC, whether before, on or after
the first-mentioned date, allows; and
(c) the resolution for voluntary winding up is passed within the period of
5 weeks after the making of the declaration or within such further period after
the making of that declaration as ASIC, whether before or after the end of that
period of 5 weeks, allows.
(4) A director who makes a declaration under this section (including a
declaration that has no effect for the purposes of this Act by reason of
subsection (3)) without having reasonable grounds for his or her opinion
that the company will be able to pay its debts in full within the period stated
in the declaration is guilty of an offence.
(5) If the company is wound up pursuant to a resolution for voluntary
winding up passed within the period of 5 weeks after the making of the
declaration or, if pursuant to paragraph (3)(c) ASIC has allowed a further
period after the end of that period of 5 weeks, within that further period, but
its debts are not paid or provided for in full within the period stated in the
declaration, it is to be presumed, unless the contrary is shown, that a director
who made the declaration did not have reasonable grounds for his or her
opinion.
(1) The company in general meeting must appoint a liquidator or
liquidators for the purpose of winding up the affairs and distributing the
property of the company and may fix the remuneration to be paid to him, her or
them.
(2) On the appointment of a liquidator, all the powers of the directors
cease except so far as the liquidator, or the company in general meeting with
the consent of the liquidator, approves the continuance of any of those
powers.
(3) If a vacancy occurs by death, resignation or otherwise in the office
of a liquidator, the company in general meeting may fill the vacancy by the
appointment of a liquidator and fix the remuneration to be paid to him or her,
and for that purpose a general meeting may be convened by any contributory or,
if there were 2 or more liquidators, by the continuing liquidators.
(4) The meeting must be held in the manner provided by this Act or by the
company’s constitution or in such manner as is, on application by any
contributory or by the continuing liquidators, determined by the
Court.
(1) Where a declaration has been made under section 494 and the
liquidator is at any time of the opinion that the company will not be able to
pay or provide for the payment of its debts in full within the period stated in
the declaration, he or she must do one of the following as soon as
practicable:
(a) apply under section 459P for the company to be wound up in
insolvency;
(b) appoint an administrator of the company under
section 436B;
(c) convene a meeting of the company’s creditors;
and if he or she convenes such a meeting, the following subsections
apply.
(2) The liquidator must send to each creditor with the notice convening
the meeting a list setting out the names of all creditors, the addresses of
those creditors and the estimated amounts of their claims, as shown in the
records of the company.
(3) Unless the Court otherwise orders, nothing in subsection (2)
requires the liquidator to send, to a creditor whose debt does not exceed $200,
a list of creditors referred to in that subsection, but the notice convening the
meeting that is sent to a creditor to whom the liquidator is not required to
send such a list must specify a place at which copies of the list referred to in
that subsection can be obtained on request made orally or in writing and, where
such a creditor so requests, the liquidator must as soon as practicable comply
with the request.
(4) The liquidator must lay before the meeting a statement of the assets
and liabilities of the company and the notice convening the meeting must draw
the attention of the creditors to the right conferred upon them by
subsection (5).
(5) The creditors may, at the meeting convened under subsection (1),
appoint some other person to be liquidator for the purpose of winding up the
affairs and distributing the property of the company instead of the liquidator
appointed by the company.
(6) If the creditors appoint some other person under subsection (5),
the winding up must thereafter proceed as if the winding up were a
creditors’ voluntary winding up.
(7) The liquidator or, if another person is appointed by the creditors to
be liquidator, the person so appointed must, within 7 days after a meeting has
been held pursuant to subsection (1), lodge a notice in the prescribed
form.
(8) Where the liquidator has convened a meeting under subsection (1)
and the creditors do not appoint a liquidator instead of the liquidator
appointed by the company, the winding up must thereafter proceed as if the
winding up were a creditors’ voluntary winding up, but the liquidator is
not required to convene an annual meeting of creditors at the end of the first
year from the commencement of the winding up if the meeting held under
subsection (1) was held less than 3 months before the end of that
year.
(1) The company must cause a meeting of the creditors of the company to be
convened for the day, or the day next following the day, on which there is to be
held the meeting at which the resolution for voluntary winding up is to be
proposed, and must cause the notices of the meeting of creditors to be sent by
post to the creditors simultaneously with the sending of the notices of the
meeting of the company.
(2) The company must convene a meeting at a date, time and place
convenient to the majority in value of the creditors and must:
(a) give to the creditors at least 7 days notice by post of the meeting;
and
(b) send to each creditor with the notice:
(i) a summary of the affairs of the company in the prescribed form;
and
(ii) a list setting out the names of all creditors, the addresses of those
creditors and the estimated amounts of their claims, as shown in the records of
the company;
(c) lodge, not less than 7 days before the day fixed for the holding of
the meeting, a copy of the notice given under paragraph (a) and of the
documents that accompanied that notice in accordance with paragraph (b);
and
(d) publish, not less than 7 days, nor more than 14 days, before the day
fixed for the holding of the meeting, a copy of the notice given or to be given
under paragraph (a) in each State, Territory or external Territory in which
the company carries on business or has carried on business at any time during
the 2 years immediately preceding that day in a daily newspaper circulating
generally in that State, Territory or external Territory.
(3) Unless the Court otherwise orders, nothing in subsection (2)
requires the company to send, to a creditor whose debt does not exceed $200, a
list of creditors referred to in subparagraph (2)(b)(ii), but the notice
convening the meeting that is sent to a creditor to whom the company is not
required to send such a list must specify a place at which copies of the list
referred to in that subparagraph can be obtained on request made orally or in
writing and, where such a creditor so requests, the company must as soon as
practicable comply with the request.
(4) If the company contravenes subsection (1) or (2):
(a) the company is not guilty of an offence by virtue of this section or
section 1311; and
(b) a person involved in the contravention contravenes this
subsection.
(5) The directors of the company must:
(a) cause to be laid before the meeting of creditors a report in the
prescribed form, and verified by all the directors, as to the affairs of the
company, made up to the latest practicable date before the notices of the
meeting were sent; and
(b) appoint one of their number to attend the meeting.
(6) The director so appointed and a secretary (if the company has one)
must attend the meeting and disclose to the meeting the affairs of the company
and the circumstances leading up to the proposed winding up. If the company has
2 or more directors, the director so appointed must not also attend in the
capacity of a secretary.
(7) The directors of the company must, not later than 7 days after the
report referred to in paragraph (5)(a) is laid before the meeting of
creditors as mentioned in that paragraph, lodge a copy of the report with
ASIC.
(8) The creditors may appoint one of their number or the director
appointed under subsection (5) to preside at the meeting.
(9) The chair must, at the meeting, determine whether the meeting
has been held at a date, time and place convenient to the majority in value of
the creditors and his or her decision is final.
(10) At a meeting of creditors held under this section the creditors may
determine the matters referred to in paragraphs 548(1)(a) and (b) and, where the
creditors so determine those matters, a meeting of the creditors for the
purposes of section 548 is taken to have been held and the determinations
are taken to have been made under that section.
(1) A meeting convened under section 497 may by resolution be
adjourned from time to time to a time and day specified in the resolution but
must not be adjourned to a day later than 21 days after the day for which the
meeting was originally convened.
(2) Where a meeting is adjourned, the adjourned meeting must, unless it is
otherwise provided by the resolution by which it is adjourned, be held at the
same place as the original meeting.
(3) Where a meeting is adjourned to a day more than 8 days after the
passing of the resolution by which it is adjourned, the company must cause
notice of the day, time and place of the resumption of the meeting to be
published, in a daily newspaper circulating generally in the State or Territory
in which the resumed meeting is to be held, at least 7 days before that
day.
(4) If the meeting of the company is adjourned and the resolution for
winding up is passed at an adjourned meeting, any resolution passed at the
meeting of the creditors has effect as if it had been passed immediately after
the passing of the resolution for winding up.
(1) The company must, and the creditors may, at their respective meetings
nominate a person to be liquidator for the purpose of winding up the affairs and
distributing the property of the company and, if the creditors and the company
nominate different persons, the person nominated by the creditors is to be
liquidator but, if no person is nominated by the creditors, the person nominated
by the company is to be liquidator.
(2) Notwithstanding the provisions of subsection (1), where different
persons are nominated, any director or member may, within 7 days after the date
on which the nomination was made by the creditors, apply to the Court for an
order directing that the person nominated as liquidator by the company is to be
liquidator instead of or jointly with the person nominated by the
creditors.
(3) The committee of inspection, or, if there is no such committee, the
creditors, may fix the remuneration to be paid to the liquidator.
(4) On the appointment of a liquidator, the powers of the directors cease
except so far as the committee of inspection, or, if there is no such committee,
the creditors, approve the continuance of any of those powers.
(5) If a liquidator, other than a liquidator appointed by or by the
direction of the Court, dies, resigns or otherwise vacates his or her office,
the creditors may fill the vacancy and, for the purpose of so doing, a meeting
of the creditors may be convened by any 2 of their number.
(1) Any attachment, sequestration, distress or execution put in force
against the property of the company after the passing of the resolution for
voluntary winding up is void.
(2) After the passing of the resolution for voluntary winding up, no
action or other civil proceeding is to be proceeded with or commenced against
the company except by leave of the Court and subject to such terms as the Court
imposes.
(3) The Court may require any contributory, trustee, receiver, banker,
agent or officer of the company to pay, deliver, convey, surrender or transfer
forthwith or within such time as the Court directs to the liquidator any money,
property or books in his, her or its hands to which the company is prima facie
entitled.
Subject to the provisions of this Act as to preferential payments, the
property of a company must, on its winding up, be applied in satisfaction of its
liabilities equally and, subject to that application, must, unless the
company’s constitution otherwise provides, be distributed among the
members according to their rights and interests in the company.
If from any cause there is no liquidator acting, the Court may appoint a
liquidator.
The Court may, on cause shown, remove a liquidator and appoint another
liquidator.
Any member or creditor, or the liquidator, may at any time before the
deregistration of the company apply to the Court to review the amount of the
remuneration of the liquidator, and the decision of the Court is final and
conclusive.
(1) The acts of a liquidator are valid notwithstanding any defects that
may afterwards be discovered in his or her appointment or
qualification.
(2) A conveyance, assignment, transfer, mortgage, charge or other
disposition of a company’s property made by a liquidator is,
notwithstanding any defect or irregularity affecting the validity of the winding
up or the appointment of the liquidator, valid in favour of any person taking
such property in good faith and for value and without actual knowledge of the
defect or irregularity.
(3) A person making or permitting a disposition of property to a
liquidator is to be protected and indemnified in so doing notwithstanding any
defect or irregularity affecting the validity of the winding up or the
appointment of the liquidator that is not then known to that person.
(4) For the purposes of this section, a disposition of property is taken
to include a payment of money.
(1) The liquidator may:
(b) exercise any of the powers that this Act confers on a liquidator in a
winding up in insolvency or by the Court; or
(c) exercise the power under section 478 of a liquidator appointed by
the Court to settle a list of contributors; or
(d) exercise the Court’s powers under subsection 483(3) (except
paragraph 483(3)(b)) in relation to calls on contributories; or
(e) exercise the power of the Court of fixing a time within which debts
and claims must be proved; or
(f) convene a general meeting of the company for the purpose of obtaining
the sanction of the company by special resolution in respect of any matter or
for any other purpose he or she thinks fit.
(1A) Subsections 477(2A) and (2B) apply in relation to the liquidator as
if:
(a) he or she were a liquidator in a winding up in insolvency or by the
Court; and
(b) in the case of a members’ voluntary winding up—a reference
in those subsections to an approval were a reference to the approval of a
special resolution of the company.
(1B) The company must lodge a copy of a special resolution referred to in
paragraph (1A)(b) with ASIC within 14 days after the resolution is
passed.
(2) A list of contributories settled in accordance with
paragraph (1)(c) is prima facie evidence of the liability of the persons
named in the list to be contributories.
(3) The liquidator must pay the debts of the company and adjust the rights
of the contributories among themselves.
(4) When several liquidators are appointed, any power given by this Act
may be exercised by such one or more of them as is determined at the time of
their appointment, or in default of such determination, by any number not less
than 2.
(1) This section applies where it is proposed to transfer or sell to a
body corporate the whole or a part of the business or property of a
company.
(2) The liquidator of the company may, with the sanction of a special
resolution of the company conferring on the liquidator either a general
authority or an authority in respect of a particular arrangement, enter into an
arrangement under which, in compensation or part compensation for the transfer
or sale:
(a) the liquidator is to receive shares, debentures, policies or other
like interests in the body corporate for distribution among the members of the
company; or
(b) the members of the company may, instead of, or as well as, receiving
cash, shares, debentures, policies or other like interests in the body
corporate, participate in the profits of, or receive any other benefit from, the
body corporate.
(3) A transfer, sale or arrangement under this section is binding on the
members of the company.
(4) If a member of the company who did not vote in favour of a special
resolution expresses dissent from the resolution in writing addressed to the
liquidator and left at the office of the liquidator within 7 days after the
passing of the resolution, the member may require the liquidator either to
abstain from carrying the resolution into effect or to purchase the
member’s interest at a price to be determined by agreement or by
arbitration under this section.
(5) If the liquidator elects to purchase the member’s interest, the
purchase money must be paid before the company is deregistered and be raised by
the liquidator in such manner as is determined by special resolution.
(6) A special resolution is not invalid for the purposes of this section
because it is passed before, or concurrently with, a resolution for voluntary
winding up or for appointing liquidators but, if an order for winding up the
company by the Court is made within 1 year after the passing of the resolution,
the resolution is not valid unless sanctioned by the Court.
(7) For the purposes of an arbitration under this section, the agreed
arbitration law applies as if there were a submission for reference to 2
arbitrators, one to be appointed by each party.
(7A) Parties to the arbitration may agree on the State or Territory in
this jurisdiction whose law is to govern the arbitration. The agreed
arbitration law is the law of that State or Territory relating to
commercial arbitration.
(8) The appointment of an arbitrator may be made in writing signed
by:
(a) if there is only one liquidator—the liquidator; or
(b) if there is more than one liquidator—any 2 or more of the
liquidators.
(9) The Court may give any directions necessary for the initiation and
conduct of the arbitration and any such direction is binding on the
parties.
(10) In the case of a creditors’ voluntary winding up, the powers of
the liquidator under this section must not be exercised except with the approval
of the Court or the committee of inspection.
(11) The company must lodge a copy of a special resolution referred to in
subsection (2) or (5) with ASIC within 14 days after the resolution is
passed.
(1) If the winding up continues for more than 1 year, the liquidator
must:
(a) in the case of a members’ voluntary winding up—convene a
general meeting of the company; or
(b) in the case of a creditors’ voluntary winding up—convene a
general meeting of the company and a meeting of the creditors;
within 3 months after the end of the first year from the commencement of
the winding up and the end of each succeeding year, and must lay before the
meeting or each meeting an account of his or her acts and dealings and of the
conduct of the winding up during that first year or that succeeding year, as the
case may be.
(2) The liquidator must cause the notices of the meeting of creditors to
be sent by post to the creditors simultaneously with the sending of the notices
of the meeting of the company.
(1) As soon as the affairs of the company are fully wound up, the
liquidator must make up an account showing how the winding up has been conducted
and the property of the company has been disposed of and, when the account is so
made up, he or she must convene a general meeting of the company, or, in the
case of a creditors’ voluntary winding up, a meeting of the creditors and
members of the company, for the purpose of laying before it the account and
giving any explanation of the account.
(2) The meeting must be convened by an advertisement published in the
Gazette at least 1 month before the meeting specifying the date, time,
place and purpose of the meeting.
(3) The liquidator must, within 7 days after the meeting, lodge a return
of the holding of the meeting and of its date with a copy of the account
attached to the return.
(4) At a meeting of the company, 2 members constitute a quorum and, at a
meeting of the creditors and members of the company, 2 creditors and 2 members
constitute a quorum and, if a quorum is not present at the meeting, the
liquidator must, in place of the return mentioned in subsection (3), lodge
a return (with account attached) stating that the meeting was duly convened and
that no quorum was present and, upon such a return being lodged, the provisions
of that subsection as to the lodging of the return are taken to have been
complied with.
ASIC must deregister at the end of 3 month period
(5) ASIC must deregister the company at the end of the 3 month period
after the return was lodged.
ASIC must deregister on a day specified by the Court
(6) On application by the liquidator or any other interested party, the
Court may make an order that ASIC deregister the company on a specified day. The
Court must make the order before the end of the 3 month period after the return
was lodged.
(7) The person on whose application an order of the Court under this
section is made must, within 14 days after the making of the order, lodge an
office copy of the order.
(1) An arrangement entered into between a company about to be, or in the
course of being, wound up and its creditors is, subject to
subsection (4):
(a) binding on the company if sanctioned by a special resolution;
and
(b) binding on the creditors if sanctioned by a resolution of the
creditors.
(1A) The company must lodge a copy of a special resolution referred to in
paragraph (1)(a) with ASIC within 14 days after the resolution is
passed.
(2) A creditor must be accounted a creditor for value for such sum as upon
an account fairly stated, after allowing the value of security or liens held by
the creditor and the amount of any debt or set-off owing by the creditor to the
company, appears to be the balance due to the creditor.
(3) A dispute about the value of any such security or lien or the amount
of any such debt or set-off may be settled by the Court on the application of
the company, the liquidator or the creditor.
(4) A creditor or contributory may, within 3 weeks after the completion of
the arrangement, appeal to the Court in respect of the arrangement, and the
Court may confirm, set aside or modify the arrangement and make such further
order as it thinks just.
(1) The liquidator, or any contributory or creditor, may apply to the
Court:
(a) to determine any question arising in the winding up of a company;
or
(b) to exercise all or any of the powers that the Court might exercise if
the company were being wound up by the Court.
(1A) APRA may apply to the Court under subsection (1) in relation to
a company that is a friendly society within the meaning of the Life Insurance
Act 1995 and which may be wound up voluntarily under subsection 180(2) of
that Act.
(2) The Court, if satisfied that the determination of the question or the
exercise of power will be just and beneficial, may accede wholly or partially to
any such application on such terms and conditions as it thinks fit or may make
such other order on the application as it thinks just.
All proper costs, charges and expenses of and incidental to the winding
up (including the remuneration of the liquidator) are payable out of the
property of the company in priority to all other claims.
Except so far as the contrary intention appears, the provisions of this
Act about winding up apply in relation to the winding up of a company whether in
insolvency, by the Court or voluntarily.
If the Court orders under section 233, 459A, 459B or 461 that a
company be wound up, the winding up is taken to have begun or
commenced:
(a) if, when the order was made, a winding up of the company was already
in progress—when the last-mentioned winding up is taken because of this
Division to have begun or commenced; or
(b) if, immediately before the order was made, the company was under
administration—on the section 513C day in relation to the
administration; or
(c) if:
(i) when the order was made, a provisional liquidator of the company was
acting; and
(ii) immediately before the provisional liquidator was appointed, the
company was under administration;
on the section 513C day in relation to the administration;
or
(d) if, immediately before the order was made, a deed of company
arrangement had been executed by the company and had not yet terminated—on
the section 513C day in relation to the administration that ended when the
deed was executed; or
(e) otherwise—on the day when the order was made.
Where a company resolves by special resolution that it be wound up
voluntarily, the winding up is taken to have begun or commenced:
(a) if, when the resolution was passed, a winding up of the company was
already in progress—when the last-mentioned winding up is taken because of
this Division to have begun or commenced; or
(b) if, immediately before the resolution was passed, the company was
under administration—on the section 513C day in relation to the
administration; or
(c) if, immediately before the resolution was passed, a deed of company
arrangement had been executed by the company but had not yet terminated—on
the section 513C day in relation to the administration that ended when the
deed was executed; or
(d) if the resolution is taken to have been passed because, at a meeting
convened under section 445F, the company’s creditors:
(i) passed a resolution terminating a deed of company arrangement executed
by the company; and
(ii) also resolved under section 445E that the company be wound
up;
on the section 513C day in relation to the administration that ended
when the deed was executed;
(e) otherwise—on the day on which the resolution was
passed.
The section 513C day in relation to the administration of a company
is:
(a) if, when the administration began, a winding up of the company was in
progress—the day on which the winding up is taken because of this Division
to have begun; or
(b) otherwise—the day on which the administration began.
Where, at the time when:
(a) the Court orders under section 233, 459A, 459B or 461 that a
company be wound up; or
(b) a company resolves by special resolution that it be wound up
voluntarily;
a winding up of the company is already in progress, all proceedings in the
last-mentioned winding up are taken to have been valid, except so far as the
Court otherwise orders because fraud or mistake has been proved.
(1) This Division applies where a company is wound up.
(2) This Division does not apply to the winding up of a no liability
company.
Subject to this Division, a present or past member is liable to
contribute to the company’s property to an amount sufficient:
(a) to pay the company’s debts and liabilities and the costs,
charges and expenses of the winding up; and
(b) to adjust the rights of the contributories among themselves.
Subject to sections 518 and 519, if the company is a company limited
by shares, a member need not contribute more than the amount (if any) unpaid on
the shares in respect of which the member is liable as a present or past
member.
Subject to sections 518 and 519, if the company is a company limited
by guarantee, a member need not contribute more than the amount the member has
undertaken to contribute to the company’s property if the company is wound
up.
Subject to section 519, if the company is a company limited both by
shares and by guarantee, neither of sections 516 and 517 applies but the
member need not contribute more than the aggregate of the following:
(a) the amount (if any) unpaid on shares in respect of which the member is
liable as a present or past member;
(b) the amount that the member has undertaken to contribute to the
company’s property if the company is wound up.
Despite sections 516, 517 and 518, if the company is a limited
company and became a limited company by virtue of a change of status, the amount
that a member at the time of the change of status, or a person who at that time
was a past member, is liable to contribute in respect of the company’s
debts and liabilities contracted before that time is unlimited.
A past member need not contribute in respect of a debt or liability of
the company contracted after the past member ceased to be a member.
Subject to section 523, a past member need not contribute if he, she
or it was a member at no time during the year ending on the day of the
commencement of the winding up.
Subject to paragraph 523(b), a past member need not contribute unless it
appears to the Court that the existing members are unable to satisfy the
contributions they are liable to make under this Act.
If an unlimited company changes to a limited company under
section 164, a past member who was a member at the time of the change is
liable:
(a) despite section 521; and
(b) if no person who was a member at that time is a member at the
commencement of the winding up—despite section 522;
to contribute in respect of the company’s debts and liabilities
contracted before that time.
If a limited company changes to an unlimited company under
section 164, a person who, at the time when the company applied for the
change, was a past member and did not again become a member after that time need
not contribute more than they would have been liable to contribute if the
company had not changed type.
Nothing in this Act invalidates a provision, in a policy of insurance or
other contract, whereby the liability of individual members on the policy or
contract is restricted or whereby the funds of the company are alone made liable
in respect of the policy or contract.
A contributory’s liability is of the nature of a specialty debt
according to the law of the Capital Territory accruing due from the contributory
when the contributory’s liability commenced but payable at the times when
calls are made for enforcing the liability.
If a contributory dies, whether before or after being placed on the list
of contributories:
(a) his or her personal representatives are liable in due course of
administration to contribute to the company’s property in discharge of his
or her liability to contribute and are contributories accordingly; and
(b) if his or her personal representatives default in paying any money
that they are ordered to pay—proceedings may be taken for administering
his or her estate and for compelling payment, out of the assets of that estate,
of the money due.
If a contributory becomes an insolvent under administration, or assigns
his or her estate for the benefit of his or her creditors, whether before or
after being placed on the list of contributories:
(a) his or her trustee is to represent him or her for the purposes of the
winding up and is to be a contributory accordingly; and
(b) calls already made, and the estimated value of his or her liability to
future calls, may be proved against his or her estate.
(1) As soon as practicable after the Court orders that a company be wound
up or appoints a provisional liquidator of a company, or a company resolves that
it be wound up, each officer of the company must:
(a) deliver to the liquidator appointed for the purposes of the winding
up, or to the provisional liquidator, as the case may be, all books in the
officer’s possession that relate to the company, other than books
possession of which the officer is entitled, as against the company and the
liquidator or provisional liquidator, to retain; and
(b) if the officer knows where other books relating to the company
are—tell the liquidator or provisional liquidator where those books
are.
(2) Where a company is being wound up, or a provisional liquidator of a
company is acting, an officer of the company must:
(a) attend on the liquidator or provisional liquidator at such times;
and
(b) give the liquidator or provisional liquidator such information about
the company’s business, property, affairs and financial circumstances;
and
(c) attend such meetings of the company’s creditors or
members;
as the liquidator or provisional liquidator reasonably requires.
(3) An officer of a company that is being wound up must do whatever the
liquidator reasonably requires the officer to do to help in the winding
up.
(4) An officer of a company must do whatever a provisional liquidator of
the company reasonably requires the officer to do to help in the performance or
exercise of any of the provisional liquidator’s functions and
powers.
(5) The liquidator or provisional liquidator of a company may require an
officer of the company:
(a) to tell the liquidator the officer’s residential address and
work or business address; or
(b) to keep the liquidator informed of any change in either of those
addresses that happens during the winding up.
(6) A person must not, without reasonable excuse, fail to comply with
subsection (1), (2), (3) or (4), or with a requirement under
subsection (5).
(7) In this section:
officer, in relation to a company, means a person who is, or
has been but is no longer, an officer (as defined by section 82A) of the
company.
(8) However, a person is not an officer of a company for the purposes of
this section merely because he or she is or has been an employee of the
company.
(9) Nothing in this section limits the generality of anything else in
it.
(1) A person is not entitled, as against the liquidator of a
company:
(a) to retain possession of books of the company; or
(b) to claim or enforce a lien on such books;
but such a lien is not otherwise prejudiced.
(2) Paragraph (1)(a) does not apply in relation to books of which a
secured creditor of the company is entitled to possession otherwise than because
of a lien, but the liquidator is entitled to inspect, and make copies of, such
books at any reasonable time.
(3) A person must not hinder or obstruct a liquidator of a company in
obtaining possession of books of the company, unless the person is entitled, as
against the company and the liquidator, to retain possession of the
books.
(4) The liquidator of a company may give to a person a written notice
requiring the person to deliver to the liquidator, as specified in the notice,
books so specified that are in the person’s possession.
(5) A notice under subsection (4) must specify a period of at least 3
days as the period within which the notice must be complied with.
(6) A person must comply with a notice under subsection (4) except so
far as the person is entitled, as against the company and the liquidator, to
retain possession of the books.
(7) In this section:
liquidator includes a provisional liquidator.
(1) The Court may issue a warrant under subsection (2) if:
(a) a company is being wound up or a provisional liquidator of a company
is acting; and
(b) on application by the liquidator or provisional liquidator, as the
case may be, or by ASIC, the Court is satisfied that a person:
(i) has concealed or removed property of the company with the result that
the taking of the property into the custody or control of the liquidator or
provisional liquidator will be prevented or delayed; or
(ii) has concealed, destroyed or removed books of the company or is about
to do so.
(2) The warrant may authorise a specified person, with such help as is
reasonably necessary:
(a) to search for and seize property or books of the company in the
possession of the person referred to in subsection (1); and
(b) to deliver, as specified in the warrant, property or books seized
under it.
(3) In order to seize property or books under the warrant, the specified
person may break open a building, room or receptacle where the property is or
the books are, or where the person reasonably believes the property or books to
be.
(4) A person who has custody of property or a book because of the
execution of the warrant must retain it until the Court makes an order for its
disposal.
A liquidator or provisional liquidator must keep proper books in which he
or she must cause to be made entries or minutes of proceedings at meetings and
of such other matters as are prescribed, and any creditor or contributory may,
unless the Court otherwise orders, personally or by an agent inspect
them.
(1A) In this section:
liquidator includes a provisional liquidator.
(1) Subject to this section, a person must not consent to be appointed,
and must not act, as liquidator of a company unless he or she is:
(a) a registered liquidator; or
(b) registered as a liquidator of that company under subsection
1282(3).
(2) Subject to this section, a person must not, except with the leave of
the Court, seek to be appointed, or act, as liquidator of a company:
(a) if the person, or a body corporate in which the person has a
substantial holding, is indebted in an amount exceeding $5,000 to the company or
a body corporate related to the company; or
(b) if the person is, otherwise than in his or her capacity as liquidator,
a creditor of the company or of a related body corporate in an amount exceeding
$5,000; or
(c) if:
(i) the person is an officer of the company (otherwise than by reason of
being a liquidator of the company or of a related body corporate); or
(ii) the person is an officer of any body corporate that is a mortgagee of
property of the company; or
(iii) the person is an auditor of the company; or
(iv) the person is a partner or employee of an auditor of the company;
or
(v) the person is a partner, employer or employee of an officer of the
company; or
(vi) the person is a partner or employee of an employee of an officer of
the company.
(3) For the purposes of paragraph (2)(a), disregard a debt owed by a
natural person to a body corporate if:
(a) the body corporate is:
(i) an Australian ADI; or
(ii) a body corporate registered under the Life Insurance Act
1995; and
(b) the debt arose because of a loan that the body corporate or entity
made to the person in the ordinary course of its ordinary business;
and
(c) the person used the amount of the loan to pay the whole or part of the
purchase price of premises that the person uses as their principal place of
residence.
(4) Subsection (1) and paragraph (2)(c) do not apply to a
members’ voluntary winding up of a proprietary company.
(5) Paragraph (2)(c) does not apply to a creditors’ voluntary
winding up if, by a resolution of the creditors passed at a meeting of the
creditors of which 7 days notice has been given to every creditor stating the
purpose of the meeting, it is determined that that paragraph does not so
apply.
(6) For the purposes of subsection (2), a person is taken to be an
officer or auditor of a company if:
(a) the person is an officer or auditor of a related body corporate;
or
(b) except where ASIC, if it thinks fit in the circumstances of the case,
directs that this paragraph does not apply in relation to the person—the
person has, at any time within the immediately preceding period of 2 years, been
an officer, auditor or promoter of the company or of a related body
corporate.
(7) A person must not consent to be appointed, and must not act, as
liquidator of a company if he or she is an insolvent under
administration.
(8) A person must not consent to be appointed, and must not act, as
liquidator of a company that is being wound up by order of the Court unless he
or she is an official liquidator.
(9) A person must not be appointed as liquidator of a company unless the
person has, before his or her appointment, consented in writing to act as
liquidator of the company.
(1) If it appears to the liquidator of a company, in the course of a
winding up of the company, that:
(a) a past or present officer, or a member or contributory, of the company
may have been guilty of an offence under a law of the Commonwealth or a State or
Territory in relation to the company; and
(b) a person who has taken part in the formation, promotion,
administration, management or winding up of the company:
(i) may have misapplied or retained, or may have become liable or
accountable for, any money or property of the company; or
(ii) may have been guilty of any negligence, default, breach of duty or
breach of trust in relation to the company; or
(c) the company may be unable to pay its unsecured creditors more than 50
cents in the dollar;
the liquidator must:
(d) as soon as practicable lodge a report with respect to the matter and
state in the report whether he or she proposes to make an application for an
examination or order under section 597; and
(e) give ASIC such information, and give to it such access to and
facilities for inspecting and taking copies of any documents, as ASIC
requires.
(2) The liquidator may also, if he or she thinks fit, lodge further
reports specifying any other matter that, in his or her opinion, it is desirable
to bring to the notice of ASIC.
(3) If it appears to the Court, in the course of winding up a
company:
(a) that a past or present officer, or a contributory or member, of the
company has been guilty of an offence under a law referred to in
paragraph (1)(a) in relation to the company; or
(b) that a person who has taken part in the formation, promotion,
administration, management or winding up of the company has engaged in conduct
referred to in paragraph (1)(b) in relation to the company;
and that the liquidator has not lodged with ASIC a report with respect to
the matter, the Court may, on the application of a person interested in the
winding up, direct the liquidator so to lodge such a report.
(1) Where:
(a) a report has been lodged under section 533; and
(b) it appears to ASIC that the matter is not one in respect of which a
prosecution ought to be begun;
it must inform the liquidator accordingly, and the liquidator may begin a
prosecution for any offence referred to in the report.
(2) ASIC may direct that the whole or a specified part of the costs and
expenses properly incurred by a liquidator in proceedings under this section
must be paid out of money of ASIC.
(3) Subject to a direction under subsection (2), to any charges on
the property of the company and to any debts to which this Act gives priority,
all such costs and expenses are payable out of that property as part of the
costs of the winding up.
(1) A liquidator has qualified privilege in respect of a statement that he
or she makes, whether orally or in writing, in the course of his or her duties
as liquidator.
(2) In this section:
liquidator includes a provisional liquidator.
(1A) In this section:
liquidator includes a provisional liquidator.
(1) Where:
(a) it appears to the Court or to ASIC that a liquidator has not
faithfully performed or is not faithfully performing his or her duties or has
not observed or is not observing:
(i) a requirement of the Court; or
(ii) a requirement of this Act, of the regulations or of the rules;
or
(b) a complaint is made to the Court or to ASIC by any person with respect
to the conduct of a liquidator in connection with the performance of his or her
duties;
the Court or ASIC, as the case may be, may inquire into the matter and,
where the Court or ASIC so inquires, the Court may take such action as it thinks
fit.
(2) ASIC may report to the Court any matter that in its opinion is a
misfeasance, neglect or omission on the part of the liquidator and the Court may
order the liquidator to make good any loss that the estate of the company has
sustained thereby and may make such other order or orders as it thinks
fit.
(3) The Court may at any time require a liquidator to answer any inquiry
in relation to the winding up and may examine the liquidator or any other person
on oath concerning the winding up and may direct an investigation to be made of
the books of the liquidator.
(1A) In this section:
liquidator includes a provisional liquidator.
(1) A liquidator must, within 14 days after his or her appointment, lodge
notice in the prescribed form of his or her appointment and of the address of
his or her office and, in the event of any change in the situation of his or her
office, must, within 14 days after the change, lodge notice in the prescribed
form of the change.
(2) A liquidator must, within 14 days after his or her resignation or
removal from office, lodge notice of the resignation or removal in the
prescribed form.
(1A) In this section:
liquidator includes a provisional liquidator.
(1) The regulations may:
(a) require a liquidator to pay, into such bank and account, in such
manner and at such times as are prescribed, money received by him or her;
and
(b) prescribe the circumstances and manner in which money paid into such
an account is to be paid out; and
(c) require a liquidator of a company to deposit, in such bank, in such
manner and at such times as are prescribed, bills, notes or other securities
payable to the company or its liquidator; and
(d) prescribe the circumstances and manner in which bills, notes or other
securities so deposited are to be delivered out; and
(e) make provision in relation to the giving by the Court of directions
with respect to the payment, deposit or custody of money payable to or into the
possession of a liquidator, or of bills, notes or other securities so payable;
and
(f) provide for:
(i) the payment by a liquidator of interest at such rate, on such amount
and in respect of such period as is prescribed; and
(ii) disallowance of all or of such part as is prescribed of the
remuneration of a liquidator; and
(iii) the removal from office of a liquidator by the Court; and
(iv) the payment by a liquidator of any expenses occasioned by reason of
his or her default;
where a liquidator contravenes or fails to comply with regulations made
under this section.
(2) Regulations made under this section may apply generally or in relation
to a specified class of windings up.
(1A) In this section:
liquidator includes a provisional liquidator.
(1) A liquidator must, within 1 month after the end of the period of 6
months from the date of his or her appointment and of every subsequent period of
6 months during which he or she acts as liquidator and within 1 month after he
or she ceases to act as liquidator, lodge:
(a) an account in the prescribed form and verified by a statement in
writing showing:
(i) his or her receipts and his or her payments during each such period
or, where he or she ceases to act as liquidator, during the period from the end
of the period to which the last preceding account related or from the date of
his or her appointment, as the case requires, up to the date of his or her so
ceasing to act; and
(ii) in the case of the second account lodged under this subsection and
all subsequent accounts—the aggregate amount of receipts and payments
during all preceding periods since his or her appointment; and
(b) in the case of a liquidator other than a provisional
liquidator—a statement in the prescribed form relating to the position in
the winding up, verified by a statement in writing.
(2) ASIC may cause the account and, where a statement of the position in
the winding up has been lodged, that statement to be audited by a registered
company auditor, who must prepare a report on the account and the statement (if
any).
(3) For the purposes of the audit under subsection (2) the liquidator
must give the auditor with such books and information as the auditor
requires.
(4) Where ASIC causes an account, or an account and a statement, to be
audited under subsection (2):
(a) ASIC must give to the liquidator a copy of the report prepared by the
auditor; and
(b) subsection 1289(2) applies in relation to the report prepared by the
auditor as if it were a document required to be lodged.
(5) The liquidator must give notice that the account has been made up to
every creditor and contributory when next forwarding any report, notice of
meeting, notice of call or dividend.
(6) The costs of an audit under this section must be fixed by ASIC and
form part of the expenses of winding up.
(1A) In this section:
liquidator includes a provisional liquidator.
(1) If any liquidator who has made any default in lodging or making any
application, return, account or other document, or in giving any notice that he
or she is by law required to lodge, make or give, fails to make good the default
within 14 days after the service on him or her of a notice requiring him or her
to do so, the Court may, on the application of any contributory or creditor of
the company or ASIC, make an order directing the liquidator to make good the
default within such time as is specified in the order.
(2) Any order made under subsection (1) may provide that all costs of
and incidental to the application must be borne by the liquidator.
(3) Nothing in subsection (1) prejudices the operation of any law
imposing penalties on a liquidator in respect of any such default.
A company that is being wound up must set out, in every public document,
and in every negotiable instrument, of the company, after the name of the
company where it first appears, the expression in
liquidation.
(1) Where a company is being wound up, all books of the company and of the
liquidator that are relevant to affairs of the company at or subsequent to the
commencement of the winding up of the company are, as between the contributories
of the company, prima facie evidence of the truth of all matters purporting to
be recorded in those books.
(2) If a company has been wound up, the liquidator must retain the books
referred to in subsection (1) for a period of 5 years from the date of
deregistration of the company and, subject to section 262A of the Income
Tax Assessment Act 1936, may, at the end of that period, destroy
them.
(3) Despite subsection (2) but subject to subsection (4), when a
company has been wound up, the books referred to in subsection (1) may be
destroyed within a period of 5 years after the deregistration of the
company:
(a) in the case of a winding up by the Court—in accordance with the
directions of the Court given pursuant to an application of which at least 14
days notice has been given to ASIC; and
(b) in the case of a members’ voluntary winding up—as the
company by resolution directs; and
(c) in the case of a creditors’ voluntary winding up—as the
committee of inspection directs, or, if there is no such committee, as the
creditors of the company by resolution direct.
(4) The liquidator is not entitled to destroy books as mentioned in
paragraph (3)(b) or (c) unless ASIC consents to the destruction of those
books.
(1) Whenever the cash balance standing to the credit of a company that is
in the course of being wound up is in excess of the amount that, in the opinion
of the committee of inspection, or, if there is no committee of inspection, of
the liquidator, is required for the time being to answer demands in respect of
the property of the company, the liquidator, if so directed in writing by the
committee of inspection, or, if there is not committee of inspection, the
liquidator himself or herself, may, unless the Court on application by any
creditor thinks fit to order otherwise and so orders, invest the sum or any part
of the sum:
(a) in any manner in which trustees are for the time being authorised by
law to invest trust funds; or
(b) on deposit with an eligible money market dealer; or
(c) on deposit at interest with any bank;
and any interest received in respect of that money so invested forms part
of the property of the company.
(2) Whenever any part of the money so invested is, in the opinion of the
committee of inspection, or, if there is no committee of inspection, of the
liquidator, required to answer any demands in respect of the property of the
company, the committee of inspection may direct, or, if there is no committee of
inspection, the liquidator may arrange for, the sale or realisation of such part
of the securities as is necessary.
(1) Where a liquidator of a company has in his or her hands or under his
or her control:
(a) any amount being a dividend or other money that has remained unclaimed
for more than 6 months after the day when the dividend or other money became
payable; or
(b) after making a final distribution, any unclaimed or undistributed
amount of money arising from the property of the company;
he or she must forthwith pay that money to ASIC to be dealt with under
Part 9.7.
(1A) If a liquidator has, or has control of, the money of a company that
has no members, the liquidator must pay it to ASIC as soon as practicable for it
to be dealt with under Part 9.7.
(2) The Court may at any time, on the application of ASIC:
(a) order a liquidator of a company to submit to it an account, verified
by affidavit, of any unclaimed or undistributed funds, dividends or other money
in his or her hands or under his or her control; and
(b) direct an audit of accounts submitted to it in accordance with
paragraph (a); and
(c) direct a liquidator of a company to pay any money referred to in
paragraph (a) to ASIC to be dealt with under Part 9.7.
(3) Where a liquidator of a company pays money to ASIC pursuant to
subsection (1) or (1A) or an order of the Court made under
paragraph (2)(c), the liquidator is entitled to a receipt for the money so
paid and the giving of that receipt discharges the liquidator from any liability
in respect of the money.
(4) For the purposes of this section the Court may exercise all the powers
conferred by this Act with respect to the discovery and realisation of the
property of a company and the provisions of this Act with respect to the
exercise of those powers apply, with such adaptations as are prescribed, to
proceedings under this section.
(5) The provisions of this section do not, except as expressly declared in
this Act, deprive a person of any other right or remedy to which the person is
entitled against the liquidator or another person.
(1) Subject to this section, a liquidator is not liable to incur any
expense in relation to the winding up of a company unless there is sufficient
available property.
(2) The Court or ASIC may, on the application of a creditor or a
contributory, direct a liquidator to incur a particular expense on condition
that the creditor or contributory indemnifies the liquidator in respect of the
recovery of the amount expended and, if the Court or ASIC so directs, gives such
security to secure the amount of the indemnity as the Court or ASIC thinks
reasonable.
(3) Nothing in this section is taken to relieve a liquidator of any
obligation to lodge a document (including a report) with ASIC under any
provision of this Act by reason only that he or she would be required to incur
expense in order to perform that obligation.
Subject to subsection 498(4), where a resolution is passed at an
adjourned meeting of any creditors or contributories of a company, the
resolution is, for all purposes, treated as having been passed on the date on
which it was in fact passed and not on any earlier date.
(1) The Court may, as to all matters relating to the winding up of a
company, have regard to the wishes of the creditors or contributories as proved
to it by any sufficient evidence and may, if it thinks fit for the purpose of
ascertaining those wishes, direct meetings of the creditors or contributories to
be convened, held and conducted in such manner as the Court directs, and may
appoint a person to act as chair of any such meeting and to report the
result of the meeting to the Court.
(2) In the case of creditors, regard is to be had to the value of each
creditor’s debt.
(3) In the case of contributories, regard is to be had to the number of
votes conferred on each contributory by this Act or the company’s
constitution.
(1) The liquidator of a company must, if so requested by a creditor or
contributory, convene separate meetings of the creditors and contributories for
the purpose of determining:
(a) whether a committee of inspection should be appointed; and
(b) where a committee of inspection is to be appointed:
(i) the numbers of members to represent the creditors and the
contributories, respectively; and
(ii) the persons who are to be members of the committee representing
creditors and contributories, respectively.
(2) If there is a difference between the determination of the meeting of
creditors and the determination of the meeting of contributories, the Court may
resolve the difference and make such order as it thinks proper.
(3) A person is not eligible to be appointed a member of a committee of
inspection unless the person is:
(a) in the case of an appointment by creditors of the company:
(i) a creditor of the company; or
(ii) the attorney of a creditor of the company by virtue of a general
power of attorney given by the creditor; or
(iii) a person authorised in writing by a creditor of the company to be a
member of the committee of inspection; or
(b) in the case of an appointment by the contributories of the
company:
(i) a contributory of the company; or
(ii) the attorney of a contributory of the company by virtue of a general
power of attorney given by the contributory; or
(iii) a person authorised in writing by a contributory of the company to
be a member of the committee of inspection.
(1) A committee of inspection must meet at such times and places as its
members from time to time appoint.
(2) The liquidator or a member of the committee may convene a meeting of
the committee.
(3) A committee may act by a majority of its members present at a meeting,
but must not act unless a majority of its members are present.
(1) A member of a committee may resign by notice in writing signed by the
member and delivered to the liquidator.
(2) If a member of a committee:
(a) becomes an insolvent under administration; or
(b) is absent from 5 consecutive meetings of the committee without the
leave of those members who together with himself or herself represent the
creditors or contributories, as the case may be;
his or her office becomes vacant.
(3) A member of the committee who represents creditors may be removed by a
resolution at a meeting of creditors of which 7 days’ notice has been
given stating the object of the meeting, and a member of the committee who
represents contributories may be removed by a resolution at a meeting of
contributories of which such notice has been given.
(4) A meeting referred to in subsection (3) may appoint a person to
fill a vacancy caused by the removal of a member of the committee.
(5) A vacancy in the committee may be filled by the appointment of a
person by a resolution at a meeting of the creditors or of the contributories,
as the case may be, of which 7 days’ notice has been given.
(6) A vacancy in the committee that is not filled as provided by
subsection (4) or (5) may be filled by the appointment of a person by the
committee and a person so appointed represents the creditors, or the
contributories, as the case may be.
(7) Notwithstanding a vacancy in the committee, the continuing members of
the committee may act provided they are not less than 2 in number.
(1) A member of a committee of inspection must not, while acting as such a
member, except as provided by this Act or with the leave of the Court:
(a) make an arrangement for receiving, or accept, from the company or any
other person, in connection with the winding up, a gift, remuneration or
pecuniary or other consideration or benefit; or
(b) directly or indirectly derive any profit or advantage from a
transaction, sale or purchase for or on account of the company or any gift,
profit or advantage from a creditor; or
(c) directly or indirectly become the purchaser of any property of the
company.
(2) A transaction entered into in contravention of subsection (1) may
be set aside by the Court on the application of a creditor or member of the
company.
Where there is no committee of inspection, the Court may, on the
application of the liquidator, do any thing and give any direction or permission
that is by this Part authorised or required to be done or given by the
committee.
(1) Subject to this Division, in every winding up, all debts payable by,
and all claims against, the company (present or future, certain or contingent,
ascertained or sounding only in damages), being debts or claims the
circumstances giving rise to which occurred before the relevant date, are
admissible to proof against the company.
(1A) Even though the circumstances giving rise to a debt payable by the
company, or a claim against the company, occur on or after the relevant date,
the debt or claim is admissible to proof against the company in the winding up
if:
(a) the circumstances occur at a time when the company is under a deed of
company arrangement; and
(b) the company is under the deed immediately before the resolution or
court order that the company be wound up.
This subsection has effect subject to the other sections in this
Division.
Note 1: See Division 10 of Part 5.3A
(sections 444A-444H) for the provisions dealing with deeds of company
arrangement.
Note 2: See paragraph 513A(d) for deeds that are followed
immediately by court ordered winding up. See paragraphs 513B(c) and (d) for
deeds that are followed immediately by voluntary winding up. Subsection 446A(2)
and section 446B provide that companies are taken in certain circumstances
to have passed resolutions that they be wound up.
(1B) For the purpose of applying the other sections of this Division to a
debt or claim that is admissible to proof under subsection (1A), the
relevant date for the debt or claim is the date on which the deed
terminates.
(2) Where, after the relevant date, an order is made under section 91
of the ASIC Act against a company that is being wound up, the amount that,
pursuant to the order, the company is liable to pay is admissible to proof
against the company.
A debt owed by a company to a person in the person’s capacity as a
member of the company, whether by way of dividends, profits or otherwise, is not
admissible to proof against the company unless the person has paid to the
company or the liquidator all amounts that the person is liable to pay as a
member of the company.
The selling shareholder in a share buy-back may claim in a winding up of
the company but is not entitled to a distribution of money or property unless
the shareholder has discharged the shareholder’s obligations to give
documents in connection with the buy-back.
Note: The selling shareholder’s claim ranks after
those of non-member creditors and before those of other member creditors (see
section 563AA).
(1) Subject to subsection (2), penalties or fines imposed by a court
in respect of an offence against a law are not admissible to proof against an
insolvent company.
(2) An amount payable under a pecuniary penalty order, or an interstate
pecuniary penalty order, within the meaning of the Proceeds of Crime Act
1987, is admissible to proof against an insolvent company.
(1) Subject to subsection (2), where there have been mutual credits,
mutual debts or other mutual dealings between an insolvent company that is being
wound up and a person who wants to have a debt or claim admitted against the
company:
(a) an account is to be taken of what is due from the one party to the
other in respect of those mutual dealings; and
(b) the sum due from the one party is to be set off against any sum due
from the other party; and
(c) only the balance of the account is admissible to proof against the
company, or is payable to the company, as the case may be.
(2) A person is not entitled under this section to claim the benefit of a
set-off if, at the time of giving credit to the company, or at the time of
receiving credit from the company, the person had notice of the fact that the
company was insolvent.
(1) A debt or claim must be proved formally if the liquidator, in
accordance with the regulations, requires it to be proved formally.
(2) A debt or claim that is not required to be proved formally:
(a) may be proved formally; or
(b) may be proved in some other way, subject to compliance with the
requirements of the regulations (if any) relating to the informal proof of debts
and claims.
(3) A debt or claim is proved formally if it satisfies the requirements of
the regulations relating to the formal proof of debts and claims.
Subject to this Division and to section 279, in the winding up of an
insolvent company the same rules are to prevail and be observed with regard to
debts provable as are in force for the time being under the Bankruptcy Act
1966 in relation to the estates of bankrupt persons (except the rules in
sections 82 to 94 (inclusive) and 96 of that Act), and all persons who in
any such case would be entitled to prove for and receive dividends out of the
property of the company may come in under the winding up and make such claims
against the company as they respectively are entitled to because of this
section.
(1) The amount of a debt or claim of a company (including a debt or claim
that is for or includes interest) is to be computed for the purposes of the
winding up as at the relevant date.
(2) Subsection (1) does not apply to an amount admissible to proof
under subsection 553(2).
(1) This section applies where, in the winding up of a company, the
liquidator admits a debt or claim that, as at the relevant date, did not bear a
certain value.
(2) The liquidator must:
(a) make an estimate of the value of the debt or claim as at the relevant
date; or
(b) refer the question of the value of the debt or claim to the
Court.
(3) A person who is aggrieved by the liquidator’s estimate of the
value of the debt or claim may, in accordance with the regulations, appeal to
the Court against the liquidator’s estimate.
(4) If:
(a) the liquidator refers the question of the value of the debt or claim
to the Court; or
(b) a person appeals to the Court against the liquidator’s estimate
of the value of the debt or claim;
the Court must:
(c) make an estimate of the value of the debt or claim as at the relevant
date; or
(d) determine a method to be applied by the liquidator in working out the
value of the debt or claim as at the relevant date.
(5) If the Court determines a method to be applied by the liquidator in
working out the value of the debt or claim, the liquidator must work out the
value of the debt or claim as at the relevant date in accordance with that
method.
(6) If:
(a) the Court has determined a method to be applied by the liquidator in
working out the value of the debt or claim as at the relevant date;
and
(b) a person is aggrieved by the way in which that method has been applied
by the liquidator in working out that value;
the person may, in accordance with the regulations, appeal to the Court
against the way in which the method was applied.
(7) If:
(a) a person appeals to the Court against the way in which the liquidator,
in working out the value of the debt or claim, applied a method determined by
the court; and
(b) the Court is satisfied that the liquidator did not correctly apply
that method;
the Court must work out the value of the debt or claim as at the relevant
date in accordance with that method.
(8) For the purposes of this Division, the amount of the debt or claim
that is admissible to proof is the value as estimated or worked out under this
section.
The amount of a debt that is admissible to proof but that, as at the
relevant date, was not payable by the company until an ascertained or
ascertainable date (the future date) after the relevant date is
the amount payable on the future date reduced by the amount of the discount
worked out in accordance with the regulations.
(1) This section applies if the amount of a debt or claim admissible to
proof against a company would, apart from this section, be an amount of foreign
currency.
(2) If the company and the creditor or claimant have, in an instrument
created before the relevant date, agreed on a method to be applied for the
purpose of converting the company’s liability in respect of the debt or
claim into Australian currency, the amount of the debt or claim that is
admissible to proof is the equivalent in Australian currency of the amount of
foreign currency, worked out as at the relevant date and in accordance with the
agreed method.
(3) If subsection (2) does not apply, the amount of the debt or claim
that is admissible to proof is the equivalent in Australian currency of the
amount of foreign currency, worked out by reference to the opening carded on
demand airmail buying rate in relation to the foreign currency available at the
Commonwealth Bank of Australia on the relevant date.
(1) This Subdivision applies in relation to the proof of a secured debt in
the winding up of an insolvent company.
(2) For the purposes of the application of this Subdivision in relation to
a secured debt of an insolvent company that is being wound up, the amount of the
debt is taken to be the amount of the debt as at the relevant date (as worked
out in accordance with Subdivision B).
(1) In the winding up of an insolvent company, a secured creditor is not
entitled to prove the whole or a part of the secured debt otherwise than in
accordance with this section and with any other provisions of this Act or the
regulations that are applicable to proving the debt.
(2) The creditor’s proof of debt must be in writing.
(3) If the creditor surrenders the security to the liquidator for the
benefit of creditors generally, the creditor may prove for the whole of the
amount of the secured debt.
(4) If the creditor realises the security, the creditor may prove for any
balance due after deducting the net amount realised, unless the liquidator is
not satisfied that the realisation has been effected in good faith and in a
proper manner.
(5) If the creditor has not realised or surrendered the security, the
creditor may:
(a) estimate its value; and
(b) prove for the balance due after deducting the value so
estimated.
(6) If subsection (5) applies, the proof of debt must include
particulars of the security and the creditor’s estimate of its
value.
(1) This section applies where a secured creditor’s proof of debt is
in respect of the balance due after deducting the creditor’s estimate of
the value of the security.
(2) The liquidator may, at any time, redeem the security on payment to the
creditor of the amount of the creditor’s estimate of its value.
(3) If the liquidator is dissatisfied with the amount of the
creditor’s estimate of the value of the security, the liquidator may
require the property comprised in the security to be offered for sale at such
times and on such terms and conditions as are agreed on by the creditor and the
liquidator or, in default of agreement, as the Court determines.
(4) If the property is offered for sale by public auction, both the
creditor and the liquidator are entitled to bid for, and purchase, the
property.
(5) The creditor may at any time, by notice in writing, require the
liquidator to elect whether to exercise the power to redeem the security or to
require it to be sold and, if the liquidator does not, within 3 months after
receiving the notice, notify the creditor, in writing, that the liquidator
elects to exercise the power:
(a) the liquidator is not entitled to exercise it; and
(b) subject to subsection (6), any equity of redemption or other
interest in the property comprised in the security that is vested in the company
or the liquidator vests in the creditor; and
(c) the amount of the creditor’s debt is, for the purposes of this
Division, taken to be reduced by the amount of the creditor’s estimate of
the value of the security.
(6) The vesting of an equity of redemption or other interest in property
because of paragraph (5)(b) is subject to compliance with any law requiring
the transmission of such interests in property to be registered.
(1) If a secured creditor’s proof of debt is in respect of the
balance due after deducting the creditor’s estimate of the value of the
security, the creditor may, at any time, apply to the liquidator or the Court
for permission to amend the proof of debt by altering the estimated
value.
(2) If the liquidator or the Court is satisfied:
(a) that the estimate of the value of the security was made in good faith
on a mistaken basis; or
(b) that the value of the security has changed since the estimate was
made;
the liquidator or the Court may permit the creditor to amend the proof of
debt accordingly.
(3) If the Court permits the creditor to amend the proof of debt, it may
do so on such terms as it thinks just and equitable.
(1) Where a creditor who has amended a proof of debt under
section 554G has received, in the winding up of the debtor company, an
amount in excess of the amount to which the creditor would have been entitled
under the amended proof of debt, the creditor must, without delay, repay the
amount of the excess to the liquidator.
(2) Where a creditor who has so amended a proof of debt has received, in
the winding up of the debtor company, less than the amount to which the creditor
would have been entitled under the amended proof of debt, the creditor is
entitled to be paid, out of the money remaining for distribution in the winding
up, the amount of the deficiency before any of that money is applied in the
payment of future distributions, but the creditor is not entitled to affect a
distribution made before the amendment of the proof of debt.
Where:
(a) a secured creditor’s proof of debt is in respect of the balance
due after deducting the creditor’s estimate of the value of the security;
and
(b) subsequently:
(i) the creditor realises the security; or
(ii) the security is realised under section 554F;
the net amount realised is to be substituted for the estimated value of the
security and section 554H applies as if the proof of debt had been amended
accordingly under section 554G.
Except as otherwise provided by this Act, all debts and claims proved in
a winding up rank equally and, if the property of the company is insufficient to
meet them in full, they must be paid proportionately.
(1) Subject to this Division, in the winding up of a company the following
debts and claims must be paid in priority to all other unsecured debts and
claims:
(a) first, expenses (except deferred expenses) properly incurred by a
relevant authority in preserving, realising or getting in property of the
company, or in carrying on the company’s business;
(b) if the Court ordered the winding up—next, the costs in respect
of the application for the order (including the applicant’s taxed costs
payable under section 466);
(c) next, the debts for which paragraph 443D(a) entitles an administrator
of the company to be indemnified (even if the administration ended before the
relevant date), except expenses covered by paragraph (a) of this subsection
and deferred expenses;
(d) if the winding up began within 2 months after the end of a period of
official management of the company—next, debts of the company properly
incurred by an official manager in carrying on the company’s business
during the period of official management, except expenses covered by
paragraph (a) of this subsection and deferred expenses;
(da) if the Court ordered the winding up—next, costs and expenses
that are payable under subsection 475(8) out of the company’s
property;
(db) next, costs that form part of the expenses of the winding up because
of subsection 539(6);
(dc) if the winding up began within 2 months after the end of a period of
official management of the company—next, the remuneration, in respect of
the period of official management, of any auditor appointed in accordance with
Part 2M.4;
(dd) next, any other expenses (except deferred expenses) properly incurred
by a relevant authority;
(de) next, the deferred expenses;
(df) if a committee of inspection has been appointed for the purposes of
the winding up—next, expenses incurred by a person as a member of the
committee;
(e) subject to subsection (1A)—next, wages and superannuation
contributions payable by the company in respect of services rendered to the
company by employees before the relevant date;
(f) next, amounts due in respect of injury compensation, being
compensation the liability for which arose before the relevant date;
(g) subject to subsection (1B)—next, all amounts due:
(i) on or before the relevant date; and
(ii) because of an industrial instrument; and
(iii) to, or in respect of, employees of the company; and
(iv) in respect of leave of absence;
(h) subject to subsection (1C)—next, retrenchment payments
payable to employees of the company.
(1A) The amount or total paid under paragraph (1)(e) to, or in
respect of, an excluded employee of the company must be such that so much (if
any) of it as is attributable to non-priority days does not exceed
$2,000.
(1B) The amount or total paid under paragraph (1)(g) to, or in
respect of, an excluded employee of the company must be such that so much (if
any) of it as is attributable to non-priority days does not exceed
$1,500.
(1C) A payment under paragraph (1)(h) to an excluded employee of the
company must not include an amount attributable to non-priority days.
(2) In this section:
company means a company that is being wound up.
deferred expenses, in relation to a company, means expenses
properly incurred by a relevant authority, in so far as they consist
of:
(a) remuneration, or fees for services, payable to the relevant authority;
or
(b) expenses incurred by the relevant authority in respect of the supply
of services to the relevant authority by:
(i) a partnership of which the relevant authority is a member;
or
(ii) an employee of the relevant authority; or
(iii) a member or employee of such a partnership; or
(c) expenses incurred by the relevant authority in respect of the supply
to the relevant authority of services that it is reasonable to expect could have
instead been supplied by:
(i) the relevant authority; or
(ii) a partnership of which the relevant authority is a member;
or
(iii) an employee of the relevant authority; or
(iv) a member or employee of such a partnership.
employee, in relation to a company, means a person:
(a) who has been or is an employee of the company, whether remunerated by
salary, wages, commission or otherwise; and
(b) whose employment by the company commenced before the relevant
date.
excluded employee, in relation to a company, means:
(a) an employee of the company who has been:
(i) at any time during the period of 12 months ending on the relevant
date; or
(ii) at any time since the relevant date;
or who is, a director of the company;
(b) an employee of the company who has been:
(i) at any time during the period of 12 months ending on the relevant
date; or
(ii) at any time since the relevant date;
or who is, the spouse of an employee of the kind referred to in
paragraph (a); or
(c) an employee of the company who is a relative (other than a spouse) of
an employee of the kind referred to in paragraph (a).
non-priority day, in relation to an excluded employee of a
company, means a day on which the employee was:
(a) if paragraph (a) of the definition of excluded
employee applies—a director of the company; or
(b) if paragraph (b) of that definition applies—a spouse of an
employee of the kind referred to in paragraph (a) of that definition;
or
(c) if paragraph (c) of that definition applies—a relative
(other than a spouse) of an employee of the kind referred to in
paragraph (a) of that definition;
even if the day was more than 12 months before the relevant date.
official manager includes a deputy official
manager.
relevant authority, in relation to a company, means any of
the following:
(a) in any case—a liquidator or provisional liquidator of the
company;
(b) if the winding up began within 2 months after the end of a period of
official management of the company—an official manager appointed for the
purposes of the official management;
(c) in any case—an administrator of the company, even if the
administration ended before the winding up began;
(d) in any case—an administrator of a deed of company arrangement
executed by the company, even if the deed terminated before the winding up
began.
retrenchment payment, in relation to an employee of a
company, means an amount payable by the company to the employee, by virtue of an
industrial instrument, in respect of the termination of the employee’s
employment by the company, whether the amount becomes payable before, on or
after the relevant date.
spouse includes a de facto spouse.
superannuation contribution, in relation to a company, means
a contribution by the company to a fund for the purposes of making provision
for, or obtaining, superannuation benefits for an employee of the company, or
for dependants of such an employee.
(1) Where a contract of employment with a company being wound up was
subsisting immediately before the relevant date, the employee under the contract
is, whether or not he or she is a person referred to in subsection (2),
entitled to payment under section 556 as if his or her services with the
company had been terminated by the company on the relevant date.
(2) Where, for the purposes of the winding up of a company, a liquidator
employs a person whose services with the company had been terminated by reason
of the winding up, that person is, for the purpose of calculating any
entitlement to payment for leave of absence, or any entitlement to a
retrenchment amount in respect of employment, taken, while the liquidator
employs him or her for those purposes, to be employed by the company.
(3) Subject to subsection (4), where, after the relevant date, an
amount in respect of long service leave or extended leave, or a retrenchment
amount, becomes payable to a person referred to in subsection (2) in
respect of the employment so referred to, the amount is a cost of the winding
up.
(4) Where, at the relevant date, the length of qualifying service of a
person employed by a company that is being wound up is insufficient to entitle
him or her to any amount in respect of long service leave or extended leave, or
to any retrenchment amount in respect of employment by the company, but, by the
operation of subsection (2) he or she becomes entitled to such an amount
after that date, that amount:
(a) is a cost of the winding up to the extent of an amount that bears to
that amount the same proportion as the length of his or her qualifying service
after that relevant date bears to the total length of his or her qualifying
service; and
(b) is, to the extent of the balance of that amount, taken, for the
purposes of section 556, to be an amount referred to in paragraph
556(1)(g), or a retrenchment payment payable to the person, as the case may
be.
(5) In this section, retrenchment amount, in relation to
employment of a person, means an amount payable to the person, by virtue of an
industrial instrument, in respect of termination of the employment.
The debts of a class referred to in each of the paragraphs of subsection
556(1) rank equally between themselves and must be paid in full, unless the
property of the company is insufficient to meet them, in which case they must be
paid proportionately.
Where a payment has been made by a company on account of wages or of
superannuation contributions (within the meaning of section 556), or in
respect of leave of absence, or termination of employment, under an industrial
instrument, being a payment made out of money advanced by a person for the
purpose of making the payment, the person by whom the money was advanced has, in
the winding up of the company, the same right of priority of payment in respect
of the money so advanced and paid, but not exceeding the amount by which the sum
in respect of which the person who received the payment would have been entitled
to priority in the winding up has been diminished by reason of the payment, as
the person who received the payment would have had if the payment had not been
made.
So far as the property of a company available for payment of creditors
other than secured creditors is insufficient to meet payment of:
(a) any debt referred to in paragraph 556(1)(e), (g) or (h); and
(b) any amount that pursuant to subsection 558(3) or (4) is a cost of the
winding up, being an amount that, if it had been payable on or before the
relevant date, would have been a debt referred to in paragraph 556(1)(e), (g) or
(h); and
(c) any amount in respect of which a right of priority is given by
section 560;
payment of that debt or amount must be made in priority over the claims of
a chargee in relation to a floating charge created by the company and may be
made accordingly out of any property comprised in or subject to that
charge.
(1) Where a company is, under a contract of insurance (not being a
contract of reinsurance) entered into before the relevant date, insured against
liability to third parties, then, if such a liability is incurred by the company
(whether before or after the relevant date) and an amount in respect of that
liability has been or is received by the company or the liquidator from the
insurer, the amount must, after deducting any expenses of or incidental to
getting in that amount, be paid by the liquidator to the third party in respect
of whom the liability was incurred to the extent necessary to discharge that
liability, or any part of that liability remaining undischarged, in priority to
all payments in respect of the debts mentioned in section 556.
(2) If the liability of the insurer to the company is less than the
liability of the company to the third party, subsection (1) does not limit
the rights of the third party in respect of the balance.
(3) This section has effect notwithstanding any agreement to the
contrary.
(1) This section applies where:
(a) a company is insured, under a contract of reinsurance entered into
before the relevant date, against liability to pay amounts in respect of a
relevant contract of insurance or relevant contracts of insurance; and
(b) an amount in respect of that liability has been or is received by the
company or the liquidator under the contract of reinsurance.
(2) Subject to subsection (4), if the amount received, after
deducting expenses of or incidental to getting in that amount, equals or exceeds
the total of all the amounts that are payable by the company under relevant
contracts of insurance, the liquidator must, out of the amount received and in
priority to all payments in respect of the debts mentioned in section 556,
pay the amounts that are so payable under those contracts of
insurance.
(3) Subject to subsection (4), if subsection (2) does not apply,
the liquidator must, out of the amount received and in priority to all payments
in respect of the debts mentioned in section 556, pay to each person to
whom an amount is payable by the company under a relevant contract of insurance
an amount calculated in accordance with the formula:
where:
particular amount owed means the amount payable to the person
under the relevant contract of insurance.
reinsurance payment means the amount received under the
contract of reinsurance, less any expenses of or incidental to getting in that
amount.
total amount owed means the total of all the amounts payable
by the company under relevant contracts of insurance.
(4) The Court may, on application by a person to whom an amount is payable
under a relevant contract of insurance, make an order to the effect that
subsections (2) and (3) do not apply to the amount received under the
contract of reinsurance and that that amount must, instead, be applied by the
liquidator in the manner specified in the order, being a manner that the Court
considers just and equitable in the circumstances.
(5) The matters that the Court may take into account in considering
whether to make an order under subsection (4) include, but are not limited
to:
(a) whether it is possible to identify particular relevant contracts of
insurance as being the contracts in respect of which the contract of reinsurance
was entered into; and
(b) whether it is possible to identify persons who can be said to have
paid extra in order to have particular relevant contracts of insurance protected
by reinsurance; and
(c) whether particular relevant contracts of insurance include statements
to the effect that the contracts are to be protected by reinsurance;
and
(d) whether a person to whom an amount is payable under a relevant
contract of insurance would be severely prejudiced if subsections (2) and
(3) applied to the amount received under the contract of reinsurance.
(6) If receipt of a payment under this section only partially discharges a
liability of the company to a person, nothing in this section affects the rights
of the person in respect of the balance of the liability.
(7) This section has effect despite any agreement to the
contrary.
(8) In this section:
relevant contract of insurance means a contract of insurance
entered into by the company, as insurer, before the relevant date.
(1) Notwithstanding anything in section 556, paragraph 556(1)(f) does
not apply in relation to the winding up of a company in any case
where:
(a) the company is being wound up voluntarily merely for the purpose of
reconstruction or of amalgamation with another company and the right to the
injury compensation has, on the reconstruction or amalgamation, been preserved
to the person entitled to it; or
(b) the company has entered into a contract with an insurer in respect of
any liability for injury compensation.
(2) Where injury compensation is payable by way of periodical payments,
the amount of that compensation is, for the purposes of paragraph 556(1)(f),
taken to be the lump sum for which those periodical payments could, if
redeemable, be redeemed under the law under which the periodical payments are
made.
(1) The selling shareholder’s claim under a buy-back agreement is
postponed until all debts owed to people otherwise than as members of the
company have been satisfied.
(2) The shareholder’s claim is not a debt owed by the company to the
seller in the shareholder’s capacity as a member of the company for the
purposes of section 563A.
Payment of a debt owed by a company to a person in the person’s
capacity as a member of the company, whether by way of dividends, profits or
otherwise, is to be postponed until all debts owed to, or claims made by,
persons otherwise than as members of the company have been satisfied.
Priorities
(1) Debentures of a company under a trust deed that are issued in place of
debentures under that deed that have been redeemed have the priority that the
redeemed debentures would have had if they had never been redeemed.
Deposit of debentures to secure advance
(2) Debentures of a company are not to be taken to be redeemed merely
because:
(a) the debentures secure advances on current account or otherwise;
and
(b) the company’s account ceases to be in debit while those
debentures remain available.
(1) If, in the winding up of a company, the liquidator pays an amount in
respect of an admitted debt or claim, there is also payable to the debtor or
claimant, as a debt payable in the winding up, interest, at the prescribed rate,
on the amount of the payment in respect of the period starting on the relevant
date and ending on the day on which the payment is made.
(2) Subject to subsection (3), payment of the interest is to be
postponed until all other debts and claims in the winding up have been
satisfied, other than debts owed to members of the company as members of the
company (whether by way of dividends, profits or otherwise).
(3) If the admitted debt or claim is a debt to which section 554B
applied, subsection (2) does not apply to postpone payment of so much of
the interest as is attributable to the period starting at the relevant date and
ending on the earlier of:
(a) the day on which the payment is made; and
(b) the future date, within the meaning of section 554B.
(1) Nothing in this Division renders a debt subordination by a creditor of
a company unlawful or unenforceable, except so far as the debt subordination
would disadvantage any creditor of the company who was not a party to, or
otherwise concerned in, the debt subordination.
(2) In this section:
debt subordination means an agreement or declaration by a
creditor of a company, however expressed, to the effect that, in specified
circumstances:
(a) a specified debt that the company owes the creditor; or
(b) a specified part of such a debt;
will not be repaid until other specified debts that the company owes are
repaid to a specified extent.
Where in any winding up:
(a) property has been recovered under an indemnity for costs of litigation
given by certain creditors, or has been protected or preserved by the payment of
money or the giving of indemnity by creditors; or
(b) expenses in relation to which a creditor has indemnified a liquidator
have been recovered;
the Court may make such orders, as it deems just with respect to the
distribution of that property and the amount of those expenses so recovered with
a view to giving those creditors an advantage over others in consideration of
the risk assumed by them.
(1) A settlement, a conveyance or transfer of property, a charge on
property, a payment made, or an obligation incurred, before 23 June 1993,
by a company that, if it had been made or incurred by a natural person, would,
in the event of his or her becoming a bankrupt, be void as against the trustee
in the bankruptcy, is, in the event of the company being wound up, void as
against the liquidator.
(2) For the purposes of subsection (1), the date that corresponds
with the date of presentation of the petition in bankruptcy in the case of a
natural person is:
(a) if the company was under official management at any time during the 6
months ending on the relation-back day—the day on which the official
management commenced; or
(b) otherwise—the relation-back day.
(3) For the purposes of this section, the date that corresponds with the
date on which a person becomes a bankrupt is the relation-back day.
(4) Subject to Part 5.3A, a transfer or assignment by a company of
all its property to trustees for the benefit of all its creditors is
void.
A floating charge on the undertaking or property of the company created
before 23 June 1993 and within 6 months before the relation-back day is,
unless it is proved that the company immediately after the creation of the
charge was solvent, invalid except to the amount of any money paid to the
company at the time of or subsequently to the creation of and in consideration
for the charge together with interest on that amount at the rate of 8% per annum
or at such other rate as is prescribed.
(1) Where any property, business or undertaking has been acquired by a
company for a cash consideration before 23 June 1993 and within 4 years
before the relation-back day in relation to a winding up of the
company:
(a) from a promoter of the company or a spouse of such a promoter, or from
a relative of such a promoter or spouse; or
(b) from a person who was, at the time of the acquisition, a director of
the company, from a spouse of such a director, or from a relative of such a
person or spouse; or
(c) from a body corporate that was, at the time of the acquisition,
related to the company; or
(d) from a person who was, at the time of the acquisition, a director of a
body corporate that was related to the company, from a spouse of such a person,
or from a relative of such a person or spouse;
the liquidator may recover from the person or body corporate from which the
property, business or undertaking was acquired any amount by which the cash
consideration for the acquisition exceeded the value of the property, business
or undertaking at the time of its acquisition.
(2) Where any property, business or undertaking has been sold by a company
for a cash consideration before 23 June 1993 and within 4 years before the
relation-back day in relation to a winding up of the company:
(a) to a promoter of the company or a spouse of such a promoter, or to a
relative of such a promoter or spouse; or
(b) to a person who was, at the time of the sale, a director of the
company, to a spouse of such a director, or to a relative of such a person or
spouse; or
(c) to a body corporate that was, at the time of the sale, related to the
company; or
(d) to a person who was, at the time of the sale, a director of a body
corporate that was related to the company, to a spouse of such a director, or to
a relative of such a person or spouse;
the liquidator may recover from the person or body corporate to which the
property, business or undertaking was sold any amount by which the value of the
property, business or undertaking at the time of the sale exceeded the cash
consideration.
(3) For the purposes of this section, the value of the property, business
or undertaking includes the value of any goodwill, profits or gain that might
have been made from the property, business or undertaking.
(4) In this section, cash consideration means any
consideration payable otherwise than by the issue of shares in the
company.
(5) Where:
(a) a disposition of property is made by a company before 23 June
1993 and within 6 months before the relation-back day in relation to a winding
up of the company; and
(b) the disposition of property confers a preference upon a creditor of
the company; and
(c) the disposition of property has the effect of discharging an officer
of the company from a liability (whether under a guarantee or otherwise and
whether contingent or otherwise);
the liquidator:
(d) in a case to which paragraph (e) does not apply—may recover
from that officer an amount equal to the value of the relevant property, as the
case may be; or
(e) where the liquidator has recovered from the creditor in respect of the
disposition of the relevant property:
(i) an amount equal to part of the value of the relevant property;
or
(ii) part of the relevant property;
may recover from that officer an amount equal to the amount by which the
value of the relevant property exceeds the sum of any amounts recovered as
mentioned in subparagraph (i) and the amount of the value of any property
recovered as mentioned in subparagraph (ii).
(6) Where:
(a) a liquidator recovers an amount of money from an officer of a company
in respect of a disposition of property to a creditor as mentioned in
subsection (5); and
(b) the liquidator subsequently recovers from that creditor an amount
equal to the whole or part of the value of the property disposed of;
the officer may recover from the liquidator an amount equal to the amount
so recovered or the value of the property so recovered.
(1) Subject to this section, a liquidator of a company may at any time, on
the company’s behalf, by signed writing disclaim property of the company
that consists of:
(a) land burdened with onerous covenants; or
(b) shares; or
(c) property that is unsaleable or is not readily saleable; or
(d) property that may give rise to a liability to pay money or some other
onerous obligation; or
(e) property where it is reasonable to expect that the costs, charges and
expenses that would be incurred in realising the property would exceed the
proceeds of realising the property; or
(f) a contract;
whether or not:
(g) except in the case of a contract—the liquidator has tried to
sell the property, has taken possession of it or exercised an act of ownership
in relation to it; or
(h) in the case of a contract—the company or the liquidator has
tried to assign, or has exercised rights in relation to, the contract or any
property to which it relates.
(1AA) This section does not apply to an agreement by the company to buy
back its own shares.
(1A) A liquidator cannot disclaim a contract (other than an unprofitable
contract or a lease of land) except with the leave of the Court.
(1B) On an application for leave under subsection (1A), the Court
may:
(a) grant leave subject to such conditions; and
(b) make such orders in connection with matters arising under, or relating
to, the contract;
as the Court considers just and equitable.
(8) Where:
(a) an application in writing has been made to the liquidator by a person
interested in property requiring the liquidator to decide whether he or she will
disclaim the property; and
(b) the liquidator has, for the period of 28 days after the receipt of the
application, or for such extended period as is allowed by the Court, declined or
neglected to disclaim the property;
the liquidator is not entitled to disclaim the property under this section
and, in the case of a contract, he or she is taken to have adopted it.
(9) The Court may, on the application of a person who is, as against the
company, entitled to the benefit or subject to the burden of a contract made
with the company, make an order:
(a) discharging the contract on such terms as to payment by or to either
party of damages for the non-performance of the contract, or otherwise, as the
Court thinks proper; or
(b) rescinding the contract on such terms as to restitution by or to
either party, or otherwise, as the Court thinks proper.
(10) Amounts payable pursuant to an order under subsection (9) may be
proved as a debt in the winding up.
(13) For the purpose of determining whether property of a company is of a
kind to which subsection (1) applies, the liquidator may, by notice served
on a person claiming to have an interest in the property, require the person to
give to the liquidator within such period, not being less than 14 days, as is
specified in the notice, a statement of the interest claimed by the person and
the person must comply with the requirement.
(1) As soon as practicable after disclaiming property, a liquidator
must:
(a) lodge a written notice of the disclaimer; and
(b) give written notice of the disclaimer to each person who appears to
the liquidator to have, or to claim to have, an interest in the property;
and
(c) if the liquidator has reason to suspect that some person or persons
may have, or may claim to have, an interest or interests in the property, but
either does not know who, or does not know where, the person is or the persons
are—comply with subsection (2); and
(d) if a law of the Commonwealth or of a State or Territory requires the
transfer or transmission of the property to be registered—give written
notice of the disclaimer to the registrar or other person who has the function
under that law of registering the transfer or transmission of the
property.
(2) If paragraph (1)(c) applies, the liquidator must cause notice of
the disclaimer to be published:
(a) if the property is situated in a State or Territory and a daily
newspaper circulates generally in that State or Territory—in a daily
newspaper that so circulates; and
(b) in each State and Territory in which:
(i) the company has carried on business during or after the period of 6
months ending when the winding up began; and
(ii) a daily newspaper circulates generally;
in a daily newspaper that circulates generally in that State or
Territory;
whether on the same or different days.
(1) A person who has, or claims to have, an interest in disclaimed
property may apply to the Court for an order setting aside the disclaimer before
it takes effect, but may only do so within 14 days after:
(a) if the liquidator gives to the person notice of the disclaimer,
because of paragraph 568A(1)(b), before the end of 14 days after the liquidator
lodges such notice—the liquidator gives such notice to the person;
or
(b) if paragraph (a) does not apply but notice of the disclaimer is
published under subsection 568A(2) before the end of the 14 days referred to in
that paragraph—the last such notice to be so published is so published;
or
(c) otherwise—the liquidator lodges notice of the
disclaimer.
(2) On an application under subsection (1), the Court:
(a) may by order set aside the disclaimer; and
(b) if it does so—may make such further orders as it thinks
appropriate.
(3) However, the Court may set aside a disclaimer under this section only
if satisfied that the disclaimer would cause, to persons who have, or claim to
have, interests in the property, prejudice that is grossly out of proportion to
the prejudice that setting aside the disclaimer would cause to the
company’s creditors.
(1) A disclaimer takes effect if, and only if:
(a) in a case where only one application under section 568B for an
order setting aside the disclaimer, or each of 2 or more such applications, is
made within the period that that section prescribes for making the
application—the application, or each of the applications, is unsuccessful;
or
(b) no such application is so made.
(2) For the purposes of subsection (1), an application under
section 568B is successful if, and only if, the result of the application,
and all appeals (if any) arising out of the application, being finally
determined or otherwise disposed of is an order setting aside the disclaimer
(whether or not further orders are also made).
(3) A disclaimer that takes effect because of subsection (1) is taken
to have taken effect on the day after:
(a) if:
(i) the liquidator gave to a person notice of the disclaimer because of
paragraph 568A(1)(b); or
(ii) notice of the disclaimer was published under subsection
568A(2);
before the end of 14 days after the liquidator lodged notice of the
disclaimer—the last day when the liquidator so gave such notice or such
notice was so published; or
(b) otherwise—the day when the liquidator lodged notice of the
disclaimer.
(1) A disclaimer is taken to have terminated, as from the day on which it
is taken because of subsection 568C(3) to take effect, the company’s
rights, interests, liabilities and property in or in respect of the disclaimer
property, but does not affect any other person’s rights or liabilities
except so far as necessary in order to release the company and its property from
liability.
(2) A person aggrieved by the operation of a disclaimer is taken to be a
creditor of the company to the extent of any loss suffered by the person because
of the disclaimer and may prove such a loss as a debt in the winding
up.
(1) With the leave of the Court, a person who has, or claims to have, an
interest in disclaimed property may apply to the Court for an order setting
aside the disclaimer after it has taken effect.
(2) The Court may give leave only if it is satisfied that it is
unreasonable in all the circumstances to expect the person to have applied for
an order setting aside the disclaimer before it took effect.
(3) The Court may give leave subject to conditions.
(4) On an application under subsection (1), the Court:
(a) may by order set aside the disclaimer; and
(b) if it does so—may make such further orders as it thinks
appropriate, including orders necessary to put the company, the liquidator or
anyone else in the same position, as nearly as practicable, as if the disclaimer
had never taken effect.
(5) However, the Court may set aside a disclaimer only if satisfied that
the disclaimer has caused, or would cause, to persons who have, or claim to
have, interests in the property, prejudice that is grossly out of proportion to
the prejudice that setting aside the disclaimer (and making any further orders)
would cause to:
(a) the company’s creditors; and
(b) persons who have changed their position in reliance on the disclaimer
taking effect.
(1) The Court may order that disclaimed property vest in, or be delivered
to:
(a) a person entitled to the property; or
(b) a person in or to whom it seems to the Court appropriate that the
property be vested or delivered; or
(c) a person as trustee for a person of a kind referred to in
paragraph (a) or (b).
(2) The Court may make an order under subsection (1):
(a) on the application of a person who claims an interest in the property,
or is under a liability in respect of the property that this Act has not
discharged; and
(b) after hearing such persons as it thinks appropriate.
(3) Subject to subsection (4), where an order is made under
subsection (1) vesting property, the property vests immediately, for the
purposes of the order, without any conveyance, transfer or assignment.
(4) Where:
(a) a law of the Commonwealth or of a State or Territory requires the
transfer of property vested by an order under subsection (1) to be
registered; and
(b) that law enables the order to be registered;
the property vests in equity because of the order but does not vest at law
until that law has been complied with.
(1) Where:
(a) a creditor has issued execution against property of a company, or
instituted proceedings to attach a debt due to a company or to enforce a charge
or a charging order against property of a company, within 6 months immediately
before the commencement of the winding up; and
(b) the company commences to be wound up;
the creditor must pay to the liquidator an amount equal to the amount (if
any) received by the creditor as a result of the execution, attachment or
enforcement of the charge or the charging order, less an amount in respect of
the costs of the execution, attachment or enforcement of the charge or the
charging order, being an amount agreed between the creditor and the liquidator
or, if no agreement is reached, an amount equal to the taxed cost of that
execution, attachment or enforcement.
(2) Where the creditor has paid to the liquidator an amount in accordance
with subsection (1), the creditor may prove in the winding up for the
creditor’s debt as an unsecured creditor as if the execution or attachment
or the enforcement of the charge or the charging order, as the case may be, had
not taken place.
(3) Subject to subsections (4) and (5), where a creditor of a company
receives:
(a) notice in writing of an application to the Court for the winding up of
the company; or
(b) notice in writing of the convening of a meeting of the company to
consider a resolution that the company be wound up voluntarily;
it is not competent for the creditor to take any action, or any further
action, as the case may be, to attach a debt due to the company or to enforce a
charge or a charging order against property of the company.
(4) Subsection (3) does not affect the right of a creditor to take
action or further action if:
(a) in a case to which paragraph (3)(a) applies—the application
has been withdrawn or dismissed; or
(b) in a case to which paragraph (3)(b) applies—the meeting of
the company has refused to pass the resolution.
(5) Subsection (3) does not prevent a creditor from performing a
binding contract for the sale of property entered into before the creditor
received a notice referred to in that subsection.
(6) Notwithstanding anything contained in this Division, a person who
purchases property in good faith:
(a) under a sale by the sheriff in consequence of the issue of execution
against property of a company that, after the sale, commences to be wound up;
or
(b) under a sale in consequence of the enforcement by a creditor of a
charge or a charging order against property of a company that, after the sale,
commences to be wound up;
acquires a good title to it as against the liquidator and the
company.
(7) In this section:
charge means a charge created by a law upon registration of a
judgment in a registry.
charging order means a charging order made by a court in
respect of a judgment.
(1) Subject to this section, where a sheriff:
(a) receives notice in writing of an application to the Court for the
winding up of a company; or
(b) receives notice in writing of the convening of a meeting of a company
to consider a resolution that the company be wound up voluntarily;
it is not competent for the sheriff to:
(c) take any action to sell property of the company pursuant to any
process of execution issued by or on behalf of a creditor; or
(d) pay to the creditor by whom or on whose behalf the process of
execution was issued or to any person on the creditor’s behalf the
proceeds of the sale of property of the company that has been sold pursuant to
such a process or any money seized, or paid to avoid seizure or sale of property
of the company, under such a process.
(2) Subsection (1) does not affect the power of the sheriff to take
any action or make any payment if:
(a) in a case to which paragraph (1)(a) applies—the application
has been withdrawn or dismissed; or
(b) in a case to which paragraph (1)(b) applies—the meeting of
the company has refused to pass the resolution.
(3) Subject to this section, where the registrar or other appropriate
officer of a court to which proceeds of the sale of property of a company or
other money has been paid by a sheriff pursuant to a process of execution issued
by or on behalf of a creditor of the company:
(a) receives notice in writing of an application to the Court for the
winding up of the company; or
(b) receives notice in writing of the convening of a meeting of the
company to consider a resolution that the company be wound up
voluntarily;
any of those proceeds or money not paid out of court must not be paid to
the creditor or to any person on behalf of the creditor.
(4) Subsection (3) does not prevent the making of a payment
if:
(a) in a case to which paragraph (3)(a) applies—the application
has been withdrawn or dismissed; or
(b) in a case to which paragraph (3)(b) applies—the meeting of
the company has refused to pass the resolution.
(5) Where a company is being wound up, the liquidator may serve notice in
writing of that fact on a sheriff or the registrar or other appropriate officer
of a court.
(6) Upon such a notice being so served:
(a) the sheriff must deliver or pay to the liquidator:
(i) any property of the company in the sheriff’s possession under a
process of execution issued by or on behalf of a creditor; and
(ii) any proceeds of the sale of property of the company or other money in
the sheriff’s possession, being proceeds of the sale of property sold,
whether before or after the commencement of the winding up, pursuant to such a
process or money seized, or paid to avoid seizure or sale of property of the
company, whether before or after the commencement of the winding up, under such
a process; or
(b) the registrar or other officer of the court must pay to the liquidator
any proceeds of the sale of property of the company or other money in court,
being proceeds of sale or other money paid into court, whether before or after
the commencement of the winding up, by a sheriff pursuant to a process of
execution issued by or on behalf of a creditor;
as the case requires.
(7) Where:
(a) property is, or proceeds of the sale of property or other money are,
required by subsection (6) to be delivered or paid to a liquidator;
or
(b) a sheriff has, pursuant to subsection (1), refrained from taking
action to sell property of a company, being land, and that company is being
wound up under an order made on the application referred to in that
subsection;
the costs of the execution are a first charge on that property or on those
proceeds of sale or other money.
(8) For the purpose of giving effect to the charge referred to in
subsection (7), the sheriff, registrar or other officer may retain, on
behalf of the creditor entitled to the benefit of the charge, such amount from
the proceeds of sale or other money referred to in that subsection as he or she
thinks necessary for the purpose.
(9) The Court may, if in a particular case it considers it is proper to do
so:
(a) permit a sheriff to take action to sell property or make a payment
that the sheriff could not, by reason of subsection (1), otherwise validly
take; or
(b) permit the making of a payment the making of which would, by reason of
subsection (3), otherwise be prohibited.
In this Division:
external administration matter means a matter relating
to:
(a) winding up, under this Chapter, a company or a Part 5.7 body;
or
(b) winding up, outside Australia, a body corporate or a Part 5.7
body; or
(c) the insolvency of a body corporate or of a Part 5.7
body.
prescribed country means:
(a) a country prescribed for the purposes of this definition; or
(b) a colony, overseas territory or protectorate of a country so
prescribed.
(1) All courts having jurisdiction in matters arising under this Act, the
Judges of those courts and the officers of, or under the control of, those
courts must severally act in aid of, and be auxiliary to, each other in all
external administration matters.
(2) In all external administration matters, the Court:
(a) must act in aid of, and be auxiliary to, the courts of:
(i) external Territories; and
(ii) States that are not in this jurisdiction; and
(iii) prescribed countries;
that have jurisdiction in external administration matters; and
(b) may act in aid of, and be auxiliary to, the courts of other countries
that have jurisdiction in external administration matters.
(3) Where a letter of request from a court of an external Territory, or of
a country other than Australia, requesting aid in an external administration
matter is filed in the Court, the Court may exercise such powers with respect to
the matter as it could exercise if the matter had arisen in its own
jurisdiction.
(4) The Court may request a court of an external Territory, or of a
country other than Australia, that has jurisdiction in external administration
matters to act in aid of, and be auxiliary to, it in an external administration
matter.
(1) This Part has effect in addition to, and not in derogation of,
sections 601CC and 601CL and any provisions contained in this Act or any
other law with respect to the winding up of bodies, and the liquidator or Court
may exercise any powers or do any act in the case of Part 5.7 bodies that
might be exercised or done by him, her or it in the winding up of
companies.
(2) Nothing in this Part affects the operation of the Bankruptcy Act
1966.
(3) A Part 5.7 body may be wound up under this Part notwithstanding
that it is being wound up or has been dissolved, deregistered or has otherwise
ceased to exist as a body corporate under or by virtue of the laws of the place
under which it was incorporated.
Subject to this Part, a Part 5.7 body may be wound up under this
Chapter and this Chapter applies accordingly to a Part 5.7 body with such
adaptations as are necessary, including the following adaptations:
(a) the principal place of business of a Part 5.7 body in this
jurisdiction is taken, for all the purposes of the winding up, to be the
registered office of the Part 5.7 body;
(b) a Part 5.7 body is not to be wound up voluntarily under this
Chapter;
(c) the circumstances in which a Part 5.7 body may be wound up are as
follows:
(i) if the Part 5.7 body is unable to pay its debts, has been
dissolved or deregistered, has ceased to carry on business in this jurisdiction
or has a place of business in this jurisdiction only for the purpose of winding
up its affairs;
(ii) if the Court is of opinion that it is just and equitable that the
Part 5.7 body should be wound up;
(iii) if ASIC has stated in a report prepared under Division 1 of
Part 3 of the ASIC Act that, in its opinion:
(A) the Part 5.7 body cannot pay its debts and should be wound up;
or
(B) it is in the interests of the public, of the members, or of the
creditors, that the Part 5.7 body should be wound up;
(d) if the Part 5.7 body is a registrable Australian body—the
winding up must deal only with the affairs of the body outside its place of
origin.
For the purposes of this Part, a Part 5.7 body is taken to be unable
to pay its debts if:
(a) a creditor, by assignment or otherwise, to whom the Part 5.7 body
is indebted in a sum exceeding the statutory minimum then due has served on the
Part 5.7 body, by leaving at its principal place of business in this
jurisdiction or by delivering to the secretary or a director or executive
officer of the Part 5.7 body or by otherwise serving in such manner as the
Court approves or directs, a demand, signed by or on behalf of the creditor,
requiring the body to pay the sum so due and the body has, for 3 weeks after the
service of the demand, failed to pay the sum or to secure or compound for it to
the satisfaction of the creditor; or
(b) an action or other proceeding has been instituted against any member
for any debt or demand due or claimed to be due from the Part 5.7 body or
from the member as such and, notice in writing of the institution of the action
or proceeding having been served on the body by leaving it at its principal
place of business in this jurisdiction or by delivering it to the secretary or a
director or executive officer of the Part 5.7 body or by otherwise serving
it in such manner as the Court approves or directs, the Part 5.7 body has
not, within 10 days after service of the notice, paid, secured or compounded for
the debt or demand or procured the action or proceeding to be stayed or
indemnified the defendant to his, her or its reasonable satisfaction against the
action or proceeding and against all costs, damages and expenses to be incurred
by him, her or it by reason of the action or proceeding; or
(c) execution or other process issued on a judgment, decree or order
obtained in a court (whether an Australian court or not) in favour of a creditor
against the Part 5.7 body or a member of the Part 5.7 body as such, or
a person authorised to be sued as nominal defendant on behalf of the
Part 5.7 body, is returned unsatisfied; or
(d) it is otherwise proved to the satisfaction of the Court that the
Part 5.7 body is unable to pay its debts.
(1) On a Part 5.7 body being wound up, every person who:
(a) in any case—is liable to pay or contribute to the payment
of:
(i) a debt or liability of the Part 5.7 body; or
(ii) any sum for the adjustment of the rights of the members among
themselves; or
(iii) the costs and expenses of winding up; or
(b) if the Part 5.7 body has been dissolved or deregistered in its
place of origin—was so liable immediately before the dissolution or
deregistration;
is a contributory and every contributory is liable to contribute to the
property of the Part 5.7 body all sums due from the contributory in respect
of any such liability.
(2) On the death or bankruptcy of a contributory, the provisions of this
Act with respect to the personal representatives of deceased contributories or
the assignees and trustees of bankrupt contributories, as the case may be,
apply.
(1) The provisions of this Act with respect to staying and restraining
actions and other civil proceedings against a company at any time after the
filing of an application for winding up and before the making of a winding up
order extend, in the case of a Part 5.7 body where the application to stay
or restrain is by a creditor, to actions and other civil proceedings against a
contributory of the Part 5.7 body.
(2) Where an order has been made for winding up a Part 5.7 body, no
action or other civil proceeding is to be proceeded with or commenced against a
contributory of the Part 5.7 body in respect of a debt of the Part 5.7
body except by leave of the Court and subject to such terms as the Court
imposes.
(1) This section applies if, after the dissolution or deregistration of a
registrable body, outstanding property of the body remains:
(a) in this jurisdiction; and
(b) outside the body’s place of origin.
(2) The estate and interest in the property, at law or in equity, of the
body or its liquidator at that time, together with all claims, rights and
remedies that the body or its liquidator then had in respect of the property,
vests by force of this section in:
(a) if the body was incorporated in Australia or an external
Territory—the person entitled to the property under the law of the
body’s place of origin; or
(b) otherwise—ASIC.
(3) Where any claim, right or remedy of a liquidator may under this Act be
made, exercised or availed of only with the approval or concurrence of the Court
or some other person, ASIC may, for the purposes of this section, make, exercise
or avail itself of the claim, right or remedy without such approval or
concurrence.
(4) Section 601AE applies to property that vests in ASIC under this
section as if the property were vested in ASIC under subsection
601AD(2).
For the purposes of this Part, a secured debt becomes an unsecured debt
to the extent that the creditor proves for the debt as an unsecured
creditor.
(1) In this section:
recovery proceeding, in relation to a company,
means:
(a) an application under section 588FF by the company’s
liquidator; or
(b) proceedings begun under subsection 588FH(2) by the company’s
liquidator; or
(c) proceedings, in so far as they relate to the question whether a charge
created by the company is void to any extent, as against the company’s
liquidator, because of subsection 588FJ(2); or
(d) proceedings begun under subsection 588FJ(6) by the company’s
liquidator; or
(e) proceedings for a contravention of subsection 588G(2) in relation to
the incurring of a debt by the company (including proceedings under
section 588M in relation to the incurring of the debt but not including
proceedings for an offence); or
(f) proceedings under section 588W in relation to the incurring of a
debt by the company.
(2) Subsections (3) to (9), inclusive, have effect for the purposes
of a recovery proceeding in relation to a company.
(3) If:
(a) the company is being wound up; and
(b) it is proved, or because of subsection (4) or (8) it must be
presumed, that the company was insolvent at a particular time during the 12
months ending on the relation-back day;
it must be presumed that the company was insolvent throughout the period
beginning at that time and ending on that day.
(4) Subject to subsections (5) to (7), if it is proved that the
company:
(a) has failed to keep financial records in relation to a period as
required by subsection 286(1); or
(b) has failed to retain financial records in relation to a period
for the 7 years required by subsection 286(2);
the company is to be presumed to have been insolvent throughout the
period.
(5) Paragraph (4)(a) does not apply in relation to a contravention of
subsection 286(1) that is only minor or technical.
(6) Subsection (4) does not have effect, in so far as it would
prejudice a right or interest of a person for the company to be presumed
insolvent because of a contravention of subsection 286(2), if it is proved
that:
(a) the contravention was due solely to someone destroying, concealing or
removing financial records of the company; and
(b) none of those financial records was destroyed, concealed or removed by
the first-mentioned person; and
(c) the person was not in any way, by act or omission, directly or
indirectly, knowingly or recklessly, concerned in, or party to, destroying,
concealing or removing any of those financial records.
(7) If the recovery proceeding is an application under section 588FF,
subsection (4) of this section does not have effect for the purposes of
proving, for the purposes of the application, that an unfair preference given by
the company to a creditor of the company is an insolvent transaction, unless it
is proved, for the purposes of the application, that a related entity of the
company was a party to the unfair preference.
(8) If, for the purposes of another recovery proceeding in relation to the
company, there has been proved:
(a) if the other proceeding is of the kind referred to in
paragraph (1)(a) of this section—a matter of the kind referred to in
a paragraph of section 588FC or of subsection 588FG(2); or
(b) if the other proceeding is of the kind referred to in
paragraph (1)(b) of this section—a matter of the kind referred to in
a paragraph of section 588FC or of subsection 588FG(2) or 588FH(1), or a
defence under subsection 588FH(3); or
(c) if the other proceeding is of the kind referred to in
paragraph (1)(c) or (d) of this section—a matter of the kind referred
to in subsection 588FJ(3); or
(d) if the other proceeding is of the kind referred to in
paragraph (1)(e) of this section—a matter of the kind referred to in
a paragraph of section 588G, or a defence under section 588H;
or
(e) if the other proceeding is of the kind referred to in
paragraph (1)(f) of this section—a matter of the kind referred to in
a paragraph of subsection 588V(1), or a defence under
section 588X;
it must be presumed that that matter was the case, or that the matters
constituting that defence were the case.
(9) A presumption for which this section provides operates except so far
as the contrary is proved for the purposes of the proceeding
concerned.
(1) For the purposes of this Part, a company’s liability under a
remittance provision to pay to the Commissioner of Taxation an amount equal to a
deduction made by the company, after 1 July 1993, from a payment:
(a) is taken to be a debt; and
(b) is taken to have been incurred when the deduction was made.
(2) In this section:
remittance provision means any of the following provisions of
the Income Tax Assessment Act 1936:
(a) section 221F (except subsection 221F(12)) or section 221G
(except subsection 221G(4A));
(b) subsection 221YHDC(2);
(c) subsection 221YHZD(1) or (1A);
(d) subsection 221YN(1);
or any of the provisions of Subdivision 16-B in Schedule 1 to the
Taxation Administration Act 1953.
(3) This section is not intended to limit the generality of a reference in
this Act to a debt or to incurring a debt.
(1) A transaction is an unfair preference given by a company to a creditor
of the company if, and only if:
(a) the company and the creditor are parties to the transaction (even if
someone else is also a party); and
(b) the transaction results in the creditor receiving from the company, in
respect of an unsecured debt that the company owes to the creditor, more than
the creditor would receive from the company in respect of the debt if the
transaction were set aside and the creditor were to prove for the debt in a
winding up of the company;
even if the transaction is entered into, is given effect to, or is required
to be given effect to, because of an order of an Australian court or a direction
by an agency.
(2) For the purposes of subsection (1), a secured debt is taken to be
unsecured to the extent of so much of it (if any) as is not reflected in the
value of the security.
(3) Where:
(a) a transaction is, for commercial purposes, an integral part of a
continuing business relationship (for example, a running account) between a
company and a creditor of the company (including such a relationship to which
other persons are parties); and
(b) in the course of the relationship, the level of the company’s
net indebtedness to the creditor is increased and reduced from time to time as
the result of a series of transactions forming part of the
relationship;
then:
(c) subsection (1) applies in relation to all the transactions
forming part of the relationship as if they together constituted a single
transaction; and
(d) the transaction referred to in paragraph (a) may only be taken to
be an unfair preference given by the company to the creditor if, because of
subsection (1) as applying because of paragraph (c) of this
subsection, the single transaction referred to in the last-mentioned paragraph
is taken to be such an unfair preference.
(1) A transaction of a company is an uncommercial transaction of the
company if, and only if, it may be expected that a reasonable person in the
company’s circumstances would not have entered into the transaction,
having regard to:
(a) the benefits (if any) to the company of entering into the transaction;
and
(b) the detriment to the company of entering into the transaction;
and
(c) the respective benefits to other parties to the transaction of
entering into it; and
(d) any other relevant matter.
(2) A transaction may be an uncommercial transaction of a company because
of subsection (1):
(a) whether or not a creditor of the company is a party to the
transaction; and
(b) even if the transaction is given effect to, or is required to be given
effect to, because of an order of an Australian court or a direction by an
agency.
A transaction of a company is an insolvent transaction of the company if,
and only if, it is an unfair preference given by the company, or an uncommercial
transaction of the company, and:
(a) any of the following happens at a time when the company is
insolvent:
(i) the transaction is entered into; or
(ii) an act is done, or an omission is made, for the purpose of giving
effect to the transaction; or
(b) the company becomes insolvent because of, or because of matters
including:
(i) entering into the transaction; or
(ii) a person doing an act, or making an omission, for the purpose of
giving effect to the transaction.
(1) A loan to a company is unfair if, and only if:
(a) the interest on the loan was extortionate when the loan was made, or
has since become extortionate because of a variation; or
(b) the charges in relation to the loan were extortionate when the loan
was made, or have since become extortionate because of a variation;
even if the interest is, or the charges are, no longer
extortionate.
(2) In determining:
(a) whether interest on a loan was or became extortionate at a particular
time as mentioned in paragraph (1)(a); or
(b) whether charges in relation to a loan were or became extortionate at a
particular time as mentioned in paragraph (1)(b);
regard is to be had to the following matters as at that time:
(c) the risk to which the lender was exposed; and
(d) the value of any security in respect of the loan; and
(e) the term of the loan; and
(f) the schedule for payments of interest and charges and for repayments
of principal; and
(g) the amount of the loan; and
(h) any other relevant matter.
(1) Where a company is being wound up, a transaction of the company that
was entered into on or after 23 June 1993 may be voidable because of
any one or more of the following subsections.
(2) The transaction is voidable if:
(a) it is an insolvent transaction of the company; and
(b) it was entered into, or an act was done for the purpose of giving
effect to it:
(i) during the 6 months ending on the relation-back day; or
(ii) after that day but on or before the day when the winding up
began.
(3) The transaction is voidable if:
(a) it is an insolvent transaction, and also an uncommercial transaction,
of the company; and
(b) it was entered into, or an act was done for the purpose of giving
effect to it, during the 2 years ending on the relation-back day.
(4) The transaction is voidable if:
(a) it is an insolvent transaction of the company; and
(b) a related entity of the company is a party to it; and
(c) it was entered into, or an act was done for the purpose of giving
effect to it, during the 4 years ending on the relation-back day.
(5) The transaction is voidable if:
(a) it is an insolvent transaction of the company; and
(b) the company became a party to the transaction for the purpose, or for
purposes including the purpose, of defeating, delaying, or interfering with, the
rights of any or all of its creditors on a winding up of the company;
and
(c) the transaction was entered into, or an act done was for the purpose
of giving effect to the transaction, during the 10 years ending on the
relation-back day.
(6) The transaction is voidable if it is an unfair loan to the company
made at any time on or before the day when the winding up began.
(7) A reference in this section to doing an act includes a reference to
making an omission.
(1) Where, on the application of a company’s liquidator, a court is
satisfied that a transaction of the company is voidable because of
section 588FE, the court may make one or more of the following
orders:
(a) an order directing a person to pay to the company an amount equal to
some or all of the money that the company has paid under the
transaction;
(b) an order directing a person to transfer to the company property that
the company has transferred under the transaction;
(c) an order requiring a person to pay to the company an amount that, in
the court’s opinion, fairly represents some or all of the benefits that
the person has received because of the transaction;
(d) an order requiring a person to transfer to the company property that,
in the court’s opinion, fairly represents the application of either or
both of the following:
(i) money that the company has paid under the transaction;
(ii) proceeds of property that the company has transferred under the
transaction;
(e) an order releasing or discharging, wholly or partly, a debt incurred,
or a security or guarantee given, by the company under or in connection with the
transaction;
(f) if the transaction is an unfair loan and such a debt, security or
guarantee has been assigned—an order directing a person to indemnify the
company in respect of some or all of its liability to the assignee;
(g) an order providing for the extent to which, and the terms on which, a
debt that arose under, or was released or discharged to any extent by or under,
the transaction may be proved in a winding up of the company;
(h) an order declaring an agreement constituting, forming part of, or
relating to, the transaction, or specified provisions of such an agreement, to
have been void at and after the time when the agreement was made, or at and
after a specified later time;
(i) an order varying such an agreement as specified in the order and, if
the Court thinks fit, declaring the agreement to have had effect, as so varied,
at and after the time when the agreement was made, or at and after a specified
later time;
(j) an order declaring such an agreement, or specified provisions of such
an agreement, to be unenforceable.
(2) Nothing in subsection (1) limits the generality of anything else
in it.
(3) An application under subsection (1) may only be made:
(a) within 3 years after the relation-back day; or
(b) within such longer period as the Court orders on an application under
this paragraph made by the liquidator within those 3 years.
(1) A court is not to make under section 588FF an order materially
prejudicing a right or interest of a person other than a party to the
transaction if it is proved that:
(a) the person received no benefit because of the transaction;
or
(b) in relation to each benefit that the person received because of the
transaction:
(i) the person received the benefit in good faith; and
(ii) at the time when the person received the benefit:
(A) the person had no reasonable grounds for suspecting that the company
was insolvent at that time or would become insolvent as mentioned in paragraph
588FC(b); and
(B) a reasonable person in the person’s circumstances would have had
no such grounds for so suspecting.
(2) A court is not to make under section 588FF an order materially
prejudicing a right or interest of a person if the transaction is not an unfair
loan to the company and it is proved that:
(a) the person became a party to the transaction in good faith;
and
(b) at the time when the person became such a party:
(i) the person had no reasonable grounds for suspecting that the company
was insolvent at that time or would become insolvent as mentioned in paragraph
588FC(b); and
(ii) a reasonable person in the person’s circumstances would have
had no such grounds for so suspecting; and
(c) the person has provided valuable consideration under the transaction
or has changed his, her or its position in reliance on the
transaction.
(3) For the purposes of paragraph (2)(c), if an amount has been paid
or applied towards discharging to a particular extent a liability to pay tax,
the discharge is valuable consideration provided:
(a) by the person to whom the tax is payable; and
(b) under any transaction that consists of, or involves, the payment or
application.
(4) In subsection (3):
tax means tax (however described) payable under a law of the
Commonwealth or of a State or Territory, and includes, for example, a levy, a
charge, and municipal or other rates.
(5) For the purposes of paragraph (2)(c), if an amount has been paid
or applied towards discharging to a particular extent a liability to the
Commonwealth, or to the Commissioner of Taxation, that arose under or because of
an Act of which the Commissioner has the general administration, the discharge
is valuable consideration provided by the Commonwealth, or by the Commissioner,
as the case requires, under any transaction that consists of, or involves, the
payment or application.
(6) Subsections (3) and (5):
(a) are to avoid doubt and are not intended to limit the cases where a
person may be taken to have provided valuable consideration under a transaction;
and
(b) apply to an amount even if it was paid or applied before the
commencement of this Act.
(1) This section applies if the Court makes an order under
section 588FF against the Commissioner of Taxation because of the payment
of an amount in respect of a liability under any of the following provisions of
the Income Tax Assessment Act 1936:
(a) section 221F (except subsection 221F(12)), section 221G
(except subsection 221G(4A)) or section 221P;
(b) subsection 221YHDC(2);
(c) subsection 221YHZD(1) or (1A);
(d) subsection 221YN(1);
(e) section 222AHA;
or under a provision of Subdivision 16-B in Schedule 1 to the
Taxation Administration Act 1953.
(2) Each person who was a director of the company when the payment was
made is liable to indemnify the Commissioner in respect of any loss or damage
resulting from the order.
(3) An amount payable to the Commissioner under
subsection (2):
(a) is a debt due to the Commonwealth and payable to the Commissioner;
and
(b) may be recovered in a court of competent jurisdiction by the
Commissioner, or a Deputy Commissioner of Taxation, suing in his or her official
name.
(4) The Court may, in the proceedings in which it made the order against
the Commissioner, order a person to pay to the Commissioner an amount payable by
the person under subsection (2).
(5) A person who pays an amount under subsection (2) has the same
rights:
(a) whether by way of indemnity, subrogation, contribution or otherwise;
and
(b) against the company or anyone else;
as if the payment had been made under a guarantee:
(c) of the liability referred to in subsection (1); and
(d) under which the person and every other person who was a director of
the company as mentioned in subsection (2) were jointly and severally
liable as guarantors.
(1) This section has effect for the purposes of:
(a) proceedings to recover from a person an amount payable under
subsection 588FGA(2); and
(b) proceedings under subsection 588FGA(5) against a person of the kind
referred to in paragraph 588FGA(5)(d).
(2) The time when the payment referred to in subsection 588FGA(1) was made
is called the payment time.
(3) It is a defence if it is proved that, at the payment time, the person
had reasonable grounds to expect, and did expect, that the company was solvent
at that time and would remain solvent even if it made the payment.
(4) Without limiting the generality of subsection (3), it is a
defence if it is proved that, at the payment time, the person:
(a) had reasonable grounds to believe, and did believe:
(i) that a competent and reliable person (the other person)
was responsible for providing to the first-mentioned person adequate information
about whether the company was solvent; and
(ii) that the other person was fulfilling that responsibility;
and
(b) expected, on the basis of information provided to the first-mentioned
person by the other person, that the company was solvent at that time and would
remain solvent even if it made the payment.
(5) It is a defence if it is proved that, because of illness or for some
other good reason, the person did not take part in the management of the company
at the payment time.
(6) It is a defence if it is proved that:
(a) the person took all reasonable steps to prevent the company from
making the payment; or
(b) there were no such steps the person could have taken.
(7) In determining whether a defence under subsection (6) has been
proved, the matters to which regard is to be had include, but are not limited
to:
(a) any action the person took with a view to appointing an administrator
of the company; and
(b) when that action was taken; and
(c) the results of that action.
(1) This section applies where a company is being wound up and a
transaction of the company:
(a) is an insolvent transaction of the company; and
(b) is voidable under section 588FE; and
(c) has had the effect of discharging, to the extent of a particular
amount, a liability (whether under a guarantee or otherwise and whether
contingent or otherwise) of a related entity of the company.
(2) The company’s liquidator may recover from the related entity, as
a debt due to the company, an amount equal to the amount referred to in
paragraph (1)(c).
(3) In deciding what orders (if any) to make under section 588FF on
an application relating to the transaction, a court must take into account any
amount recovered under subsection (2) of this section.
(4) If the liquidator recovers an amount under subsection (2) from
the related entity, the related entity has the same rights:
(a) whether by way of indemnity, subrogation, contribution or otherwise;
and
(b) against the company or anyone else;
as if the related entity had paid the amount in discharging, to the extent
of that amount, the liability referred to in paragraph (1)(c).
(1) This section applies where:
(a) a transaction is an unfair preference given by a company to a creditor
of the company after 23 June 1993; and
(b) at the request of the company’s liquidator, because of an order
under section 588FF, or for any other reason, the creditor has put the
company in the same position as if the transaction had not been entered
into.
(2) A court must not make under section 588FF, on an application
relating to the transaction, an order prejudicing a right or interest of the
creditor.
(3) The creditor may prove in the winding up as if the transaction had not
been entered into.
(1) This section applies if:
(a) a company is being wound up in insolvency; and
(b) the company created a floating charge on property of the company at a
particular time that is at or after 23 June 1993 and:
(i) during the 6 months ending on the relation-back day; or
(ii) after that day but on or before the day when the winding up
began.
(2) The charge is void, as against the company’s liquidator, except
so far as it secures:
(a) an advance paid to the company, or at its direction, at or after that
time and as consideration for the charge; or
(b) interest on such an advance; or
(c) the amount of a liability under a guarantee or other obligation
undertaken at or after that time on behalf of, or for the benefit of, the
company; or
(d) an amount payable for property or services supplied to the company at
or after that time; or
(e) interest on an amount so payable.
(3) Subsection (2) does not apply if it is proved that the company
was solvent immediately after that time.
(4) Paragraphs (2)(a) and (b) do not apply in relation to an advance
so far as it was applied to discharge, directly or indirectly, an unsecured
debt, whether contingent or otherwise, that the company owed to:
(a) the chargee; or
(b) if the chargee was a body corporate—a related entity of the
body.
(5) Paragraphs (2)(d) and (e) do not apply in relation to an amount
payable as mentioned in paragraph (2)(d) in so far as the amount exceeds
the market value of the property or services when supplied to the
company.
(6) If, during the 6 months ending on the relation-back day, or after that
day but on or before the day when the winding up began, a debt secured by the
charge was discharged, out of the company’s money or property, to the
extent of a particular amount (in this subsection called the realised
amount), the liquidator may, by proceedings in a court of competent
jurisdiction, recover from the chargee, as a debt due to the company, the amount
worked out in accordance with the formula:
where:
realisation costs means so much (if any) of the costs and
expenses of enforcing the charge as is attributable to realising the realised
amount.
unsecured amount means so much of the realised amount as does
not exceed so much of the debt as would, if the debt had not been so discharged,
have been unsecured, as against the liquidator, because of
subsection (2).
(1) This section applies if:
(a) a person is a director of a company at the time when the company
incurs a debt; and
(b) the company is insolvent at that time, or becomes insolvent by
incurring that debt, or by incurring at that time debts including that debt;
and
(c) at that time, there are reasonable grounds for suspecting that the
company is insolvent, or would so become insolvent, as the case may be;
and
(d) that time is at or after the commencement of this Act.
(1A) For the purposes of this section, if a company takes action set out
in column 2 of the following table, it incurs a debt at the time set out in
column 3.
|
When debts are incurred |
|
[operative table] |
||
|---|---|---|---|---|
|
|
Action of company |
When debt is incurred |
||
|
1 |
paying a dividend |
when the dividend is paid or, if the company has a constitution that
provides for the declaration of dividends, when the dividend is
declared |
||
|
2 |
making a reduction of share capital to which Division 1 of
Part 2J.1 applies (other than a reduction that consists only of the
cancellation of a share or shares for no consideration) |
when the reduction takes effect |
||
|
3 |
buying back shares (even if the consideration is not a sum certain in
money) |
when the buy-back agreement is entered into |
||
|
4 |
redeeming redeemable preference shares that are redeemable at its
option |
when the company exercises the option |
||
|
5 |
issuing redeemable preference shares that are redeemable otherwise than at
its option |
when the shares are issued |
||
|
6 |
financially assisting a person to acquire shares (or units of shares) in
itself or a holding company |
when the agreement to provide the assistance is entered into or, if there
is no agreement, when the assistance is provided |
||
|
7 |
entering into an uncommercial transaction (within the meaning of
section 588FB) other than one that a court orders, or a prescribed agency
directs, the company to enter into |
when the transaction is entered into |
||
(2) By failing to prevent the company from incurring the debt, the person
contravenes this section if:
(a) the person is aware at that time that there are such grounds for so
suspecting; or
(b) a reasonable person in a like position in a company in the
company’s circumstances would be so aware.
Note: This subsection is a civil penalty provision (see
subsection 1317E(1)).
(3) A person commits an offence if:
(a) the person is a director of the company when it incurs a debt;
and
(b) the company is insolvent at that time, or becomes insolvent by
incurring that debt, or by incurring at that time debts including that debt;
and
(c) the person suspected at the time when the company incurred the debt
that the company was insolvent or would become insolvent as a result of
incurring that debt or other debts (as in paragraph (1)(b)); and
(d) the person’s failure to prevent the company incurring the debt
was dishonest.
(4) The provisions of Division 4 of this Part are additional to, and
do not derogate from, Part 9.4B as it applies in relation to a
contravention of this section.
(1) This section has effect for the purposes of proceedings for a
contravention of subsection 588G(2) in relation to the incurring of a debt
(including proceedings under section 588M in relation to the incurring of
the debt).
(2) It is a defence if it is proved that, at the time when the debt was
incurred, the person had reasonable grounds to expect, and did expect, that the
company was solvent at that time and would remain solvent even if it incurred
that debt and any other debts that it incurred at that time.
(3) Without limiting the generality of subsection (2), it is a
defence if it is proved that, at the time when the debt was incurred, the
person:
(a) had reasonable grounds to believe, and did believe:
(i) that a competent and reliable person (the other person)
was responsible for providing to the first-mentioned person adequate information
about whether the company was solvent; and
(ii) that the other person was fulfilling that responsibility;
and
(b) expected, on the basis of information provided to the first-mentioned
person by the other person, that the company was solvent at that time and would
remain solvent even if it incurred that debt and any other debts that it
incurred at that time.
(4) If the person was a director of the company at the time when the debt
was incurred, it is a defence if it is proved that, because of illness or for
some other good reason, he or she did not take part at that time in the
management of the company.
(5) It is a defence if it is proved that the person took all reasonable
steps to prevent the company from incurring the debt.
(6) In determining whether a defence under subsection (5) has been
proved, the matters to which regard is to be had include, but are not limited
to:
(a) any action the person took with a view to appointing an administrator
of the company; and
(b) when that action was taken; and
(c) the results of that action.
(1) Where, on an application for a civil penalty order against a person in
relation to a contravention of subsection 588G(2), the Court is satisfied
that:
(a) the person committed the contravention in relation to the incurring of
a debt by a company; and
(b) the debt is wholly or partly unsecured; and
(c) the person to whom the debt is owed has suffered loss or damage in
relation to the debt because of the company’s insolvency;
the Court may (whether or not it makes a pecuniary penalty order under
section 1317G or an order under section 206C disqualifying a person
from managing corporations) order the first-mentioned person to pay to the
company compensation equal to the amount of that loss or damage.
(2) A company’s liquidator may intervene in an application for a
civil penalty order against a person in relation to a contravention of
subsection 588G(2).
(3) A company’s liquidator who so intervenes is entitled to be
heard:
(a) only if the Court is satisfied that the person committed the
contravention in relation to the incurring of a debt by that company;
and
(b) only on the question whether the Court should order the person to pay
compensation to the company.
If:
(a) a court finds a person guilty of an offence under subsection 588G(3)
in relation to the incurring of a debt by a company; and
(b) the court is satisfied that:
(i) the debt is wholly or partly unsecured; and
(ii) the person to whom the debt is owed has suffered loss or damage in
relation to the debt because of the company’s insolvency;
the court may (whether or not it imposes a penalty) order the
first-mentioned person to pay to the company compensation equal to the amount of
that loss or damage.
Note: Section 73A defines when a court is taken to find
a person guilty of an offence.
An order to pay compensation that a court makes under section 588J
or 588K may be enforced as if it were a judgment of the court.
(1) This section applies where:
(a) a person (in this section called the director) has
contravened subsection 588G(2) or (3) in relation to the incurring of a debt by
a company; and
(b) the person (in this section called the creditor) to whom
the debt is owed has suffered loss or damage in relation to the debt because of
the company’s insolvency; and
(c) the debt was wholly or partly unsecured when the loss or damage was
suffered; and
(d) the company is being wound up;
whether or not:
(e) the director has been convicted of an offence in relation to the
contravention; or
(f) a civil penalty order has been made against the director in relation
to the contravention.
(2) The company’s liquidator may recover from the director, as a
debt due to the company, an amount equal to the amount of the loss or
damage.
(3) The creditor may, as provided in Subdivision B but not otherwise,
recover from the director, as a debt due to the creditor, an amount equal to the
amount of the loss or damage.
(4) Proceedings under this section may only be begun within 6 years after
the beginning of the winding up.
An amount recovered in proceedings under section 588M in relation to
the incurring of a debt by a company is to be taken into account in working out
the amount (if any) recoverable in:
(a) any other proceedings under that section in relation to the incurring
of the debt; and
(b) proceedings under section 596AC in relation to a contravention of
section 596AB that is linked to the incurring of the debt.
Sections 588J, 588K and 588M:
(a) have effect in addition to, and not in derogation of, any rule of law
about the duty or liability of a person because of the person’s office or
employment in relation to a company; and
(b) do not prevent proceedings from being instituted in respect of a
breach of such a duty or in respect of such a liability.
For the purposes of this Part, a certificate that:
(a) purports to be signed by the Registrar or other proper officer of an
Australian court; and
(b) states:
(i) that that court has declared that a specified person has, by failing
to prevent a specified company from incurring a specified debt, contravened
subsection 588G(3) in relation to the company; or
(ii) that a specified person was convicted by that court for an offence
constituted by a contravention of section 588G in relation to the incurring
of a specified debt by a specified company; or
(iii) that a specified person charged before that court with such an
offence was found in that court to have committed the offence but that the court
did not proceed to convict the person of the offence;
is, unless it is proved that the declaration, conviction or finding was set
aside, quashed or reversed, conclusive evidence:
(c) that the declaration was made, that the person was convicted of the
offence, or that the person was so found, as the case may be; and
(d) that the person committed the contravention.
(1) A creditor of a company that is being wound up may, with the written
consent of the company’s liquidator, begin proceedings under
section 588M in relation to the incurring by the company of a debt that is
owed to the creditor.
(2) Subsection (1) has effect despite section 588T, but subject
to section 588U.
After the end of 6 months beginning when a company begins to be wound up,
a creditor of the company may give to the company’s liquidator a written
notice:
(a) stating that the creditor intends to begin proceedings under
section 588M in relation to the incurring by the company of a specified
debt that is owed to the creditor; and
(b) asking the liquidator to give to the creditor, within 3 months after
receiving the notice:
(i) a written consent to the creditor beginning the proceedings;
or
(ii) a written statement of the reasons why the liquidator thinks that
proceedings under section 588M in relation to the incurring of that debt
should not be begun.
(1) This section applies where a notice is given under
section 588S.
(2) The creditor may begin proceedings in a court under section 588M
in relation to the incurring by the company of the debt specified in the notice
if:
(a) as at the end of 3 months after the liquidator receives the notice, he
or she has not consented to the creditor beginning such proceedings;
and
(b) on an application made after those 3 months, the court has given leave
for the proceedings to begin.
(3) If:
(a) during those 3 months, the liquidator gives to the creditor a written
statement of the reasons why the liquidator thinks that such proceedings should
not be begun; and
(b) the creditor applies for leave under paragraph (2)(b);
then:
(c) the creditor must file the statement with the court when so applying;
and
(d) in determining the application, the court is to have regard to the
reasons set out in the statement.
(1) A creditor of a company that is being wound up cannot begin
proceedings under section 588M in relation to the incurring of a debt by
the company if:
(a) the company’s liquidator has applied under section 588FF in
relation to the debt, or in relation to a transaction under which the debt was
incurred; or
(b) the company’s liquidator has begun proceedings under
section 588M in relation to the incurring of the debt; or
(c) the company’s liquidator has intervened in an application for a
civil penalty order against a person in relation to a contravention of
subsection 588G(2) in relation to the incurring of the debt.
(2) Subsection (1) has effect despite sections 588R and
588T.
(1) A corporation contravenes this section if:
(a) the corporation is the holding company of a company at the time when
the company incurs a debt; and
(b) the company is insolvent at that time, or becomes insolvent by
incurring that debt, or by incurring at that time debts including that debt;
and
(c) at that time, there are reasonable grounds for suspecting that the
company is insolvent, or would so become insolvent, as the case may be;
and
(d) one or both of the following subparagraphs applies:
(i) the corporation, or one or more of its directors, is or are aware at
that time that there are such grounds for so suspecting;
(ii) having regard to the nature and extent of the corporation’s
control over the company’s affairs and to any other relevant
circumstances, it is reasonable to expect that:
(A) a holding company in the corporation’s circumstances would be so
aware; or
(B) one or more of such a holding company’s directors would be so
aware; and
(e) that time is at or after the commencement of this Act.
(2) A corporation that contravenes this section is not guilty of an
offence.
(1) Where:
(a) a corporation has contravened section 588V in relation to the
incurring of a debt by a company; and
(b) the person to whom the debt is owed has suffered loss or damage in
relation to the debt because of the company’s insolvency; and
(c) the debt was wholly or partly unsecured when the loss or damage was
suffered; and
(d) the company is being wound up;
the company’s liquidator may recover from the corporation, as a debt
due to the company, an amount equal to the amount of the loss or
damage.
(2) Proceedings under this section may only be begun within 6 years after
the beginning of the winding up.
(1) This section has effect for the purposes of proceedings under
section 588W.
(2) It is a defence if it is proved that, at the time when the debt was
incurred, the corporation, and each relevant director (if any), had reasonable
grounds to expect, and did expect, that the company was solvent at that time and
would remain solvent even if it incurred that debt and any other debts that it
incurred at that time.
(3) Without limiting the generality of subsection (2), it is a
defence if it is proved that, at the time when the debt was incurred, the
corporation, and each relevant director (if any):
(a) had reasonable grounds to believe, and did believe:
(i) that a competent and reliable person was responsible for providing to
the corporation adequate information about whether the company was solvent;
and
(ii) that the person was fulfilling that responsibility; and
(b) expected, on the basis of the information provided to the corporation
by the person, that the company was solvent at that time and would remain
solvent even if it incurred that debt and any other debts that it incurred at
that time.
(4) If it is proved that, because of illness or for some other good
reason, a particular relevant director did not take part in the management of
the corporation at the time when the company incurred the debt, the fact that
the director was aware as mentioned in subparagraph 588V(1)(d)(i) is to be
disregarded.
(5) It is a defence if it is proved that the corporation took all
reasonable steps to prevent the company from incurring the debt.
(6) In subsections (2), (3) and (4):
relevant director means a director of the corporation who was
aware as mentioned in subparagraph 588V(1)(d)(i).
(1) An amount paid to a company under section 588J, 588K, 588M or
588W is not available to pay a secured debt of the company unless all the
company’s unsecured debts have been paid in full.
(2) Where:
(a) under section 588J or 588K, or in proceedings under
section 588M or 588W, a court orders a person to pay to the company
compensation, or an amount, equal to the amount of loss or damage suffered by a
person in relation to a debt because of the company’s insolvency;
and
(b) the court is satisfied that, at the time when the company incurred the
debt, the person who suffered the loss or damage knew that the company was
insolvent at that time or would become insolvent by incurring the debt, or by
incurring at that time debts including the debt, as the case requires;
the court may order that the compensation or amount paid to the company is
not available to pay that debt unless all the company’s unsecured debts
(other than debts to which orders under this subsection relate) have been paid
in full.
(3) Subsection (2) does not apply in relation to proceedings under
section 588M in relation to the incurring of a debt by a company if the
proceedings are begun by a creditor of the company (as provided for in
Subdivision B of Division 4).
(4) Subsection (2) does not apply in relation to a liability that is
taken to be a debt because of section 588F.
Where:
(a) a company is being wound up; and
(b) on or after 23 June 1993 and within 4 years before the
relation-back day, a person contravened section 206A by managing the
company;
the Court may, on the application of the company’s liquidator, order
that the person is personally liable for so much of the company’s debts
and liabilities as does not exceed an amount specified in the
order.
(1) Sections 590 to 593 (inclusive) apply to a company:
(a) that has been wound up or is in the course of being wound up;
or
(b) that has been in the course of being wound up, where the winding up
has been stayed or terminated by an order under section 482; or
(ba) of which a provisional liquidator has been appointed; or
(c) that is or has been under administration; or
(ca) that has executed a deed of company arrangement, even if the deed has
since terminated; or
(d) affairs of which are or have been under investigation; or
(e) in respect of property of which a receiver, or a receiver and manager,
has at any time been appointed, whether by the Court or under a power contained
in an instrument, whether or not the appointment has been terminated;
or
(f) that has ceased to carry on business or is unable to pay its debts;
or
(g) that has entered into a compromise or arrangement with its
creditors.
(2) For the purposes of this Part, affairs of a company are or have been
under investigation if, and only if:
(a) ASIC is investigating, or has at any time investigated, under
Division 1 of Part 3 of the ASIC Act:
(i) matters being, or connected with, affairs of the company; or
(ii) matters including such matters; or
(b) affairs of the company have at any time been under investigation
under:
(i) Part VII of the Companies Act 1981; or
(ii) the provisions of a previous law of a State or Territory that
correspond to that Part.
(3) For the purposes of this Part, a company is taken to have ceased to
carry on business only if:
(a) ASIC has published in the Gazette a notice of the
proposed deregistration of the company under subsection 601AA(4) or 601AB(3);
and
(b) if the notice was published under subsection 601AA(4) or under
subsection 601AB(3) because of a decision under subsection 601AB(1)—2
months have passed since the notice was published and ASIC has not been informed
that the company is carrying on business.
(4) For the purposes of this Part, a company is taken to be unable to pay
its debts if, and only if, execution or other process issued on a judgment,
decree or order of a court (whether or not an Australian court) in favour of a
creditor of the company is returned unsatisfied in whole or in part.
(5) In this Part:
appropriate officer means:
(a) in relation to a company that has been, has been being or is being
wound up—the liquidator; and
(aa) in relation to a company of which a provisional liquidator has been
appointed—the provisional liquidator; and
(b) in relation to a company that is or has been under
administration—the administrator; and
(ba) in relation to a company that has executed a deed of company
arrangement—the deed’s administrator; and
(c) in relation to a company affairs of which are or have been under
investigation—ASIC or the NCSC, as the case requires; and
(d) in relation to a company in respect of property of which a receiver,
or a receiver and manager, has been appointed—the receiver or the receiver
and manager; and
(e) in relation to a company that has ceased to carry on business or is
unable to pay its debts—ASIC or the NCSC, as the case requires;
and
(f) in relation to a company that has entered into a compromise or
arrangement with its creditors—the person appointed by the Court to
administer the compromise or arrangement.
relevant day means the day on which:
(a) in relation to a company that has been wound up, has been in the
course of being wound up, or is being wound up:
(i) if, because of Division 1A of Part 5.6, the winding up is
taken to have begun on the day when an order that the company be wound up was
made—the application for the order was filed; or
(ii) otherwise—the winding up is taken because of Division 1A
of Part 5.6 to have begun;
(aa) in relation to a company of which a provisional liquidator has been
appointed—the provisional liquidator was appointed;
(b) in relation to a company that is or has been under
administration—the administration began;
(ba) in relation to a company that has executed a deed of company
arrangement—the deed was executed;
(c) in relation to a company affairs of which are or have been under
investigation:
(i) if paragraph (2)(a) applies—the investigation began;
or
(ii) if paragraph (2)(b) applies—a direction was given to the
NCSC to arrange for the investigation;
(d) in relation to a company in respect of property of which a receiver,
or a receiver and manager, has been appointed—the receiver, or the
receiver and manager, was appointed;
(e) in relation to a company that is unable to pay its debts—the
execution or other process was returned unsatisfied in whole or in
part;
(f) in relation to a company that has ceased to carry on
business—a notice was first published in relation to the company under
subsection 601AA(4) or 601AB(3);
(g) in relation to a company that has entered into a compromise or
arrangement with its creditors—the compromise or arrangement was approved
by the Court.
(6) This Part applies in relation to a company that was first incorporated
other than under this Act:
(a) as if, in this Part (other than section 595) as so
applying:
(i) a reference to the company included a reference to the company as it
existed at a time before its registration day (including a time before the
commencement of this Act); and
(iii) a reference, in relation to a provision of this Act, to ASIC
included a reference to the NCSC (if relevant); and
(b) with such other modifications as the circumstances require.
(1) A person who, being a past or present officer of a company to which
this section applies:
(a) does not, so far as the person is capable of doing so, disclose to the
appropriate officer all the property of the company, and how and to whom and for
what consideration and when any part of the property of the company was disposed
of within 10 years next before the relevant day, except such part as has been
disposed of in the ordinary course of the business of the company; or
(b) does not deliver up to, or in accordance with the directions of, the
appropriate officer:
(i) all the property of the company in the person’s possession;
or
(ii) all books in the person’s possession belonging to the company
(except books of which the person is entitled, as against the company and the
appropriate officer, to retain possession);
(c) has, within 10 years next before the relevant day or at a time on or
after that day:
(i) fraudulently concealed or removed any part of the property of the
company to the value of $100 or more; or
(ii) concealed any debt due to or by the company; or
(iii) fraudulently parted with, altered or made any omission in, or been
privy to fraudulent parting with, altering or making any omission in, any book
affecting or relating to affairs of the company; or
(iv) by any false representation or other fraud, obtained on credit, for
or on behalf of the company, any property that the company has not subsequently
paid for; or
(v) fraudulently pawned, pledged or disposed of, otherwise than in the
ordinary course of the business of the company, property of the company that has
been obtained on credit and has not been paid for;
(d) fraudulently makes any material omission in any statement or report
relating to affairs of the company; or
(e) knowing or believing that a false debt has been proved by a person,
fails for a period of one month to inform the appropriate officer of his or her
knowledge or belief; or
(f) prevents the production to the appropriate officer of any book
affecting or relating to affairs of the company; or
(g) has, within 10 years next before the relevant day or at a time on or
after that day, attempted to account for any part of the property of the company
by making entries in the books of the company showing fictitious transactions,
losses or expenses; or
(h) has, within 10 years next before the relevant day or at a time on or
after that day, been guilty of any false representation or other fraud for the
purpose of obtaining the consent of the creditors of the company or any of them
to an agreement with reference to affairs of the company or to the winding
up;
contravenes this subsection.
(5) Where a person pawns, pledges or disposes of any property in
circumstances that amount to a contravention by virtue of
subparagraph (1)(c)(v), a person who takes in pawn or pledge or otherwise
receives the property knowing it to be pawned, pledged or disposed of in those
circumstances contravenes this subsection.
(6) A person who takes in pawn or pledge or otherwise receives property in
circumstances mentioned in subsection (5) and with the knowledge mentioned
in that subsection is taken to hold the property as trustee for the company
concerned and is liable to account to the company for the property.
(7) Where, in proceedings under subsection (6), it is necessary to
establish that a person has taken property in pawn or pledge, or otherwise
received property:
(a) in circumstances mentioned in subsection (5); and
(b) with the knowledge mentioned in that subsection;
the matter referred to in paragraph (b) of this subsection may be
established on the balance of probabilities.
(1) Where:
(a) a company has incurred a debt before 23 June 1993; and
(b) immediately before the time when the debt was incurred:
(i) there were reasonable grounds to expect that the company will not be
able to pay all its debts as and when they become due; or
(ii) there were reasonable grounds to expect that, if the company incurs
the debt, it will not be able to pay all its debts as and when they become due;
and
(c) the company was, at the time when the debt was incurred, or becomes at
a later time, a company to which this section applies;
any person who was a director of the company, or took part in the
management of the company, at the time when the debt was incurred contravenes
this subsection and the company and that person or, if there are 2 or more such
persons, those persons are jointly and severally liable for the payment of the
debt.
(2) In any proceedings against a person under subsection (1), it is a
defence if it is proved:
(a) that the debt was incurred without the person’s express or
implied authority or consent; or
(b) that at the time when the debt was incurred, the person did not have
reasonable cause to expect:
(i) that the company would not be able to pay all its debts as and when
they became due; or
(ii) that, if the company incurred that debt, it would not be able to pay
all its debts as and when they became due.
(3) Proceedings may be brought under subsection (1) for the recovery
of a debt whether or not the person against whom the proceedings are brought, or
any other person, has been convicted of an offence under subsection (1) in
respect of the incurring of that debt.
(4) In proceedings brought under subsection (1) for the recovery of a
debt, the liability of a person under that subsection in respect of the debt may
be established on the balance of probabilities.
(5) Where subsection (1) renders a person or persons liable to pay a
debt incurred by a company, the payment by that person or either or any of those
persons of the whole or any part of that debt does not render the company liable
to the person concerned in respect of the amount so paid.
(6) Where:
(a) a company has done an act (including the making of a contract or the
entering into of a transaction) with intent to defraud creditors of the company
or of any other person or for any other fraudulent purpose; and
(b) the company was at the time when it does the act, or becomes at a
later time, a company to which this section applies;
any person who was knowingly concerned in the doing of the act with that
intent or for that purpose contravenes this subsection.
(7) A certificate issued by the proper officer of an Australian court
stating that a person specified in the certificate:
(a) was convicted of an offence under subsection (1) in relation to a
debt specified in the certificate incurred by a company so specified;
or
(b) was convicted of an offence under subsection (6) in relation to a
company specified in the certificate;
is, in any proceedings, prima facie evidence of the matters stated
in the certificate.
(8) A document purporting to be a certificate issued under
subsection (7) is, unless the contrary is established, taken to be such a
certificate and to have been duly issued.
(1) Where a person has been convicted of an offence under subsection
592(1) in respect of the incurring of a debt, the Court, on the application of
ASIC or the person to whom the debt is payable, may, if it thinks it proper to
do so, declare that the first-mentioned person is personally responsible without
any limitation of liability for the payment to the person to whom the debt is
payable of an amount equal to the whole of the debt or such part of it as the
Court thinks proper.
(2) Where a person has been convicted of an offence under subsection
592(6), the Court, on the application of ASIC or of a prescribed person, may, if
it thinks it proper to do so, declare that the first-mentioned person is
personally responsible without any limitation of liability for the payment to
the company of the amount required to satisfy so much of the debts of the
company as the Court thinks proper.
(3) In relation to a company in respect of which a conviction referred to
in subsection (2) relates:
(a) the appropriate officer; and
(b) a creditor or contributory of the company authorised by ASIC to make
an application under that subsection; and
(c) if the company was a company to which section 592 applied by
reason of paragraph 589(1)(c)—a member of the company;
are prescribed persons for the purposes of that subsection.
(4) Where the Court makes a declaration under subsection (1) in
relation to a person, it may give such further directions as it thinks proper
for the purpose of giving effect to that declaration.
(5) In particular, the Court may order that the liability of the person
under the declaration is a charge:
(a) on a debt or obligation due from the company to the person;
or
(b) on a right or interest under a charge on any property of the company
held by or vested in the person or a person on the person’s behalf, or a
person claiming as assignee from or through the person liable or a person acting
on the person’s behalf.
(6) The Court may, from time to time, make such further order as it thinks
proper for the purpose of enforcing a charge imposed under
subsection (5).
(7) For the purpose of subsection (5), assignee
includes a person to whom or in whose favour, by the directions of the person
liable, the debt, obligation or charge was created, issued or transferred or the
interest created, but does not include an assignee for valuable consideration,
not including consideration by way of marriage, given in good faith and without
actual knowledge of any of the matters upon which the conviction or declaration
was made.
(8) On the hearing of an application under subsection (1) or (2), the
appropriate officer or other applicant may give evidence or call
witnesses.
Except as provided by subsection 592(4) nothing in subsection 592(1) or
593(1) or (2) affects any rights of a person to indemnity, subrogation or
contribution.
A person must not give, or agree or offer to give, to a member or
creditor of a company any valuable consideration with a view to securing the
person’s own appointment or nomination, or to securing or preventing the
appointment or nomination of some other person, as:
(a) a liquidator or provisional liquidator of the company; or
(b) an administrator of the company; or
(c) an administrator of a deed of company arrangement executed, or to be
executed, by the company; or
(d) a receiver, or a receiver and manager, of property of the company;
or
(e) a trustee or other person to administer a compromise or arrangement
made between the company and any other person or persons.
A person who, while an officer of a company:
(a) by false pretences or by means of any other fraud, induces a person to
give credit to the company or to a related body corporate; or
(b) with intent to defraud the company or a related body corporate, or
members or creditors of the company or of a related body corporate, makes or
purports to make, or causes to be made or to be purported to be made, any gift
or transfer of, or charge on, or causes or connives at the levying of any
execution against, property of the company or of a related body corporate;
or
(c) with intent to defraud the company or a related body corporate, or
members or creditors of the company or of a related body corporate, conceals or
removes any part of the property of the company or of a related body corporate
after, or within 2 months before, the date of any unsatisfied judgment or order
for payment of money obtained against the company or a related body
corporate;
contravenes this section.
Object
(1) The object of this Part is to protect the entitlements of a
company’s employees from agreements and transactions that are entered into
with the intention of defeating the recovery of those entitlements.
Employee entitlements
(2) The entitlements of an employee of a company that are
protected under this Part are:
(a) wages payable by the company for services rendered to the company by
the employee; and
(b) superannuation contributions (that is, contributions by the company to
a fund for the purposes of making provision for, or obtaining, superannuation
benefits for the employee, or for dependants of the employee) payable by the
company in respect of services rendered to the company by the employee;
and
(c) amounts due in respect of injury compensation in relation to the
employee; and
(d) amounts due under an industrial instrument in respect of the
employee’s leave of absence; and
(e) retrenchment payments for the employee (that is, amounts payable by
the company to the employee, under an industrial instrument, in respect of the
termination of the employee’s employment by the company).
An entitlement of an employee need not be owed to the employee. It might,
for example, be an amount owed to the employee’s dependants or a
superannuation contribution payable to a fund in respect of services rendered by
the employee.
(3) The entitlements of an excluded employee (within the meaning of
section 556) are protected under this Part only to the extent to which they
have priority under paragraph 556(1)(e), (f), (g) or (h).
Employees
(4) For the purposes of this Part, a person is an employee
of a company if the person is, or has been, an employee of the company (whether
remunerated by salary, wages, commission or otherwise).
(5) If an entitlement of an employee of a company is owed to a person
other than the employee, this Part applies to the entitlement as if a reference
to the employee included a reference to the person to whom the
entitlement is owed.
(1) A person must not enter into a relevant agreement or a transaction
with the intention of, or with intentions that include the intention
of:
(a) preventing the recovery of the entitlements of employees of a company;
or
(b) significantly reducing the amount of the entitlements of employees of
a company that can be recovered.
(2) Subsection (1) applies even if:
(a) the company is not a party to the agreement or transaction;
or
(b) the agreement or transaction is approved by a court.
(3) A reference in this section to a relevant agreement or a
transaction includes a reference to:
(a) a relevant agreement and a transaction; and
(b) a series or combination of:
(i) relevant agreements or transactions; or
(ii) relevant agreements; or
(iii) transactions.
(4) If a person contravenes this section by incurring a debt (within the
meaning of section 588G), the incurring of the debt and the contravention
are linked for the purposes of this Act.
(1) A person is liable to pay compensation under subsection (2) or
(3) if:
(a) the person contravenes section 596AB in relation to the
entitlements of employees of a company; and
(b) the company is being wound up; and
(c) the employees suffer loss or damage because of:
(i) the contravention; or
(ii) action taken to give effect to an agreement or transaction involved
in the contravention.
The person is liable whether or not the person has been convicted of an
offence in relation to the contravention.
(2) The company’s liquidator may recover from the person an amount
equal to the loss or damage as a debt due to the company.
Note: Because employee entitlements are priority payments
under paragraphs 556(1)(e) to (h), employees have priority to any compensation
recovered by the liquidator in proceedings brought under this
section.
(3) If an employee of the company has suffered loss or damage because
of:
(a) the contravention; or
(b) action taken to give effect to an agreement or transaction involved in
the contravention;
the employee may, as provided in section 596AF to 596AI (but not
otherwise), recover from the person, as a debt due to the employee, an amount
equal to the amount of the loss or damage. Any amount recovered by the employee
under this subsection is to be taken into account in working out the amount for
which the employee may prove in the liquidation of the company.
(4) Proceedings under this section may only be begun within 6 years after
the beginning of the winding up.
An amount recovered in proceedings under section 596AC in relation
to a contravention of section 596AB is to be taken into account in working
out the amount (if any) recoverable in:
(a) any other proceedings under that section in relation to the
contravention; and
(b) proceedings under section 588M in relation to the incurring of a
debt that is linked to the contravention.
Section 596AC:
(a) has effect in addition to, and not in derogation of, any rule of law
about the duty or liability of a person because of the person’s office or
employment in relation to a company; and
(b) does not prevent proceedings from being instituted in respect of a
breach of such a duty or in respect of such a liability.
(1) If a company is being wound up, an employee of the company may, with
the written consent of the company’s liquidator, begin proceedings under
section 596AC in relation to a contravention of section 596AB in
relation to an entitlement of the employee.
(2) Subsection (1) has effect despite section 596AH, but subject
to section 596AI.
An employee of a company that is being wound up may give the
company’s liquidator a written notice:
(a) stating that the employee intends to begin proceedings under
section 596AC in relation to a contravention of section 596AB in
relation to an entitlement of the employee; and
(b) specifying the contravention of section 596AB and the entitlement
to which the proposed proceedings relate; and
(c) asking the liquidator to give the employee, within 3 months after
receiving the notice:
(i) a written consent to the employee beginning the proceedings;
or
(ii) a written statement of the reasons why the liquidator thinks that
proceedings under section 596AC in relation to the contravention should not
be begun.
The notice may be given only after the end of 6 months beginning when the
company begins to be wound up.
(1) This section applies if an employee of a company gives a notice under
section 596AG in relation to a contravention of section 569AB and to
an entitlement.
(2) The employee may begin proceedings in a court under section 596AC
in relation to the contravention and the entitlement if:
(a) as at the end of 3 months after the liquidator receives the notice, he
or she has not consented to the employee beginning such proceedings;
and
(b) on an application made after those 3 months, the court has given leave
for the proceedings to begin.
(3) If:
(a) during those 3 months, the liquidator gives to the employee a written
statement of the reasons why the liquidator thinks that such proceedings should
not be begun; and
(b) the employee applies for leave under paragraph (2)(b);
then:
(c) the employee must file the statement with the court when so applying;
and
(d) in determining the application, the court is to have regard to the
reasons set out in the statement.
(1) An employee of a company that is being wound up cannot begin
proceedings under section 596AC in relation to a contravention in relation
to an entitlement of the employee if:
(a) the company’s liquidator has applied under section 588FF in
relation to a transaction that constituted, or was part of, the contravention;
or
(b) the company’s liquidator has begun proceedings under
section 596AC in relation to the contravention; or
(c) the company’s liquidator has begun proceedings under
section 588M in relation to the incurring of the debt that is linked to the
contravention; or
(d) the company’s liquidator has intervened in an application for a
civil penalty order against a person in relation to a contravention of
section 588G in relation to the incurring of the debt that is linked to the
contravention.
(2) Subsection (1) has effect despite sections 596AF and
596AH.
The Court is to summon a person for examination about a
corporation’s examinable affairs if:
(a) an eligible applicant applies for the summons; and
(b) the Court is satisfied that the person is an examinable officer of the
corporation or was such an officer during or after the 2 years ending:
(i) if the corporation is under administration—on the
section 513C day in relation to the administration; or
(ii) if the corporation has executed a deed of company arrangement that
has not yet terminated—on the section 513C day in relation to the
administration that ended when the deed was executed; or
(iii) if the corporation is being, or has been, wound up—when the
winding up began; or
(iv) otherwise—when the application is made.
(1) The Court may summon a person for examination about a
corporation’s examinable affairs if:
(a) an eligible applicant applies for the summons; and
(b) the Court is satisfied that the person:
(i) has taken part or been concerned in examinable affairs of the
corporation and has been, or may have been, guilty of misconduct in relation to
the corporation; or
(ii) may be able to give information about examinable affairs of the
corporation.
(2) This section has effect subject to section 596A.
(1) A person who applies under section 596B must file an affidavit
that supports the application and complies with the rules.
(2) The affidavit is not available for inspection except so far as the
Court orders.
(1) A summons to a person under section 596A or 596B is to require
the person to attend before the Court:
(a) at a specified place and at a specified time on a specified day, being
a place, time and day that are reasonable in the circumstances; and
(b) to be examined on oath about the corporation’s examinable
affairs.
(2) A summons to a person under section 596A or 596B may require the
person to produce at the examination specified books that:
(a) are in the person’s possession; and
(b) relate to the corporation or to any of its examinable
affairs.
(3) A summons under section 596A is to require under
subsection (2) of this section the production of such of the books
requested in the application for the summons as the summons may so
require.
If the Court summons a person for examination, the person who applied for
the summons must give written notice of the examination to:
(a) as many of the corporation’s creditors as reasonably
practicable; and
(b) each eligible applicant in relation to the corporation,
except:
(i) the person who applied for the examination; and
(ii) if a person authorised by ASIC applied for the
examination—ASIC; and
(iii) a person who is such an eligible applicant only because the person
is authorised by ASIC.
(1) Subject to section 597, the Court may at any time give one or
more of the following:
(a) a direction about the matters to be inquired into at an
examination;
(b) a direction about the procedure to be followed at an
examination;
(c) a direction about who may be present at an examination while it is
being held in private;
(d) a direction that a person be excluded from an examination, even while
it is being held in public;
(e) a direction about access to records of the examination;
(f) a direction prohibiting publication or communication of information
about the examination (including questions asked, and answers given, at the
examination);
(g) a direction that a document that relates to the examination and was
created at the examination be destroyed.
(2) The Court may give a direction under paragraph (1)(e), (f) or (g)
in relation to all or part of an examination even if the examination, or that
part, was held in public.
(3) A person must not contravene a direction under
subsection (1).
(4) An examination is to be held in public except to such extent (if any)
as the Court considers that, by reason of special circumstances, it is desirable
to hold the examination in private.
(5A) Any of the following may take part in an examination:
(a) ASIC;
(b) any other eligible applicant in relation to the corporation;
and for that purpose may be represented by a lawyer or by an agent
authorised in writing for the purpose.
(5B) The Court may put, or allow to be put, to a person being examined
such questions about the corporation or any of its examinable affairs as the
Court thinks appropriate.
(6) A person who is summoned under section 596A or 596B to attend
before the Court must not, without reasonable excuse:
(a) fail to attend as required by the summons; or
(b) fail to attend from day to day until the conclusion of the
examination.
(7) A person who attends before the Court for examination must
not:
(a) without reasonable excuse, refuse or fail to take an oath or make an
affirmation; or
(b) without reasonable excuse, refuse or fail to answer a question that
the Court directs him or her to answer; or
(c) make a statement that is false or misleading in a material particular;
or
(d) without reasonable excuse, refuse or fail to produce books that the
summons requires him or her to produce.
(9) The Court may direct a person to produce, at an examination of that or
any other person, books that are in the first-mentioned person’s
possession and are relevant to matters to which the examination relates or will
relate.
(9A) A person may comply with a direction under subsection (9) by
causing the books to be produced at the examination.
(10) Where the Court so directs a person to produce any books and the
person has a lien on the books, the production of the books does not prejudice
the lien.
(10A) A person must not, without reasonable excuse, refuse or fail to
comply with a direction under subsection (9).
(12) A person is not excused from answering a question put to the person
at an examination on the ground that the answer might tend to incriminate the
person or make the person liable to a penalty.
(12A) Where:
(a) before answering a question put to a person (other than a body
corporate) at an examination, the person claims that the answer might tend to
incriminate the person or make the person liable to a penalty; and
(b) the answer might in fact tend to incriminate the person or make the
person so liable;
the answer is not admissible in evidence against the person in:
(c) a criminal proceeding; or
(d) a proceeding for the imposition of a penalty;
other than a proceeding under this section, or any other proceeding in
respect of the falsity of the answer.
(13) The Court may order the questions put to a person and the answers
given by him or her at an examination to be recorded in writing and may require
him or her to sign that written record.
(14) Subject to subsection (12A), any written record of an
examination so signed by a person, or any transcript of an examination of a
person that is authenticated as provided by the rules, may be used in evidence
in any legal proceedings against the person.
(14A) A written record made under subsection (13):
(a) is to be open for inspection, without fee, by:
(i) the person who applied for the examination; or
(ii) an officer of the corporation; or
(iii) a creditor of the corporation; and
(b) is to be open for inspection by anyone else on paying the prescribed
fee.
(15) An examination under this Division may, if the Court so directs and
subject to the rules, be held before such other court as is specified by the
Court and the powers of the Court under this Division may be exercised by that
other court.
(16) A person ordered to attend before the Court or another court for
examination under this Division may, at his or her own expense, employ a
solicitor, or a solicitor and counsel, and the solicitor or counsel, as the case
may be, may put to the person such questions as the Court, or the other court,
as the case may be, considers just for the purpose of enabling the person to
explain or qualify any answers or evidence given by the person.
(17) The Court or another court before which an examination under this
Division takes place may, if it thinks fit, adjourn the examination from time to
time.
(1) The Court is to require a person to file an affidavit about a
corporation’s examinable affairs if:
(a) an eligible applicant applies for the requirement to be made;
and
(b) the Court is satisfied that the person is an examinable officer of the
corporation or was such an officer during or after the 2 years ending:
(i) if the corporation is under administration—on the
section 513C day in relation to the administration; or
(ii) if the corporation has executed a deed of company arrangement that
has not yet terminated—on the section 513C day in relation to the
administration that ended when the deed was executed; or
(iii) if the corporation is being, or has been, wound up—when the
winding up began; or
(iv) otherwise—when the application is made;
even if the person has been summoned under section 596A or 596B for
examination about those affairs.
(2) The requirement is to:
(a) specify such of the information requested in the application as
relates to examinable affairs of the corporation; and
(b) require the affidavit to set out the specified information;
and
(c) require the affidavit to be filed on or before a specified day that is
reasonable in the circumstances.
(3) A person must not, without reasonable excuse, refuse or fail to comply
with a requirement made of the person under subsection (1).
(4) The Court may excuse a person from answering a question at an
examination about a corporation’s examinable affairs if the person has
already filed an affidavit under this section about that corporation’s
examinable affairs that sets out information that answers the
question.
Where the Court is satisfied that a summons to a person under
section 596A or 596B, or a requirement made of a person under
section 597A, was obtained without reasonable cause, the Court may order
some or all of the costs incurred by the person because of the summons or
requirement to be paid by:
(a) in any case—the applicant for the summons or requirement;
or
(b) in the case of a summons—any person who took part in the
examination.
(2) Subject to subsection (3), where, on application by an eligible
applicant, the Court is satisfied that:
(a) a person is guilty of fraud, negligence, default, breach of trust or
breach of duty in relation to a corporation; and
(b) the corporation has suffered, or is likely to suffer, loss or damage
as a result of the fraud, negligence, default, breach of trust or breach of
duty;
the Court may make such order or orders as it thinks appropriate against or
in relation to the person (including either or both of the orders specified in
subsection (4)) and may so make an order against or in relation to a person
even though the person may have committed an offence in respect of the matter to
which the order relates.
(3) The Court must not make an order against a person under
subsection (2) unless the Court has given the person the
opportunity:
(a) to give evidence; and
(b) to call witnesses to give evidence; and
(c) to bring other evidence in relation to the matters to which the
application relates; and
(d) to employ, at the person’s own expense, a solicitor, or a
solicitor and counsel, to put to the person, or to any other witness, such
questions as the Court considers just for the purpose of enabling the person to
explain or qualify any answers or evidence given by the person.
(4) The orders that may be made under subsection (2) against a person
include:
(a) an order directing the person to pay money or transfer property to the
corporation; and
(b) an order directing the person to pay to the corporation the amount of
the loss or damage.
(5) Nothing in this section prevents any person from instituting any other
proceedings in relation to matters in respect of which an application may be
made under this section.
(1) Subsection (2) applies where, on the application of a creditor of
a company or Part 5.1 body, the Court is satisfied:
(a) that a proposed resolution has been voted on at:
(i) in the case of a company—a meeting of creditors of the company
held:
(A) under Part 5.3A or a deed of company arrangement executed by the
company; or
(B) in connection with winding up the company; or
(ii) in the case of a Part 5.1 body—a meeting of creditors, or
of a class of creditors, of the body held under Part 5.1; and
(b) that, if the vote or votes that a particular related creditor, or
particular related creditors, of the company or body cast on the proposed
resolution had been disregarded for the purposes of determining whether or not
the proposed resolution was passed, the proposed resolution:
(i) if it was in fact passed—would not have been passed;
or
(ii) if in fact it was not passed—would have been passed;
or the question would have had to be decided on a casting vote;
and
(c) that the passing of the proposed resolution, or the failure to pass
it, as the case requires:
(i) is contrary to the interests of the creditors as a whole or of that
class of creditors as a whole, as the case may be; or
(ii) has prejudiced, or is reasonably likely to prejudice, the interests
of the creditors who voted against the proposed resolution, or for it, as the
case may be, to an extent that is unreasonable having regard to:
(A) the benefits resulting to the related creditor, or to some or all of
the related creditors, from the resolution, or from the failure to pass the
proposed resolution, as the case may be; and
(B) the nature of the relationship between the related creditor and the
company or body, or of the respective relationships between the related
creditors and the company or body; and
(C) any other relevant matter.
(2) The Court may make one or more of the following:
(a) if the proposed resolution was passed—an order setting aside the
resolution;
(b) an order that the proposed resolution be considered and voted on at a
meeting of the creditors of the company or body, or of that class of creditors,
as the case may be, convened and held as specified in the order;
(c) an order directing that the related creditor is not, or such of the
related creditors as the order specifies are not, entitled to vote on:
(i) the proposed resolution; or
(ii) a resolution to amend or vary the proposed resolution;
(d) such other orders as the Court thinks necessary.
(3) In this section:
related creditor, in relation to a company or Part 5.1
body, in relation to a vote, means a person who, when the vote was cast, was a
related entity, and a creditor, of the company or body.
(1) This section applies if, because the person presiding at the meeting
exercises a casting vote, a resolution is passed at a meeting of creditors of a
company held:
(a) under Part 5.3A or a deed of company arrangement executed by the
company; or
(b) in connection with winding up the company.
(2) A person may apply to the Court for an order setting aside or varying
the resolution, but only if:
(a) the person voted against the resolution in some capacity (even if the
person voted for the resolution in another capacity); or
(b) a person voted against the resolution on the first-mentioned
person’s behalf.
(3) On an application, the Court may:
(a) by order set aside or vary the resolution; and
(b) if it does so—make such further orders, and give such
directions, as it thinks necessary.
(4) On and after the making of an order varying the resolution, the
resolution has effect as varied by the order.
(1) This section applies if, because the person presiding at the meeting
exercises a casting vote, or refuses or fails to exercise such a vote, a
proposed resolution is not passed at a meeting of creditors of a company
held:
(a) under Part 5.3A or a deed of company arrangement executed by the
company; or
(b) in connection with winding up the company.
(2) A person may apply to the Court for an order under
subsection (3), but only if:
(a) the person voted for the proposed resolution in some capacity (even if
the person voted against the proposed resolution in another capacity);
or
(b) a person voted for the proposed resolution on the first-mentioned
person’s behalf.
(3) On an application, the Court may:
(a) order that the proposed resolution is taken to have been passed at the
meeting; and
(b) if it does so—make such further orders, and give such
directions, as it thinks necessary.
(4) If an order is made under paragraph (3)(a), the proposed
resolution:
(a) is taken for all purposes (other than those of subsection (1)) to
have been passed at the meeting; and
(b) is taken to have taken effect:
(i) if the order specifies a time when the proposed resolution is taken to
have taken effect—at that time, even if it is earlier than the making of
the order; or
(ii) otherwise—on the making of the order.
(1) Where:
(a) an application under subsection 600A(1), 600B(2) or 600C(2) has not
yet been determined; and
(b) the Court is of the opinion that it is desirable to do so;
the Court may make such interim orders as it thinks appropriate.
(2) An interim order must be expressed to apply until the application is
determined, but may be varied or discharged.
An act done pursuant to a resolution as in force before the making under
section 600A or 600B of an order setting aside or varying the resolution is
as valid and binding on and after the making of the order as if the order had
not been made.
(1) If:
(a) a relevant authority of an eligible company requests, or authorises
someone else to request, a person or authority (the supplier) to
supply an essential service to the company in Australia; and
(b) the company owes an amount to the supplier in respect of the supply of
the essential service before the effective day;
the supplier must not:
(c) refuse to comply with the request for the reason only that the amount
is owing; or
(d) make it a condition of the supply of the essential service pursuant to
the request that the amount is to be paid.
(2) In this section:
effective day, in relation to a relevant authority of an
eligible company, means the day when the relevant authority became a relevant
authority of the company, even if that day began before this Act
commenced.
eligible company means a company:
(a) that is being wound up; or
(b) a provisional liquidator of which is acting; or
(c) that is under administration; or
(d) that has executed a deed of company arrangement that has not yet
terminated; or
(e) a receiver, or receiver and manager, of property of which is
acting.
essential service means:
(a) electricity; or
(b) gas; or
(c) water; or
(d) a carriage service (within the meaning of the Telecommunications
Act 1997).
relevant authority, in relation to an eligible company,
means:
(a) the liquidator; or
(b) the provisional liquidator; or
(c) the administrator of the company; or
(d) the administrator of the deed of company arrangement; or
(e) the receiver, or receiver and manager;
as the case requires.
Who may apply for deregistration
(1) An application to deregister a company may be lodged with ASIC
by:
(a) the company; or
(b) a director or member of the company; or
(c) a liquidator of the company.
If the company lodges the application, it must nominate a person to be
given notice of the deregistration.
Circumstances in which application can be made
(2) A person may apply only if:
(a) all the members of the company agree to the deregistration;
and
(b) the company is not carrying on business; and
(c) the company’s assets are worth less than $1,000; and
(d) the company has paid all fees and penalties payable under this Act;
and
(e) the company has no outstanding liabilities; and
(f) the company is not a party to any legal proceedings.
ASIC may ask for information about officers
(3) The applicant must give ASIC any information that ASIC requests about
the current and former officers of the company.
Deregistration procedure
(4) If ASIC is not aware of any failure to comply with
subsections (1) to (3), it must give notice of the proposed
deregistration:
(a) on ASIC database; and
(b) in the Gazette.
When 2 months have passed since the Gazette notice, ASIC may
deregister the company.
(5) ASIC must give notice of the deregistration to:
(a) the applicant; or
(b) the person nominated in the application to be given the
notice.
Circumstances in which the ASIC may deregister
(1) ASIC may decide to deregister a company if:
(a) the company’s annual return is at least 6 months late;
and
(b) the company has not lodged any other documents under this Act in the
last 18 months; and
(c) ASIC has no reason to believe that the company is carrying on
business.
(2) ASIC may also decide to deregister a company if the company is being
wound up and ASIC has reason to believe that:
(a) the liquidator is no longer acting; or
(b) the company’s affairs have been fully wound up and a return that
the liquidator should have lodged is at least 6 months late; or
(c) the company’s affairs have been fully wound up under
Part 5.4 and the company has no property or not enough property to cover
the costs of obtaining a Court order for the company’s
deregistration.
Deregistration procedure
(3) If ASIC decides to deregister a company under this section, it must
give notice of the proposed deregistration:
(a) to the company; and
(b) to the company’s liquidator (if any); and
(c) to the company’s directors; and
(d) on ASIC database; and
(e) in the Gazette.
When 2 months have passed since the Gazette notice, ASIC may
deregister the company.
(4) ASIC does not have to give a person notice under subsection (3)
if ASIC does not have the necessary information about the person’s
identity or address.
(5) ASIC must give notice of the deregistration to everyone who was
notified of the proposed deregistration under paragraph (3)(b) or
(c).
(1) ASIC must deregister a company if the Court orders the deregistration
of the company under:
(a) paragraph 413(1)(d) (reconstruction and amalgamation of Part 5.1
bodies); or
(b) paragraph 481(5)(b) (release of liquidator); or
(c) subsection 509(6) (liquidator’s return following winding
up).
(2) ASIC must deregister a company if:
(a) 3 months have passed since the company’s liquidator lodged a
return under section 509; and
(b) no order under subsection 509(6) has been made during that
period.
Company ceases to exist
(1) A company ceases to exist on deregistration.
Note: Despite the deregistration, officers of the company
may still be liable for things done before the company was
deregistered.
Company’s property vests in ASIC
(2) On deregistration, all the company’s property vests in ASIC. If
company property is vested in a liquidator immediately before deregistration,
that property vests in ASIC. This subsection extends to property situated
outside this jurisdiction.
(3) Under subsection (2), ASIC takes only the same property rights
that the company itself held. If the company held particular property subject to
a security or other interest or claim, ASIC takes the property subject to that
interest or claim.
Note: See also subsection 601AE(3)—which deals with
liabilities that a law imposes on the property (particularly liabilities such as
rates, taxes and other charges).
(4) ASIC has all the powers of an owner over property vested in it under
subsection (2).
Note: Section 601AF confers additional powers on ASIC
to fulfil outstanding obligations of the deregistered company.
Company books to be kept by former directors
(5) The directors of the company immediately before deregistration must
keep the company’s books for 3 years after the deregistration. This does
not apply to books that a liquidator has to keep under subsection
542(2).
(1) If property vested in ASIC under subsection 601AD(2) was held by the
company on trust, ASIC may:
(a) continue to act as trustee; or
(b) apply to a court for the appointment of a new trustee.
Note: Under paragraph (a), ASIC may be able to transfer
the property to a new trustee chosen in accordance with the trust
instrument.
(2) If the company did not hold the property on trust, ASIC may:
(a) dispose of or deal with the property as it sees fit; and
(b) apply any money it receives to:
(i) defray expenses incurred by ASIC in exercising its powers in relation
to the company under this Chapter; and
(ii) make payments authorised by subsection (3).
ASIC must deal with the rest (if any) under Part 9.7.
Obligations attaching to property
(3) The property remains subject to all liabilities imposed on the
property under a law and does not have the benefit of any exemption that the
property might otherwise have because it is vested in ASIC. These liabilities
include a liability that:
(a) is a charge or claim on the property; and
(b) arises under a law that imposes rates, taxes or other
charges.
(4) ASIC’s obligation under subsection (3) is limited to
satisfying the liabilities out of the company’s property to the extent
that the property is properly available to satisfy those liabilities.
Accounts
(5) ASIC must keep:
(a) a record of property that it knows is vested in it under this Chapter;
and
(b) a record of its dealings with that property; and
(c) accounts of all money received from those dealings; and
(d) all accounts, vouchers, receipts and papers relating to the property
and that money.
ASIC may do an act on behalf of the company or its liquidator if ASIC is
satisfied that the company or liquidator would be bound to do the act if the
company still existed.
Note: This power is a general one and is not limited to acts
in relation to property vested in ASIC under subsection 601AD(2). ASIC has all
the powers that automatically flow from the vesting of property in ASIC under
that subsection (see subsection 601AD(4)) and may exercise those
powers whether or not the company was bound to do so.
A person may recover from the insurer of a company that is deregistered
an amount that was payable to the company under the insurance contract
if:
(a) the company had a liability to the person; and
(b) the insurance contract covered that liability immediately before
deregistration.
Reinstatement by ASIC
(1) ASIC may reinstate the registration of a company if ASIC is satisfied
that the company should not have been deregistered.
Reinstatement by Court
(2) The Court may make an order that ASIC reinstate the registration of a
company if:
(a) an application for reinstatement is made to the Court by:
(i) a person aggrieved by the deregistration; or
(ii) a former liquidator of the company; and
(b) the Court is satisfied that it is just that the company’s
registration be reinstated.
(3) If the Court makes an order under subsection (2), it
may:
(a) validate anything done between the deregistration of the company and
its reinstatement; and
(b) make any other order it considers appropriate.
Note: For example, the Court may direct ASIC to transfer to
another person property vested in ASIC under subsection
601AD(2).
ASIC to give notice of reinstatement
(4) ASIC must give notice of a reinstatement in the Gazette. If
ASIC exercises its power under subsection (1) in response to an application
by a person, ASIC must also give notice of the reinstatement to the
applicant.
Effect of reinstatement
(5) If a company is reinstated, the company is taken to have continued in
existence as if it had not been deregistered. A person who was a director of the
company immediately before deregistration becomes a director again as from the
time when ASIC or the Court reinstates the company. Any property of the company
that is still vested in ASIC revests in the company. If the company held
particular property subject to a security or other interest or claim, the
company takes the property subject to that interest or claim.
A company may transfer its registration to registration under a law of a
State or Territory by:
(a) passing a special resolution resolving to transfer its registration to
registration under that law; and
(b) complying with sections 601AJ and 601AK.
The company may transfer its registration only if the State or Territory is
the one in which it is taken to be registered.
Note 1: Section 119A tells you which State or Territory
the company is taken to be registered in.
Note 2: In order to be registered under the State or
Territory law, the company may need to amend its constitution, or adopt a new
one, and the provisions of this Act (including the class rights provisions in
Part 2F.2) will apply to the amendment or adoption.
(1) To transfer its registration, a company must lodge an application with
ASIC together with:
(a) a copy of the special resolution that resolves to change the
company’s registration to a registration under the law of the State or
Territory; and
(b) a statement signed by the directors of the company that in their
opinion the company’s creditors are not likely to be materially prejudiced
by the change and sets out their reasons for that opinion.
(2) The application must be in the prescribed form.
ASIC may make a transfer of registration declaration in relation to the
company under this section if ASIC is satisfied that:
(a) the application complies with section 601AJ; and
(b) the company’s creditors are not likely to be materially
prejudiced by the transfer of the company’s registration; and
(c) the law of the State or Territory concerned adequately provides
for:
(i) the continuation of the company’s legal personality after the
transfer; and
(ii) the preservation of any rights or claims against the company (other
than the right of a member as a member) that accrued while the company was
registered under this Act.
(1) ASIC must deregister the company if:
(a) ASIC makes a transfer of registration declaration in relation to the
company; and
(b) the company is registered under the law of the State or
Territory.
Note: Despite the deregistration, officers of the company
may still be liable for things done before the company was
deregistered.
(2) Sections 601AD, 601AE, 601AF and 601AG do not apply to the
deregistration of a company under this section.
(1) A body corporate that is not a company or corporation sole may be
registered under this Act as a company of one of the following types:
(a) a proprietary company limited by shares;
(b) an unlimited proprietary company with share capital;
(c) a public company limited by shares;
(d) a company limited by guarantee;
(e) an unlimited public company with share capital;
(f) a no liability company.
(2) A body corporate may be registered as a no liability company only
if:
(a) the body has a share capital; and
(b) the body’s constitution states that its sole objects are mining
purposes; and
(c) under the constitution the body has no contractual right to recover
calls made on its shares from a member who fails to pay them.
Note: Section 9 defines mining
purposes and minerals.
(1) The body must have no more than 50 non-employee shareholders if it is
to be registered as a proprietary company under this Part.
(2) In applying subsection (1):
(a) count joint holders of a particular parcel of shares as
1 person;
and
(b) an employee shareholder is:
(i) a shareholder who is an employee of the body or of a subsidiary of the
body; or
(ii) a shareholder who was an employee of the body, or of a subsidiary of
the body, when they became a shareholder.
(1) To register the body as a company under this Part, a person must lodge
an application with ASIC.
Note 1: For the types of companies that can be registered
under this Part, see section 601BA.
Note 2: A name may be reserved for a company to be
registered under this Part before the application is lodged (see
Part 2B.6).
(2) The application must state the following:
(a) the type of company that the body is proposed to be registered as
under this Act;
(b) the name of the body;
(c) if the body is a registered body—its ARBN;
(d) the proposed name under which the body is to be registered (unless the
ACN is to be used);
(e) the name and address of each member of the body;
(f) the present given and family name, all former given and family names
and the date and place of birth of each person who consents in writing to become
a director;
(g) the present given and family name, all former given and family names
and the date and place of birth of each person who consents in writing to become
a company secretary;
(h) the address of each person who consents in writing to become a
director or company secretary;
(i) the address of the body’s proposed registered office;
(j) for a body proposed to be registered as a public company—the
proposed opening hours of its registered office (if they are not the standard
opening hours);
(k) the address of the body’s proposed principal place of business
(if it is not the address of the proposed registered office);
(l) for a body proposed to be registered as a company limited by shares or
an unlimited company—the following:
(i) the number and class of shares each member already holds or has
agreed, in writing, to take up;
(ii) the amount each member has already paid or agreed, in writing, to pay
for each share;
(iii) the amount unpaid on each share;
(m) for a body proposed to be registered as a public company, if shares
have been issued for non-cash consideration—the prescribed particulars
about the issue of the shares, unless the shares were issued under a written
contract and a copy of the contract is lodged with the application;
(n) for a body proposed to be registered as a company limited by
guarantee—the amount of the guarantee that each member has agreed to in
writing;
(o) the State or Territory in this jurisdiction in which the company is to
be taken to be registered.
Note 1: Paragraph (h)—the address that must be
stated is usually the residential address, although an alternative address can
sometimes be stated instead (see section 205D).
Note 2: Paragraph (i)—if the body when it is
registered under this Part is not to be the occupier of premises at the address
of its registered office, the application must state that the occupier has
consented to the address being specified in the application and has not
withdrawn that consent (see section 100).
(3) If the body is proposed to be registered as a public company, the
application must be accompanied by a copy of each document (including an
agreement or consent) or resolution that is necessary to ascertain the rights
attached to issued or unissued shares of the body.
(4) The application must be in the prescribed form.
(5) An applicant must have the consents and agreements referred to in
subsection (2) when the application is lodged. After the body is registered
as a company, the applicant must give the consents and agreements to the
company. The company must keep the consents and agreements.
(6) The following documents must be lodged with the application:
(a) a certified copy of a current certificate of the body’s
incorporation in its place of origin, or of a document that has a similar
effect;
(b) a certified printed copy of the body’s constitution (if
any);
(c) for a body that is not a registered body—the documents required
by subsection 263(3) in relation to existing charges on the property of the
body;
(d) any other documents that are prescribed;
(e) any other documents that ASIC requires by written notice given to the
body.
A document need not be lodged if ASIC already has the document and agrees
not to require its lodgment.
Note: Subsection 263(3) requires documents relating to
charges on the property of the body to be lodged with the
application.
(7) The application must be accompanied by evidence that:
(a) the body is not an externally-administered body corporate;
and
(b) no application to wind up the body has been made to a court (in
Australia or elsewhere) that has not been dealt with; and
(c) no application to approve a compromise or arrangement between the body
and another person has been made to a court (in Australia or elsewhere) that has
not been dealt with.
(8) The application must be accompanied by evidence that under the law of
the body’s place of origin:
(a) the body’s type is the same or substantially the same as the
proposed type specified in the application; and
(b) if the members of the body have limited liability—the
body’s constitution defines how and to what extent that liability is
limited; and
(d) the transfer of the body’s incorporation is authorised;
and
(e) the body has complied with the requirements (if any) of that law for
the transfer of its incorporation; and
(f) if those requirements do not include consent to the transfer by the
members of the body—the members:
(i) have consented to the transfer by a resolution that has been passed at
a meeting by at least 75% of the votes cast by members entitled to vote on the
resolution; and
(ii) were given at least 21 days notice of the meeting and the proposed
resolution.
(9) The evidence lodged in accordance with subsections (7) and (8)
must be satisfactory proof to ASIC of the matters referred to in those
subsections.
Note: Section 1304 requires documents that are not in
English to be translated into English.
Registration
(1) If an application is lodged under section 601BC, ASIC
may:
(a) give the body an ACN; and
(b) register the body as a company of the proposed type specified in the
application; and
(c) issue a certificate that states:
(i) the company’s name; and
(ii) the company’s ACN; and
(iii) the company’s type; and
(iv) that the company is registered as a company under this Act;
and
(v) the State or Territory in which the company is taken to be registered;
and
(vi) the date of registration.
Note: For the evidentiary value of a certificate of
registration, see subsection 1274(7A).
ASIC must keep record of registration
(2) ASIC must keep a record of the registration. Subsections 1274(2) and
(5) apply to the record as if it were a document lodged with ASIC.
The address specified in the application as the body’s proposed
registered office becomes the address of its registered office as a company on
registration.
A company registered under this Part has a name on registration that
is:
(a) an available name; or
(b) the expression “Australian Company Number” followed by the
company’s ACN.
The name must also include the words required by subsection 148(2) or
148(3).
(1) The constitution on registration (if any) of a company registered
under this Part is the constitution lodged with the application.
(2) If any text in a constitution lodged with the application is not in
English, the English translation of that text lodged with the application for
registration is taken to be the relevant text in the constitution on
registration.
(1) A company registered under this Part must modify its constitution
within 3 months after registration to give effect to this Part.
(2) If the constitution specifies amounts of money expressed in foreign
currency, the company must:
(a) fix a single rate of conversion by resolution; and
(b) modify its constitution by special resolution to convert those amounts
into Australian currency using that rate.
The modification must be made within 3 months after registration.
(3) An amendment of a company’s constitution under this section does
not affect the number and class of shares held by each member.
(1) ASIC may give the company a written direction to apply to the Court
within a specified period for an order approving the modified
constitution.
(2) The Court may make an order:
(a) declaring that the company has complied with section 601BH;
or
(b) declaring that the company will comply with section 601BH if it
makes further modifications of its constitution as specified in the
order.
(3) The company must lodge a copy of the order with ASIC within 14 days
after the order is made.
(1) A company registered under this Part must, within 14 days after
registration:
(a) set up the registers required by sections 168 and 271;
and
(b) include in those registers the information that is required to be
included in those registers and that is available to the company on
registration; and
(c) set up the minute books required by section 251A.
(2) During the 14 days the company need not comply with a person’s
request to inspect or obtain a copy of:
(a) information in a register; or
(b) a minute of a general meeting.
However, the period within which the company must comply with the request
begins at the end of the 14 days.
(1) If a registered body becomes registered as a company under this Part,
it ceases to be a registered body. ASIC must remove the body’s name from
the appropriate register kept for the purposes of Division 1 or 2 of
Part 5B.2.
(2) ASIC may keep any of the documents relating to the company that were
lodged because the company used to be a registered body.
(1) Registration under this Part does not:
(a) create a new legal entity; or
(b) affect the body’s existing property, rights or obligations
(except as against the members of the body in their capacity as members);
or
(c) render defective any legal proceedings by or against the body or its
members.
(2) This Part and sections 263, 266 and 276 set out special
provisions for companies registered under this Part.
A person who stopped being a member of the body before it was registered
as a company under this Part is to be treated as a past member of the company in
applying Division 2 of Part 5.6 to a winding up of the company.
However, the person’s liability to contribute to the company’s
property is further limited by this section to an amount sufficient for the
following:
(a) payment of debts and liabilities contracted by the company before the
day on which the company was registered under this Part;
(b) payment of the costs, charges and expenses of winding up the company,
so far as those costs, charges and expenses relate to those debts and
liabilities;
(c) the adjustment of the rights between the contributories, so far as the
adjustment relates to those debts and liabilities.
(1) A bearer of a bearer share in a company registered under this Part may
surrender the share to the company. The company must:
(a) cancel the share; and
(b) include the bearer’s name in the company’s register of
members.
(2) The company is liable to compensate anyone who suffers a loss because
the company includes the bearer’s name in the company’s register of
members despite the fact that:
(a) the share was not surrendered to the company; or
(b) the company failed to cancel the share.
(3) Subject to this section, the constitution of a company registered
under this Part may provide that the bearer of a bearer share in the company is
taken to be a member of the company for all purposes or for specified
purposes.
Note: A body must not issue bearer shares after it is
registered as a company under this Part (see paragraph
254F(a)).
(1) This section applies in relation to a company registered under this
Part for the purpose of interpreting and applying after registration:
(a) a contract entered into before the registration; or
(b) a trust deed or other document executed before the
registration.
(2) A reference to the par value of a share is taken to be a reference to
the par value of the share immediately before the registration, or the par value
that the share would have had if it had been issued then.
(3) A reference to a right to a return of capital on a share is taken to
be a reference to a right to a return of capital of a value equal to the amount
paid before the registration in respect of the share’s par value, or the
par value that the share would have had if it had been issued then.
(4) A reference to the aggregate par value of the company’s issued
share capital is taken to be a reference to that aggregate as it existed
immediately before the registration.
Despite subsection 250N(1), a public company registered under this Part
must hold its first AGM after registration in the calendar year of its
registration.
The regulations may modify the operation of this Part in relation to a
company registered under this Part.
A registrable Australian body must not carry on business in a State or
Territory in this jurisdiction unless:
(a) that State or Territory is its place of origin; or
(b) it has its head office or principal place of business in that State or
Territory; or
(c) it is registered under this Division; or
(d) it has applied to be so registered and the application has not been
dealt with.
Subject to this Part, where a registrable Australian body lodges an
application for registration under this Division that is in the prescribed form
and is accompanied by:
(a) a certified copy of a current certificate of its incorporation or
registration in its place of origin, or a document of similar effect;
and
(b) a certified copy of its constitution; and
(c) a list of its directors containing personal details of those directors
that are equivalent to the personal details of directors referred to in
subsection 242(2); and
(d) in relation to each existing charge on property of the body that would
be a registrable charge within the meaning of Chapter 2K if the body were a
registered Australian body, the documents that subsection 263(3) requires to be
lodged; and
(e) notice of the address of:
(i) if it has in its place of origin a registered office for the purposes
of a law (other than this Act) there in force—that office; or
(ii) otherwise—its principal place of business in its place of
origin; and
(f) notice of the address of its registered office under
section 601CT;
ASIC must:
(g) grant the application and register the body under this Division by
entering the body’s name in a register kept for the purposes of this
Division; and
(h) allot to the body an ARBN distinct from the ARBN or ACN of each body
corporate (other than the body) already registered as a company or registered
body under this Act.
(1) Within 7 days after ceasing to carry on business interstate, a
registered Australian body must lodge written notice that it has so
ceased.
(1A) For the purposes of this section, a body carries on business
interstate if, and only if, the body carries on business at a place that
is in this jurisdiction and outside the body’s place of origin.
(2) Where ASIC has reasonable cause to believe that a registered
Australian body does not carry on business interstate, ASIC may send to the body
in the prescribed manner a letter to that effect and stating that, if no answer
showing cause to the contrary is received within one month from the date of the
letter, a notice will be published in the Gazette with a view to striking
the body’s name off the register.
(3) Unless ASIC receives, within one month after the date of the letter,
an answer to the effect that the body is still carrying on business interstate,
it may publish in the Gazette, and send to the body in the prescribed
manner, a notice that, at the end of 3 months after the date of the notice, the
body’s name will, unless cause to the contrary is shown, be struck off the
register.
(4) At the end of the period specified in a notice sent under
subsection (3), ASIC may, unless cause to the contrary has been shown,
strike the body’s name off the register and must publish in the Gazette
notice of the striking off.
(5) Nothing in subsection (4) affects the power of the Court to wind
up a body whose name has been struck off the register.
(6) Where a body’s name is struck off the register under
subsection (4), the body ceases to be registered under this
Division.
(7) If ASIC is satisfied that a body’s name was struck off the
register as a result of an error on ASIC’s part, ASIC may restore the
body’s name to the register, and thereupon the body’s name is taken
never to have been struck off and the body is taken never to have ceased to be
registered under this Division.
(8) A person who is aggrieved by a body’s name having been struck
off the register may, within 15 years after the striking off, apply to the Court
for the body’s name to be restored to the register.
(9) If, on an application under subsection (8), the Court is
satisfied that:
(a) at the time of the striking off, the body was carrying on business
interstate; or
(b) it is otherwise just for the body’s name to be restored to the
register;
the Court may, by order:
(c) direct the body’s name to be restored to the register;
and
(d) give such directions, and make such provisions, as it thinks just for
placing the body and all other persons in the same position, as nearly as
practicable, as if the body’s name had never been struck off.
(10) On the lodging of an office copy of an order under
subsection (9), the body’s name is taken never to have been struck
off.
(11) Where a body’s name is restored to the register under
subsection (7) or (9), ASIC must cause notice of that fact to be published
in the Gazette.
(12) Where a body ceases to be registered under this Division, an
obligation to lodge a document that this Act imposes on the body by virtue of
the doing of an act or thing, or the occurrence of an event, at or before the
time when the body so ceased, being an obligation not discharged at or before
that time, continues to apply in relation to the body even if the period
prescribed for lodging the document has not ended at or before that
time.
(13) Where a registered Australian body commences to be wound up, or is
dissolved or deregistered, in its place of origin, the Court must, on
application by the person who is the liquidator for the body’s place of
origin, or by ASIC, appoint a liquidator of the body.
(14) A liquidator of a registered Australian body who is appointed by the
Court:
(a) must, before any distribution of the body’s property is made, by
advertisement in a daily newspaper circulating generally in each State or
Territory where the body carried on business at any time during the 6 years
before the liquidation, invite all creditors to make their claims against the
body within a reasonable time before the distribution; and
(b) must not, without obtaining an order of the Court, pay out a creditor
of the body to the exclusion of another creditor of the body; and
(c) must, unless the Court otherwise orders, recover and realise the
property of the body that is located:
(i) in this jurisdiction; and
(ii) outside the body’s place of origin;
and must pay the net amount so recovered and realised to the liquidator
of the body for its place of origin.
(15) If a registered Australian body has been wound up so far as its
property located:
(a) in this jurisdiction; and
(b) outside its place of origin;
is concerned and there is no liquidator for its place of origin, the
liquidator may apply to the Court for directions about the disposal of the net
amount recovered under subsection (14).
(1) A foreign company must not carry on business in this jurisdiction
unless:
(a) it is registered under this Division; or
(b) it has applied to be so registered and the application has not been
dealt with.
(2) For the purposes of this Division, a foreign company carries on
business in this jurisdiction if it:
(a) offers debentures in this jurisdiction; or
(b) is a guarantor body for debentures offered in this
jurisdiction;
and Part 2L.1 applies to the debentures.
Subject to this Part, where a foreign company lodges an application for
registration under this Division that is in the prescribed form and is
accompanied by:
(a) a certified copy of a current certificate of its incorporation or
registration in its place of origin, or a document of similar effect;
and
(b) a certified copy of its constitution; and
(c) a list of its directors containing personal details of those directors
that are equivalent to the personal details of directors referred to in
subsection 205B(3); and
(d) if that list includes directors who are:
(i) resident in Australia; and
(ii) members of a local board of directors;
a memorandum that is duly executed by or on behalf of the foreign company
and states the powers of those directors; and
(e) in relation to each existing charge on property of the foreign company
that would be a registrable charge within the meaning of Chapter 2K if the
foreign company were a registered foreign company, the documents that subsection
263(3) requires to be lodged; and
(f) notice of the address of:
(i) if it has in its place of origin a registered office for the purposes
of a law there in force—that office; or
(ii) otherwise—its principal place of business in its place of
origin; and
(g) notice of the address of its registered office under
section 601CT;
ASIC must:
(h) grant the application and register the foreign company under this
Division by entering the foreign company’s name in a register kept for the
purposes of this Division; and
(j) allot to the foreign company an ARBN distinct from the ARBN or ACN of
each body corporate (other than the foreign company) already registered as a
company or registered body under this Act.
(1) A foreign company may at any time appoint a person as a local
agent.
(2) ASIC must not register a foreign company under this Division unless
the foreign company has at least one local agent in relation to whom the foreign
company has complied with section 601CG.
(3) Where:
(a) because a person ceased on a particular day to be a local agent of the
foreign company, a registered foreign company has no local agent; and
(b) the foreign company carries on business, or has a place of business,
in this jurisdiction;
the foreign company must, within 21 days after that day, appoint a person
as a local agent.
(1) A foreign company that lodges a memorandum of appointment, or a power
of attorney, that is duly executed by or on behalf of the foreign company and
states the name and address of a person who is:
(a) a natural person or a company; and
(b) resident in this jurisdiction; and
(c) authorised to accept on the foreign company’s behalf service of
process and notices;
is taken to appoint that person as a local agent.
(2) Where a memorandum of appointment, or a power of attorney, lodged
under subsection (1) is executed on the foreign company’s behalf, the
foreign company must, unless it has already done so, lodge a copy, verified in
writing in the prescribed form to be a true copy, of the document authorising
the execution.
(3) A copy lodged under subsection (2) is taken for all purposes to
be the original of the document.
(4) A foreign company that appoints a local agent must lodge a written
statement that is in the prescribed form and is made by the local
agent.
(5) A person whom a foreign company appoints as a local agent is a local
agent of the foreign company until the person:
(a) ceases by virtue of section 601CH to be such a local agent;
or
(b) dies or ceases to exist.
(1) Where a person is a local agent of a foreign company, the foreign
company or the person may lodge a written notice stating that the person’s
appointment as a local agent has terminated, or will terminate, on a specified
day.
(2) Where a notice is lodged under subsection (1), the person ceases
to be a local agent of the foreign company at the end of:
(a) the period of 21 days beginning on the day of lodgment; or
(b) the day specified in the notice;
whichever is the later.
A local agent of a registered foreign company:
(a) is answerable for the doing of all acts, matters and things that the
foreign company is required by or under this Act to do; and
(b) is personally liable to a penalty imposed on the foreign company for a
contravention of this Act if the court or tribunal hearing the matter is
satisfied that the local agent should be so liable.
(1) Subject to this section, a registered foreign company must, at least
once in every calendar year and at intervals of not more than 15 months, lodge a
copy of its balance-sheet made up to the end of its last financial year, a copy
of its cash flow statement for its last financial year and a copy of its profit
and loss statement for its last financial year, in such form and containing such
particulars and including copies of such documents as the company is required to
prepare by the law for the time being applicable to that company in its place of
origin, together with a statement in writing in the prescribed form verifying
that the copies are true copies of the documents so required.
(2) ASIC may extend the period within which subsection (1) requires a
balance-sheet, profit and loss statement, cash flow statement or other document
to be lodged.
(3) ASIC may, if it is of the opinion that the balance-sheet, the profit
and loss statement and the other documents referred to in subsection (1) do
not sufficiently disclose the company’s financial position:
(a) require the company to lodge a balance-sheet; or
(b) require the company to lodge an audited balance-sheet; or
(ba) require the company to lodge a cash flow statement; or
(bb) require the company to lodge an audited cash flow statement;
or
(c) require the company to lodge a profit and loss statement; or
(d) require the company to lodge an audited profit and loss
statement;
within such period, in such form, containing such particulars and including
such documents as ASIC by notice in writing to the company requires, but this
subsection does not authorise ASIC to require a balance-sheet or a profit and
loss statement to contain any particulars or include any documents that would
not be required to be given if the company were a public company within the
meaning of this Act.
(4) The registered foreign company must comply with the requirements set
out in the notice.
(5) Where a registered foreign company is not required by the law of the
place of its incorporation or formation to prepare a balance-sheet, the company
must prepare and lodge a balance-sheet, or, if ASIC so requires, an audited
balance-sheet, within such period, in such form and containing such particulars
and including such documents as the company would have been required to prepare
if the company were a public company incorporated under this Act.
(5A) If a registered foreign company is not required by the law of the
place of its incorporation or formation to prepare a cash flow statement, the
company must prepare and lodge a cash flow statement, or, if ASIC so requires,
an audited cash flow statement, within the period, in the form, containing the
particulars and including the documents that the company would have been
required to prepare if the company were a public company registered under this
Act.
(6) Where a registered foreign company is not required by the law of its
place of origin to prepare a profit and loss statement, the company must prepare
and lodge a profit and loss statement or, if ASIC so requires, an audited profit
and loss statement, within such period, in such form, containing such
particulars and including such documents as the company would have been required
to prepare if the company were a public company incorporated under this
Act.
(7) ASIC may, by Gazette notice, declare that this section does not
apply to specified foreign companies.
(8) Subsections (1) to (6), inclusive, do not apply in relation to a
foreign company in relation to which a notice is in force under
subsection (7).
(9) A registered foreign company in relation to which a notice is in force
under subsection (7) must, at least once in every calendar year, lodge with
ASIC a return in the prescribed form made up to the date of its annual general
meeting.
(10) The return must be lodged within 1 month after the date to which it
is made up, or within such further period as ASIC, in special circumstances,
allows.
(1) Within 7 days after ceasing to carry on business in this jurisdiction,
a registered foreign company must lodge written notice that it has so
ceased.
(2) Where ASIC receives notice from a local agent of a registered foreign
company that the foreign company has been dissolved or deregistered, ASIC must
remove the foreign company’s name from the register.
(3) Where ASIC has reasonable cause to believe that a registered foreign
company does not carry on business in this jurisdiction, ASIC may send to the
foreign company in the prescribed manner a letter to that effect and stating
that, if no answer showing cause to the contrary is received within one month
from the date of the letter, a notice will be published in the Gazette
with a view to striking the foreign company’s name off the
register.
(4) Unless ASIC receives, within one month after the date of the letter,
an answer to the effect that the foreign company is still carrying on business
in this jurisdiction, it may publish in the Gazette, and send to the
foreign company in the prescribed manner, a notice that, at the end of 3 months
after the date of the notice, the foreign company’s name will, unless
cause to the contrary is shown, be struck off the register.
(5) At the end of the period specified in a notice sent under
subsection (4), ASIC may, unless cause to the contrary has been shown,
strike the foreign company’s name off the register and must publish in the
Gazette notice of the striking off.
(6) Nothing in subsection (5) affects the power of the Court to wind
up a foreign company whose name has been struck off the register.
(7) Where a foreign company’s name is struck off the register under
subsection (5), the foreign company ceases to be registered under this
Division.
(8) If ASIC is satisfied that a foreign company’s name was struck
off the register as a result of an error on ASIC’s part, ASIC may restore
the foreign company’s name to the register, and thereupon the foreign
company’s name is taken never to have been struck off and the foreign
company is taken never to have ceased to be registered under this
Division.
(9) A person who is aggrieved by a foreign company’s name having
been struck off the register may, within 15 years after the striking off, apply
to the Court for the foreign company’s name to be restored to the
register.
(10) If, on an application under subsection (9), the Court is
satisfied that:
(a) at the time of the striking off, the foreign company was carrying on
business in this jurisdiction; or
(b) it is otherwise just for the foreign company’s name to be
restored to the register;
the Court may, by order:
(c) direct the foreign company’s name to be restored to the
register; and
(d) give such directions, and make such provision, as it thinks just for
placing the foreign company and all other persons in the same position, as
nearly as practicable, as if the foreign company’s name had never been
struck off.
(11) On the lodging of an office copy of an order under
subsection (10), the foreign company’s name is taken never to have
been struck off.
(12) Where a foreign company’s name is restored to the register
under subsection (8) or (10), ASIC must cause notice of that fact to be
published in the Gazette.
(13) Where a foreign company ceases to be registered under this Division,
an obligation to lodge a document that this Act imposes on the foreign company
by virtue of the doing of an act or thing, or the occurrence of an event, at or
before the time when the foreign company so ceased, being an obligation not
discharged at or before that time, continues to apply in relation to the foreign
company even if the period prescribed for lodging the document has not ended at
or before that time.
(14) Where a registered foreign company commences to be wound up, or is
dissolved or deregistered, in its place of origin:
(a) each person who, on the day when the winding up proceedings began, was
a local agent of the foreign company must, within the period of 1 month after
that day or within that period as extended by ASIC in special circumstances,
lodge or cause to be lodged notice of that fact and, when a liquidator is
appointed, notice of the appointment; and
(b) the Court must, on application by the person who is the liquidator for
the foreign company’s place of origin, or by ASIC, appoint a liquidator of
the foreign company.
(15) A liquidator of a registered foreign company who is appointed by the
Court:
(a) must, before any distribution of the foreign company’s property
is made, by advertisement in a daily newspaper circulating generally in each
State or Territory where the foreign company carried on business at any time
during the 6 years before the liquidation, invite all creditors to make their
claims against the foreign company within a reasonable time before the
distribution; and
(b) must not, without obtaining an order of the Court, pay out a creditor
of the foreign company to the exclusion of another creditor of the foreign
company; and
(c) must, unless the Court otherwise orders, recover and realise the
property of the foreign company in this jurisdiction and must pay the net amount
so recovered and realised to the liquidator of the foreign company for its place
of origin.
(16) Where a registered foreign company has been wound up so far as its
property in this jurisdiction is concerned and there is no liquidator for its
place of origin, the liquidator may apply to the Court for directions about the
disposal of the net amount recovered under subsection (15).
(1) A registered foreign company that has a share capital may cause a
branch register of members to be kept in this jurisdiction.
(2) If a member of a registered foreign company is resident in this
jurisdiction and requests the foreign company in writing to register in a branch
register kept under subsection (1) shares held by the member,
then:
(a) if the foreign company already keeps a register under
subsection (1)—the foreign company must register in that register the
shares held by the member; or
(b) otherwise—the foreign company must, within 1 month after
receiving the request:
(i) keep at its registered office or at some other place in this
jurisdiction a branch register of members; and
(ii) register in that register the shares held by the member.
(3) Subsection (2) does not apply in relation to a foreign company
whose constitution prohibits any invitation to the public to subscribe for, and
any offer to the public to accept subscriptions for, shares in the foreign
company.
(4) Subject to this section, a registered foreign company may discontinue
a register kept under subsection (1) and must, if it does so, transfer all
entries in that register to a register of members kept outside
Australia.
(5) If shares held by a member of a registered foreign company who is
resident in this jurisdiction are registered in a register kept by the foreign
company under subsection (1), the foreign company must not discontinue that
register without that member’s written consent.
(1) This section has effect where a registered foreign company keeps a
register under section 601CM.
(2) The foreign company must keep the register in the same manner as this
Act requires a company to keep its register of members.
(3) Subject to subsection (2), the foreign company must register a
transaction in the register in the same way, and at the same charge, as it would
have registered the transaction in the register of members that the foreign
company keeps in its place of origin.
(4) A transfer of shares in the foreign company that is lodged at the
foreign company’s registered office, or at the place where the register is
kept, is binding on the foreign company.
(5) The Court has the same powers in relation to correction of the
register as it has in relation to correction of a company’s register of
members.
(6) The register is taken to be part of the foreign company’s
register of members.
(7) At the written request of a member who holds shares registered in the
register, the foreign company must remove the shares from the register and
register them in such other register as is specified in the request.
(8) The register is prima facie evidence of matters that this Act requires
or authorises to be entered in the register.
Within 14 days after:
(a) beginning to keep a register under section 601CM; or
(b) changing the place where a register is so kept; or
(c) discontinuing a register under section 601CM;
a registered foreign company must lodge a written notice of that fact
specifying, if paragraph (a) or (b) applies, the address or new address, as
the case may be, where the register is kept.
Where:
(a) a law of the place of origin of a foreign company that corresponds to
section 414, 661A or 664A entitles a person to give notice to another
person that the first-mentioned person wishes to acquire shares in the foreign
company that the other person holds; and
(b) some or all of those shares are registered in a register kept under
section 601CM;
sections 601CM, 601CN and 601CP cease to apply in relation to the
foreign company until the first-mentioned person acquires, or ceases to be
entitled to acquire, the shares so registered.
Subsection 169(2) and sections 173, 174 and 177 apply in relation to
a register kept under section 601CM.
A certificate under the seal of a foreign company specifying shares held
by a member of that company and registered in a register kept under
section 601CM is prima facie evidence of the title of the member to the
shares and of the fact that the shares are registered in the
register.
(1) A registered body must have a registered office in this jurisdiction
to which all communications and notices may be addressed and that must be
open:
(a) if the body has:
(i) lodged a notice under subsection (2); or
(ii) lodged a notice under subsection (2) and a notice or notices
under subsection (4);
for such hours (being not fewer than 3) between 9 am and 5 pm on each
business day as are specified in that notice, or in the later or last of those
notices, as the case may be; or
(b) otherwise—each business day from at least 10 am to 12 noon and
from at least 2 pm to 4 pm;
and at which a representative of the body is present at all times when the
office is open.
(2) A registered body may lodge written notice of the hours (being not
fewer than 3) between 9 am and 5 pm on each business day during which the
body’s registered office is open.
(3) Within 7 days after a change in the situation of its registered
office, a registered body must lodge a written notice of the change and of the
new address of that office.
(4) A registered body that has lodged a notice under subsection (2)
must, within 7 days after a change in the hours during which its registered
office is open, lodge a notice, in the prescribed form, of the change.
(1) On registering a body corporate under Division 1 or 2 or
registering under section 601DH or 601DJ a change in a registered
body’s name, ASIC must issue to the body a certificate, under ASIC’s
common seal and in the prescribed form, of the body’s registration under
that Division.
(2) A certificate under subsection (1) is prima facie evidence of the
matters stated in it.
(1) A registered body must, within 1 month after a change in:
(b) its constitution or any other document lodged in relation to the body;
or
(c) its directors; or
(d) if the body is a foreign company;
(i) the powers of any directors who are resident in Australia and members
of an Australian board of directors of the foreign company; or
(ii) a local agent or local agents; or
(iii) the name or address of a local agent; or
(e) the situation of:
(i) if it has in its place of origin a registered office for the purposes
of a law (other than this Act) there in force—that office; or
(ii) otherwise—its principal place of business in its place of
origin;
lodge a written notice of particulars of the change, together with such
documents (if any) as the regulations require.
(2) ASIC may in special circumstances extend the period within which
subsection (1) requires a notice or document to be lodged.
(1) Subject to subsection (2), this section applies to a registrable
body.
(2) If the registrable body is a registrable Australian body, this section
does not apply to a place at which the body carries on business if the place is
in the body’s place of origin.
(9) Unless the body is an Australian ADI, it must paint or affix and keep
painted or affixed, in a conspicuous position and in letters easily legible, on
the outside of every office and place (including its registered office) that is
in this jurisdiction, at which its business is carried on and that is open and
accessible to the public:
(a) its name and the name of its place of origin; and
(b) if the liability of its members is limited and the last word of its
name is neither the word “Limited” nor the abbreviation
“Ltd.”—notice of the fact that the liability of its members is
limited; and
(c) in the case of its registered office—the expression
“Registered Office”.
(10) If the body is an Australian ADI, it must paint or affix its name,
and must keep its name painted or affixed, in a conspicuous position and in
letters easily legible, on the outside of every office or place (including its
registered office) that is in this jurisdiction, at which its business is
carried on and that is open and accessible to the public.
(1) A document may be served on a registered body:
(a) by leaving it at, or by sending it by post to, the registered office
of the body; or
(b) in the case of a registered foreign company—by leaving it at, or
by sending it by post to, the address of a local agent of the foreign company,
being:
(i) in a case to which subparagraph (ii) does not apply—an
address notice of which has been lodged under subsection 601CG(1); or
(ii) if a notice or notices of a change or alteration in that address has
or have been lodged under subsection 601CV(1)—the address shown in that
last-mentioned notice or the later or latest of those last-mentioned
notices.
(2) For the purposes of subsection (1), the situation of the
registered office of a registered body:
(a) in a case to which neither paragraph (b) nor paragraph (c)
applies—is taken to be the place notice of the address of which has been
lodged under paragraph 601CB(e) or 601CE(g); or
(b) if only one notice of a change in the situation of the registered
office has been lodged with ASIC under subsection 601CT(3)—is, on and
from:
(i) the day that is 7 days after the day on which the notice was lodged;
or
(ii) the day that is specified in the notice as the day from which the
change is to take effect;
whichever is later, taken to be the place the address of which is
specified in the notice; or
(c) if 2 or more notices of a change in the situation of the registered
office have been lodged under subsection 601CT(3)—is, on and
from:
(i) the day that is 7 days after the day on which the later or latest of
those notices was lodged; or
(ii) the day that is specified in the later or latest of those notices as
the day from which the change is to take effect;
whichever is later, taken to be the place the address of which is
specified in the relevant notice;
and is so taken to be that place irrespective of whether the address of a
different place is shown as the address of the registered office of the
registered body in a return or other document (not being a notice under
subsection 601CT(3)) lodged after the notice referred to in paragraph (a)
or (b), or the later or latest of the notices referred to in paragraph (c),
was lodged.
(3) Without limiting the operation of subsection (1), if 2 or more
directors of a registered body reside in Australia or an external Territory, a
document may be served on the body by delivering a copy of the document
personally to each of 2 of those directors.
(3A) Without limiting the operation of subsection (1), a document may
be served on a registered body that is registered as a proprietary company and
has only one director by delivering a copy personally to that
director.
(4) Where a liquidator of a registered body has been appointed, a document
may be served on the body by leaving it at, or by sending it by post to, the
last address of the office of the liquidator notice of which has been
lodged.
(5) Nothing in this section affects the power of the Court to authorise a
document to be served on a registered body in a manner not provided for by this
section.
(6) Subject to subsection 8(4), subsection 8(3) applies in relation to a
reference in this section.
A registered body has power to hold land in this
jurisdiction.
For the purposes of this Division, choses in action (including an
undertaking) that fall into one of the exceptions in paragraphs (a), (b),
(e) and (f) of the definition of debenture in section 9 must
also be entered into the register of debenture holders.
(1) A body that is not a company must set up and maintain a register of
debenture holders if it issues debentures covered by Chapter 2L.
Note 1: Companies have to keep a register of debenture
holders under sections 168 and 171.
Note 2: The register may be kept on computer (see
section 1306).
(2) The register must contain the following information about each
debenture holder:
(a) their name and address;
(b) the amount of the debentures held.
(3) A body’s failure to comply with this section in relation to a
debenture does not affect the debenture itself.
(1) The register must be kept at:
(a) the body’s registered office; or
(b) the body’s principal place of business in this jurisdiction;
or
(c) a place in this jurisdiction (whether of the body or of someone else)
where the work involved in maintaining the register is done; or
(d) another place approved by ASIC.
(2) The body must lodge with ASIC a notice of the address at which the
register is kept within 7 days after the register is:
(a) established at an office that is neither the body’s registered
office nor at its principal place of business; or
(b) moved from one office to another.
Notice is not required for moving the register between the registered
office and an office at the principal place of business.
Sections 173 to 177 apply to a register kept under this Division as
if it were kept under Chapter 2C.
Note: Sections 173 to 177 deal with rights to inspect
the register and get copies, the obligations of agents who maintain the
register, correction of the register, the evidential value of the register and
the use of information on the register.
(1) A person may lodge an application in the prescribed form with ASIC to
reserve a name for a registrable Australian body or a foreign company. If the
name is available, ASIC must reserve it.
Note: For available names, see
section 601DC.
(2) The reservation lasts for 2 months from the date when the application
was lodged. An applicant may ask ASIC in writing for an extension of the
reservation during a period that the name is reserved, and ASIC may extend the
reservation for 2 months.
(3) ASIC must cancel a reservation if the applicant asks ASIC in writing
to do so.
(1) The abbreviations set out in the following table may be
used:
(a) instead of words that this Act requires to be part of a registrable
Australian body’s or foreign company’s name or to be included in a
document; and
(b) instead of words that are part of a registrable Australian
body’s or foreign company’s name; and
(c) with or without full stops.
|
Acceptable abbreviations |
|
[operative table] |
|
|---|---|---|---|
|
|
Word |
Abbreviation |
|
|
1 |
Company |
Co or Coy |
|
|
2 |
Proprietary |
Pty |
|
|
3 |
Limited |
Ltd |
|
|
4 |
Australian |
Aust |
|
|
5 |
Number |
No |
|
|
6 |
and |
& |
|
|
7 |
Australian Registered Body Number |
ARBN |
|
|
8 |
Registered |
Regd |
|
(2) If a registrable Australian body’s or foreign company’s
name includes any of these abbreviations, the word corresponding to the
abbreviation may be used instead.
Name is available unless identical or unacceptable
(1) A name is available to a registrable Australian body or a foreign
company unless the name is:
(a) identical (under rules set out in the regulations) to a name that is
reserved or registered under this Act for another body; or
(b) identical (under rules set out in the regulations) to a name that is
included on the national business names register in respect of another
individual or body who is not the person applying to have the name; or
(c) unacceptable for registration under the regulations.
Minister may consent to a name being available
(2) The Minister may consent in writing to a name being available to a
registrable Australian body or foreign company even if the name is:
(a) identical to a name that is reserved or registered under this
Act for another body; or
(b) unacceptable for registration under the regulations.
(3) The Minister’s consent may be given subject to
conditions.
Note: If the body or company breaches a condition, ASIC may
direct it to change its name under section 601DJ.
(4) The regulations may specify that a particular unacceptable name is
available to a registrable Australian body or foreign company if:
(a) a specified public authority, or an instrumentality or agency of the
Crown in right of the Commonwealth, a State or an internal Territory has
consented to the body or company using or assuming the name; or
(b) the body or company is otherwise permitted to use or assume the name
by or under a specified provision of an Act of the Commonwealth, a State or an
internal Territory.
The consent of the authority, instrumentality or agency may be given
subject to conditions.
Note: If the consent is withdrawn, the body or company
ceases to be permitted or it breaches a condition, ASIC may direct it to change
its name under section 601DJ.
(1) A registered Australian body or registered foreign company must not
carry on business under a name in this jurisdiction unless subsection (2)
or (3) authorises the body or company to use the name.
(2) The body or company may use the name if the company or body is
registered under that name under Part 5B.2.
(3) A registered Australian body may use a name in the State or Territory
that is its place of origin if the use of that name is authorised by a law of
that State or Territory that deals with business names.
Requirements for bodies that are not Australian ADIs
(1) Subject to sections 601DF and 601DG, a registered Australian body
or registered foreign company must set out the following on all its public
documents and negotiable instruments published or signed in this
jurisdiction:
(a) its name;
(b) the expression “Australian Registered Body Number”
followed by its ARBN;
(c) its place of origin;
(d) if the liability of its members is limited and this is not
apparent from its name—notice of the limited liability of its
members.
Paragraphs (c) and (d) do not apply to an Australian ADI.
Where information to be set out
(2) Subject to sections 601DF and 601DG, the information required by
paragraph (1)(b) must be set out with the company’s or body’s
name, or 1 of the references to its name in the document or instrument. If the
name appears on 2 or more pages of the document or instrument, this must be done
on the first of those pages.
A registered Australian body or a registered foreign company does not
have to set out the expression “Australian Registered Body Number”
followed by its ARBN on a receipt (for example, a cash register receipt) that
sets out information recorded in the machine that produced the
receipt.
The regulations may exempt a specified registered Australian body or
registered foreign company, or a class of those bodies or companies, from the
requirement in paragraphs 601DE(1)(b), (c) and (d) to set out information on its
public documents and negotiable instruments. The exemption may relate to
specified documents or instruments, or a class of documents or
instruments.
(1) A registered Australian body or a registered foreign company must give
ASIC written notice of a change to its name within 14 days after the date the
change occurred.
(2) If the proposed name is available, ASIC must alter the details of the
body’s or foreign company’s registration to reflect the change. For
the purposes of this Act (other than subsection (1)), the change of name
takes effect when ASIC alters the details of the body’s or foreign
company’s registration.
Note 1: For the reservation of names, see
section 601DA.
Note 2: For available names, see
section 601DC.
Note 3: ASIC must issue a new certificate reflecting the
name change (see section 601CU).
(1) ASIC may direct a registered Australian body or registered foreign
company in writing to change the name under which the body or company is
registered within 2 months if:
(a) the name should not have been registered; or
(b) the body or company has breached a condition under subsection 601DC(3)
on the availability of the name; or
(c) a consent given under subsection 601DC(4) to use or assume the name
has been withdrawn; or
(d) the body or company has breached a condition on a consent given under
subsection 601DC(4); or
(e) the body or company ceases to be permitted to use or assume the name
(as referred to in paragraph 601DC(4)(b)).
(2) The body or company must comply with the direction within 2 months
after being given it by doing everything necessary to change its name for the
purposes of this Act under section 601DH.
(3) If the body or company does not comply with subsection (2), ASIC
may change the body’s or company’s name to a name that includes its
ARBN by altering the details of the body’s or company’s registration
to reflect the change.
(4) For the purposes of this Act, a change of name under
subsection (3) takes effect when ASIC alters the details of the
body’s or foreign company’s registration.
Note: ASIC must issue a new certificate reflecting the name
change (see section 601CU).
(1) To register a managed investment scheme, a person must lodge an
application with ASIC.
(2) The application must state:
(a) the name, and the address of the registered office, of the proposed
responsible entity; and
(b) the name and address of a person who has consented to be the auditor
of the compliance plan.
(3) The applicant must have the consent referred to in
paragraph (2)(b) when the application is lodged. After the scheme is
registered, the applicant must give the consent to the responsible entity. The
responsible entity must keep the consent.
(4) The following must be lodged with the application:
(a) a copy of the scheme’s constitution;
(b) a copy of the scheme’s compliance plan;
(c) a statement signed by the directors of the proposed responsible entity
that:
(i) the scheme’s constitution complies with sections 601GA and
601GB; and
(ii) the scheme’s compliance plan complies with
section 601HA.
Note: Section 601HC requires that the copy of the
compliance plan be signed by the directors of the responsible
entity.
(1) ASIC must register the scheme within 14 days of lodgment of the
application, unless it appears to ASIC that:
(c) the application does not comply with section 601EA; or
(d) the proposed responsible entity does not meet the requirements of
section 601FA; or
(e) the scheme’s constitution does not meet the requirements of
sections 601GA and 601GB; or
(f) the scheme’s compliance plan does not meet the requirements of
section 601HA; or
(g) the copy of the compliance plan lodged with the application is not
signed as required by section 601HC; or
(h) arrangements are not in place that will satisfy the requirements of
section 601HG in relation to audit of compliance with the plan.
(2) If ASIC registers the scheme, ASIC must give it an ARSN.
(3) ASIC must keep a record of the registration of the scheme.
(4) For the purpose of determining whether subsection (1) is
satisfied in relation to the scheme:
(a) references in Parts 5C.3, 5C.4 and 5C.5 to a registered scheme
are taken to include a reference to the scheme; and
(b) references in those Parts to the responsible entity of a registered
scheme are taken to include a reference to the proposed responsible entity of
the scheme.
After a managed investment scheme is registered, the scheme’s ARSN
must appear on all documents relating to the scheme that are lodged with
ASIC.
(1) Subject to subsection (2), a managed investment scheme must be
registered under section 601EB if:
(a) it has more than 20 members; or
(b) it was promoted by a person, or an associate of a person, who was,
when the scheme was promoted, in the business of promoting managed investment
schemes; or
(c) a determination under subsection (3) is in force in relation to
the scheme and the total number of members of all of the schemes to which the
determination relates exceeds 20.
(2) A managed investment scheme does not have to be registered if all the
issues of interests in the scheme that have been made did not need disclosure to
investors under Part 6D.2 (see sections 706 and 708) when they were
made.
(3) ASIC may, in writing, determine that a number of managed investment
schemes are closely related and that each of them has to be registered at any
time when the total number of members of all of the schemes exceeds 20. ASIC
must give written notice of the determination to the operator of each of the
schemes.
(4) For the purpose of this section, when working out how many members a
scheme has:
(a) joint holders of an interest in the scheme count as a single member;
and
(b) an interest in the scheme held on trust for a beneficiary is taken to
be held by the beneficiary (rather than the trustee) if:
(i) the beneficiary is presently entitled to a share of the trust estate
or of the income of the trust estate; or
(ii) the beneficiary is, individually or together with other
beneficiaries, in a position to control the trustee.
(5) A person must not operate in this jurisdiction a managed investment
scheme that this section requires to be registered under section 601EB
unless the scheme is so registered.
(6) For the purpose of subsection (5), a person is not operating a
scheme merely because:
(a) they are acting as an agent or employee of another person;
or
(b) they are taking steps to wind up the scheme or remedy a defect that
led to the scheme being deregistered.
(7) A person who would otherwise contravene subsection (5) because an
interest in a scheme is held in trust for 2 or more beneficiaries (see
paragraph (4)(b)) does not contravene that subsection if they prove that
they did not know, and had no reason to suspect, that the interest was held in
that way.
(1) If a person operates a managed investment scheme in contravention of
subsection 601ED(5), the following may apply to the Court to have the scheme
wound up:
(a) ASIC;
(b) the person operating the scheme;
(c) a member of the scheme.
(2) The Court may make any orders it considers appropriate for the winding
up of the scheme.
The responsible entity of a registered scheme must be a public company
that holds a dealers licence authorising it to operate a managed investment
scheme.
(1) The responsible entity of a registered scheme is to operate the scheme
and perform the functions conferred on it by the scheme’s constitution and
this Act.
(2) The responsible entity has power to appoint an agent, or otherwise
engage a person, to do anything that it is authorised to do in connection with
the scheme. For the purpose of determining whether:
(a) there is a liability to the members; or
(b) the responsible entity has properly performed its duties for the
purposes of subsection 601GA(2);
the responsible entity is taken to have done (or failed to do) anything
that the agent or person has done (or failed to do) because of the appointment
or engagement, even if they were acting fraudulently or outside the scope of
their authority or engagement.
Note: A scheme’s constitution may provide for the
responsible entity to be indemnified for liabilities¾see subsection 601GA(2).
(3) An agent appointed, or a person otherwise engaged, by:
(a) the agent or person referred to in subsection (2); or
(b) a person who is taken under this subsection to be an agent of the
responsible entity;
to do anything that the responsible entity is authorised to do in
connection with the scheme is taken to be an agent appointed by the responsible
entity to do that thing for the purposes of subsection (2).
(4) If:
(a) an agent holds scheme property on behalf of the responsible entity;
and
(b) the agent is liable to indemnify the responsible entity against any
loss or damage that:
(i) the responsible entity suffers as a result of a wrongful or negligent
act or omission of the agent; and
(ii) relates to a failure by the responsible entity to perform its duties
in relation to the scheme;
any amount recovered under the indemnity forms part of the scheme
property.
(1) In exercising its powers and carrying out its duties, the responsible
entity of a registered scheme must:
(a) act honestly; and
(b) exercise the degree of care and diligence that a reasonable person
would exercise if they were in the responsible entity’s position;
and
(c) act in the best interests of the members and, if there is a conflict
between the members’ interests and its own interests, give priority to the
members’ interests; and
(d) treat the members who hold interests of the same class equally and
members who hold interests of different classes fairly; and
(e) not make use of information acquired through being the responsible
entity in order to:
(i) gain an improper advantage for itself or another person; or
(ii) cause detriment to the members of the scheme; and
(f) ensure that the scheme’s constitution meets the requirements of
sections 601GA and 601GB; and
(g) ensure that the scheme’s compliance plan meets the requirements
of section 601HA; and
(h) comply with the scheme’s compliance plan; and
(i) ensure that scheme property is:
(i) clearly identified as scheme property; and
(ii) held separately from property of the responsible entity and property
of any other scheme; and
(j) ensure that the scheme property is valued at regular intervals
appropriate to the nature of the property; and
(k) ensure that all payments out of the scheme property are made in
accordance with the scheme’s constitution and this Act; and
(l) report to ASIC any breach of this Act that:
(i) relates to the scheme; and
(ii) has had, or is likely to have, a materially adverse effect on the
interests of members;
as soon as practicable after it becomes aware of the breach;
and
(m) carry out or comply with any other duty, not inconsistent with this
Act, that is conferred on the responsible entity by the scheme’s
constitution.
Note: Subsection (1) is a civil penalty provision as
defined by section 1317DA and Part 9.4B provides for civil and
criminal consequences of contravening it.
(2) The responsible entity holds scheme property on trust for scheme
members.
Note: Under subsection 601FB(2), the responsible entity may
appoint an agent to hold scheme property separately from other
property.
(3) A duty of the responsible entity under subsection (1) or (2)
overrides any conflicting duty an officer or employee of the responsible entity
has under Part 2D.1.
Investment of scheme property in other managed investment
schemes
(4) The responsible entity may only invest scheme property, or keep scheme
property invested, in another managed investment scheme if that other scheme is
registered under this Chapter.
(1) An officer of the responsible entity of a registered scheme
must:
(a) act honestly; and
(b) exercise the degree of care and diligence that a reasonable person
would exercise if they were in the officer’s position; and
(c) act in the best interests of the members and, if there is a conflict
between the members’ interests and the interests of the responsible
entity, give priority to the members’ interests; and
(d) not make use of information acquired through being an officer of the
responsible entity in order to:
(i) gain an improper advantage for the officer or another person;
or
(ii) cause detriment to the members of the scheme; and
(e) not make improper use of their position as an officer to gain,
directly or indirectly, an advantage for themselves or for any other person or
to cause detriment to the members of the scheme; and
(f) take all steps that a reasonable person would take, if they were in
the officer’s position, to ensure that the responsible entity complies
with:
(i) this Act; and
(ii) any conditions imposed on the responsible entity’s dealers
licence; and
(iii) the scheme’s constitution; and
(iv) the scheme’s compliance plan.
Note: Subsection (1) is a civil penalty provision as
defined in section 1317DA and Part 9.4B provides for civil and
criminal consequences of contravening it.
(2) A duty of an officer of the responsible entity under
subsection (1) overrides any conflicting duty the officer has under
Part 2D.1.
(1) An employee of the responsible entity of a registered scheme must
not:
(a) make use of information acquired through being an employee of the
responsible entity in order to:
(i) gain an improper advantage for the employee or another person;
or
(ii) cause detriment to members of the scheme; or
(b) make improper use of their position as an employee to gain, directly
or indirectly, an advantage for themselves or for any other person or to cause
detriment to the members of the scheme.
Note: Subsection (1) is a civil penalty provision as
defined in section 1317DA and Part 9.4B provides for civil and
criminal consequences of contravening it.
(2) A duty of an employee of the responsible entity under
subsection (1) overrides any conflicting duty the employee has under
Part 2D.1.
(1) ASIC may, from time to time, check whether the responsible entity of a
registered scheme is complying with the scheme’s constitution and
compliance plan and with this Act.
Note: For this purpose ASIC may exercise the powers set out
in Division 3 of Part 3 of the ASIC Act.
(2) The responsible entity and its officers must take all reasonable steps
to assist ASIC in carrying out a check under subsection (1).
The responsible entity of a registered scheme may acquire and hold an
interest in the scheme, but it must only do so:
(a) for not less than the consideration that would be payable if the
interest were acquired by another person; and
(b) subject to terms and conditions that would not disadvantage other
members.
Note 1: If the responsible entity holds an interest in the
scheme, it does so subject to section 253E (certain members cannot vote or
be counted).
Note 2: This section is a civil penalty provision as defined
in section 1317DA and Part 9.4B provides for civil and criminal
consequences of contravening it.
If the company that is a registered scheme’s responsible entity is
being wound up, is under administration or has executed a deed of company
arrangement that has not terminated:
(a) a provision of the scheme’s constitution, or of another
instrument, is void against the liquidator, or the administrator of the company
or the deed, if it purports to deny the company a right to be indemnified out of
the scheme property that the company would have had if it were not being wound
up, were not under administration, or had not executed a deed of company
arrangement; and
(b) a right of the company to be indemnified out of the scheme property
may only be exercised by the liquidator or the administrator of the company or
the deed.
(1) Despite anything in this Division, the company named in ASIC’s
record of registration as the responsible entity or temporary responsible entity
of a registered scheme remains the scheme’s responsible entity until the
record is altered to name another company as the scheme’s responsible
entity or temporary responsible entity.
(2) A purported change of the scheme’s responsible entity is
ineffective unless it is in accordance with this Division.
A company cannot be chosen or appointed as the responsible entity or
temporary responsible entity of a registered scheme unless it meets the
requirements of section 601FA.
(1) If the responsible entity of a registered scheme wants to retire, it
must call a members’ meeting to explain its reason for wanting to retire
and to enable the members to vote on a resolution to choose a company to be the
new responsible entity. The resolution must be an extraordinary resolution if
the scheme is not listed.
(2) If the members choose a company to be the new responsible entity and
that company has consented, in writing, to becoming the scheme’s
responsible entity:
(a) as soon as practicable and in any event within 2 business days after
the resolution is passed, the current responsible entity must lodge a notice
with ASIC asking it to alter the record of the scheme’s registration to
name the chosen company as the scheme’s responsible entity; and
(b) if the current responsible entity does not lodge the notice required
by paragraph (a), the company chosen by the members to be the new
responsible entity may lodge that notice; and
(c) ASIC must comply with the notice when it is lodged.
(3) If the members do not choose a company to be the new responsible
entity, or the company they choose does not consent to becoming the
scheme’s responsible entity, the current responsible entity may apply to
the Court for appointment of a temporary responsible entity under
section 601FP.
(4) A person must not lodge a notice under subsection (2) unless the
consent referred to in that subsection has been given before the notice is
lodged.
(1) If members of a registered scheme want to remove the responsible
entity, they may take action under Division 1 of Part 2G.4 for the
calling of a members’ meeting to consider and vote on a resolution that
the current responsible entity should be removed and a resolution choosing a
company to be the new responsible entity. The resolutions must be extraordinary
resolutions if the scheme is not listed.
(2) If the members vote to remove the responsible entity and, at the same
meeting, choose a company to be the new responsible entity that consents, in
writing, to becoming the scheme’s responsible entity:
(a) as soon as practicable and in any event within 2 business days after
the resolution is passed, the current responsible entity must lodge a notice
with ASIC asking it to alter the record of the scheme’s registration to
name the chosen company as the scheme’s responsible entity; and
(b) if the current responsible entity does not lodge the notice required
by paragraph (a), the company chosen by the members to be the new
responsible entity may lodge that notice; and
(c) ASIC must comply with the notice when it is lodged.
(3) A person must not lodge a notice under subsection (2) unless the
consent referred to in that subsection has been given before the notice is
lodged.
Note: If the members vote to remove the responsible entity
but do not, at the same meeting, choose a company to be the new responsible
entity, or the company they choose does not consent to becoming the
scheme’s responsible entity, the scheme must be wound up (see
section 601NE).
ASIC or a member of the registered scheme may apply to the Court for the
appointment of a temporary responsible entity of the scheme under
section 601FP if the scheme does not have a responsible entity that meets
the requirements of section 601FA.
(1) On application under section 601FL or 601FN, the Court may, by
order, appoint a company as the temporary responsible entity of a registered
scheme if the Court is satisfied that the appointment is in the interest of the
members.
(2) The Court may make any further orders that it considers
necessary.
(3) If the application was made by the current responsible entity, it
must, as soon as practicable after the Court’s order appointing the
temporary responsible entity, lodge a notice with ASIC informing ASIC of the
appointment made by the Court.
(4) As soon as practicable after the appointment, ASIC must alter the
record of the scheme’s registration to name the appointed company as the
scheme’s temporary responsible entity.
(1) The temporary responsible entity of a registered scheme must call a
members’ meeting for the purpose of the members, by resolution, choosing a
company to be the new responsible entity. The resolution must be an
extraordinary resolution if the scheme is not listed. The temporary responsible
entity must call the meeting as soon as practicable and, in any event, within 3
months of becoming the temporary responsible entity.
(2) Within that 3 months, the temporary responsible entity may call
further members’ meetings for the purpose of choosing a company to be the
new responsible entity. Before the end of the 3 months, it may apply to the
Court for an extension of that period. If the Court grants the extension, the
temporary responsible entity may, within the extended period, call further
members’ meetings for the purpose of choosing a company to be the new
responsible entity.
(3) Provided it still meets the requirements in section 601FA,
nothing prevents the company that is the temporary responsible entity from being
chosen as the new responsible entity.
(4) If the members choose a company to be the new responsible entity and
that company has consented, in writing, to becoming the scheme’s
responsible entity, the temporary responsible entity must, as soon as
practicable, lodge a notice with ASIC asking it to alter the record of the
scheme’s registration to name the chosen company as the scheme’s
responsible entity. ASIC must comply with the notice when it is
lodged.
(5) The temporary responsible entity must apply to the Court for an order
directing it to wind up the scheme, and the Court may make the order,
if:
(a) no meeting is called within the 3 months or extended period for the
purpose of choosing a new company to be the responsible entity; or
(b) the meeting or meetings called within that period for that purpose
have not resulted in the members choosing a company to be the new responsible
entity that consents to becoming the scheme’s responsible
entity.
ASIC or a member of the scheme may apply for the order if the temporary
responsible entity does not do so.
(6) The temporary responsible entity must not lodge a notice under
subsection (4) unless the consent referred to in that subsection has been
given before the notice is lodged.
If the responsible entity of a registered scheme changes, the former
responsible entity must:
(a) as soon as practicable give the new responsible entity any books in
the former responsible entity’s possession or control that this Act
requires to be kept in relation to the scheme; and
(b) give other reasonable assistance to the new responsible entity to
facilitate the change of responsible entity.
(1) If the responsible entity of a registered scheme changes, the rights,
obligations and liabilities of the former responsible entity in relation to the
scheme become rights, obligations and liabilities of the new responsible
entity.
(2) Despite subsection (1), the following rights and liabilities
remain rights and liabilities of the former responsible entity:
(a) any right of the former responsible entity to be paid fees for the
performance of its functions before it ceased to be the responsible entity;
and
(b) any right of the former responsible entity to be indemnified for
expenses it incurred before it ceased to be the responsible entity;
and
(c) any right, obligation or liability that the former responsible entity
had as a member of the scheme; and
(d) any liability for which the former responsible entity could not have
been indemnified out of the scheme property if it had remained the
scheme’s responsible entity.
(1) If the responsible entity of a registered scheme changes, a
document:
(a) to which the former responsible entity is a party, in which a
reference is made to the former responsible entity, or under which the former
responsible entity has acquired or incurred a right, obligation or liability, or
might have acquired or incurred a right, obligation or liability if it had
remained the responsible entity; and
(b) that is capable of having effect after the change;
has effect as if the new responsible entity (and not the former responsible
entity) were a party to it, were referred to in it or had or might have acquired
or incurred the right, obligation or liability under it.
(2) Subsection (1) does not apply to a right, obligation or liability
that remains a right, obligation or liability of the former responsible entity
because of subsection 601FS(2).
(1) The constitution of a registered scheme must make adequate provision
for:
(a) the consideration that is to be paid to acquire an interest in the
scheme; and
(b) the powers of the responsible entity in relation to making investments
of, or otherwise dealing with, scheme property; and
(c) the method by which complaints made by members in relation to the
scheme are to be dealt with; and
(d) winding up the scheme.
(2) If the responsible entity is to have any rights to be paid fees out of
scheme property, or to be indemnified out of scheme property for liabilities or
expenses incurred in relation to the performance of its duties, those
rights:
(a) must be specified in the scheme’s constitution; and
(b) must be available only in relation to the proper performance of those
duties;
and any other agreement or arrangement has no effect to the extent that it
purports to confer such a right.
(3) If the responsible entity is to have any powers to borrow or raise
money for the purposes of the scheme:
(a) those powers must be specified in the scheme’s constitution;
and
(b) any other agreement or arrangement has no effect to the extent that it
purports to confer such a power.
(4) If members are to have a right to withdraw from the scheme, the
scheme’s constitution must:
(a) specify the right; and
(b) if the right may be exercised while the scheme is liquid (as defined
in section 601KA)¾set out adequate
procedures for making and dealing with withdrawal requests; and
(c) if the right may be exercised while the scheme is not liquid (as
defined in section 601KA)¾provide for the
right to be exercised in accordance with Part 5C.6 and set out any other
adequate procedures (consistent with that Part) that are to apply to making and
dealing with withdrawal requests.
The right to withdraw, and any provisions in the constitution setting out
procedures for making and dealing with withdrawal requests, must be fair to all
members.
The constitution of a registered scheme must be contained in a document
that is legally enforceable as between the members and the responsible
entity.
(1) The constitution of a registered scheme may be modified, or repealed
and replaced with a new constitution:
(a) by special resolution of the members of the scheme; or
(b) by the responsible entity if the responsible entity reasonably
considers the change will not adversely affect members’ rights.
(2) The responsible entity must lodge with ASIC a copy of the modification
or the new constitution. The modification, or repeal and replacement, cannot
take effect until the copy has been lodged.
(3) The responsible entity must lodge with ASIC a consolidated copy of the
scheme’s constitution if ASIC directs it to do so.
(4) The responsible entity must send a copy of the scheme’s
constitution to a member of the scheme within 7 days if the member:
(a) asks the responsible entity, in writing, for the copy; and
(b) pays any fee (up to the prescribed amount) required by the responsible
entity.
(1) The compliance plan of a registered scheme must set out adequate
measures that the responsible entity is to apply in operating the scheme to
ensure compliance with this Act and the scheme’s constitution, including
the arrangements for:
(a) ensuring that all scheme property is clearly identified as scheme
property and held separately from property of the responsible entity and
property of any other scheme (see paragraph 601FC(1)(i)); and
(b) if the scheme is required to have a compliance committee (see
section 601JA)¾ensuring that the compliance
committee functions properly, including adequate arrangements relating
to:
(i) the membership of the committee; and
(ii) how often committee meetings are to be held; and
(iii) the committee’s reports and recommendations to the responsible
entity; and
(iv) the committee’s access to the scheme’s accounting records
and to the auditor of the scheme’s financial statements; and
(v) the committee’s access to information that is relevant to the
responsible entity’s compliance with this Act; and
(c) ensuring that the scheme property is valued at regular intervals
appropriate to the nature of the property; and
(d) ensuring that compliance with the plan is audited as required by
section 601HG; and
(e) ensuring adequate records of the scheme’s operations are kept;
and
(f) any other matter prescribed by the regulations.
(2) If:
(a) a registration application is made as a result of a resolution passed
under subparagraph 1457(1)(a)(i); and
(b) the resolution included a direction under subsection
1457(1A);
the compliance plan lodged with the application must provide for scheme
property to be held by a person other than the responsible entity, or a person
that is not related to the responsible entity, as the responsible entity’s
agent.
(1) The responsible entity of a registered scheme may lodge with ASIC a
compliance plan for the scheme that is expressed to incorporate specified
provisions, as in force at a specified time, of a compliance plan of another
registered scheme of which it is also the responsible entity.
(2) The specified provisions, as in force at the specified time, are taken
to be included in the plan.
The copy of a scheme’s compliance plan that is lodged with ASIC
must be signed by all the directors of the responsible entity.
ASIC may direct the responsible entity of a registered scheme to give it
information about the arrangements contained in the compliance plan. The
direction is to be given by notice in writing to the responsible
entity.
Responsible entity’s powers
(1) The responsible entity of a registered scheme may modify the
scheme’s compliance plan or repeal it and replace it with a new compliance
plan.
ASIC may require modifications
(2) ASIC may direct the responsible entity of a registered scheme to
modify the scheme’s compliance plan, as set out in the direction, to
ensure that the plan is consistent with section 601HA. The direction is to
be given by notice in writing to the responsible entity.
Lodgment of modification or new plan
(3) The responsible entity must lodge with ASIC a copy of a modification
of the scheme’s compliance plan or of a new compliance plan within 14 days
after the modification is made or the old plan is repealed. The copy must be
signed by all the directors of the responsible entity.
(1) ASIC may direct the responsible entity of a registered scheme to lodge
a consolidated copy of the scheme’s compliance plan.
(2) The consolidation must set out:
(a) the plan as modified to the time of lodgment; and
(b) if required by ASIC’s direction—the full text of
provisions taken to be included in the plan by subsection 601HB(2).
(1) The responsible entity of a registered scheme must ensure that at all
times a registered company auditor is engaged to audit compliance with the
scheme’s compliance plan in accordance with this section. This auditor is
referred to as the auditor of the compliance plan.
(2) A person is not eligible to act as the auditor of the compliance plan
if the person is:
(a) an associate of the responsible entity; or
(b) an agent holding scheme property on behalf of the responsible entity
or an associate of an agent of that kind; or
(c) the auditor of the responsible entity’s financial
statements.
The auditor of the compliance plan and the auditor of the responsible
entity’s financial statements may, however, work for the same firm of
auditors.
(3) Within 3 months after the end of a financial year of the scheme, the
auditor of the compliance plan must:
(a) examine the scheme’s compliance plan; and
(b) carry out:
(i) if the scheme has only had one responsible entity during the financial
year¾an audit of the responsible entity’s
compliance with the compliance plan during the financial year; or
(ii) if the scheme has had more than one responsible entity during the
financial year¾an audit of each responsible
entity’s compliance with the compliance plan during that part of the
financial year when it was the scheme’s responsible entity; and
(c) give to the scheme’s current responsible entity a report that
states whether, in the auditor’s opinion:
(i) the responsible entity, or each responsible entity, complied with the
scheme’s compliance plan during the financial year or that part of the
financial year when it was the scheme’s responsible entity; and
(ii) the plan continues to meet the requirements of this Part.
(4) The auditor of the compliance plan must, as soon as possible, notify
ASIC in writing if the auditor:
(a) has reasonable grounds to suspect that a contravention of this Act has
occurred; and
(b) believes that the contravention has not been or will not be adequately
dealt with by commenting on it in the auditor’s report under
subsection (3) or bringing it to the attention of the responsible
entity.
(5) The auditor of the compliance plan:
(a) has a right of access at all reasonable times to the books of the
scheme; and
(b) may require an officer of the responsible entity to give the auditor
information and explanations for the purposes of the audit.
(6) An officer of the responsible entity must:
(a) allow the auditor of the compliance plan to have access to the books
of the scheme; and
(b) give the auditor information or an explanation required under
subsection (5); and
(c) otherwise assist the conduct of the audit.
(7) The responsible entity must lodge the auditor’s report under
subsection (3) with ASIC at the same time as the financial statements and
reports in respect of the scheme are to be lodged with ASIC (see
sections 292 and 321).
(8) The auditor of the compliance plan has qualified privilege in respect
of:
(a) a statement made in a report under subsection (3); or
(b) a notification to ASIC under subsection (4).
(9) This section does not prevent the responsible entity from arranging
for the auditor of the compliance plan to carry out audits in addition to those
required by this section.
Removal of auditor by responsible entity
(1) The responsible entity:
(a) must remove the auditor of the compliance plan if the auditor becomes
ineligible under subsection 601HG(2) to act as auditor of the compliance plan;
and
(b) may, with ASIC’s consent, remove the auditor of the compliance
plan.
Resignation of auditor
(2) The auditor of the compliance plan may resign by written notice to the
responsible entity if:
(a) the auditor:
(i) applies to ASIC in writing for its consent to the resignation;
and
(ii) gives the responsible entity written notice of the application at or
about the same time as applying to ASIC; and
(b) ASIC consents to the resignation.
(3) As soon as practicable after receiving the application, ASIC must
notify the auditor and the responsible entity whether it consents to the
resignation.
(4) A statement by the auditor in the application or in answer to an
inquiry by ASIC relating to the reasons for the application:
(a) is not admissible in evidence in any civil or criminal proceedings
against the auditor (other than proceedings for a contravention of
section 1308); and
(b) may not be made the ground of a prosecution (other than a prosecution
for a contravention of section 1308), action or suit against the
auditor.
A certificate by ASIC that the statement was made in the application, or in
answer to an inquiry by ASIC, is conclusive evidence that the statement was so
made.
(5) The auditor’s resignation takes effect on the later
of:
(a) the day (if any) specified in the notice of resignation; or
(b) the day ASIC consents to the resignation; or
(c) the day (if any) fixed by ASIC for the purpose.
If the auditor of the compliance plan of a registered scheme changes, the
responsible entity must, as soon as practicable after the change and in writing,
ask ASIC to alter the record of the scheme’s registration to show the name
of the new auditor as the auditor of the scheme’s compliance plan. ASIC
must comply with the request if the change complies with this Act.
(1) The responsible entity of a registered scheme must establish a
compliance committee if less than half of the directors of the responsible
entity are external directors.
(2) A director of the responsible entity is an external director if
they:
(a) are not, and have not been in the previous 2 years, an employee of the
responsible entity or a related body corporate; and
(b) are not, and have not been in the previous 2 years, an executive
officer of a related body corporate; and
(c) are not, and have not been in the previous 2 years, substantially
involved in business dealings, or in a professional capacity, with the
responsible entity or a related body corporate; and
(d) are not a member of a partnership that is, or has been in the previous
2 years, substantially involved in business dealings, or in a professional
capacity, with the responsible entity or a related body corporate; and
(e) do not have a material interest in the responsible entity or a related
body corporate; and
(f) are not a relative or de facto spouse of a person who has a material
interest in the responsible entity or a related body corporate.
(3) The responsible entity must establish the compliance committee within
14 days after it is required to do so by subsection (1) or within any
longer period that ASIC has agreed to in writing.
(4) In agreeing to a longer period under subsection (3), ASIC may
impose conditions to be complied with and the responsible entity must comply
with them.
(1) A scheme’s compliance committee must have at least 3 members,
and a majority of them must be external members.
(2) A member of the compliance committee is an external member if
they:
(a) are not, and have not been in the previous 2 years, a non-external
director, an executive officer or an employee of the responsible entity or a
related body corporate; and
(b) are not, and have not been in the previous 2 years, substantially
involved in business dealings, or in a professional capacity, with the
responsible entity or a related body corporate; and
(c) are not a member of a partnership that is, or has been in the previous
2 years, substantially involved in business dealings, or in a professional
capacity, with the responsible entity or a related body corporate; and
(d) do not have a material interest in the responsible entity or a related
body corporate; and
(e) are not a relative or de facto spouse of a person who has a material
interest in the responsible entity or a related body corporate.
(3) For the purposes of paragraph (2)(a), a person who is a director
of a related body corporate, but not of the responsible entity itself, is an
external director of the related body corporate if they would have been an
external director of the responsible entity under subsection 601JA(2) had they
been a director of the responsible entity.
(4) A person who is, or has been, either:
(a) an external director of the responsible entity; or
(b) a member of a compliance committee for the scheme or another
registered managed investment scheme operated by the responsible
entity;
is not, merely because of that directorship or membership, taken to be, or
to have been, substantially involved in business dealings, or in a professional
capacity, with the responsible entity.
(5) If the membership of the scheme’s compliance committee ceases to
satisfy subsection (1), the responsible entity must make appointments to
the committee to satisfy that subsection within 14 days or within any longer
period that ASIC has agreed to in writing.
(6) In agreeing to a longer period under subsection (5), ASIC may
impose conditions to be complied with and the responsible entity must comply
with them.
(1) The functions of a scheme’s compliance committee are:
(a) to monitor to what extent the responsible entity complies with the
scheme’s compliance plan and to report on its findings to the responsible
entity; and
(b) to report to the responsible entity:
(i) any breach of this Act involving the scheme; or
(ii) any breach of the provisions included in the scheme’s
constitution in accordance with section 601GA;
of which the committee becomes aware or that it suspects; and
(c) to report to ASIC if the committee is of the view that the responsible
entity has not taken, or does not propose to take, appropriate action to deal
with a matter reported under paragraph (b); and
(d) to assess at regular intervals whether the compliance plan is
adequate, to report to the responsible entity on the assessment and to make
recommendations to the responsible entity about any changes that it considers
should be made to the plan.
(2) In carrying out its functions, the compliance committee may commission
independent legal, accounting or other professional advice or assistance, at the
reasonable expense of the responsible entity.
(1) A member of a scheme’s compliance committee must:
(a) act honestly; and
(b) exercise the degree of care and diligence that a reasonable person
would exercise if they were in the member’s position; and
(c) not make use of information acquired through being a member of the
committee in order to:
(i) gain an improper advantage for the member or another person;
or
(ii) cause detriment to the members of the scheme; and
(d) not make improper use of their position as a member of the committee
to gain, directly or indirectly, an advantage for themselves or for any other
person or to cause detriment to the members of the scheme.
Note: Subsection (1) is a civil penalty provision as
defined in section 1317DA and Part 9.4B provides for civil and
criminal consequences of contravening it.
(2) A member of the compliance committee is to take all reasonable steps
to assist ASIC in carrying out a check under subsection 601FF(1).
A member of a scheme’s compliance committee has qualified privilege
in respect of a statement concerning the operation of the scheme made by or on
behalf of the committee, or a member of the committee, to the responsible entity
or to ASIC.
(1) A scheme’s responsible entity or a related body corporate must
not:
(a) indemnify a person who is or has been a member of the scheme’s
compliance committee against a liability incurred by the person as a member;
or
(b) exempt the person from such a liability.
(2) A provision of the scheme’s constitution or a body
corporate’s constitution is void in so far as it provides for the
responsible entity or a related body corporate to do something that
subsection (1) prohibits.
(3) Subsection (1) does not prevent a person from being indemnified
against a liability to another person (other than the responsible entity or a
related body corporate) unless the liability arises out of conduct involving a
lack of good faith.
(4) Subsection (1) does not prevent a person from being indemnified
against a liability for costs and expenses incurred by them:
(a) in defending proceedings, whether civil or criminal, in which judgment
is given in favour of them or in which they are acquitted; or
(b) in connection with an application, in relation to such proceedings, in
which the Court grants relief to them under this Act.
(5) In this section:
indemnify includes indemnify indirectly through one or more
interposed entities.
(1) A scheme’s responsible entity or a related body corporate must
not pay, or agree to pay, a premium in respect of a contract insuring a person
who is or has been a member of the scheme’s compliance committee against a
liability:
(a) incurred by the person as a member; and
(b) arising out of conduct involving a wilful breach of a duty referred to
in section 601JD.
(2) If subsection (1) is contravened, the contract is void in so far
as it insures the person against the liability.
(3) Subsections (1) and (2) do not apply to a liability for costs and
expenses incurred by a person in defending proceedings, whether civil or
criminal and whatever their outcome.
(4) In this section:
pay includes pay indirectly through one or more interposed
entities.
(1) Subject to the requirements of the compliance plan, a scheme’s
compliance committee may regulate its proceedings as it thinks
appropriate.
(2) The committee must keep:
(a) minutes of its meetings; and
(b) records of its reports and recommendations.
(3) A committee meeting may be held using any technology agreed to by all
the members.
(1) A member of a scheme’s compliance committee must disclose to the
committee a direct or indirect pecuniary interest that they have in a matter
being considered, or about to be considered, by the committee if their interest
could conflict with the proper performance of their duties in relation to the
consideration of the matter.
(2) A disclosure under subsection (1) must occur at the first meeting
of the committee after the relevant facts have come to the member’s
knowledge and must be recorded in the minutes of the meeting.
Withdrawal from schemes that are liquid
(1) The constitution of a registered scheme may make provision for members
to withdraw from the scheme, wholly or partly, at any time while the scheme is
liquid (see subsection 601GA(4)).
Withdrawal from schemes that are not liquid
(2) The constitution of a registered scheme may make provision for members
to withdraw from the scheme, wholly or partly, in accordance with this Part
while the scheme is not liquid (see subsection 601GA(4)).
Restrictions on withdrawal from schemes
(3) The responsible entity must not allow a member to withdraw from the
scheme:
(a) if the scheme is liquid¾otherwise than
in accordance with the scheme’s constitution; or
(b) if the scheme is not liquid¾otherwise
than in accordance with the scheme’s constitution and sections 601KB
to 601KE.
Liquid schemes
(4) A registered scheme is liquid if liquid assets account for at least
80% of the value of scheme property.
Liquid assets
(5) The following are liquid assets unless it is proved that the
responsible entity cannot reasonably expect to realise them within the period
specified in the constitution for satisfying withdrawal requests while the
scheme is liquid:
(a) money in an account or on deposit with a bank;
(b) bank accepted bills;
(c) marketable securities (as defined in section 9);
(d) property of a prescribed kind.
(6) Any other property is a liquid asset if the responsible entity
reasonably expects that the property can be realised for its market value within
the period specified in the constitution for satisfying withdrawal requests
while the scheme is liquid.
(1) The responsible entity of a registered scheme that is not liquid may
offer members an opportunity to withdraw, wholly or partly, from the scheme to
the extent that particular assets are available and able to be converted to
money in time to satisfy withdrawal requests that members may make in response
to the offer.
(2) The withdrawal offer must be in writing and be made:
(a) if the constitution specifies procedures for making the offer—in
accordance with those procedures; or
(b) otherwise—by giving a copy of the offer to all members of the
scheme or to all members of a particular class.
(3) The withdrawal offer must specify:
(a) the period during which the offer will remain open (this period must
last for at least 21 days after the offer is made); and
(b) the assets that will be used to satisfy withdrawal requests;
and
(c) the amount of money that is expected to be available when those assets
are converted to money; and
(d) the method for dealing with withdrawal requests if the money available
is insufficient to satisfy all requests.
The method specified under paragraph (d) must comply with
section 601KD.
(4) For joint members, a copy of the withdrawal offer need only be given
to the joint member named first in the register of members.
(5) As soon as practicable after making the withdrawal offer, the
responsible entity must lodge a copy of the offer with ASIC.
Only one withdrawal offer may be open at any time in relation to a
particular interest in a registered scheme that is not liquid.
The responsible entity of a registered scheme that is not liquid must
ensure that withdrawal requests made in response to a withdrawal offer are
satisfied within 21 days after the offer closes. No request made under the
withdrawal offer may be satisfied while the offer is still open. If an
insufficient amount of money is available from the assets specified in the offer
to satisfy all requests, the requests are to be satisfied proportionately in
accordance with the formula:
(1) The responsible entity of a registered scheme that is not
liquid:
(a) may cancel a withdrawal offer before it closes if the offer contains a
material error; or
(b) must cancel a withdrawal offer before it closes if it is in the best
interests of members to do so.
(2) The cancellation must be made:
(a) if the constitution specifies procedures for cancelling the withdrawal
offer¾in accordance with those procedures;
or
(b) otherwise¾by notice in writing to the
members to whom the withdrawal offer was made.
(3) The responsible entity must lodge written notice of the cancellation
with ASIC.
Chapter 2E applies to a registered scheme with the modifications set
out in sections 601LB to 601LE and as if:
(a) references to a public company were instead references to the
responsible entity of the scheme; and
(b) references to a benefit being given to or received by a related party
of a public company were instead references to a benefit being given to or
received by the responsible entity or a related party; and
(c) references to a resolution of a public company were instead references
to a resolution of the members of the scheme; and
(d) references to a general meeting were instead references to a
members’ meeting of the scheme; and
(e) references to members of a public company were instead references to
members of the scheme; and
(f) references to the company’s best interests were instead
references to the best interests of the scheme’s members.
Chapter 2E applies as if section 207 were replaced by the
following section:
207 Purpose
The rules in this Chapter, as they apply to a registered scheme, are
designed to protect the interests of the scheme’s members as a whole, by
requiring member approval for giving financial benefits to the responsible
entity or its related parties that come out of scheme property or that could
endanger those interests.
Chapter 2E applies as if section 208 were replaced by the
following section:
208 Need for member approval for financial benefit
(1) If all the following conditions are satisfied in relation to a
financial benefit:
(a) the benefit is given by:
(i) the responsible entity of a registered scheme; or
(ii) an entity that the responsible entity controls; or
(iii) an agent of, or person engaged by, the responsible entity
(b) the benefit either:
(i) is given out of the scheme property; or
(ii) could endanger the scheme property
(c) the benefit is given to:
(i) the person or a related party; or
(ii) another person referred to in paragraph (a) or a related party
of that person;
then, for the person referred to in paragraph (a) to give the benefit,
either:
(d) the person referred to in paragraph (a) must:
(i) obtain the approval of the scheme’s members in the way set out
in sections 217 to 227; and
(ii) give the benefit within 15 months after the approval; or
(e) the giving of the benefit must fall within an exception set out in
sections 210 to 216.
Note: Section 228 defines related party,
section 191 defines entity, section 191 defines
control and section 229 affects the meaning of giving a
financial benefit.
(2) If:
(a) the giving of the benefit is required by a contract; and
(b) the making of the contract was approved in accordance with
subparagraph (1)(d)(i) as a financial benefit given to the entity or
related party; and
(c) the contract was made:
(i) within 15 months after that approval; or
(ii) before that approval, if the contract was conditional on the approval
being obtained;
member approval for the giving of the benefit is taken to have been given
and the benefit need not be given within the 15 months.
(3) Subsection (1) does not prevent the responsible entity from
paying itself fees, and exercising rights to an indemnity, as provided for in
the scheme’s constitution under subsection 601GA(2).
Chapter 2E applies as if sections 213, 214 and 224 were
omitted.
Note: Instead of section 224, the rule in
section 253E will apply.
Chapter 2E applies as if subsection 225(1) were amended by omitting
“subsection 224(1)” and substituting
“section 253E”.
(1) A member of a registered scheme who suffers loss or damage because of
conduct of the scheme’s responsible entity that contravenes a provision of
this Chapter may recover the amount of the loss or damage by action against the
responsible entity whether or not the responsible entity has been convicted of
an offence, or has had a civil penalty order made against it, in respect of the
contravention.
(2) An action under subsection (1) must be begun within 6 years after
the cause of action arises.
(3) This section does not affect any liability that a person has under
other provisions of this Act or under other laws.
(1) If:
(a) a managed investment scheme is being operated in contravention of
subsection 601ED(5) and a person (the offeror) offers an interest
in the scheme for subscription, or issues an invitation to subscribe for an
interest in the scheme; or
(b) a person (the offeror), in contravention of
Chapter 6D, offers an interest in a registered scheme for subscription, or
issues an invitation to subscribe for an interest in a registered
scheme;
a contract entered into by a person (other than the offeror) to subscribe
for the interest as a result of the person accepting the offer, or of the
acceptance of an offer made by the person in response to the invitation, is
voidable at the option of that person by notice in writing to the
offeror.
(2) If the person gives a notice under subsection (1), the
obligations of the parties to the contract are suspended:
(a) during the period of 21 days after the notice is given; and
(b) during the period beginning when an application is made under
subsection (4) in relation to the notice and ending when the application,
and any appeals arising out of it, have been finally determined or otherwise
disposed of.
(3) Subject to subsection (6), the notice takes effect to void the
contract:
(a) at the end of 21 days after the notice is given; or
(b) if, within that 21 days, the offeror applies under
subsection (4)¾at the end of the period
when the obligations of the parties are suspended under
paragraph (2)(b).
(4) Within 21 days after the notice is given, the offeror may apply to the
Court for an order declaring the notice to have had no effect.
(5) The Court may extend the period within which the offeror may apply
under subsection (4), even if the notice has taken effect.
(6) On application under subsection (4), the Court may declare the
notice to have had no effect if it is satisfied that, in all the circumstances,
it is just and equitable to make the declaration.
The constitution of a registered scheme may provide that the scheme is to
be wound up:
(a) at a specified time; or
(b) in specified circumstances or on the happening of a specified
event;
but a provision of the constitution that purports to provide that the
scheme is to be wound up if a particular company ceases to be its responsible
entity is of no effect (including for the purposes of paragraph
601NE(1)(a)).
If members of a registered scheme want the scheme to be wound up, they
may take action under Division 1 of Part 2G.4 for the calling of a
members’ meeting to consider and vote on an extraordinary resolution
directing the responsible entity to wind up the scheme.
(1) If the responsible entity of a registered scheme considers that the
purpose of the scheme:
(a) has been accomplished; or
(b) cannot be accomplished;
it may, in accordance with this section, take steps to wind up the
scheme.
(2) The responsible entity must give to the members of the scheme and to
ASIC a notice in writing:
(a) explaining the proposal to wind up the scheme, including explaining
how the scheme’s purpose has been accomplished or why that purpose cannot
be accomplished; and
(b) informing the members of their rights to take action under
Division 1 of Part 2G.4 for the calling of a members’ meeting to
consider the proposed winding up of the scheme and to vote on any extraordinary
resolution members propose about the winding up of the scheme; and
(c) informing the members that the responsible entity is permitted to wind
up the scheme unless a meeting is called to consider the proposed winding up of
the scheme within 28 days of the responsible entity giving the notice to the
members.
(3) If no meeting is called within that 28 days to consider the proposed
winding up, the responsible entity may wind up the scheme.
(1) The Court may, by order, direct the responsible entity of a registered
scheme to wind up the scheme if:
(a) the Court thinks it is just and equitable to make the order;
or
(b) within 3 months before the application for the order was made,
execution or other process was issued on a judgment, decree or order obtained in
a court (whether an Australian court or not) in favour of a creditor of, and
against, the responsible entity in its capacity as the scheme’s
responsible entity and the execution or process has been returned
unsatisfied.
(2) An order based on paragraph (1)(a) may be made on the application
of:
(a) the responsible entity; or
(b) a director of the responsible entity; or
(c) a member of the scheme; or
(d) ASIC.
(3) An order based on paragraph (1)(b) may be made on the application
of a creditor.
(1) The responsible entity of a registered scheme must ensure that the
scheme is wound up in accordance with its constitution and any orders under
subsection 601NF(2) if:
(a) the scheme’s constitution provides that the scheme is to be
wound up at a specified time, in specified circumstances or on the happening of
a specified event and that time is reached, those circumstances occur or that
event occurs; or
(b) the members pass an extraordinary resolution directing the responsible
entity to wind up the scheme; or
(c) the Court makes an order directing the responsible entity to wind up
the scheme; or
(d) the members pass a resolution removing the responsible entity but do
not, at the same meeting, pass a resolution choosing a company to be the new
responsible entity that consents to becoming the scheme’s responsible
entity.
Note: For the Court’s power to order winding up, see
subsection 601FQ(5) and section 601ND.
(2) The responsible entity of a registered scheme may wind up the scheme
in accordance with its constitution and any orders under subsection 601NF(2) if
the responsible entity is permitted by subsection 601NC(3) to wind up the
scheme.
(3) Interests must not be issued in a registered scheme at a time after
the responsible entity has become obliged to ensure the scheme is wound up, or
after the scheme has started to be wound up.
(1) The Court may, by order, appoint a person to take responsibility for
ensuring a registered scheme is wound up in accordance with its constitution and
any orders under subsection (2) if the Court thinks it necessary to do so
(including for the reason that the responsible entity has ceased to exist or is
not properly discharging its obligations in relation to the winding
up).
(2) The Court may, by order, give directions about how a registered scheme
is to be wound up if the Court thinks it necessary to do so (including for the
reason that the provisions in the scheme’s constitution are inadequate or
impracticable).
(3) An order under subsection (1) or (2) may be made on the
application of:
(a) the responsible entity; or
(b) a director of the responsible entity; or
(c) a member of the scheme; or
(d) ASIC.
If, on completion of the winding up of a registered scheme, the person
who has been winding up the scheme has in their possession or under their
control any unclaimed or undistributed money or other property that was part of
the scheme property, the person must, as soon as practicable, pay the money or
transfer the property to ASIC to be dealt with under
Part 9.7.
Responsible entity may apply for deregistration
(1) The responsible entity of a registered scheme may lodge an application
for deregistration of the scheme with ASIC.
(2) The responsible entity may only apply if:
(a) the scheme:
(i) has 20 or less members (calculated in accordance with subsection
601ED(4)) and all the members agree that the scheme should be deregistered;
and
(ii) is not required to be registered by paragraph 601ED(1)(b) or (c);
or
(b) because of subsection 601ED(2) (exemption based on Chapter 6D not
applying), the scheme is not required to be registered and all the members agree
that the scheme should be deregistered; or
(c) the scheme is not a managed investment scheme.
(3) If ASIC is satisfied that the application complies with
subsections (1) and (2), it must give notice of the proposed
deregistration:
(a) on the national database; and
(b) in the Gazette.
When 2 months have passed since the Gazette notice, ASIC may
deregister the scheme.
(4) ASIC must give notice of the deregistration to the
applicant.
(1) ASIC may decide to deregister a registered scheme if:
(a) the scheme does not have a responsible entity that meets the
requirements of section 601FA; or
(b) the scheme does not have a constitution that meets the requirements of
sections 601GA and 601GB; or
(c) the scheme does not have a compliance plan that meets the requirements
of section 601HA; or
(d) the scheme’s property is not being:
(i) clearly identified as the scheme’s property; and
(ii) held separately from property of the responsible entity and property
of any other scheme;
in accordance with the scheme’s compliance plan; or
(e) the following conditions are satisfied:
(i) the annual return for the scheme is at least 6 months late;
and
(ii) no other documents have been lodged by or on behalf of the scheme in
the last 18 months; and
(iii) ASIC has no reason to believe that the scheme is being operated;
or
(f) the scheme has been wound up.
Deregistration procedure
(2) If ASIC decides to deregister a scheme under this section, it must
give notice of the proposed deregistration:
(a) to the scheme’s responsible entity; and
(b) to any other person who is winding up the scheme; and
(c) on the national database; and
(d) in the Gazette.
If the notice is given under paragraph (1)(a), (b), (c) or (d), the
notice must specify the period at the end of which ASIC proposes to deregister
the scheme.
(3) ASIC may deregister the scheme:
(a) if paragraph (1)(a), (b), (c) or (d) applies—at the end of
the period set out in the Gazette notice; or
(b) if paragraph (1)(e) or (f) applies—when 2 months have
passed since the Gazette notice.
(4) ASIC does not have to give a person notice under subsection (2)
if ASIC does not have the necessary information about the person’s
address.
(5) ASIC must give notice of the deregistration to everyone who was
notified of the proposed deregistration under paragraph (2)(a) or
(b).
(1) ASIC may reinstate the registration of a managed investment scheme if
ASIC is satisfied that the scheme should not have been deregistered or if the
defect that led to the scheme being deregistered has been remedied.
(2) The Court may make an order that ASIC reinstate the registration of a
managed investment scheme if:
(a) an application for reinstatement is made to the Court by:
(i) a person aggrieved by the deregistration; or
(ii) a person who was winding up the scheme; and
(b) the Court is satisfied that it is just that the scheme’s
registration be reinstated.
(3) The Court may give any directions it thinks just for putting the
scheme and other people in the same position, as far as possible, as if the
scheme had not been deregistered.
ASIC to give notice of reinstatement
(4) ASIC must give notice of a reinstatement in the Gazette. If
ASIC exercises its power under subsection (1) in response to an application
by a person, ASIC must also give notice of the reinstatement to the
applicant.
(1) ASIC may:
(a) exempt a person from a provision of this Chapter; or
(b) declare that this Chapter applies to a person as if specified
provisions were omitted, modified or varied as specified in the
declaration.
Without limiting this, ASIC may declare that this Chapter applies to a
person as if section 601HA included a requirement for scheme property to be
held by a person other than the responsible entity as the responsible
entity’s agent.
(2) The exemption or declaration may:
(a) apply to all or specified provisions of this Chapter; and
(b) apply to all persons, specified persons, or a specified class of
persons; and
(c) relate to all securities, specified securities or a specified class of
securities; and
(d) relate to any other matter generally or as specified.
(3) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an exemption applies must
comply with the condition. The Court may order the person to comply with the
condition in a specified way. Only ASIC may apply to the Court for the
order.
(4) The exemption or declaration must be in writing and ASIC must publish
notice of it in the Gazette.
(5) For the purposes of this section, the provisions of this
Chapter include:
(a) regulations made for the purposes of this Chapter; and
(b) definitions in this Act or the regulations as they apply to references
in:
(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) the old Division 11 of Part 11.2 transitionals.
The regulations may modify the operation of this Chapter or any other
provisions of this Act relating to securities in relation to:
(a) a managed investment scheme; or
(b) all managed investment schemes of a specified class.
The purposes of this Chapter are to ensure that:
(a) the acquisition of control over:
(i) the voting shares in a listed company, or an unlisted company with
more than 50 members; or
(ii) the voting shares in a listed body; or
(iii) the voting interests in a listed managed investment
scheme;
takes place in an efficient, competitive and informed market;
and
(b) the holders of the shares or interests, and the directors of the
company or body or the responsible entity for the scheme:
(i) know the identity of any person who proposes to acquire a substantial
interest in the company, body or scheme; and
(ii) have a reasonable time to consider the proposal; and
(iii) are given enough information to enable them to assess the merits of
the proposal; and
(c) as far as practicable, the holders of the relevant class of voting
shares or interests all have a reasonable and equal opportunity to participate
in any benefits accruing to the holders through any proposal under which a
person would acquire a substantial interest in the company, body or scheme;
and
(d) an appropriate procedure is followed as a preliminary to compulsory
acquisition of voting shares or interests or any other kind of securities under
Part 6A.1.
Note 1: To achieve the objectives referred to in
paragraphs (a), (b) and (c), the prohibition in section 606 and the
exceptions to it refer to interests in “voting shares”. To achieve
the objective in paragraph (d), the provisions that deal with the takeover
procedure refer more broadly to interests in
“securities”.
Note 2: Subsection 92(3) defines securities
for the purposes of this Chapter.
This Chapter applies to the acquisition of relevant interests in the
securities of listed bodies that are not companies but are incorporated or
formed in Australia in the same way as it applies to the acquisition of relevant
interests in the securities of companies.
Note: Section 9 defines company and
listed.
(1) This Chapter applies to the acquisition of relevant interests in the
interests in a registered scheme that is also listed as if:
(a) the scheme were a listed company; and
(b) interests in the scheme were shares in the company; and
(c) voting interests in the scheme were voting shares in the company;
and
(d) a meeting of the members of the scheme were a general meeting of the
company; and
(e) the obligations and powers that are imposed or conferred on the
company were imposed or conferred on the responsible entity; and
(f) the directors of the responsible entity were the directors of the
company; and
(g) the appointment of a responsible entity for the scheme were the
election of a director of the company; and
(h) the scheme’s constitution were the company’s
constitution.
Note 1: Paragraph (g): See subsection
610(2).
Note 2: Section 9 defines voting interest
in a managed investment scheme.
(2) The regulations may modify the operation of this Chapter as it applies
in relation to the acquisition of interests in listed managed investment
schemes.
(1) Takeover bids are made for securities within a particular class.
Similarly, compulsory acquisition and buy-out rights operate on securities
within a particular class.
(2) For the purposes of this Chapter and Chapters 6A and 6C,
securities are not taken to be different classes merely because:
(a) some of the securities are fully-paid and others are partly-paid;
or
(b) different amounts are paid up or remain unpaid on the
securities.
Acquisition of relevant interests in voting shares through transaction
entered into by or on behalf of person acquiring relevant interest
(1) A person must not acquire a relevant interest in issued voting shares
in a company if:
(a) the company is:
(i) a listed company; or
(ii) an unlisted company with more than 50 members; and
(b) the person acquiring the interest does so through a transaction in
relation to securities entered into by or on behalf of the person; and
(c) because of the transaction, that person’s or someone
else’s voting power in the company increases:
(i) from 20% or below to more than 20%; or
(ii) from a starting point that is above 20% and below 90%.
However, the person may acquire the relevant interest under one of the
exceptions set out in section 611 without contravening this
subsection.
Note 1: Section 9 defines company as
meaning a company registered under this Act.
Note 2: Section 607 deals with the effect of a
contravention of this section on transactions. Sections 608 and 609 deal
with the meaning of relevant interest.
Section 610 deals with the calculation of a person’s voting power in
a company.
Note 3: If the acquisition of relevant interests in an
unlisted company with 50 or fewer members leads to the acquisition of a relevant
interest in another company that is an unlisted company with more than 50
members, or a listed company, the acquisition is caught by this section because
of its effect on that other company.
Acquisition of legal or equitable interest giving rise to relevant
interest for someone else
(2) A person must not acquire a legal or equitable interest in securities
of a body corporate if, because of the acquisition:
(a) another person acquires a relevant interest in issued voting shares in
a company that is:
(i) a listed company; or
(ii) an unlisted company with more than 50 members; and
(b) someone’s voting power in the company increases:
(i) from 20% or below to more than 20%; or
(ii) from a starting point that is above 20% and below 90%.
However, if the acquisition of the relevant interest is covered by one of
the exceptions set out in section 611, the person may acquire the legal or
equitable interest without contravening this subsection.
50 member threshold
(3) In determining whether the company has more than 50 members for the
purposes of subsection (1) or (2), count joint holders of a particular
parcel of shares as 1 person.
Offers and invitations
(4) A person must not:
(a) make an offer, or cause an offer to be made on their behalf, if the
person would contravene subsection (1) or (2) if the offer were accepted;
or
(b) issue an invitation, or cause an invitation to be issued on their
behalf, if the person would contravene subsection (1) or (2) if:
(i) an offer were made in response to the invitation; and
(ii) the offer were accepted.
Defences
(5) It is a defence to the prosecution of a person for contravening
subsection (1), (2) or (4) if the person proves that they contravened the
subsection:
(a) because of inadvertence or mistake; or
(b) because the person was not aware of a relevant fact or
occurrence.
In determining whether the defence is available, disregard the
person’s ignorance of, or a mistake on the person’s part concerning,
a matter of law.
Extended meaning of acquiring relevant interests—conversions and
increases in voting rights
(6) A person is taken for the purposes of subsection (1) or (2) to
acquire a relevant interest in voting shares in a company if:
(a) securities in which the person already had a relevant interest become
voting shares in the company; or
(b) there is an increase in the number of votes that may be cast on a poll
attached to voting shares that the person already had a relevant interest
in.
The acquisition occurs when the securities become voting shares or the
number of votes increases.
Note: Some examples of cases to which this subsection
applies are:
• A person exercises a right to convert a non-voting
preference share into an ordinary share that carries votes.
• A person pays up partly-paid shares with limited
votes and this leads to an increase in the number of votes attached to the
shares.
A transaction is not invalid merely because it involves a contravention
of section 606.
Basic rule—relevant interest is holding, or controlling voting or
disposal of, securities
(1) A person has a relevant interest in securities if they:
(a) are the holder of the securities; or
(b) have power to exercise, or control the exercise of, a right to vote
attached to the securities; or
(c) have power to dispose of, or control the exercise of a power to
dispose of, the securities.
It does not matter how remote the relevant interest is or how it arises. If
2 or more people can jointly exercise one of these powers, each of them is taken
to have that power.
Extension to control exercisable through a trust, agreement or
practice
(2) In this section, power or control includes:
(a) power or control that is indirect; and
(b) power or control that is, or can be, exercised as a result of, by
means of or by the revocation or breach of:
(i) a trust; or
(ii) an agreement; or
(iii) a practice; or
(iv) any combination of them;
whether or not they are enforceable; and
(c) power or control that is, or can be made, subject to restraint or
restriction.
It does not matter whether the power or control is express or implied,
formal or informal, exercisable alone or jointly with someone else. It does not
matter that the power or control cannot be related to a particular
security.
Extension to relevant interests held through bodies
corporate
(3) A person has the relevant interests in any securities that any of the
following has:
(a) a body corporate, or managed investment scheme, in which the
person’s voting power is above 20%;
(b) a body corporate, or managed investment scheme, that the person
controls.
Paragraph (a) does not apply to a relevant interest that the body
corporate or scheme itself has in the securities merely because of the operation
of that paragraph in relation to another body corporate or managed investment
scheme.
(4) For the purposes of paragraph (3)(b), a person controls a body
corporate if the person has the capacity to determine the outcome of decisions
about the body corporate’s financial and operating policies.
(5) In determining whether a person has this capacity:
(a) the practical influence the person can exert (rather than the rights
they can enforce) is the issue to be addressed; and
(b) any practice or pattern of behaviour affecting the body
corporate’s financial or operating policies is to be taken into account
(even if it involves a breach of an agreement or a breach of trust).
(6) The person does not control the body corporate merely because the
person and an entity that is not an associate jointly have the capacity to
determine the outcome of decisions about the body corporate’s financial
and operating policies.
(7) A person is not taken to control a body corporate merely because of a
capacity they have if they are under a legal obligation to exercise that
capacity for the benefit of:
(a) if the person is an individual—someone else; or
(b) if the person is a body corporate—someone other than its
members.
Extension to control in anticipation of performance of agreements
etc.
(8) If at a particular time all the following conditions are
satisfied:
(a) a person has a relevant interest in issued securities;
(b) the person (whether before or after acquiring the relevant
interest):
(i) has entered or enters into an agreement with another person with
respect to the securities; or
(ii) has given or gives another person an enforceable right, or has been
or is given an enforceable right by another person, in relation to the
securities (whether the right is enforceable presently or in the future and
whether or not on the fulfilment of a condition); or
(iii) has granted or grants an option to, or has been or is granted an
option by, another person with respect to the securities;
(c) the other person would have a relevant interest in the securities if
the agreement were performed, the right enforced or the option
exercised;
the other person is taken to already have a relevant interest in the
securities.
Note: Subsections 609(6) and (7) deal with specific
situations in which the agreement will not give rise to a relevant
interest.
Body corporate may have relevant interest in its own
securities
(9) This section may result in a body corporate having a relevant interest
in its own securities.
Money lending and financial accommodation
(1) A person does not have a relevant interest in securities merely
because of a mortgage, charge or other security taken for the purpose of a
transaction entered into by the person if:
(a) the mortgage, charge or security is taken or acquired in the ordinary
course of the person’s business of providing financial services and on
ordinary commercial terms; and
(b) the person whose property is subject to the mortgage, charge or
security is not an associate of the person.
Note: Sections 11 to 17 define
associate.
Nominees and other trustees
(2) A person who would otherwise have a relevant interest in securities as
a bare trustee does not have a relevant interest in the securities if a
beneficiary under the trust has a relevant interest in the securities because of
a presently enforceable and unconditional right of the kind referred to in
subsection 608(8).
Note: This subsection will often apply to a person who holds
securities as a nominee.
Holding of securities by securities dealer
(3) A securities dealer does not have a relevant interest in securities
merely because they hold securities on behalf of someone else in the ordinary
course of their securities business.
Shares covered by buy-backs
(4) A person does not have a relevant interest in a company’s shares
if the relevant interest would arise merely because the company has entered into
an agreement to buy back the shares.
Proxies
(5) A person does not have a relevant interest in securities merely
because the person has been appointed to vote as a proxy or representative at a
meeting of members, or of a class of members, of the company, body or managed
investment scheme if:
(a) the appointment is for one meeting only; and
(b) neither the person nor any associate gives valuable consideration for
the appointment.
Exchange traded options and futures contracts
(6) A person does not have a relevant interest in securities merely
because of:
(a) an exchange traded option over the securities; or
(b) a right to acquire the securities given by a futures
contract.
This subsection stops applying to the relevant interest when the obligation
to make or take delivery of the securities arises.
Note: Without this subsection, subsection 608(8) would
create a relevant interest from the option or contract.
Conditional agreements
(7) A person does not have a relevant interest in securities merely
because of an agreement if the agreement:
(a) is conditional on:
(i) a resolution under item 7 in the table in section 611 being
passed; or
(ii) ASIC exempting the acquisition under the agreement from the
provisions of this Chapter under section 655A; and
(b) does not confer any control over, or power to substantially influence,
the exercise of a voting right attached to the securities; and
(c) does not restrict disposal of the securities for more than 3 months
from the date when the agreement is entered into.
The person acquires a relevant interest in the securities when the
condition referred to in paragraph (a) is satisfied.
Pre-emptive rights
(8) A member of a company, body or managed investment scheme does not have
a relevant interest in securities of the company, body or scheme merely because
the company’s, body’s or scheme’s constitution gives members
pre-emptive rights on the transfer of the securities if all members have
pre-emptive rights on the same terms.
Director of body corporate holding securities
(9) A person does not have a relevant interest in securities merely
because:
(a) the person is a director of a body corporate; and
(b) the body corporate has a relevant interest in those
securities.
Prescribed exclusions
(10) A person does not have a relevant interest in securities in the
circumstances specified in the regulations. The regulations may provide that
interests in securities are not relevant interests subject to specified
conditions.
Person’s voting power in a body corporate
(1) A person’s voting power in a body corporate
is:
where:
person’s and associates’ votes is the total
number of votes attached to all the voting shares in the body corporate (if any)
that the person or an associate has a relevant interest in.
total votes in body corporate is the total number of votes
attached to all voting shares in the body corporate.
Note: Even if a person’s relevant interest in voting
shares is based on control over disposal of the shares (rather than control over
voting rights attached to the shares), their voting power in the body corporate
is calculated on the basis of the number of votes attached to those
shares.
Counting votes
(2) For the purposes of this section, the number of votes attached to a
voting share in a body corporate is the maximum number of votes that can be cast
in respect of the share on a poll:
(a) if the election of directors is determined by the casting of votes
attached to voting shares—on the election of a director of the body
corporate; or
(b) if the election of directors is not determined by the casting of votes
attached to voting shares—on the adoption of a constitution for the body
corporate or the amendment of the body corporate’s constitution.
Note: The Corporations and Securities Panel may decide that
the setting or varying of voting rights in a way that affects control of a body
corporate is unacceptable circumstances under
section 657A.
(3) If:
(a) a transaction in relation to, or an acquisition of an interest in,
securities occurs; and
(b) before the transaction or acquisition, a person did not have a
relevant interest in particular voting shares but an associate of the person did
have a relevant interest in those shares; and
(c) because of the transaction or acquisition, the person acquires a
relevant interest in those shares;
then, for the purposes of applying section 606 to the transaction or
acquisition, the person’s voting power is taken to have increased because
of the transaction or acquisition from what it would have been before the
transaction or acquisition if the votes attached to those shares were
disregarded to what it was after the transaction or acquisition (taking the
votes attached to those shares into account).
(4) Disregard the operation of section 613 in working out a
person’s voting power in a body corporate.
The following table sets out:
(a) acquisitions of relevant interests in a company’s voting
shares that are exempt from the prohibition in subsection 606(1);
and
(b) acquisitions of relevant interests in a company’s voting
shares resulting from acquisitions of legal or equitable interests in
securities of a body corporate that are exempt from the prohibition in
subsection 606(2).
Note: Some of the items in the table cover only activities
in relation to the company itself (items 7, 8, 12 and 13) while the other
items cover acquisitions in that company that may occur through activities in
relation to other companies.
|
Acquisitions that are exempt |
[operative] |
|
|---|---|---|
|
|
Takeover bids |
|
|
|
Acceptance of takeover offer |
|
|
1 |
An acquisition that results from the acceptance of an offer under a
takeover bid. See also section 612. |
|
|
|
On-market purchase during bid period |
|
|
2 |
An acquisition in relation to bid class securities that results from an
on-market transaction if: |
|
|
|
(d) the bid is: See also sections 612 and 613. |
|
|
|
On-market purchase of convertible securities during bid
period |
|
|
3 |
An acquisition of bid class securities that results directly from the
exercise of rights attached to convertible securities if: See sections 612 and 613. |
|
|
|
Acceptance of scrip offered as takeover consideration |
|
|
4 |
An acquisition that results from the acceptance of: See also section 612. |
|
|
|
Nature of acquirer |
|
|
6 |
An acquisition that results from the exercise by a person of a power, or
appointment as a receiver, or receiver and manager, under a mortgage,
charge or other security if: |
|
|
|
Approval by resolution of target |
|
|
7 |
An acquisition approved previously by a resolution passed at a general
meeting of the company in which the acquisition is made, if: |
|
|
|
(iii) the voting power that person would have as a result of the
acquisition; and |
|
|
|
Target newly formed |
|
|
8 |
An acquisition that results from an issue of securities of the company in
which the acquisition is made if the company has not started to carry on any
business and has not borrowed any money. |
|
|
|
Manner of acquisition |
|
|
|
3% creep in 6 months |
|
|
9 |
An acquisition by a person if: |
|
|
|
Rights issues |
|
|
10 |
An acquisition that results from an issue of securities that
satisfies all of the following conditions: |
|
|
|
(d) agreements to issue are not entered into until a specified time for
acceptances of offers has closed; This extends to an acquisition by a person as underwriter to the issue or
sub-underwriter. See section 615. |
|
|
|
Dividend reinvestment etc. |
|
|
11 |
An acquisition that results from an issue of: if the plan or facility is available to all members. Disregard any unavailability to foreign holders in determining whether the
plan or facility is available to all members. |
|
|
|
Initial public offering (IPO) fundraising |
|
|
12 |
An acquisition that results from an issue under a disclosure document of
securities in the company in which the acquisition is made if: |
|
|
|
Underwriting of fundraising |
|
|
13 |
An acquisition that results from an issue under a disclosure document of
securities in the company in which the acquisition is made if: |
|
|
|
Acquisition through listed company |
|
|
14 |
An acquisition that results from another acquisition of relevant interests
in voting shares in a body corporate included in the official list of: |
|
|
|
Wills etc. |
|
|
15 |
An acquisition through a will or through operation of law. |
|
|
|
Forfeiture of shares |
|
|
16 |
An acquisition that results from an auction of forfeited shares conducted
on-market. |
|
|
|
Compromise, arrangement, liquidation or buy-back |
|
|
|
Part 5.1 compromise or arrangement |
|
|
17 |
An acquisition that results from a compromise or arrangement approved by
the Court under Part 5.1. |
|
|
|
Section 507 arrangement |
|
|
18 |
An acquisition that results from an arrangement entered into by a
liquidator under section 507. |
|
|
|
Buy-back |
|
|
19 |
An acquisition that results from a buy-back authorised by
section 257A. |
|
|
|
Regulations |
|
|
20 |
An acquisition made in a manner or in circumstances prescribed by the
regulations. The circumstances may include acquisitions of relevant interests in
voting shares in a specified body or class of bodies. |
|
The exceptions in items 1 to 4 of the table in section 611 do
not apply to a takeover bid if the bid is carried out in contravention
of:
(a) section 618 (full or proportionate bid); or
(b) section 619 (offers to be the same); or
(c) subsection 621(3) (minimum price); or
(d) subsection 624(1) (minimum offer period); or
(e) sections 625 to 630 (conditional offers); or
(f) items 2, 3 and 6 in the table in subsection 633(1) (procedural
steps for off-market bid); or
(g) items 3, 4 and 6 in the table in section 635 (procedural
steps for market bid).
If the exception in item 2 or 3 of the table in section 611
applies to an acquisition on-market during a takeover bid, the bidder is not
entitled to exercise the voting rights attached to the shares if:
(a) the bid is an off-market bid; and
(b) the bidder fails to send offers under the bid within 28 days after
giving the bidder’s statement to the target.
The exception in item 10 of the table in section 611 applies
even though the conditions set out in the item are not satisfied in respect of
foreign holders of the company’s securities if, under the terms of the
offers:
(a) the company must appoint a nominee for foreign holders of the
company’s securities who is approved by ASIC; and
(b) the company must transfer to the nominee:
(i) the securities that would otherwise be issued to the foreign holders
who accept the offer; or
(ii) the right to acquire those securities; and
(c) the nominee must sell the securities, or those rights, and distribute
to each of those foreign holders their proportion of the proceeds of the sale
net of expenses.
(1) There are 2 kinds of takeover bid:
(a) an off-market bid (for quoted or unquoted securities); or
(b) a market bid (only available for quoted securities).
Note: Although the prohibition in section 606 is
against acquiring relevant interests in voting shares, a takeover bid may be
made for any securities (for example, as a preliminary to compulsorily acquiring
securities in that class under Part 6A.1).
(2) The following table shows where to find the provisions dealing with
the main features of the offers that may be made under off-market bids and
market bids and the procedures to be followed:
|
Takeover bids |
[signpost table] |
|||
|---|---|---|---|---|
|
|
Feature |
Off-market bid |
Market bid |
|
|
1 |
people to whom offers made |
617(1)-(2) |
617(3) |
|
|
2 |
securities covered |
618(1)-(2) |
618(3) |
|
|
3 |
consideration offered for the securities |
621(1), (3)-(5) and 651A |
621(2), (3)-(5) |
|
|
4 |
escalation agreements and collateral benefits not allowed |
622 and 623 |
622 and 623 |
|
|
5 |
offer period |
624(1)-(2) and 650C |
624(1)-(2) and 649C |
|
|
6 |
conditional offers |
625(2)-(3) and 626-630 |
625(1) |
|
|
7 |
procedure to be followed in making bid |
632 and 633 |
634 and 635 |
|
|
8 |
acceptances |
650E and 653A-653B |
- |
|
Off-market bid
(1) An off-market bid must relate to securities:
(a) in a class of securities (the bid class); and
(b) that exist or will exist as at the date set by the bidder under
subsection 633(2).
Note: Subsection 92(3) defines securities for
the purposes of this Chapter.
(2) If other securities exist or will exist at that date that:
(a) will convert, or may be converted, to securities in the bid class;
or
(b) confer rights to be issued securities in the bid class;
the bid may extend to securities that come to be in the bid class during
the offer period due to a conversion or exercise of the rights.
Note: The bidder’s statement must say if the bid is
extended in this way (see paragraph 636(1)(j)).
Market bid
(3) A market bid must relate to securities:
(a) in a class of quoted securities (the bid class);
and
(b) that exist or will exist at any time during the offer
period.
Off-market bid
(1) An offer for securities under an off-market bid must be an offer to
buy:
(a) all the securities in the bid class; or
(b) a specified proportion of the securities in the bid class.
The proportion specified under paragraph (b) must be the same for all
holders of securities in the bid class.
Off-market bid—non-marketable parcels
(2) If accepting an offer under an off-market bid for quoted securities
would leave a person with a parcel of the securities that is less than a
marketable parcel (within the meaning of the rules of the relevant securities
exchange), the offer extends to that parcel.
Market bid
(3) An offer for securities under a market bid must be an offer to buy all
the securities in the bid class.
Off-market bid
(1) All the offers made under an off-market bid must be the
same.
Note: The offers may include alternative forms of
consideration (see section 621).
(2) In applying subsection (1), disregard the following:
(a) any differences in the offers attributable to the fact that the number
of securities that may be acquired under each offer is limited by the number of
securities held by the holder;
(b) any differences in the offers attributable to the fact that the offers
relate to securities having different accrued dividend or distribution
entitlements;
(c) any differences in the offers attributable to the fact that the offers
relate to securities on which different amounts are paid up or remain
unpaid;
(d) any differences in the offers attributable to the fact that the bidder
may issue or transfer only whole numbers of securities as consideration for the
acquisition;
(e) any additional cash amount offered to holders instead of the fraction
of a security that they would otherwise be offered.
Foreign holders
(3) If the consideration for the bid includes an offer of securities, the
securities do not need to be offered to foreign holders of the target’s
securities if under the terms of the bid:
(a) the bidder must appoint a nominee for foreign holders of the
target’s securities who is approved by ASIC; and
(b) the bidder must transfer to the nominee:
(i) the securities that would otherwise be transferred to the foreign
holders who accept the bid for that consideration; or
(ii) the right to acquire those securities; and
(c) the nominee must sell the securities, or those rights, and distribute
to each of those foreign holders their proportion of the proceeds of the sale
net of expenses.
(1) Each offer under an off-market bid must:
(a) be in writing; and
(b) have the same date; and
(c) provide that, unless withdrawn, it will remain open until the end of
the offer period (see section 624); and
(d) state how, and when, the bidder is to satisfy their
obligations.
(2) Each offer must provide that the bidder is to pay or provide the
consideration for the offer:
(a) if the bidder is given the necessary transfer documents with the
acceptance—by the end of whichever of the following periods ends
earlier:
(i) 1 month after the offer is accepted or, if the offer is subject to a
defeating condition, within 1 month after the takeover contract becomes
unconditional
(ii) 21 days after the end of the offer period; or
(b) if the bidder is given the necessary transfer documents after the
acceptance and before the end of the bid period—within 1 month after the
bidder is given the necessary transfer documents; or
(c) if the bidder is given the necessary transfer documents after the
acceptance and after the end of the bid period—within 21 days after the
bidder is given the necessary transfer documents.
Note: Subsection 630(1) requires an offer that is subject to
a defeating condition to specify a date for declaring whether the condition has
been fulfilled or not.
(3) The offer may provide that the bidder may avoid the takeover contract
if the bidder is not given the necessary transfer documents within 1 month after
the end of the offer period.
Off-market bid—general
(1) A bidder making an off-market bid for securities may offer any form of
consideration for the securities, including:
(a) a cash sum; or
(b) securities (including shares, debentures, interests in a managed
investment scheme or options); or
(c) a combination of a cash sum and securities.
Note: Sections 650B and 651A deal with variations of
the consideration offered under the bid.
Market bid—cash only
(2) As the offers under a market bid for securities are made through the
stock market of a securities exchange, the bidder must offer to acquire the
securities for a cash sum only for each security.
Note: Section 649B deals with variations of the
consideration offered under the bid.
All bids—minimum consideration if bidder purchased securities in
the 4 months before the bid
(3) The consideration offered for securities in the bid class under a
takeover bid must equal or exceed the maximum consideration that the bidder or
an associate provided, or agreed to provide, for a security in the bid class
under any purchase or agreement during the 4 months before the date of the
bid.
(4) For the purposes of subsection (3), the consideration offered or
provided for a security is:
(a) if the consideration offered or provided is a cash sum only—the
amount of that cash sum; or
(b) if the consideration offered or provided does not include a cash
sum—the value of that consideration; or
(c) if the consideration offered or provided is a cash sum and other
consideration—the sum of the amount of the cash sum and the value of the
other consideration.
The value of consideration that is not a cash sum is to be ascertained as
at the time the relevant offer, purchase or agreement is made.
(5) If:
(a) a person agrees to buy a security in a company; and
(b) the agreement provides that the price payable for the security is a
price specified in the agreement but may be varied in accordance with the terms
of the agreement;
any variation in price under the agreement is to be disregarded in working
out, for the purposes of subsection (3), the price agreed to be paid for
the security under the agreement.
Benefits linked to bids and proposed bids not allowed
(1) A person who makes or proposes to make a takeover bid for securities,
or their associate, contravenes this section if:
(a) a person acquires a relevant interest in securities in the bid class
within the 6 months before the bid is made or proposed; and
(b) at any time whatever, the bidder, proposed bidder or associate gives
or agrees to give a benefit to, or receives or agrees to receive a benefit
from:
(i) a person who had a relevant interest in any of the paragraph (a)
securities immediately before the acquisition; or
(ii) an associate of a person who had a relevant interest in any of those
securities at that time; and
(c) the benefit is attributable to the acquisition or matters that include
the acquisition; and
(d) the amount or value of the benefit is, or is to be, determined by
reference to or to matters that include either of the following:
(i) the amount or value of the consideration for the securities under the
bid or proposed bid;
(ii) the amount or value of the consideration for which the bidder or
proposed bidder acquires, offers or proposes to offer to acquire, securities in
the bid class during the offer period (whether or not under the bid) or under
Chapter 6A.
Contravening agreements void
(2) An agreement is void to the extent that it purports to provide
for:
(a) a person to give a benefit to a person; or
(b) a person to receive a benefit from a person;
in contravention of subsection (1).
(1) A bidder, or an associate, must not, during the offer period for a
takeover bid, give, offer to give or agree to give a benefit to a person
if:
(a) the benefit is likely to induce the person or an associate
to:
(i) accept an offer under the bid; or
(ii) dispose of securities in the bid class; and
(b) the benefit is not offered to all holders of securities in the bid
class under the bid.
(2) For the purpose of this section, a person does not receive a benefit
that is not offered under a takeover bid merely because the person sells bid
class securities on-market and the takeover bid is an off-market bid or a
conditional bid.
(3) This section does not prohibit:
(a) the variation of a takeover offer as provided by sections 649A to
650D; or
(b) an acquisition of securities through an on-market transaction;
or
(c) simultaneous takeover bids for different classes of securities in the
target.
Offer period set in offer
(1) The offers under a takeover bid must remain open for the period stated
in the offer. The period must:
(a) start on the date the first offer under the bid is made; and
(b) last for at least 1 month, and not more than 12 months.
However, the offer may be withdrawn during that period under
section 652B.
Note: Sections 649C (market bids) and 650C (off-market
bids) deal with variation of the offer period.
Automatic extension of offer period if bidder reaches 50% or
consideration increased in last week
(2) If, within the last 7 days of the offer period:
(a) for an off-market bid—the offers under the bid are varied to
improve the consideration offered; or
(b) in any case—the bidder’s voting power in the target
increases to more than 50%;
the offer period is extended so that it ends 14 days after the event
referred to in paragraph (a) or (b). The bidder must give the target and
everyone who has not accepted an offer under the bid written notice that the
extension has occurred within 3 days after that event.
Note: The consideration for a market bid cannot be increased
in the last 5 trading days of the offer period (see
section 649B).
Market bids
(1) Offers under a market bid must be unconditional.
Off-market bids may generally be conditional
(2) Offers under an off-market bid may be subject to conditions that are
not prohibited by sections 626 to 629.
(3) If:
(a) the consideration offered is or includes securities; and
(b) the offer or the bidder’s statement states or implies that the
securities are to be quoted on a stock market of a securities exchange (whether
in Australia or elsewhere);
the following rules apply:
(c) the offer is subject to a condition that:
(i) an application for admission to quotation will be made within 7 days
after the start of the bid period; and
(ii) permission for admission to quotation will be granted no later than 7
days after the end of the bid period;
(d) the offer may not be freed from this condition.
Note: Section 1325A provides that a Court may make a
remedial order if the condition is not satisfied.
Maximum acceptance conditions not allowed
(1) Offers under an off-market bid must not be subject to a maximum
acceptance condition. A maximum acceptance condition is one that provides that
the offers will terminate, or the maximum consideration offered under the bid
will be reduced, if one or more of the following occur:
(a) the number of securities for which the bidder receives acceptances
reaches or exceeds a particular number; or
(b) the bidder’s voting power in the company reaches or exceeds a
particular percentage; or
(c) the percentage of securities the bidder has relevant interests in
reaches or exceeds a particular percentage of securities in that
class.
(2) For the purposes of subsection (1), it does not matter:
(a) how the condition is expressed; or
(b) how a particular number or percentage was, or is to be, determined;
or
(c) whether or not a particular number or percentage is specified in the
condition and, if it is so specified, how it is expressed.
(3) For the purposes of subsection (1), an offer under an off-market
bid terminates if:
(a) the offer lapses, is withdrawn or otherwise ceases to have effect;
or
(b) a binding takeover contract will not result from an acceptance of the
offer; or
(c) an obligation of the bidder will not arise under the takeover
contract; or
(d) the takeover contract is rescinded; or
(e) the bidder is entitled to rescind the takeover contract; or
(f) the bidder is relieved of an obligation arising under the takeover
contract.
Offers under an off-market bid must not be subject to a condition that
allows the bidder to acquire, or may result in the bidder acquiring, securities
from some but not all of the people who accept the offers. It does not matter
how the condition is expressed.
An offer to a person under an off-market bid must not be made subject to
a condition that requires the person to approve or consent to a payment or other
benefit to an officer of the target or a related body corporate:
(a) as compensation for loss of; or
(b) as consideration in connection with retirement from;
any office or employment in connection with the management of the target or
of a related body corporate. A purported requirement of this kind is
void.
(1) Offers under an off-market bid must not be subject to a defeating
condition if the fulfilment of the condition depends on:
(a) the bidder’s, or an associate’s, opinion, belief or other
state of mind; or
(b) the happening of an event that is within the sole control of, or is a
direct result of action by, any of the following:
(i) the bidder (acting alone or together with an associate or
associates);
(ii) an associate (acting alone or together with the bidder or another
associate or associates of the bidder).
A purported condition of this kind is void.
Note: Section 9 defines defeating
condition. Sections 630, 650F and 650G deal with defeating
conditions.
(2) For the purposes of paragraph (1)(b):
(a) the target; and
(b) a subsidiary of the target;
are taken not to be associates of the bidder if they would otherwise be an
associate merely because they are a related body corporate.
Note: Paragraph 11(b) makes related bodies corporate
associates of each other.
Off-market bid may include defeating conditions
(1) Offers under an off-market bid may be made subject to a defeating
condition only if the offers specify a date (not more than 14 days and not less
than 7 days before the end of the offer period) for giving a notice on the
status of the condition.
(2) If the offer period is extended by a period:
(a) the date for giving the notice is taken to be postponed for the same
period; and
(b) as soon as practicable after the extension, the bidder must give a
notice that states:
(i) the new date for giving the notice of the status of the condition;
and
(ii) whether the offers have been freed from the condition and whether, so
far as the bidder knows, the condition has been fulfilled on the date the notice
under this subsection is given.
Bidder to give notice of status of defeating condition near end of offer
period
(3) On the date determined under subsection (1) or (2), the bidder
must give a notice that states:
(a) whether the offers are free of the condition; and
(b) whether, so far as the bidder knows, the condition was fulfilled on
the date the notice is given; and
(c) the bidder’s voting power in the target.
The bidder must comply with this subsection whether or not the bidder has
given a notice under subsection (4) or 650F(1).
Note: The offers may be freed of the condition by a
declaration by the bidder under subsection 650F(1).
Bidder to give notice if defeating condition fulfilled
(4) If the condition is fulfilled (so that the offers become free of the
condition) during the bid period but before the date for publishing the notice
on the status of the condition, the bidder must publish as soon as practicable a
notice that states that the condition has been fulfilled.
(5) A notice under this section is given by:
(a) giving the notice to the target; and
(b) for quoted bid class securities—giving the notice to the
relevant securities exchange; and
(c) for unquoted bid class securities—lodging the notice with
ASIC.
Bid must proceed within 2 months after proposal
(1) If a person publicly proposes to make a takeover bid for securities in
a company, either alone or with other persons, the person contravenes this
subsection unless they make offers for the securities under a takeover bid
within 2 months after the proposal. The terms and conditions of the bid must be
the same as or not substantially less favourable than those in the public
proposal.
Note: The Court has power under section 1325B to order
a person to proceed with a bid.
Proposals if takeover bid not intended
(2) A person must not publicly propose, either alone or with other
persons, to make a takeover bid if:
(a) the person knows the proposed bid will not be made, or is reckless as
to whether the proposed bid is made; or
(b) the person is reckless as to whether they will be able to perform
their obligations relating to the takeover bid if a substantial proportion of
the offers under the bid are accepted.
(3) Section 1314 (continuing offences) and subsection 1324(2)
(injunctions) do not apply in relation to a failure to make a takeover bid in
accordance with a public proposal under subsection (1).
Note: For liability and defences for contraventions of this
section, see sections 670E and 670F.
The following diagram gives an overview of the steps involved in an
off-market bid.
|
Overview of steps in an off-market bid |
||||
|
|
Bidder |
|
|
|
|
Step 1 |
bidder’s statement (together with offer
document) |
|
*
ASIC |
|
|
|
|
|
|
|
|
Step 2 |
notice that Step 1 done |
——→ |
*
ASIC |
|
|
|
|
|
|
|
|
Step 3 |
bidder’s statement and
offers |
——→ |
*
holders of bid class securities |
|
|
|
|
|
|
|
|
Step 4 |
notice that Step 3 done |
|
*
target |
|
|
|
|
|
|
|
|
|
Target |
|
|
|
|
Step 5 |
target’s statement |
|
*
bidder |
|
|
The holders then consider the terms of the offer, and the statements
provided by the bidder and the target, and decide whether to accept the offer
under section 653A before the end of the bid period. A holder may also
decide to sell on-market during the bid period. |
||||
(1) The following table provides for the steps that a bidder must take to
make an effective off-market bid and the steps that a target must take when an
off-market bid is made.
|
Steps in off-market bid |
[operative table] |
|
|---|---|---|
|
|
Steps |
Timing and relevant provisions |
|
1 |
The bidder must prepare: |
See section 636 for content of statement. |
|
2 |
The bidder must lodge a copy of the bidder’s statement and offer
document with ASIC. |
|
|
3 |
The bidder must send a copy of the bidder’s statement and offer
document to the target. |
To be done on the day the bidder’s statement is lodged or within 21
days afterwards |
|
4 |
The bidder must lodge with ASIC a notice stating that the bidder’s
statement and offer document have been sent to the target. |
To be done on the day the bidder’s statement is sent to the
target |
|
5 |
The bidder must send a copy of the bidder’s statement and offer
document to each securities exchange that has a stock market on which the
target’s securities are quoted. |
To be done on the day the bidder’s statement is sent to the
target See also subsection (5). |
|
6 |
The bidder must send the bidder’s statement and offers to each person
(other than the bidder) who holds: as at the date set by the bidder under subsection (2). The offers must be made on the terms set out in the bidder’s
statement and the offer document lodged with ASIC under item 2. |
To be done: The directors of the target may agree that the offers and accompanying
documents be sent earlier. See also subsections (5) and (6). Item 2 of the table in section 611 covers offers made by the
bidder on-market during the period between the lodgment of the bidder’s
statement and the making of the offers under the bid. Sections 648B and 648C provide for the manner in which documents
may be sent to holders. |
|
7 |
The bidder must send a notice to the target that the bidder’s
statement and offers have been sent as required by item 6. The notice must state the date of the offers. |
To be done on the day all offers have been sent as required by
item 6 See subsection 620(1) on date of offer. |
|
8 |
The bidder must send a notice that offers have been sent as required by
item 6 to each securities exchange that has a stock market on which the
target’s securities are quoted. |
To be done on the day all offers have been sent as required by
item 6 |
|
9 |
The bidder must lodge with ASIC a notice that offers have been sent as
required by item 6. |
To be done on the day all offers have been sent as required by
item 6 |
|
10 |
The target must prepare a target’s statement. |
See section 638 for content of statement. |
|
11 |
The target must send the target’s statement (and any accompanying
report) to the bidder. |
To be done no later than 15 days after the target receives a notice that
all offers have been sent as required by item 6 |
|
12 |
The target must send a copy of the target’s statement (and any
accompanying report) to each person who holds: as at the date set by the bidder under subsection (2). |
To be done: Sections 648B and 648C provide for the manner in which documents
may be sent to holders. |
|
13 |
The target must lodge a copy of the target’s statement (and any
accompanying report) with ASIC. |
To be done on the day the target’s statement is sent to the
bidder See also subsection (7). |
|
14 |
The target must send a copy of the target’s statement (and any
accompanying report) to each securities exchange that has a stock market on
which the target’s securities are quoted. |
To be done on the day the target’s statement is sent to the
bidder See also subsection (7). |
Date for determining holders of securities
(2) The people to whom information is to be sent under items 6 and 12
of the table in subsection (1) are the holders of the securities referred
to in those items as at the date set by the bidder in:
(a) the bidder’s statement; or
(b) a separate written notice given to the target on or before the
date set by the bidder.
Note: The bidder may set the date when the bidder asks the
target for a list of members under section 641.
(3) The date set by the bidder must be:
(a) on or after the date on which the bidder gives the bidder’s
statement, or the separate written notice, to the target; and
(b) on or before the date on which the first offers under the bid are made
to holders of the securities.
(4) As soon as practicable after setting the day, the bidder must give
notice of it by:
(a) if the securities in the bid class are quoted—giving the notice
to the relevant securities exchange; or
(b) otherwise—lodging the notice with ASIC.
Information to be sent with bidder’s statement
(5) A bidder’s statement required to be sent under item 5 or 6
in the table in subsection (1) must be sent together with any other
information sent by the bidder to the target with the statement.
Information to be sent with notices that offers have been
sent
(6) If the bidder sends the people to whom the bidder’s statement is
sent under item 6 of the table in subsection (1) additional
information together with the bidder’s statement and the offer, the bidder
must also include that information in any notice under item 7, 8 or 9 of
the table.
Information to be sent with target’s statement
(7) If the target sends the people to whom the target’s statement is
sent under item 12 of the table in subsection (1) additional
information together with the target’s statement, the target must also
include that information in any notice under item 13 or 14 of the
table.
The following diagram gives an overview of the steps involved in a market
bid.
|
Overview of steps in a market bid |
||||
|
|
Bidder |
|
|
|
|
Step 1 |
announcement of bid to the
exchange |
|
|
|
|
|
|
|
|
|
|
Step 2 |
bidder’s statement |
——→ |
*
exchange |
|
|
|
|
|
|
|
|
Step 3 |
bidder’s statement and any other
documents sent with it to the exchange |
——→ |
*
holders of bid class securities |
|
|
|
|
|
|
|
|
Step 4 |
copy of documents sent to
holders |
——→ |
*
exchange |
|
|
|
|
|
|
|
|
|
Target |
|
|
|
|
Step 5 |
target’s statement |
|
*
exchange |
|
|
|
|
|
|
|
|
|
Bidder |
|
|
|
|
Step 6 |
make offers on the exchange |
|
|
|
|
The holders then consider the terms of the offer, and the statements
provided by the bidder and the target, and decide whether to accept the offer
on-market before the end of the bid period. |
||||
The following table provides for the steps that a bidder must take to
make an effective market bid and the steps that a target must take when a market
bid is made.
|
Steps in market bid |
[operative] |
|
|---|---|---|
|
|
Steps |
Timing and relevant provisions |
|
1 |
The bidder must prepare a bidder’s statement. |
See section 636 for content of statement |
|
2 |
The bidder must have the bid announced to the relevant securities
exchange. |
|
|
3 |
The bidder must send a copy of the bidder’s statement to the relevant
securities exchange. |
To be done on the day the announcement is made |
|
4 |
The bidder must send to the target: |
To be done on the day the announcement is made |
|
5 |
The bidder must lodge with ASIC: |
To be done on the day the announcement is made |
|
6 |
The bidder must send to each holder of bid class securities (other than the
bidder): |
Within 14 days after the announcement is made Sections 648B and 648C provide for the manner in which documents
may be sent to holders. |
|
7 |
The bidder must lodge with ASIC a copy of every other document sent to
holders of bid class securities with the bidder’s statement. |
To be done no later than the day copies of the bidder’s statement
have been sent to all holders of bid class securities |
|
8 |
The bidder must give the relevant securities exchange a copy of every other
document sent to holders of bid class securities with the bidder’s
statement. |
To be done no later than the day copies of the bidder’s statement
have been sent to all holders of bid class securities |
|
9 |
The target must prepare a target’s statement. |
See section 638 for content of statement |
|
10 |
The target must send a copy of the target’s statement to the relevant
securities exchange. |
Within 14 days after the announcement is made |
|
11 |
The target must send to the bidder: |
To be done on the day the target sends a copy of the target’s
statement to the securities exchange |
|
12 |
The target must lodge with ASIC: |
To be done on the day the target sends a copy of the target’s
statement to the securities exchange |
|
13 |
The target must send each holder of bid class securities: |
Within 14 days after the announcement is made Sections 648B and 648C provide for the manner in which documents
may be sent to holders. |
|
14 |
The bidder must make offers for the securities under the bid through the
relevant securities exchange. |
To be done on the next day after the end of the 14 day period referred to
in item 13. If the bidder does not make the offers at that time, the bidder contravenes
this section. Item 2 of the table in section 611 covers offers made by the
bidder on market during the 14 day period between the announcement and the
making of the offers under the bid |
(1) A bidder’s statement must include the following:
(a) the identity of the bidder;
(b) the date of the statement;
(c) if the target is a company or body—details of the bidder’s
intentions regarding:
(i) the continuation of the business of the target; and
(ii) any major changes to be made to the business of the target, including
any redeployment of the fixed assets of the target; and
(iii) the future employment of the present employees of the
target;
(d) if the target is a managed investment scheme—details of the
bidder’s intentions regarding:
(i) the continued operation of the scheme; and
(ii) any major changes to be made to the operation of the scheme,
including any redeployment of scheme property; and
(iii) any plans to remove the current responsible entity and appoint a new
responsible entity;
(e) for an off-market bid—a statement that the bidder’s
statement has been lodged with ASIC but that ASIC takes no responsibility for
the content of the statement;
(f) in relation to the cash consideration (if any) offered under the
bid—details of:
(i) the cash amounts (if any) held by the bidder for payment of the
consideration; and
(ii) the identity of any other person who is to provide, directly or
indirectly, cash consideration from that person’s own funds; and
(iii) any arrangements under which cash will be provided by a person
referred to in subparagraph (ii);
(g) if any securities are offered as consideration under the bid and the
bidder is:
(i) the body that has issued or will issue the securities; or
(ii) a person who controls that body;
all material that would be required for a prospectus for an offer of
those securities by the bidder under section 710 to 713;
(h) if the bidder or an associate provided, or agreed to provide,
consideration for a security in the bid class under a purchase or agreement
during the 4 months before the date of the bid—the following information
about the consideration:
(i) to the extent to which the consideration is a cash sum—the
amount per security of the cash sum;
(ii) to the extent to which the consideration is quoted
securities—the market price per security of those securities;
(iii) to the extent to which the consideration is neither a cash sum nor a
quoted security—the value per security of that consideration;
(i) if, during the period of 4 months before the date of the bid, the
bidder or an associate gave, or offered to give or agreed to give a benefit to
another person and the benefit was likely to induce the other person, or an
associate, to:
(i) accept an offer under the bid; or
(ii) dispose of securities in the bid class;
and the benefit is not offered to all holders of securities in the bid
class under the bid—details of the benefit;
(j) if the bid is to extend to securities that come to be in the bid class
during the offer period due to the conversion of or exercise of rights attached
to other securities (see subsection 617(2))—a statement to that
effect;
(k) for an off-market bid—the following details in relation to each
class of securities in the target:
(i) the total number of securities in the class;
(ii) the number of securities in the class that the bidder had a relevant
interest in immediately before the first offer is sent (expressed as a number of
securities or as a percentage of the total number of securities in the
class);
(l) for an off-market bid—the bidder’s voting power in the
company;
(m) any other information that:
(i) is material to the making of the decision by a holder of bid class
securities whether to accept an offer under the bid; and
(ii) is known to the bidder; and
(iii) does not relate to the value of securities offered as consideration
under the bid.
The information that the bidder must disclose under
subparagraph (k)(i) and paragraph (l) must be only as up-to-date as it
is reasonable to expect in the circumstances. The bidder does not have to
disclose information under paragraph (m) if it would be unreasonable to
require the bidder to do so because the information had previously been
disclosed to the holders of bid class securities.
Note: Paragraph (b)—See subsection 637(2) for the
date of the statement.
Expert’s report on non-cash consideration provided for bid class
securities in last 4 months
(2) If the bidder’s statement includes details of the value per
share of consideration under subparagraph (1)(h)(iii), the statement must
include, or be accompanied by, a report by an expert that states whether, in the
expert’s opinion, the value stated is fair and reasonable and gives the
reasons for forming that opinion.
Note: Subsections 648A(2) and (3) provide for the
independence of the expert and disclosure of any association between the bidder
and the expert or the target and the expert. A contravention of one of those
subsections results in the bidder’s statement not complying with this
subsection.
Consent of person to whom statement attributed
(3) The bidder’s statement may only include, or be accompanied by, a
statement by a person, or a statement said in the bidder’s statement to be
based on a statement by a person, if:
(a) the person has consented to the statement being included in the
bidder’s statement, or accompanying it, in the form and context in which
it is included; and
(b) the bidder’s statement states that the person has given this
consent; and
(c) the person has not withdrawn this consent before the bidder’s
statement is lodged with ASIC.
(4) The bidder must keep the consent.
Approval
(1) The copy of the bidder’s statement that is lodged with ASIC must
be approved by:
(a) for a bidder that is a body corporate:
(i) if the consideration offered under the bid is a cash sum only—a
resolution passed by the directors of the bidder; or
(ii) otherwise—a unanimous resolution passed by all the directors of
the bidder; or
(b) for a bidder who is an individual—the bidder.
(2) The bidder’s statement must be dated. The date is the date on
which it is lodged with ASIC.
General requirement
(1) A target’s statement must include all the information that
holders of bid class securities and their professional advisers would reasonably
require to make an informed assessment whether to accept the offer under the
bid. The statement must contain this information:
(a) only to the extent to which it is reasonable for investors and their
professional advisers to expect to find the information in the statement;
and
(b) only if the information is known to any of the directors of the
target.
(2) In deciding what information should be included under
subsection (1), have regard to:
(a) the nature of the bid class securities; and
(b) if the bid class securities are interests in a managed investment
scheme—the nature of the scheme; and
(c) the matters that the holders of bid class securities may reasonably be
expected to know; and
(d) the fact that certain matters may reasonably be expected to be known
to their professional advisers; and
(e) the time available to the target to prepare the statement.
Director’s recommendations
(3) A target’s statement must contain a statement by each director
of the target:
(a) recommending that offers under the bid be accepted or not accepted,
and giving reasons for the recommendation; or
(b) giving reasons why a recommendation is not made.
(4) The statement under subsection (3) must be made by:
(a) if the target is under administration—the liquidator or
administrator; or
(b) if the target has executed a deed of company arrangement that has not
yet terminated—the deed’s administrator.
Consent of person to whom statement attributed
(5) The target’s statement may only include, or be accompanied by, a
statement by a person, or a statement said in the target’s statement to be
based on a statement by a person, if:
(a) the person has consented to the statement being included in the
target’s statement, or accompanying it, in the form and context in which
it is included; and
(b) the target’s statement states that the person has given this
consent; and
(c) the person has not withdrawn this consent before the target’s
statement is lodged with ASIC.
(6) The target must keep the consent.
Approval
(1) The copy of the target’s statement that is lodged with ASIC must
be approved by:
(a) if paragraphs (b) and (c) do not apply—a resolution passed
by the directors of the target; or
(b) for a target that is under administration—the liquidator or
administrator; or
(c) for a target that has executed a deed of company arrangement that has
not yet terminated—the deed’s administrator.
Date
(2) The target’s statement must be dated. The date is the date on
which it is lodged with ASIC.
(1) If:
(a) the bidder’s voting power in the target is 30% or more;
or
(b) for a bidder who is, or includes, an individual—the bidder is a
director of the target; or
(c) for a bidder who is, or includes, a body corporate—a director of
the bidder is a director of the target;
a target’s statement given in accordance with section 638 must
include, or be accompanied by, a report by an expert that states whether, in the
expert’s opinion, the takeover offers are fair and reasonable and gives
the reasons for forming that opinion.
Note: Subsections 648A(2) and (3) provide for the
independence of the expert and disclosure of any association between the target
and the expert or the bidder and the expert. A contravention of one of those
subsections results in the target’s statement not complying with this
subsection.
(2) In determining whether the bidder’s voting power in the target
is 30% or more, calculate the bidder’s voting power at the time the
bidder’s statement is sent to the target.
Requirement to inform bidder and information that must be
given
(1) If the bidder has given a bidder’s statement to the target and
requested the target to give the bidder information in accordance with this
section, the target must inform the bidder of:
(a) the name and address of each person who, at a time specified by the
bidder under subsection (2), held securities:
(i) in the bid class; or
(ii) convertible into securities in the bid class; and
(b) the type, and number of each type, of those securities held by the
person at the specified time.
However, the target does not need to give information to the bidder about a
person or their holding of securities unless the target knows the person’s
name.
Time at which target’s information must be correct
(2) The bidder’s request must specify a day as at which the
information must be correct. The day must be one that occurs after the day on
which the bidder makes the request unless the target agrees to it being the day
on which the bidder makes the request.
Form in which target must provide information
(3) The target must give the information to the bidder:
(a) in the form that the bidder requests; or
(b) if the target is unable to comply with the request—in
writing.
(4) If the target must give the information to the bidder in electronic
form, the information must be readable but the information need not be formatted
for the bidder’s preferred operating system.
Fee for provision of information
(5) The target may require the bidder to pay an amount, not exceeding the
prescribed amount, for the provision of the information to the bidder.
Time by which target must provide information
(6) The target must give the information to the bidder no later than the
latest of the following times:
(a) the end of the second day after the day on which the bidder requested
the information; or
(b) the end of the next day after the day as at which the information must
be correct; or
(c) the time when the target receives the amount mentioned in
subsection (5).
(1) If the target is a company or body, the directors of the target have a
right to recover from the target any expenses they reasonably incur in the
interest of members of the target and in relation to the takeover bid. The
directors have this right regardless of anything contained in the target’s
constitution (if any).
(2) If the target is a managed investment scheme, the responsible entity
for the scheme has a right to recover from scheme property any expenses it
reasonably incurs in the interest of members of the scheme and in relation to
the takeover bid. The responsible entity has this right regardless of anything
contained in the scheme’s constitution.