Corporations Act 2001

CHAPTER 2D - OFFICERS AND EMPLOYEES  

PART 2D.1 - DUTIES AND POWERS  

Division 5 - Exercise of powers while company under external administration  

SECTION 198G   EXERCISE OF POWERS WHILE COMPANY UNDER EXTERNAL ADMINISTRATION  
Powers of officers while company under external administration

198G(1)    
While a company is under external administration, an officer of the company must not perform or exercise a function or power of that office.

Note: For a CCIV, section 1224Q applies instead of this section.

Offence

198G(2)    
A person commits an offence if:

(a)    the person is an officer of a company; and

(b)    the company is under external administration; and

(c)    the person purports to perform or exercise a function or power of that office.

Penalty: 30 penalty units.

Exceptions

198G(3)    
Subsections (1) and (2) do not apply to the extent that the officer of the company is acting:

(a)    as the external administrator of the company; or

(b)    with the written approval of the external administrator of the company or the Court; or

(c)    in circumstances in which, despite the fact that the company is under external administration, the officer is permitted by this Act to act.

Note: In proceedings to determine whether a person has committed an offence under subsection (2) , a defendant bears an evidential burden in relation to the matters in subsection (3) , see subsection 13.3(3) of the Criminal Code .

198G(4)    
Subsections (1) and (2) do not apply if the company has executed a deed of company arrangement and the deed has not yet terminated.

Note 1: Section 444G deals with the effect of a deed of company arrangement on various persons.

Note 2: In proceedings to determine whether a person has committed an offence under subsection (2) , a defendant bears an evidential burden in relation to the matters in subsection (4) , see subsection 13.3(3) of the Criminal Code .

198G(4A)    

Subsections (1) and (2) do not apply in relation to:

(a)    a company under restructuring; or

(b)    a company that has made a restructuring plan that has not yet terminated.

Functions and powers of liquidator or provisional liquidator prevail in case of conflict

198G(5)    
If subsection (3) applies and there is a conflict between a function or power of the external administrator of the company and a function or power of the officer in relation to the company, the external administrator ' s function or power prevails.

Effect of section

198G(6)    
This section does not remove an officer of a company from office.

198G(7)    
For the purposes of this section, a person is not an officer of a company merely because he or she is a managing controller, appointed under a power contained in an instrument, of property of the company.

198G(8)    
Nothing in this section affects a secured creditor ' s right to realise or otherwise deal with the security interest.

Definitions

198G(9)    

In this section:

external administration
(Repealed by No 87 of 2024, s 3, Sch 1[4] (effective 24 September 2024).)

external administrator
of a company has the same meaning as in Schedule 2 .