Corporations Act 2001
[ CCH Note: Ch 2N heading will be amended by No 69 of 2020, s 3, Sch 1 [ 633], by omitting " ASIC " , (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
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Hide history noteNote: This Part does not apply to CCIVs: see subsection 1232U(1) .
The directors of a company must pass a solvency resolution within 2 months after each review date for the company.
347A(2)
Subsection (1) does not apply to the directors of a company that has lodged a financial report with ASIC under Chapter 2M within the period of 12 months before the review date.
Note: The defendant bears an evidential burden in relation to the matter in subsection (2) . See subsection 13.3(3) of the Criminal Code .
[ CCH Note: S 347A(2) will be amended by No 69 of 2020, s 3, Sch 1[650], by substituting " the Registrar " for " ASIC " , (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
347A(3)
An offence based on subsection (1) is an offence of strict liability.
[ CCH Note: S 347B heading will be amended by No 69 of 2020, s 3, Sch 1[651], by substituting " THE REGISTRAR " for " ASIC " , (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
If the directors of a company pass a negative solvency resolution under section 347A , the company must notify ASIC of that fact, in the prescribed form, within 7 days after the resolution is passed.
[ CCH Note: S 347B(1) will be amended by No 69 of 2020, s 3, Sch 1[652] and [ 653], by substituting " the Registrar " for " ASIC of that fact, in the prescribed form, " and inserting " The notification must meet any requirements of the data standards. " at the end, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
347B(2)
If: (a) subsection 347A(1) applies to the directors of a company; and (b) the directors have not passed a solvency resolution under section 347A within 2 months after a review date;
the company must notify ASIC of that fact, in the prescribed form, within 7 days after the end of the 2 month period following the review date.
[ CCH Note 1: S 347B(2) will be amended by No 69 of 2020, s 3, Sch 1[654], by substituting " the Registrar " for " ASIC of that fact, in the prescribed form, " , (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
[ CCH Note 2: S 347B(2A) will be inserted by No 69 of 2020, s 3, Sch 1[655] (effective 1 July 2026 or a day or days to be fixed by Proclamation). S 347B(2A) will read:
347B(2A)
A notification under subsection (1) or (2) must meet any requirements of the data standards.]
347B(3)
An offence based on subsection (1) or (2) is an offence of strict liability.
If: (a) a company has paid its review fee in respect of a review date; and (b) the company has not lodged a notice under section 347B within 7 days after the end of the 2 month period following the review date; and (c) the company has not lodged a financial report with ASIC under Chapter 2M within the period of 12 months before the review date;
the directors of the company are taken to have represented to ASIC, as at the end of the 2 month period following the company ' s review date, 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.
Note: Directors are not taken to have passed a solvency resolution for the purposes of section 347A merely because they are taken, under this subsection, to have made a representation to ASIC.
[ CCH Note: S 347C(1) will be amended by No 69 of 2020, s 3, Sch 1[656], by substituting " the Registrar " for " ASIC " in para (c) (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
347C(2)
Subsection (1) does not apply if the directors prove that they made a positive solvency resolution under section 347A within 2 months after the end of the review date.